Cymbiotics had earlier in-licensed its arthritis drug to Indian drug-makers Cipla and Dr Reddy's Laboratories.

According to the deal signed today, Elder will introduce in India Flexasur (a drug for the treatment of joint pain and inflammation in arthritis), a topical cream Diaperin for treating pain in diabetics due to peripheral neuropathy (pain or loss of sensation due to nerve damage) and Lepislim, an anti-obesity drug targeted at youth population.

"In addition to pain management and arthritis, Elder will market a special formulation under the brand name of Flexasur for repetitive strain injuries (RSI), a common ailment among people who sit in front of computers for a longtime," said Dr Jack Bookout, executive vice-president, Cymbiotics.

Promoted by US-based Indian scientist Raj Brathur, Cymbiotics had earlier licensed Flexasur to Dr Reddy's Lab, which is marketing the drug under the brand name Celadrin, and to Cipla, which sells it as Mobix.

Raj Brathur, who is the president and chief executive officer of the company, said the company was in advanced talks with three Indian companies, including Dr Reddy's and Elder, to license more drugs from its product basket in the Indian market.

"Lepslim is undergoing phase III advanced clinical trials in the US and we are marketing it in about 15 countries. We will conduct a clinical trial in India before launching Lepslim in the Indian market," said Brathur.

He added that Cymbiotics planned to set up a research and development centre in Hyderabad with an investment of $2 million. The R&D centre will employ about 40 scientists.

The company has earmarked $5 million investment in India in the near future and has already floated an Indian subsidiary Cymbiotics India Pvt.

The San Diego- based Cymbiotics has about 15 drugs in its product basket, mainly developed through collaborative research with US-based universities and research institutions. In future, the company plans to make India a major hub for its research and development activities.

Alok Saxena, director, Elder, said the collaboration with Cymbiotics would help Elder strengthen its product profile in the area of pain management, diabetes care and dermatology. In 2006, Elder entered into seven in-licensing deals, the maximum by an Indian pharmaceutical company that year.