Orchid invests in new European pharma
Indian pharmaceutical company Orchid Chemicals and Pharmaceuticals has entered into a partnership with new European biopharmaceutical company Allecra Therapeutics.
As part of the transaction, Orchid will assign its IP related to developing antibiotics that combat multi-drug resistant infections to Allecra.
Allecra will continue Orchid’s pre-clinical trials with the IP as part of its antibiotic discovery programme.
Orchid will be paid an upfront sum and will receive further royalties and bonuses dependent on Allecra’s success.
Orchid chairman and managing director K Raghavendra Rao said: “We have always believed in building collaborative business models to achieving our vision. This strategic partnership with Allecra is yet another demonstration of how we can create value by harnessing the relative strengths of each company.”
Nicholas Benedict, chief executive of Allecra, said: “To combat the increasing threat of bacterial resistance the medical community is trying to conserve the use of currently available antibiotics. At the same time, the biopharmaceutical industry is working to find new antibiotics.
“These objectives are complimentary activities in the increasingly urgent battle against bacterial resistance. Allecra has been formed in order to find new cures for some of the most widespread and hardest to treat resistant infections.”
Dr Mohan Dewan, principal at R K Dewan & Co in Mumbai, described the deal as a good investment on both sides, and said that established pharmaceutical companies in India will often invest in smaller companies as a method of growth.
“Either you grow internally, or you grow externally by acquiring,” he said. He added that any patents that Allecra may now create will be controlled by Orchid.
Pharmaceutical companies will often invest their surplus funds into brands or other company divisions, he said.
In August 2012 Orchid entered into a business transfer agreement with Hospira for the “sale and transfer of its Penicillin and Penem API business and API facility, along with an associated process research and development infrastructure in a deal worth approximately $200 million.
