Advinus Therapeutics, a Tata group promoted drug research firm and US-based pharma major Merck on Thursday announced that they have formed a drug discovery and clinical development collaboration in the area of metabolic disorders. The companies said that they would work together to develop clinically validated drug candidates for metabolic disorders, with Merck retaining the right to advance the most promising of these candidates into late-stage clinical trials. The deal is Merck's first research-based collaboration in the country.

Advinus will receive $150 million, including up-front and potential milestone payments, for two target programmes. The deal could be extended to add more programmes. Advinus would also be eligible for royalties on the sales of any products that result from the collaboration. "This agreement reflects India's emerging role in bringing innovative and life-saving drugs to market with speed and cost-effectiveness,' Advinus Therapeutics CEO Rashmi Barbhaiya said. Low production costs are attracting a host of drug firms to India, even as Indian firms seek acquisitions in the US and Europe for a bigger share of the generics market.