Jan. 8 (Bloomberg) -- Elan Corp. shares jumped 15 percent in the U.S. and bullish options trading surged to 22 times the average on speculation that Pfizer Inc. may acquire the Irish drugmaker.

“The speculation is that Pfizer is possibly looking at acquiring Elan,” said Frederic Ruffy, the senior options strategist at WhatsTrading.com, a New York-based provider of options market analysis.

Elan’s American depositary receipts rose $1.11, or 15 percent, to close at $8.70 in New York Stock Exchange composite trading, the biggest single-day increase in almost three months. The shares plunged 73 percent last year. Each receipt represents one ordinary company share.

The Financial Times said Jan. 4 that Pfizer may “acquire a large rival drug company to improve its financial health,” citing an interview with Jeffrey Kindler, the New York-based drugmaker’s chief executive.

Pfizer spokesman Ray Kerins declined to comment on market rumor or speculation. Elan spokeswoman Mary Stutts said the company doesn’t comment on market speculation.

Investors have said Pfizer could build on its extension into biological medicines by buying Amgen Inc., the world’s largest biotechnology company by sales, the report said.

Options Volume

Trading of options to buy Elan shares rose to 79,053, the most since August, with almost four calls traded for each put. Calls give the right to buy a security for a certain amount, the strike price, by a given date. Puts convey the right to sell.

The fourth-most-active options were January $9 calls, which quadrupled to 60 cents for the fourth-biggest gain among Elan options. Those contracts expire at the end of next week, which means buyers of those contracts are wagering that the stock will rise before then. Elan hasn’t closed at more than $9 since Oct. 21.

More than 70 percent of those contracts changing hands today were at the ask price, which indicates that buyers initiated the transactions. Today’s volume of 11,611 for the January $9 calls was 16 times the 20-day average.

Elan’s April $14 calls climbed ninefold to 45 cents for the biggest gain among options linked to the stock.

To contact the reporter on this story: Jeff Kearns in New York at jkearns3@bloomberg.net; Shannon Pettypiece in New York at spettypiece@bloomberg.net

Last Updated: January 8, 2009 17:22 EST