Merck Signs $100M Development Deal with Ranbaxy

Merck signed a deal on Monday with Indian generics giant Ranbaxy to codevelop a new line of anti-infectives. As part of the agreement, Ranbaxy stands to receive more than $100 million for each drug that passes a certain milestone. That's on top of an undisclosed upfront payment.

The deal is set to help Merck bolster its pipeline in anti-infectives and anti-fungals and to help Ranbaxy bolster its reputation outside the generics-only category.

Although Ranbaxy could not be reached for comment on this story, a representative spoke to Pharm Exec a few months ago about its plans for growth. "[Ranbaxy] is evolving into an R&D company, but will also maintain generics. We are looking at both biotech and biogenerics, and have eight new molecules in the pipeline," said Charles Caprariello, vice president of corporate communications and government affairs. "[Recent] deals with GSK and Bayer will flush out further compounds. This issue of cooperating and competing is one that we will see more of—it is not going away."This is Merck's first alliance with Ranbaxy, but it isn't the drug giant's first foray into India. For those keeping score, the company secured similar discovery collaborations with Nicholas Piramal for cancer meds.

"Ranbaxy is looking to expand its drug-discovery capabilities, and Merck's had a longstanding strategy of leveraging the best science to complement its internal R&D," Ian McConnell, a spokesperson for Merck, told Pharm Exec on Monday. "This collaboration is a great opportunity to advance our pipeline by gaining access to tap into Ranbaxy's growing R&D expertise."

McConnell said that Merck already has some anti-infective drugs in the works but wouldn't elaborate on whether they would be shifted to Ranbaxy. Merck also owns Cancidas, an injectible antifungal used to treat aspergillus and candida.

"This is not an outsourcing deal," McConnell said. "What you do here is mitigate the risk [by partnering] and still ensure the prospect of getting the upside. Fundamentally, we go where the research is."