Pharma company Ranbaxy Laboratories has entered into a long-term drug discovery and development agreement with the US-based pharma company Merck in the area of anti-infective medicines. Ranbaxy could earn over $100 million on each drug developed through the collaborative research programme.
The agreement, announced on Monday, calls for joint research to develop clinically validated anti-bacterial and anti-fungal drug candidates. Ranbaxy will undertake early stages of the drug discovery, while the later-phase clinical trials and commercialisation of drug candidates will be Merck's responsibility.
"Considering the scope of research and commercial terms agreed upon, the deal is one of the best collaborative research pacts ever for an Indian drug company", Malvinder Mohan Singh, CEO and MD, Ranbaxy, said. "The agreement is target specific and pertains to the new drug compound synthesised", Singh said.
Ranbaxy will have a dedicated team of scientists to look into the research tie-up. The agreement is applicable for an initial term of five years, with provisions for further extensions. Ranbaxy will be eligible for an undisclosed upfront sum and could receive payments totalling more than $100 million upon attaining various research, development and regulatory approval milestones for each target included in the collaboration.
Ranbaxy will also receive significant royalties on worldwide net sales of any products commercialised under the agreement.
Merck is having ongoing collaborative research programmes with Indian pharma companies such as Nicholas Piramal and Advinus Therapeutics in therapeutic areas such as oncology and metabolic disorders. Merck's recent tie-up is in tune with its long-term research strategy.
"Collaborations with external partners, wherever in the world, are an integral and essential part of Merck's long-term strategy to build and expand its pipeline," said Mervyn Turner, senior vice-president of worldwide licensing and external research at Merck.
"By combining each other's strengths and resources, both Merck and Ranbaxy are able to decrease the development risk while sharing the potential reward", Mervyn added.
Ranbaxy had announced a similar collaborative research tie-up with GlaxoSmithKline in October 2003. The Ranbaxy-GSK alliance covers a wide range of therapeutic areas, including anti-infectives, metabolic disorders, respiratory and oncology. The collaboration was further expanded in 2007 after the joint research resulted in the identification of a potential new drug compound for respiratory inflammation.
"We believe that our philosophy of partnering with big pharma will gather momentum as companies continue to recognise the strength and breadth of our research and development expertise and resources. This collaboration with Merck positions Ranbaxy to extend its capability to move up the value chain for drug discovery and development," Singh said.
