Dr. Reddy’s out licenses infection drug to CHD Bioscience
Dr. Reddy’s would receive equity in CHD Bioscience valued at $30 million upon an IPO of the latter or a minimum of $30 million in cash within 18 months of execution of the agreement
Mumbai: Dr. Reddy’s Laboratories Ltd has licensed out its molecule, DFA-02, intended for prevention of surgical site infections to US-based CHD Bioscience Inc, the Hyderabad-based drug maker said in a press release on Thursday.
DFA-02 is a novel bioresorbable (biodegradable, or naturally-dissolving) extended-release phospholipid-based gel of gentamicin and vancomycin, intended to be applied within the surgical incision at the time of closure to potentially reduce the risk of surgical site infection. Phase-II clinical studies for the molecule have been successfully completed, and it will now enter into pivotal Phase III registration studies.
The companies have signed a global licensing agreement, under which, CHD Bioscience will be responsible for phase-III clinical trial, regulatory filings and commercialization of the molecule and Dr. Reddy’s will receive certain payments from the US firm.
Dr. Reddy’s would receive equity in CHD Bioscience valued at $30 million upon an initial public offering of the latter or a minimum of $30 million in cash within 18 months of execution of the agreement. The Indian pharmaceutical major will also receive milestone payment of $40 million once the product gets approval from the US Food and Drug Administration (FDA) as well as double-digit royalties on sales and commercial milestones.
“We feel that the needs of patients undergoing surgery will be well served by CHD, given their strong focus on offering targeted solutions for surgical site infections. DFA-02 has demonstrated promising results in clinical studies, and we are excited about the prospect of CHD undertaking further development and commercialization of the asset,” said Anil Namboodiripad, senior vice president, proprietary products, and president, Promius Pharma, a wholly-owned subsidiary of Dr. Reddy’s.
Shares of Dr. Reddy’s ended down 3.3% at Rs2,621.45 on the BSE, while the benchmark Sensex index closed flat at 32,383.30 points.
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