RANBAXY, GSK ENTER NEW R&D AGREEMENT

Indian drugmaker Ranbaxy Laboratories announced it has signed a new multiyear R&D agreement with GlaxoSmithKline (GSK) that modifies the terms of their existing alliance to provide Ranbaxy expanded drug-development responsibilities and further financial opportunities.

Under the original agreement, established in 2003, Ranbaxy conducted the optimization chemistry required to progress drug leads to the stage of candidate selection. Under the new agreement, Ranbaxy will advance leads beyond candidate selection to completion of clinical proof-of-concept trials. GSK will then conduct further clinical development for each program and take resulting products through the regulatory approval process to final commercialization.

Ranbaxy could receive more than $100 million in potential milestone payments and up to double-digit royalties on worldwide net sales. Ranbaxy will retain the right to co-commercialize the products in India. The new agreement will apply both to future drug discovery programs and to the two programs currently under way at Ranbaxy.

Ranbaxy's announcement comes days after GSK said it plans to file for a preliminary injunction against Ranbaxy that would block the generic firm from launching generic Valtrex in 500- and 1,000-mg tablets in the U.S. Ranbaxy won FDA approval to market generic Valtrex (valacyclovir hydrochloride) last week and, as the first generic drug firm to successfully challenge the Valtrex patent, it would enjoy 180 days of marketing exclusivity pending the outcome of the ongoing litigation.