Updated with new information throughout.

WALTHAM, Massachusetts ( TheStreet) -- Alkermes ( ALKS) reached a deal to acquire Elan Drug Technologies from Elan ( ELN), the Irish drugmaker, for $960 million in cash and stock.

Alkermes and Elan Drug Technologies will be combined under a new holding company headquartered in Ireland. The company will be named Alkermes Plc. and is expected to have annual revenue of more than $450 million from 25 commercialized products. Elan will have a 25% stake in the new company.

The deal joins two companies whose primary business focuses on technologies that improve the delivery of drugs made and sold by other companies. Elan Drug Technologies (EDT) formulates the once-monthly schizophrenia drug Invega Sustena sold by Johnson & Johnson ( JNJ) and Acorda Therapeutics' ( ACOR) multiple sclerosis medicine Ampyra. EDT generated $261 million in revenue last year, according to Bloomberg.

Alkermes is the drug-delivery technology partner for the once-weekly diabetes drug Bydureon under development by Eli Lilly ( LLY) and Amylin Pharmaceuticals ( AMLN). The current Alkermes is expected to record $181 million in revenue in the fiscal year ended March 31, most of which comes from royalties derived from Risperdal Consta, another schizophrenia drug marketed by J&J. More recently, Alkermes has started to develop and market its own drugs, including Vivitrol, used to combat alcohol and opioid dependence.

Alkermes loses money today but will turn cash-flow positive and profitable with the acquisition of the EDT business," the company said. On a pro forma basis, revenues are expected to grow in fiscal year 2012 with adjusted earnings in the range of $70 million to $90 million.

The new Alkermes will be led by current Alkermes chief executive Richard Pops. Shane Cooke, currently executive vice president and head of EDT, will join Alkermes as president.

"Both companies have a proven track record as innovators. This merger will bring the scale and resources for strategic and balanced investment across the whole product continuum, from R&D innovation to clinical development, to world-class manufacturing and commercial expansion. We're looking forward to working with the EDT team to accelerate growth and to create value for our shareholders and the patients we serve," said Pops, in a statement.

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