Glenmark Pharmaceuticals is set to earn euro190 million (Rs 1,077.5 crore) from Merck KGaA by licensing the German major to develop a diabetes drug.
The deal, which is being dubbed as another milestone in the country's pharmaceutical sector, will include an upfront payment of euro25 million and various milestone payments for the drug, GRC 8,200, which is in mid-stage trials in South Africa and India.
On commercial launch, Glenmark would supply the active ingredient to Merck and would receive royalties on net sales of the product, Glenmark announced here in a press conference.
Merck gets the rights to the drug in North America, Europe and Japan while Glenmark will retain the rights for India. If the drug comes into the market, Glenmark will supply the medication to Merck and receive royalties on product sales.
The partners will share rights for the remaining markets. Merck will bear the cost of all ongoing studies and will be responsible for planning, managing and sponsoring all development activity.
The drug works by inhibiting the enzyme DPPIV and stimulating the secretion of higher levels of insulin. It is intended for use in treating Type 2 diabetes, which could affect over 330 million people worldwide by 2025.
Merck's Glucophage, which has been in the market for nearly 50 years, is one of the top treatments for Type 2 diabetes.
According to Glenn Saldanha, MD and CEO of Glenmark Pharmaceuticals: "This deal is in line with our strategy to collaborate with global partners for our new chemical entities programme. Existing and pipeline drugs from Merck are excellent candidates for the development of combinations and this will prove a significant advantage to both partners."
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