Fledgling pharmaceutical company Azur Pharma has raised €40 million in a private placing to fund initial acquisitions.

The company, founded last March by three former Elan executives, aims to create a US pharmaceutical business developing and marketing products in specialist areas.

The group is led by Séamus Mulligan, a 20-year Elan veteran, who oversaw that group's $2 billion (€1.63 billion) asset disposal programme as part of its efforts to recover from a market collapse caused by adverse trial findings and concerns about its accounting practices.

The placing was organised through Davy Corporate Finance and includes a significant investment by the management team.

Mr Mulligan, who is chairman and chief executive of Azur, welcomed the success of the fundraising. "It is a first step and we are pleased with the support that we got."

Azur intends to acquire a portfolio of established pharmaceutical brands. He said the scale of the fundraising should not be seen as determining the scope of any acquisitions.

"We know from our long experience in the US pharmaceuticals market that there are many ways of putting acquisitions together in this sector," he said.

While refusing to be drawn on the possibility of further fund-raising, Mr Mulligan said he had been determined to have some money behind the group before pursuing acquisitions.

"This fundraising is an external validation of our business plan. It gives us visibility and improves our viability," said Mr Mulligan. He said the current management team - chief financial officer David Brabazon and Eunan Maguire, senior vice-president of business and corporate development - was specifically designed to target and execute acquisitions.

The company says it hopes to expand into late-stage clinical development projects, but not in the immediate future.

"We will be going down a commercial path first and will need to build out infrastructure before we add a development pipeline."