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Ms. Swati A. Piramal

Our Bureau

Mumbai, Feb. 15 NPIL Research and Development Ltd (NRDL), the demerged research entity of pharmaceutical company Nicholas Piramal India Ltd has signed a drug development agreement with Eli Lilly.

The deal envisages that NRDL will collaborate on development and, in certain regions, commercialise a select group of Lilly’s pre-clinical drug candidates that span multiple therapeutic areas.

NRDL’s compensation, based on a pre-agreed formula, could total up to $110 million in call-back payments and milestones, plus royalties on sales, an NPIL note said. No timeline was, however, provided. NPIL had forged a similar deal with Lilly earlier last year, for the development of a candidate to treat metabolic disorders.

And here too NPIL was to get payments up to $ 100 million, including milestone and call-back payments. No milestones have come into NPIL’s kitty yet from this deal, a company official said.

Later in 2007, NPIL signed another drug-development deal with Merck & Co Inc to discover and develop cancer drugs for two targets selected and provided by Merck. This made NPIL eligible for milestone payments of $175 million (about Rs 688 crore) per target on completing the second phase of clinical trials, company officials had then said.

But the recent second agreement includes an innovative structure, the note said. Both companies will independently carry out early clinical development of two different candidate compounds directed against the same target. Subsequently, data from the proof-of-concept studies will be evaluated and one or more of the drug candidates may be selected for further development.

Dr Swati Piramal, NPIL’s Director (Strategic Alliances), said in a statement that the company was strengthening its research collaboration with Eli Lilly, as the first agreement is on track and has seen benefits accruing to both partners in terms of cost, quality and time.

But NPIL shares were down close to 13 per cent, at Rs 288.25 on the Bombay Stock Exchange. According to pharma-industry watchers, the fall reflected investor sentiment, with research effectively moving out of the parent company. NPIL had in September last year decided to hive off its new chemical entity research division into a separate company. The company had fixed February 22 as the record date to determine the entitlement of equity shareholders of NPIL to receive shares of NRDL, in the ration of 1:10 or one share of Rs 10 of NRDL for every 10 shares of Rs 2 held in NPIL as on the record date.

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NPIL Research enters drug development pact with Eli Lilly

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