Lilly Eli Lilly has struck a drug discovery and research pact with India's Cadila Healthcare, the latest in a string of innovative R&D deals in the subcontinent.

Shares of Cadila Healthcare spiked 16 percent on the news that Lilly had agreed to pay the company up to $300 million in milestones for the discovery and successful advancement of cardiovascular drugs. As in similar deals, Lilly will pay the Indian company-which is part of the Zydus–for finding new drug candidates and taking them to mid-stage trials, at which point Lilly will have the option to step in and license the therapies.

"This is a positive development from the long-term perspective. Such a deal means that its multinational partner has faith and confidence in Cadila's drug discovery research operations," said Ranjit Kapadia, head of research for the brokerage firm Prabhudas Lilladher.

Cadila Healthcare is already engaged in partnerships with Karo Bio and Prolong Pharmaceuticals. And the drug development model appears to be catching on among U.S. pharma companies in need of promising new pipeline therapies.