Indian drugmaker Nicholas Piramal’s newly spun-off R&D unit has signed another deal with Eli Lilly, the second in just over a year, which will see the firms collaborate on the development of a range of drugs for a variety of diseases.

Specifically, the agreement between NPIL Research & Development (NRDL) and Lilly follows the framework established by an agreement signed in January 2007 and “continues the rationale of seeking to increase productivity in drug development by synergizing the unique strengths of both companies and equitably sharing risk and reward”, the firms claims. This second pact includes “an innovative structure that may improve the probability of success of the programme”, they say, as both NRDL and Lilly will independently carry out early clinical development of two different compounds directed against the same target.

Once the data from the proof-of-concept studies are evaluated, one or more of the drug candidates may be selected for further development. NRDL could receive up to $110 million in milestone payments, plus royalties from sales, and may also get marketing rights in certain regions with the successful launch of a drug.

Swati Piramal, director of strategic alliances and communications at Nicholas Piramal, said the firms’ first agreement is on track “and has seen benefits accruing to both partners in terms of cost, quality and time. These partnerships are a win-win for both companies”. Robert Armstrong, vice president of global external R&D at Lilly added that this additional collaboration “is a prime example of the innovative risk-sharing relationships that Lilly is building around the globe”.

The deal comes just a few months after Nicholas Piramal decided to spin off its research operations, a process which will be completed by April 2008. The new entity will be initially funded by the Indian drugmaker but later down the line, the firm has said that it will look at alternative sources of financing like private equity or even from existing shareholders. It will focus on four therapeutic areas – cancer, diabetes, inflammation and infectious diseases.