Orchid Chemicals & Pharmaceuticals Ltd (Orchid) and Merck & Co., Inc. (Merck owns an affiliate, MSD Pharmaceuticals Pvt. Ltd., a marketer and distributor of Merck pharmaceutical products in India) announced that they have established a strategic Research Collaboration and License Agreement (the “Agreement”) focused on the discovery, development and commercialization of novel agents for the treatment of bacterial and fungal infections.

Orchid Research Laboratories (the wholly-owned drug discovery subsidiary of Orchid) and Merck will work to identify and develop novel antibacterial and anti fungal compounds as clinically validated drug candidates. Orchid will undertake discovery and candidate development through Phase IIa human clinical trials. Merck will conduct late‐stage clinical development and commercialization if regulatory approval is granted.

Under the terms of the Agreement, Orchid will be paid an undisclosed upfront sum, and is eligible to receive payments totaling more than US$100 million associated with the achievement of various research and development milestones. The Agreement contemplates that Merck and Orchid will work on multiple targets and compounds, which will be evaluated against specific criteria for discovery and development. Orchid is also eligible to receive significant royalties on worldwide net sales of any products commercialized under the Agreement.

“We have established a world class infrastructure for discovery and development of new drug candidates," said Mr. K Raghavendra Rao, Managing Director, Orchid Chemicals & Pharmaceuticals Ltd., “We are extremely happy that Merck has chosen to collaborate with us to leverage our anti‐infectives discovery, development and manufacturing capabilities to bring new anti‐infective medicines to meet global healthcare needs.”

Orchid’s drug discovery efforts are conducted through its wholly-owned drug discovery subsidiary, Orchid Research Laboratories. Orchid is also an acknowledged world leader in development and manufacture of anti-infective products such as Cephalosporins, Penicillins and Carbapenems. Orchid’s facilities are US FDA and UK MHRA compliant and cater to a wide range of sterile and oral dosage forms as applicable, with end-to-end connectivity from the API stage. Orchid believes that it is uniquely positioned to support Merck in the anti-infectives drug discovery and development all the way up to commercialization of validated and approved compounds.

"Microbial infection and the increased incidence of drug resistant organisms represent a serious unmet medical need," said Dr. Mervyn Turner, Senior Vice President of Worldwide Licensing and External Research at Merck & Co., Inc., "Orchid has established impressive expertise and capabilities in anti‐infective drug discovery and development as well as manufacturing. This Agreement underscores Merck's strategy of leveraging the best external science and discovery to complement our strong internal R&D capabilities as well as our ongoing commitment to the development of novel antibiotics and antifungal agents."