GROWTH Tonic

Mumbai, May 12:Ranbaxy Laboratories today entered into a drug discovery and development tieup with US-based Merck & Co.

Under the terms of the deal, Ranbaxy will carry out the discovery and development of new products and Merck will conduct the development and commercialisation of drug candidates at a later stage.

The agreement is yet another indication of overseas pharmaceutical companies turning to India for their research work.

Last year, Nicholas Piramal India inked a deal with Merck to discover and develop cancer drugs.

Nicholas had earlier reached an arrangement with Eli Lilly to develop drugs for metabolic disorders.

Ranbaxy has a research agreement with GlaxoSmithKline Plc to develop anti-infectives, metabolic, respiratory and oncology drugs.

Delhi-based Ranbaxy’s latest agreement with Merck will involve discovery and development of anti-infectives.

Both partners will work together to develop anti-bacterial and anti-fungal drug candidates.

The collaboration will begin this year with an initial term of five years and can be later extended mutually by the two.

Merck will pay Ranbaxy an undisclosed upfront sum. Ranbaxy will receive payments of more than $100 million depending on various research, development and regulatory milestones.

Ranbaxy is also eligible to receive royalties on worldwide sales of any product commercialised under the deal.

Ranbaxy CEO and managing director Malvinder Mohan Singh said, “We believe that our philosophy of partnering big pharmaceutical companies will continue to gather momentum as companies continue to recognise the strength of our research and development expertise and resources. This collaboration with Merck positions Ranbaxy to extend its capabilities and move up the value chain for drug discovery and development.”

Mervyn Turner, senior vice-president of worldwide licensing and external research at Merck, said collaborations with external partners were an integral part of Merck’s long-term strategy to build and expand its pipeline.

After the announcement of the deal, Ranbaxy shares ended higher by 5.3 per cent at Rs 494.20 on the Bombay Stock Exchange.