Dr Reddy's step-down subsidiary collaborates with Olema Pharmaceuticals

10 Jun 2022 , 10:26 AM

Dr Reddy’s Laboratories Limited announced that its wholly-owned subsidiary Aurigene Discovery Technologies Limited (Aurigene) has entered into an exclusive global license agreement to research, develop and commercialize novel small molecule inhibitors of an undisclosed oncology target, with Olema Pharmaceuticals Limited.

As per the terms of the agreement, Olema will make an upfront licensing payment of US $8 million in exchange for rights to a pre-existing Aurigene program. Aurigene seeks to receive up to US $60 million in potential clinical development and regulatory milestones. Further, it is also eligible to receive up to US $370 million in potential commercial milestones, and royalties ranging from the mid-single digits to the low double digits on the basis of annual net sales.

During the research term, Olema will provide funding to Aurigene for the smooth functioning of ongoing discovery efforts. It has sufficient cash flows to fund Aurigene’s planned research and development operations into 2024.

“Company’s agreement with Olema further validates Aurigene’s extensive expertise in the discovery and preclinical development of effective cancer therapeutics,” commented Murali Ramachandra, Ph.D., Chief Executive Officer of Aurigene.

Olema and Aurigene will be jointly responsible to direct further preclinical work. If successful, Olema will act as a leader in clinical development as well as regulatory and commercial activities.

Dr Reddys Laboratories is currently trading at Rs4,336.35 up by Rs10.25 or 0.24% from its previous closing of Rs4,326.10 on the BSE. The scrip opened at Rs4,326 and has touched intraday high and low of Rs4,344 and Rs4,283.80 respectively.