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Ranbaxy-Glaxo pact expanded

This step could enable the former to earn an additional $100 million (Rs 450 crore) through potential royalty and other payments, reports Gaurav Choudhury.

india Updated: Feb 06, 2007 20:21 IST

RanbaxyLaboratoriesLimited(RLL)and GlaxoSmithKilne(GSK)have expanded their four-year-old drug-development agreement on Tuesday, a step that couldenabletheformer to earn an additional $100 million (Rs 450 crore) through potential royalty and other payments.

Thenewagreement, modifies and expands the terms of their2003 strategic alliance to provide Ranbaxy expanded drug-development responsibilities and further financial opportunities.

Underthe original agreement, Ranbaxy carried out the chemical tests required to take drug leads being developed to the stage of candidate selection.

Underthenewagreement,Ranbaxywilladvance beyond mere candidate selection, going right up tothe stage of completion of clinical proof of the efficacy of the drug concerned. GSK will then go in forfurtherclinical development of each programme and take resulting productsthroughthe regulatoryapprovalprocesstofinal commercialisation.

Ranbaxy could thus receive substantial milestone payments for products it develops, which aresubsequently launched by GSK, and up to double digit royalties on worldwide net sales.

Ranbaxywillretainthe right to co-commercialise the products in India.
Thenewmilestones and royalties will apply both to future drug discovery
programmesand to the two programmes currently in progress at Ranbaxy,that were started under the original agreement with GSK.

Theexpandedallianceforseespotential for working togetheronawiderange of
therapeuticsofinterest to GSK, including anti-infectives and metabolic,
respiratoryandoncologyproducts. While recognising the performance and
clinical-development capabilities of Ranbaxy, it also conforms to the agenda
of GSK's Center of Excellence for External Drug Discovery ("CEEDD").

TheCEEDD, created after the initial agreement between Ranbaxy and GSK, is
a small, dedicated team that contributes to the GSK pipeline solely through
theefforts of its external alliances. The CEEDD effectively 'virtualises'
aportionoftheGSK pipeline — from target to clinical proof of concept — by forming multiple risk-sharing/reward-sharing alliances.

Malvinder Mohan Singh, CEO and MD, Ranbaxy, said, "The agreement presents a
uniqueopportunitytodemonstratetheIndia-centric advantages of high
quality research and development to deliver value at the cutting edge."

Maxine Gowen, Senior Vice President, Center of Excellence for External Drug
Discovery(CEEDD),GSK, said, "This expanded agreement furthers our CEEDD
strategy of building a strong pipeline through to clinical Proof of Concept
via external R&D collaborations."

Email Gaurav Choudhury: gaurav.choudhury@hindustantimes.com

First Published: Feb 06, 2007 20:21 IST