Orchid Chemicals & Pharmaceuticals, the Chennai-based pharma major has signed a marketing agreement with Par Pharmaceuticals Inc.,the principal subsidiary of Pharmaceutical Resources, Inc. for marketing of its oral cephalosporin formulations in the US generics market. The agreement covers seven key oral products in multiple dosage forms and dosage strengths. Two of the seven products are premium, high-value products, which are to go off-patent.

Under the agreement Par would source the products exclusively from Orchid for distribution in the US. The ANDAs will be owned by Orchid. Par will also provide regulatory support as required.

Orchid would manufacture the generic cephalosporin formulation products from its state-of-the-art Irungattukottai Plant near Chennai, India. The products would be supplied exclusively by Orchid to Par under a profit share arrangement. In addition, Par would be paying Orchid towards its R&D and ANDA costs over a period of time until such costs are reimbursed in respect of each Product.

Commenting on the agreement, Orchid's managing director, K Raghavendra Rao stated that this marketing alliance for oral cephalosporin products is a landmark development in Orchid's strategy to enter the highly attractive US markets. The combination of Orchid's development, manufacturing and regulatory strengths with Par's marketing capabilities would be a win-win combination, he stated.

Scott Tarriff, president and chief executive officer, Pharmaceutical Resources, Inc., the holding company of Par, stated that Par's rapid growth has placed it among the half-dozen largest generic companies in the U.S. This strategic alliance with Orchid would expand Par's product portfolio and contribute to our continued growth, he stated. Orchid's broad line of cephalosporins, technological strengths, and state-of-the-art manufacturing facilities make it an ideal partner for Par.

"We are pleased to have the opportunity to collaborate with Orchid. This alliance will provide Par entry into a therapeutic category where we do not currently have a presence. Orchid represents an ideal partner to help us broaden our product line. They are a fully integrated pharmaceutical company, with capabilities in areas ranging from active pharmaceutical ingredients to final dosage forms, Tarriff added.

It may be recalled that Orchid has already entered into an agreement with Apotex Corp. for marketing its sterile antibiotic formulations in the US. Together with the sterile products, the current retail market for the formulations covered by both the Apotex and Par alliances is estimated at over USD 3 billion. With several key products slated to go off-patent between 2005 and 2008, Orchid anticipates a quantum jump in sales and profitability from 2005 onwards.