Orchid bags more than $100 mn Merck deal

BUS10Business/BusinessOrchid bags more than $100 mn Merck dealChennai, Sep 29 IANSA wholly-owned subsidiary of Indian drug major Orchid Chemicals and Pharmaceuticals Ltd OCPL has bagged a more than $100 million deal with US drug giant Merck & Co, for drug discovery, development and commercialization, a top OCPL official said here Monday.The deal was signed between the OCPL subsidiary Orchid Research Laboratories Ltd and an affiliate of the $24.2 billion turnover US drug giant Merck called MSD Pharmaceuticals Pvt Ltd. OCPL is a city based Rs.12.40 billion turnover globally recognized, integrated pharmaceutical company with core competencies in the development and manufacture of Active Pharmaceutical Ingredients APIs and finished dosage forms as well as in drug discovery."Orchid Research will undertake anti-infective drug discovery and candidate developments through phase II a human clinical trials. Merck will conduct late-stage clinical development and commercialization once regulatory approval is granted," C.B. Rao, deputy managing director, Orchid Chemicals told reporters here Monday.According to him, Orchid Research will be paid an undisclosed upfront sum and payments on achieving milestones."The total receipts will be over $100 million during the development stage. In addition when the drug is developed and passes through clinical trials, Orchid Research will license Merck to manufacture and sell world-wide for which there will be additional payment," said K. Raghavendra Rao, managing director.Orchid Research will form a 20 member team for the Merck project.According to Raghavendra Rao, the research arm is not in a hurry to raise cash for operations."The parent company will infuse necessary money. We will look at selling minority stakes to others a year later. With sufficient successful projects we can get better valuation," he added.He is confident that the $18 million foreign currency convertible bonds FCCB that would mature in 2010 would be converted into equity rather than being redeemed."The conversion price is Rs.240. The difference between the current market price of our scrip around Rs.217 and the conversion price will be bridged," he said.He said Indian drug major Ranbaxy Ltd. has not approached Orchid Chemicals for using the latter's facility for production. It may be noted one of Ranbaxy's arms holds 13.3 per cent stake in Orchid Chemcals.--Indo-Asian News Servicevj/arj/dg407 Words29091706