The company will pay up to $51.9m for the product line and will transfer production from BioMerieux's North Carolina plant to facilities in New York and Bray. The acquisition will also involve a capital expenditure charge of between $5m and $6m at the Irish plant.

Investors will no doubt be buoyed by the positive sentiment towards the acquisition.

Analyst Ian Hunter with Goodbody Stockbrokers said last week that Trinity Biotech "had the basic model in place" three to four months ago, having set up a direct sales force in the US, Germany and Britain.

"They got an instrument base that they acquired and further developed, and on the back of that we felt the company had turned a corner and we could see earnings growth starting to come back into the model, " he said. "They're becoming a big player now in the coagulation product side of things and that could drive profits."

Trinity Biotech estimates that the global coagulation test market is worth $600m and is growing by about 5% annually. Following the bioMerieux acquisition, Trinity Biotech will become the fourth-biggest player in the coagulation product sphere. The company provides hundreds of diagnostic kits that allow for the quick diagnosis of various conditions.

Among its products is a 10minute HIV test.

Hunter, who rates the stock as an 'add' with a price target of $9.75, added that he remains "positive" on the shares. He said downside could emerge if competitors develop more efficient and faster tests.

"The direct sales force in the US will be up against some very experienced competitors, but it does seem like the Trinity Biotech team have been able to face up to that, " he said.

Davy Stockbrokers analyst Jack Gorman said recently that the bioMerieux acquisition will give Trinity Biotech "critical mass" in a specialist diagnostic category. He also noted that the purchase will "more fully exploit" the substantial investment made in the company's direct sales infrastructure during the past three years. Gorman is quoting a price target of $9.50.

"We believe that there is potential upside to this target over time as the discount unwinds further on the back of a successfully executed integration plan, " said Gorman in a research note.

He reckons that the acquisition will add 15% to forecast revenues in the current year, 23% to profit before tax and 5% to earnings per share.

In early trading last Thursday in New York, Trinity Biotech was trading at $7.50, down three cents. One brokerage, New York-based Roth Capital, is quoting a price target of $13, which is obviously a considerable premium to the current share price and may be ambitious.

Still, it seems that investors willing to buy now could see some welcome upside to the stock in coming months.

Elan The other main pharmaceutical news last week was that Elan has received European approval to sell its multiple sclerosis drug, Tysabri. The European Commission ruled that the treatment can be used by patients with the severest form of the condition. It also approved it for patients who have not been helped by older treatments, such as Biogen Idec's Avonex.

Tysabri will be introduced in Ireland and Germany next month. Cannacord Capital assumed that Tysabri would be approved in Europe, and while it forecast significant revenue for the product, it continues to believe that the profitability of those revenues to Elan is not enough to justify the current valuation. Tysabri recently received restricted US approval.

Merrion Stockbrokers is rating Elan as a 'hold' and analyst Robert Brisbourne noted that a launch in each of the EU markets will depend on national administrative procedures, including price and reimbursement approvals being granted in each country.

Goodbody's Ian Hunter said that "The speed to market and lack of requirement for a mandatory registry as part of the risk management plan are more positive than expected".

Tysabri, which is administered 13 times a year, will cost $28,400 a year per patient in the US, up from $23,500 previously. Analysts including Orla Hartford at NCB had forecast that the price of the drug would rise by about 10% after the companies spent more to study its effects over two years.

Tysabri will probably generate about $2bn in annual sales, according to Hartford.

On Thursday afternoon Elan was trading up 12 cents in new York at $16.44, but down 15 cents in Dublin at 13.10, having earlier reached a high of 13.50.