Dr Reddy's Laboratories has formed India's first integrated drug development company 'Perlecan Pharma Private Limited' with equity capital commitment of USD 52.5 million from India's leading venture capital investors, Citigroup Venture Capital International Growth Partnership Mauritius Limited and ICICI Venture Funds Management Company and Dr Reddy's.

Perlecan Pharma will be engaged in the clinical development and out-licensing of NCE assets. Perlecan Pharma's early priorities will be to advance the clinical development of NCE assets received from Dr. Reddy's through Phase II and thereafter seek out-licensing, co-development or joint commercialization opportunities. Perlecan will build on its initial pipeline through a combination of in-licensing opportunities. Perlecan will be managed by an independent Board and an Executive management team.

Citigroup Venture and ICICI Venture will contribute USD 22.5 million each and Dr Reddy's will contribute USD 7.5 million towards Perlecan Pharma's initial equity capital. Perlecan will immediately issue warrants to Dr Reddy's.

According to a DRL release, Perlecan Pharma provides Dr Reddy's Drug Discovery program, a model, to rapidly advance its existing as well as future NCE assets through Phase II trials and seek out-licensing, co-development or joint commercialization opportunities thereby enhancing the value of the pipeline. Further, it also enables Dr. Reddy's to aggressively accelerate its new discoveries to clinical development in the areas of Metabolic Disorders and Cardiovascular.

In connection with this transaction, Dr Reddy's and Perlecan Pharma will enter into agreements covering the transfer of all titles and rights including the development and commercialization rights of 4 NCE assets to Perlecan Pharma and provision of support services, supply of clinical development quantities and commercial quantities to Perlecan on an arms-length basis.

Perlecan Pharma will have the first right of refusal on future pipeline of Dr Reddy's at fair market value. Dr Reddy's will be offered commercial rights to Russia, India, China and other countries in the Commonwealth of Independent states at fair market value for all NCE assets of Perlecan Pharma, added the release.

Commenting on the formation of Perlecan, Dr Anji Reddy, chairman, Dr Reddy's Laboratories, said, "The formation of Perlecan acts as a precursor to many more exciting partnerships in the area of drug discovery and development for the Indian pharmaceutical industry. We have made significant progress in the last decade in building a strong drug discovery platform and look forward to further building on this foundation to realize Perlecan Pharma's potential. We are pleased to welcome the involvement of Citigroup Venture and ICICI Venture, who bring important skills and experience to the new company."