"Although Breo Elipta could become a blockbuster, its rate of market acceptance is not certain and substantial returns to Elan could be protracted, " said analyst Michael Levesque.

WSJ: Elan enters $1B royalty deal with Theravance

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, and two treatments that have entered late-stage testing.

WSJ: Elan enters $1B royalty deal with Theravance

On Friday, the U.S. Food and Drug Administration said it approved Breo Ellipta for long-term use and to control flare-ups in patients with chronic obstructive pulmonary disorder, often called smoker's cough.

WSJ: Elan enters $1B royalty deal with Theravance