Ranbaxy and Merck sign drug discovery agreement

Ranbaxy and Merck will work together to develop clinically validated antibacterial and anti-fungal drug candidates. Ranbaxy will carry-out drug discovery and clinical development through Phase IIa clinical trials, with Merck conducting development and commercialization of drug candidates thereafter. The agreement provides that the collaboration will begin in 2008 with an initial term of five years and can be extended mutually thereafter by the parties.

Under the terms of the agreement, Ranbaxy will be paid an undisclosed upfront sum, with the potential to receive payments totaling more than $100 million associated with the achievement of various research, development and regulatory approval milestones for each target included in the collaboration. Ranbaxy is also eligible to receive significant royalties on worldwide net sales of any products commercialized under the agreement.

Malvinder Mohan Singh, CEO and managing director of Ranbaxy, said: “This collaboration with Merck positions Ranbaxy to extend its capability set and move up the value chain for drug discovery and development.”