Nicholas Piramal India Ltd (NPIL) has signed an agreement for new drug development with Eli Lilly and Company (Lilly), to carry the studies of a patented preclinical drug candidate for a metabolic disorder.

The agreement, claimed to be unique on its nature for a call-back payment, and potential milestone payments of up to $100 million, plus royalties on sales upon successful launch of the first compound for NPIL, will be extended to new drug development of another four drug candidates in various therapeutic areas, informed Ajay Piramal, chairman, NPIL in a press conference.

The NPIL-Lilly alliance seeks to increase productivity in drug development by synergizing the unique strengths of both companies and equitably sharing risk and reward. The company will be responsible for the design and execution of the global clinical development programme, including IND-enabling non-clinical studies and human clinical trials up to phase III.

The phase 1, phase 2 studies would be carried in the NPIL facilities at India and Canada. NPIL is expecting to complete the phase 2 studies by 2008. The agreement, which will serve as a prototype for joint development of several pre-clinical drug candidates from Lilly in multiple therapeutic areas, will be a new paradigm for global alliances in drug discovery and development, according to the officials from both the companies. The first term payment for NPIL is to be delivered by the successful completion of Phase 1 studies, according to the agreement.

Commenting on the collaboration agreement, Dr Swati Piramal, director - Strategic Alliances and Communications, of the company said, "We are delighted to be working with Lilly, which over a hundred years has been discovering new medicines that have had a huge impact on human health. This will be a unique partnership where we will collaborate in the development of new drug candidates and help reduce the burden of disease for patients worldwide."