Ranbaxy Laboratories (Ranbaxy) announced today that its new drug discovery research (NDDR) initiative with GlaxoSmithKline Plc (GSK) has decided to pursue further research on a compound for respiratory inflammation. A steering committee, consisting of senior members from GSK's center of excellence for external drug discovery (CEEDD) and Ranbaxy approved the selection process.The GSK-Ranbaxy R&D collaboration was initiated in 2003 to develop new drugs, and the scope of research and terms and conditions between the partners were revised in February 2007. As per the multi-year agreement, Ranbaxy will be able to progress and further profile the drug candidate through pre-clinical studies needed to support an investigational new drug (IND) application. Ranbaxy will also be responsible for conducting Phase I and Phase II clinical studies through to Proof of Concept. GSK will then have the option to conduct further development through to final commercialisation. Market sources estimate prescription respiratory drugs market to grow exponentially in the coming years, with 2010 sales expected to surpass $44 billion. Dr. Pradip Bhatnagar, senior vice president, new drug discovery, Ranbaxy, said: "A dynamic collaboration between GSK's CEEDD and Ranbaxy has been the key for this success. The achievement also reflects the discovery capabilities of Ranbaxy's research team and the growing partnership between the two organizations in the area of NCE research."The new milestone payments and royalties, as enumerated in the revised agreement, will apply to this current development program and to future discovery programs. The Ranbaxy-GSK alliance envisages strong research workflow to emanate from a wide range of therapeutic areas of interest to Ranbaxy and GSK, including anti-infectives, metabolic disorders, respiratory and oncology. Ranbaxy could receive over $100 million in potential milestone payments for a product developed by Ranbaxy and subsequently launched by GSK in multiple indications and up to double digit royalties on worldwide net sales.