Ranbaxy & Merck Sign Anti-infective Drug Discovery and Development Agreement

Ranbaxy & Merck Sign Anti-infective Drug Discovery and Development Agreement

GURGAON, India, May 12, 2008 - Ranbaxy Laboratories Ltd. (Ranbaxy) and Merck & Co., Inc. (Merck) announced today that they have signed a strategic Product Development Agreement (the “Agreement”) providing for a drug discovery and clinical development collaboration for new products, in the anti-infective field.

Ranbaxy and Merck will work together to develop clinically validated anti-bacterial and anti-fungal drug candidates. Ranbaxy will carry-out drug discovery and clinical development through Phase IIa clinical trials, with Merck conducting development and commercialization of drug candidates thereafter.

The Agreement provides that the collaboration will begin this year with an initial term of five years and can be extended mutually thereafter by the parties. Under the terms of the Agreement, Ranbaxy will be paid an undisclosed upfront sum, with the potential to receive payments totaling more than US$100 million associated with the achievement of various research, development and regulatory approval milestones for each target included in the collaboration. Ranbaxy is also eligible to receive significant royalties on worldwide net sales of any products commercialized under the Agreement.

Commenting on this agreement with Merck, Malvinder Mohan Singh, CEO and MD, Ranbaxy, said, “We believe that our philosophy of partnering with Big Pharma will continue to gather momentum as companies continue to recognize the strength and breadth of our R&D expertise and resources. This collaboration with Merck positions Ranbaxy to extend its capability set and move up the value chain for drug discovery and development.”

"Collaborations with external partners, wherever in the world, are an integral and essential part of Merck's long-term strategy to build and expand its pipeline," said Dr. Mervyn Turner, senior vice president of worldwide Licensing and external research at Merck. "By combining each other's strengths and resources both Merck and Ranbaxy are able to decrease development risk while sharing the potential reward."

Ranbaxy Laboratories Limited, India's largest pharmaceutical company, is an integrated, research based, international pharmaceutical company producing a wide range of quality, affordable generic medicines, trusted by healthcare professionals and patients across geographies. Ranbaxy’s continued focus on R&D has resulted in several approvals in developed markets and significant progress in New Drug Discovery Research. The Company’s foray into Novel Drug Delivery Systems has led to proprietary "platform technologies," resulting in a number of products under development. The Company is serving its customers in over 125 countries and has an expanding international portfolio of affiliates, joint ventures and alliances, ground operations in 49 countries and manufacturing operations in 11 countries.