Dr Reddy's Laboratories has inked a global licensing pact with CHD Bioscience for commercialisation of a molecule which when developed would be used to prevent surgical site infections.
Phase II studies for DFA-02 have been successfully completed and the product will now be transitioning to Phase III registration studies.
Under the terms of the agreement, Dr Reddy's will receive equity in CHD valued at USD 30 million upon an IPO of CHD or a minimum of USD 30 million in cash within 18 months of execution of the agreement, the Hyderabad-based firm said in a statement.
Dr Reddy's will also receive additional milestone payments of USD 40 million upon USFDA approval.
In addition, CHD will pay Indian drug major double-digit royalties on sales and commercial milestones.
"DFA-02 has demonstrated promising results in clinical studies, and we are excited about the prospect of CHD undertaking further development and commercialisation of the asset," Anil Namboodiripad, Senior Vice-President, Proprietary Products, and President, Promius Pharma, a wholly-owned subsidiary of Dr Reddy's, said.
CHD Bioscience Director and CEO Michael Handley said the transaction advances company's strategy to become a world leader in the targeted prevention and treatment of drug- resistant infections.
"DFA-02 potentially extends our ability to help patients in the surgical setting who may be at high risk of infections without exposing the patient to large amounts of systemic antibiotics," he added.
CHD Bioscience Inc is a privately-held biopharmaceutical company.
Dr Reddy's stock today ended 3.29 per cent down at Rs 2,621.45 on the BSE today.
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