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Nicholas Piramal India Ltd (NPIL) has signed a memorandum of understanding with Eli Lilly covering the manufacture and marketing of four brands of the US pharma multinational here. The products are anti-infectives Lovir, Zidime, Mucokef and Keroxime.

Sources close to the deal said NPIL and Eli Lilly had signed the MoU last month.

The companies are working out an arrangement that will give the Indian pharmaceuticals major exclusive rights to manufacture and market these brands in the country. However, ownership will continue to remain with Lilly which sells these brands globally.

The agreement will involve a payment to be made to the US firm for the products vended by NPIL. That talks had been on between the two companies had been reported earlier by Business Standard.

 

The four brands are currently being marketed by Eli Lilly Ranbaxy, a joint venture between Eli Lilly and Ranbaxy Laboratories. When contacted Christopher Shaw, managing director, Eli Lilly Ranbaxy, declined to comment.

The turnover of these anti-infective brands is in the vicinity of Rs 7-8 crore and covers molecules such as acyclovir, cephalexin, and ceftazidime.

The manufacturing will be undertaken at NPIL's plant at Pithampur and marketed by its sales force. Currently, some part of the manufacturing is also being sourced from Chennai-based Orchid Chemicals and Pharmaceuticals.

"Eli Lilly has to now get the brands out of the existing joint venture with Ranbaxy. Meanwhile, NPIL and Lilly are working out the nature of the deal etc. It will involve a certain payment from NPIL to Eli Lilly but the amount has not been finalised and the price multiple has not been decided," sources said.

For NPIL, the deal is another in the long list of strategic alliances, joint ventures and marketing tie-ups the company has with various multinationals. The anti-infectives segment has been identified as a growth area and the Lilly brands are expected to help achieve growth targets.

According to sources in Ranbaxy, the joint venture does not wish to burden its sales force with too many brands, which is why these four products whose contribution to sales is "marginal" are being off-loaded.

However, NPIL sources said Lilly was not impressed by the performance of these brands in the joint venture which is the reason behind the proposed shift. However, it is not clear whether Lilly will pay any compensation to the joint venture for moving out the products.