Orchid enters into $100 mn licensing agreement with Merck

MUMBAI: Drug-maker Orchid Chemicals on Monday said it has entered into a USD 100-million (about Rs 470 crore) licensing agreement with Merck & Co for discovery of anti-bacterial drug candidates.

In a filing to the Bombay Stock Exchange Orchid Chemicals said that both the firms have entered into a research collaboration and licensing agreement focussed on the discovery, development and commercialisation of novel agents for the treatment of bacterial and fungal infections.

Under the agreement, wherein both the firms would identify and develop novel anti-bacterial and anti-fungal compounds as clinically validated drug candidates, Orchid would be paid an undisclosed upfront sum, and is eligible to receive payments totalling more than USD 100 million, it said.

"Orchid will undertake discovery and candidate development through human clinical trials. Merck will consider late stage clinical development and commercialisation if regulatory approval is granted," the filing added.

Further, Orchid is also eligible to receive significant royalties on worldwide net sales of any product commercialised.

"We are happy that Merck has chosen to collaborate with us to leverage our anti-infective discovery, development and manufacturing capabilities to bring new anti-infective medicines to meet global healthcare needs," Orchid Chemicals Managing Director K Raghvendra Rao said.

Shares of Orchid Chemical were trading at Rs 206, down 3.13 per cent in the late afternoon trade on the BSE.