Ranbaxy closes $65 million Bayer deal

09 September 1999

Ranbaxy Laboratories and German pharmaceuticals major Bayer AG have signed a 20-year agreement for development and marketing of the Indian company's oral variant of the anti-infective drug ciprofloxacin. The deal will be effective from the date of filing of the patent.

The available dosage regimen for ciprofloxacin, a Bayer discovery, is 'BID' or twice-a-day for a 500 mg tablet, while Ranbaxy has developed an oral once-a-day dosage form that is expected to increase patient compliance and convenience.

The Indian company is transferring the product development and global marketing rights to the German giant for a fee of over $65 million dollars, of which, it has already received an upfront $10 million. The remaining amount will be received over a span of two years as the novel drug delivery system clears various development stages until it reaches commecialisation.

Ranbaxy will also receive royalties on sales up to 10 per cent, with the exact percentage varying with the patent and competitive situation in the individual countries in which the ciprofloxacin variant is marketed. If, for example, a rival product with similar features emerges in a particular market, then royalty percentage for Ranbaxy will be less than 10 per cent.

Though Bayer will undertake marketing activities in most countries, Ranbaxy has reserved marketing rights for India and the CIS countries. The agreement also envisages joint marketing efforts in some countries.

Bayer's effort will be to replace its existing product with the once-a-day dosage variant. This variant will give Bayer an edge in the market for this drug, which is going off-patent in September 2001 in Japan, and October 2002 in the US. In major European countries like France, UK, and Germany the patent for ciprofloxacin expires in August 2001.