Dr Reddy's Laboratories Limited and CHD Bioscience Inc, a privately-held biopharmaceutical company, announced on Thursday, a global licensing agreement for the clinical development and commercialisation of Dr Reddy's phase III clinical trial candidate, DFA-02. The drug candidate is used for the prevention of surgical site infections, following non-emergency, elective colorectal surgery. Phase II studies for DFA-02 have been successfully completed, and the product will be transitioning to pivotal Phase III registration studies, Dr Reddy's said in a statement. Under the terms of the agreement, Dr Reddy's would receive equity in Colorado-based CHD valued at $30 million upon an IPO of CHD or a minimum of $30 million in cash within 18 months of execution of the agreement. Dr Reddy's will also receive additional milestone payments of $40 million upon US Food and Drug Administration (USFDA) approval.
In addition, CHD will pay Dr Reddy's double-digit royalties on sales and commercial milestones.Anil Namboodiripad, senior vice president, Proprietary Products, and President, Promius Pharma, a wholly owned subsidiary of Dr Reddy's, said, "We are pleased to announce our partnership with CHD Bioscience. We feel that the needs of patients undergoing surgery will be well served by CHD, given their strong focus on offering targeted solutions for surgical site infections. DFA-02 has demonstrated promising results in clinical studies, and we are excited about the prospect of CHD undertaking further development and commercialisation of the asset." DFA-02, Gentamicin and Vancomycin Sterile Gel for surgical wound administration, is a novel bioresorbable extended release phospholipid-based gel intended to be applied to the surgical incision at the time of closure to potentially reduce the risk of surgical site infection, according to the company. "This transaction advances our strategy to become a world leader in the targeted prevention and treatment of drug-resistant infections. Building on our development work with VERIOX in orthopaedics and wound care, DFA-02 potentially extends our ability to help patients in the surgical setting who may be at high risk of infections without exposing the patient to large amounts of systemic antibiotics," said Michael Handley, director and chief executive officer of CHD Bioscience. "DFA-02 fits our strategy of targeting the site of the infection rather than the whole patient, and we are pleased to be continuing the great work that Dr Reddy's has started."