Irish drugmaker Elan plans to pay $1 billion for the right to future royalties from four respiratory treatments being developed by Theravance and GlaxoSmithKline.

The deal will give Elan 21 percent of the future royalties that Theravance Inc. receives from Glaxo. Theravance shares jumped 7 percent in premarket trading. Elan shares slipped.

Drugs named in the deal include Breo Ellipta, a once-a-day inhaled treatment that just received approval from the U.S. Food and Drug Administration.

Elan Corp. PLC says the deal immediately diversifies its business, and it plans to use part of the sales from the drugs to pay shareholders a cash dividend.

Elan has recently rejected takeover bids from Royalty Pharma, a private U.S. company that buys royalty interests in drugs and late-stage drug candidates.