Under the agreement, Bristol-Myers Squibb will have the right to exercise an option to obtain an exclusive worldwide licence to the programme. It will, however, conduct the clinical trials of the new drug candidate according to a pre-agreed development programme up to the completion of Phase II.
"This agreement is one huge step closer to realising the dream of bringing oral insulin to market," said Kiran-Mazumdar Shaw, MD and chairman, Biocon.
Biocon, which has been looking to partner the drug for nearly two years, said it would receive a licence fee as well as milestone payments and royalties based on sales of the drug outside India, but will retain India rights.
"If Bristol-Myers Squibb exercises the option to licence IN -105 following the successful completion of Phase II trial, it will assume full responsibility for the development programme, including all development and commercialisation activities outside India," said Biocon.
Currently, there are no insulin tablets available.
Earlier this year, Pfizer scrapped a deal to sell injectable insulin products made by Biocon.