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Tata firm gets Merck deal

Tata-promoted Advinus joins hands with US pharma giant Merck and expects milestone payments of up to $150 mn, reports Suprotip Ghosh.

india Updated: Nov 16, 2006 20:10 IST

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

Advinus Therapeutics Pvt Ltd, the Tata-promoted, Bangalore-based integrated pharmaceutical services company will work with two potential drugs discovered by US-based giant Merck & Co, the world's fourth largest pharmaceutical company, with the aim of developing them into marketable products through collaborative research and services.

Both drugs are aimed at curing metabolical disorders. While one of the two potential drugs is 'precedented', which means it has been worked upon, the other is new. Merck will retain the right to advance the more promising of these candidates into late-stage clinical trials, Advinus officials said.

Advinus has received an undisclosed amount as 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 patent emerging from the development programme would accrue to Advinus, said Rajiv Malik, senior vice-president in the company.

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

The Advinus partnership would also involve the Tata group's agrochemicals firm Rallis India and software leader Tata Consultancy Services, Dr Rashmi Barbhaiya, chief executive of Advinus, told a news conference.

"TCS has certain core knowledge areas that we would have to work with," he said.

TCS has an active practice in which it uses information technology skills to carry out work that can boost productivity in work related to healthcare.

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

However, Advinus has no plans to develop biotechnology-based drugs, though it is 'open to partnerships', Barbhaiya said.

Indian companies such as Dr Reddy's Ltd (DRL) have been in the fray for dedicated research and development facilities from India. 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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First Published: Nov 16, 2006 20:10 IST