Hyderabad: Dr. Reddy’s Laboratories Ltd, India’s second-largest drug maker, has tied up with Australian pharmaceutical company Hatchtech Pty Ltd to commercialise head lice topical lotion Xeglyze in a deal valued at around $198 million (AUD$279 million) based on regulatory and sales milestones.
Dr. Reddy’s said it will pay Hatchtech an upfront amount of $10 million, up to $50 million based on pre-commercialisation milestones, and an undisclosed amount based on post-commercialisation milestones linked to the achievement of annual net sales targets.
Hatchtech chief executive Hugh Alsop, in an interview to Fairfax Media, said the total deal was worth up to AUD$279 million.
The exclusive rights for this product are applicable for the territories of the US, Canada, India, Russia and the Commonwealth of Independent States, Australia, New Zealand and Venezuela, Dr. Reddy’s said in a statement on Monday.
Hatchtech on Monday announced it will be filing its new drug application for Xeglyze with the US Food and Drug Administration.
If approved, the product will be marketed in the US by Promius Pharma, a wholly-owned specialty company of Dr. Reddy’s.
In September 2014, Hatchtech announced positive results from its two pivotal phase-3 clinical studies evaluating Xeglyze lotion as a potential treatment for head lice infestation.
The studies involved 704 people, across 14 clinical trial sites in the US and resulted in 81.5% success rate, following the observation period of 14 days after a single 10-minute application.
Hatchtech’s Xeglyze lotion is a prescription treatment that kills the eggs as well as the lice. The head lice treatment is worth approximately 100 million a year in US.
Dr.Reddy’s, as part of its strategy to boost sales through low competition innovative products, is entering into commercialisation deals with other pharmaceutical companies as well.
Hatchtech is fifth such deal this year. Earlier, it tied up with US-PanTheryx, Inc., US-based Amgen Inc. Spain-based Ferrer Internacional S.A. and AstraZenaca Plc to launch their products in therapeutic areas such as cardiac, diabetes, oncology and nutrition.
Shares of Dr.Reddy’s gained 0.04% and were trading at Rs.4,006.75 at 10.57am on the BSE, while the benchmark Sensex index was trading at 25,722.97 points, up 0.44%.
Hatchtech was founded in 2001 by Dr Vern Bowles, who is the company’s chief science officer and deputy director of the centre for animal biotechnology at the University of Melbourne.
The company was seed funded by Uniseed, the venture capital arm of the Universities of Melbourne, Queensland and New South Wales. Other investors in Hatchtech include QIC and venture capital firms OneVentures, GBS Ventures and Blue Sky.
