Ranbaxy Laboratories Ltd. announced that the company had signed a new multi-year research and development agreement with the GlaxoSmithKline (GSK), expanding the strategic alliance between the companies. As per the terms and conditions of the new agreement Ranbaxy will enjoy expanded drug-development responsibilities and financial opportunities.
The company revealed that the new agreement would enable it to advance leads to completion of clinical proof of concept. Under the original agreement that was established in 2003, Ranbaxy's responsibility was limited to conducting of optimisation chemistry required to progress drug leads to the stage of candidate selection.
Ranbaxy further said after the completion of clinical proof of concept, GlaxoSmithKline (GSK) will handle the further process, including clinical development for each programme, regulatory approval proceedings and commercialisation activities.
Under the modified agreement, Ranbaxy will receive over $100 million in potential milestone payments for a product. At the same time, Ranbaxy will also retain the right to co-commercialise the products in India.
The new milestones and royalties will apply both to future drug discovery programmes and to the two programs progressing at the company that were commenced under the original agreement with GSK.
This expanded alliance envisages potential work in a wide range of therapeutics of interest to GSK, including anti-infectives and metabolic, respiratory and oncology products. While recognizing the performance and clinical-development capabilities of Ranbaxy, it also conforms to the remit of GSK's Centre of Excellence for External Drug Discovery (CEEDD).
The CEEDD, created after the initial agreement between Ranbaxy and GSK, is a small, dedicated team that contributes to the GSK pipeline solely through the efforts of its external alliances. The CEEDD effectively 'virtualises' a portion of the GSK pipeline; namely, from target to clinical proof of concept, by forming multiple risk-sharing/reward-sharing alliances.
Welcoming the expanded agreement with GSK, Malvinder Mohan Singh, CEO and MD, Ranbaxy, said, "This is a great moment for our scientists. The agreement presents a unique opportunity to demonstrate the India centric advantages of high quality research and development to deliver value at the cutting edge. I believe the arrangement with GSK is path-breaking and acknowledges the higher level of R&D maturity prevalent today in our state-of-the art labs in India."
Endorsing the development, Maxine Gowen, senior vice president, Centre of Excellence for External Drug Discovery (CEEDD), GSK, said, "This expanded agreement builds on the success of the existing collaboration and furthers our CEEDD strategy of building a strong pipeline through to clinical Proof of Concept via external R&D collaborations."