After being sued by Schering, Orchid Pharma inks $100 million Merck Drug Development Deal

Longer-term readers will recall that Schering-Plough has sued Orchid, and several other would-be generic manufacturers (back in 2007), in what looks to be a largely vain attempt to delay the U.S. availability of generic versions of Schering's Clarinex Redi-Tabs (composed of the chemical compound descloratadine, at right). Clarinex was, until recently, a $700 million per year franchise for Schering. Orchid, an Indian company, is poised to lauch an "at risk" generic version very shortly -- perhaps by year-end 2008, or early in 2009 -- and thus has the most skin in that patent lawsuit game.

Now, thanks to the keen eyes of Ed Silverman (H/T) -- we learn that Schering's 50 - 50 partner in the cholesterol joint venture, Merck, has inked a deal with an Orchid subsidiary to spend $100 million in pursuit of new anti-infection compounds, among other classes of drugs. Quoth the article, out of India, that Ed links:

. . . .Orchid Chemcials and Pharmaceuticals today said that it has entered into an arrangement with US drug maker Merck & Co Inc for discovery and development of novel anti-infective drugs which holds a potential revenue stream of over $100 million.

While the deal has been signed by the two parties with an undisclosed upfront payment from Merck to Orchid the flow of money to Orchid would depend on milestones achieved over the next five years, said K Ragavendra Rao, managing director of Orchid Chemicals.

The arrangement is such that at the end of the drug discovery cycle, Orchid will hold the global patent for the molecules with an exclusive arrangement with Merck for licencing for commercialisation. Orchid expects to manufacture the drugs while Merck will market it across the world. The potential market for a the drugs yet to be discovered is estimated at $1 billion annually.

Orchid Chemicals’ fully owned drug discovery subsidiary Orchid Research Laboratories Ltd (OPLL) will be undertaking the research and development of new drug(s) in the anti-infective therapeutic area [and anti-inflamatory area]. Orchid Chemcials’ chief scientific officer, B Gopalan will be heading this initiative. Gopalan, who specializes in new drug discovery, joined Orchid Chemicals six months back after three decades of experience in various drug companies includes Boots and Glenmark. . . .

Does this presage an unwinding of the much-larger so-called Cholesterol Franchise Joint Venture Governance Agreements, to be announced on the third quarter conference calls of each company -- on October 21, and 22, 2008? I guess we shall have to wait -- and see.