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Tatas strike gold in pharmaceutical sector

india Updated: Nov 16, 2006 16:58 IST

The Tatas have struck gold again, and this time in the pharmaceutical services.

Advinus Therapeutics (P) Ltd, the Tata-promoted, Bangalore-headquartered integrated pharmaceutical services company will work with two potential drugs discovered by Merck & Co of US, the world's fourth largest pharmaceutical company.

Their aim would be to develop the potential into full-blown drugs.

Merck is best known for its banned drug Vioxx, which brought about strict changes in US laws regarding post-launch clinical testing and patent awards.

The partnership would also involve Rallis and Tata Consultancy Services, said Dr Rashmi Barbhaiya, CEO and MD, Advinus at a press conference. "TCS has sudden core knowledge areas that we would have to work with," he said.

The company has received an undisclosed amount of upfront payment from Merck, and expects milestone payments of up to $ 150 million from the two leads, at $ 74.5 million each.

Milestone payments are delivered at various stages of drug discovery. Any patents emerging from the development programme would be going to Advinus, senior vice president, Advinus Rajiv Malik said.

One of the two potential drugs is 'precedented', which means it has been worked upon, while the other is new.

The drugs are for metabolic disorders, with Merck retaining the right to advance the most promising of these candidates into late-stage clinical trials.  

Advinus is also eligible for royalties on the sales of any products that result from the collaboration. The collaboration will begin with two target programs, and could expand to include others over time.    

However, the company is not going to develop biotechnology-based drugs, though it is 'open to partnerships', said Barbhaiya.

Companies such as Dr Reddy's Ltd (DRL) have been in the fray for dedicated research and development facilities. DRL owns Perlecan Pharma, an R&D based facility in Hyderabad jointly promoted with ICICI Ventures.

Other companies such as Ranbaxy and Sun Pharma also have strong research and development capabilities, and have been working on a large number of leads in pharmaceutical research.

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