Merck Will Outsource Some Drug Research To India

Tata Group's Advinus will get up to $74.5 million for every Merck project.

MUMBAI, India (AP) – Merck & Co., the U.S. pharmaceutical company, has agreed to hire India's Advinus Therapeutics to conduct research and preclinical trials on some drugs used to treat metabolic disorders.

The move marks the first time New Jersey-based Merck, which does not have any manufacturing or research centers in India, has hired an Indian company to conduct drug research.

Advinus, which is owned by the Tata Group, will receive up to $74.5 million for every project it gets from Merck.

Under the deal, Merck and Advinus will start their collaboration with two projects, said Rashmi Barbhaiya, managing director of Advinus.

Both projects relate to research and development of drugs that could be used in the treatment of metabolic disorders such as diabetes, obesity and hypertension.

Advinus will do research and preclinical trials on the drugs ''with Merck retaining the right to advance the most promising of these candidates into late stage clinical trials'' and commercial development, Barbhaiya said.

Advinus will also be eligible for royalties on sales if any of the drugs developed go on the market.

The announcement comes at a time when western pharmaceutical companies are increasingly shifting drug research and clinical trials to India to cut costs. The country's heterogeneous population and new patent laws have added to the trend.

Advinus was set up 18 months ago by the Tata Group as part of its effort to tap new business. It has two research centers, one in western India and the other in the southern city of Bangalore.