Chennai, April 18 (IANS) City-based Orchid Chemicals and Pharmaceuticals Ltd. has transferred the intellectual property (IP) related to an antibiotic discovery programme to Europe-based Allecra Therapeutics, a top company official said Thursday.
"We have completed the in-house animal trials on the proposed drug. We have transferred the IP to Allecra in a cash-cum-stake deal. We will hold around 20 percent stake in Allecra and receive around $1 million in cash soon," K. Raghavendra Rao, chairman and managing director of Orchid, told IANS.
Under the terms of the agreement, together with shareholding and cash payment, Orchid is eligible to receive further royalties and exit bonuses based on Allecra's progress.
Rao said Allecra would take necessary steps needed for the development of the new drug.
He said once the drug is ready for commercial production, Orchid would be preferred manufacturer.
"It is for Allecra to decide whether the drug will be launched by it or to licence it further. If Allecra does not take forward the drug discovery programme within a reasonable time, then the IP will come back to us," Rao added.
On the reason for Orchid transferring the IP, Rao said the company did not have deep pockets for the end-to-end new drug discovery process.
Allecra is a bio-pharmaceutical company in the area of development of novel antibiotics to combat multi-drug-resistant bacterial infections. Allecra's 15 million Series A financing round was co-led by Edmond de Rothschild Investment Partners and Forbion Capital Partners. EMBL Ventures also participated.
Bacterial resistance to current antibiotics is widespread and growing exponentially, leading to increased urgency to combat what has been called the epidemic of antibiotic-resistance, Orchid said in a statement here.
The company in a filing with the Bombay Stock Exchange (BSE) said its board has approved the extension of financial year 2012-13 by three more months as the business transfer agreement with Hospira has been extend till June 30, 2013.
Last August Orchid sold its penicillin, penem active pharmaceutical ingredients (API) business and the API facilities in Maharashtra alongwith the R&D facilities here for around $200 million to Hospira, a global leader in injectibles space.