Merck turns to Ranbaxy for $100M R&D effort

India's Ranbaxy has flexed its research muscles once again, this time signing a five-year pact with Merck to develop new anti-infectives. Ranbaxy, which received an undisclosed upfront payment, says it stands to earn more than $100 million from each new therapy developed in the five-year collaboration, which follows a similar deal it signed with GlaxoSmithKline. Ranbaxy researchers will advance therapies into Phase II, at which point Merck will take over the development program. Ranbaxy shares jumped more than five percent on the news.

This new deal signals an ongoing effort by big pharma companies to reduce their expenses by shifting development programs into China and India. Eli Lilly has also aggressively pursued an Asian strategy for its R&D work as well.

"We are going to start work on a minimum of two (drug candidates), and we can then add to it later," Ranbaxy CEO Malvinder Mohan Singh told Dow Jones.

- see this release on the deal
- read the report from Dow Jones

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