Hyderabad-based Dr Reddy’s Labs (DRL) has tied up with biotechnology firm Transgene Biotek for

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producing a drug named Orlistat, which is used in the treatment of obesity.

Transgene would out-license the technology to manufacture the drug to DRL. “Under the terms of the agreement, which is effective immediately, DRL will gain worldwide rights to a unique technology for the manufacture and commercialization of Orlistat API which was developed exclusively by Transgene,” Transgene said in a filing with stock exchanges.

The company would receive an upfront payment, additional payments for certain commercial milestones, and royalties on the sale of Orlistat worldwide.

“It is the most studied weight loss medicine in the world, with more than 100 clinical studies, involving more than 30 thousand patients,” the company adds.

Transgene has, in the past, out-licensed its recombinant Hepatitis B Vaccine technology to Serum Institute of India. The company’s alliance with DRL, which is the second largest drug maker in the country, combines Transgene’s technology with DRL’s manufacturing skills, and extensive global sales and marketing capabilities, Transgene said.