PHARMA major Lupin on Monday told the BSE that it has entered into a

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research and development pact with US-based Medicis for development of multiple therapeutic compounds. Separately, Lupin said it has settled all patent litigation over Solodyn tablets with Medicis Pharmaceutical Corp.

Nilesh Gupta, group president and executive director at Lupin said, “This further substantiates our drug delivery capabilities in building and developing proprietary products.“

Under the terms of the agreement, Lupin will receive a $20 million (Rs 88.31 crore) upfront payment from Medicis and will be primarily responsible for formulating certain novel therapeutic products for Medicis utilising Lupin's formulation technologies. Sidhant Khandekar, analyst at ICICI Direct said, “It's a good deal and the impact on the stock will be positive.“

Medicis will have global exclusive rights (excluding India) for the products developed under the agreement, said the announcement.

Lupin will be eligible for future research, development, regulatory and other milestones of up to $38 million (Rs 167.78 crore), as well as a single digit royalty rate on sales by Medicis.

Medicis will be responsible for further development and commercialisation of the licensed products, said the announcement.

Lupin is entitled to sell its generic versions of Solodyn (antibiotic used for treating acne), in 45 mg, 90 mg, and 135 mg strengths under a licence from Medicis commencing November 2011, or earlier under certain conditions, a company statement said. Punit Adhia, research analyst at Mape Securities said, “Lupin is the sixth player to have settled the litigation. This would be a $15 million (Rs 66.23 crore) opportunity for Lupin.“

Shares of Lupin closed on Monday at Rs 457.25 on the Bombay Stock Exchange, up 1.14 per cent from its previous close.