Panacea Biotec gains 15% on strategic alliance with US firm

Moneycontrol Bureau

Shares of Panacea Biotec rallied nearly 15 percent intraday Friday on signing strategic alliance with the US-based pharmaceutical firm.

"Panacea Biotec has entered into collaboration with Rising Pharmaceuticals Inc, one of industry’s leading organizations involved in marketing and distribution of innovative branded and multi-source prescription and over-the-counter pharmaceutical products in USA," said the company in its filing to the exchange.

The collaboration established on December 17 for an oral controlled release product utilising Panacea's platform oral drug delivery technology, it added.

The dossier for the product is currently under review by Food and Drug Administration.

According to the signed agreement, Panacea will receive an upfront research fee on signing as well as a milestone payment on approval of the product by FDA.

"Upon commercialisation of the product (which has a market size of more than 300 million in the USA), both companies will share profits at a pre-agreed ratio," said Panacea.

Panacea will undertake product development and will manufacture & supply products while Rising Pharma will be responsible for sales and distribution of products in USA.

"This collaboration is an important addition to Panacea's proven track record of building strong and deeply intergrated strategic alliances that will accelerate the company's growth plans in the US," said Rajesh Jain, Joint Managing Director of the company.

In FY15, Panacea entered into multiple long term collaborations for North America and cumulatively these alliances translate to potential USD 13 million as research fee payments. "Out of which the company already received USD 2.5 million in Q1FY15 and USD 1 million is expected in Q3FY15," said the company.

Meanwhile, Panacea, on December 12, had entered into strategic alliance with Apotex, the largest Canadian-owned pharmaceutical company. The alliance was for research, development, license and supply of two drugs delivery based high barrier to entry generic products for US, Canada, Australia and New Zealand.

Panacea will undertake product development and will manufacture and supply the products to Apotex, while Apotex will be responsible for regulatory affairs, Hatch Waxman litigation and commercialisation activities in the territories.

At 11:16 hours IST, the stock was quoting at Rs 179.00, up Rs 19.10, or 11.94 percent amid high volumes on the BSE.