Orchid in R&D pact with Pfizer

Orchid Chemicals and Pharmaceuticals has signed a Master Research and Development agreement with Pfizer International. As part of the deal, Orchid will provide Pfizer's animal health business with research and development services.

An Orchid press release said the agreement has a life of seven years, after which it would come up for renewal.

According to C Bhaktavatsala Rao, deputy managing director of Orchid, the master agreement is an umbrella agreement of R&D cooperation between the companies. The basic principles that would govern the collaboration have been laid down in the agreement. Over and above that, the agreement has an built-in flexibility to add more projects and products, he added.

Though the agreement initially would cover animal health drugs, it has the flexibility to cover drugs for humans at a later date.

At the moment, the two sides are evaluating products and services that could be part of the agreement. Orchid's returns from the agreement would be linked to milestones cleared by each project.

Pfizer and other multinational pharmaceutical companies have begun to look at R&D collaborations in India on account of lower cost of work here.

It's been triggered by the expense incurred in developing a new drug. A new drug today costs around $1 billion to develop.

Rao said that for Orchid the most important part of the agreement was the endorsement by a multinational company of Pfizer's standing. In addition, the opportunity of long-term partnership was an important spin-off, he added.