India’s Dr Reddy’s Laboratories Ltd. (RDY) on Wednesday announced a partnership with Japan’s Fujifilm Corp. and Global Response Aid (GRA) to develop and sell the anti-flu drug Avigan for the potential treatment of COVID-19.
Under the terms of the agreement Dr. Reddy’s and GRA will have the exclusive rights to manufacture, sell and distribute Avigan tablets worldwide except for Japan, China and Russia. In addition, Dr. Reddy’s will be granted exclusive rights for developing, selling and distributing Avigan in India. In return, Fujifilm will receive an upfront license fee and royalties on sales from Dr. Reddy’s and GRA.
Fujifilm said it is currently conducting a clinical Avigan study targeting COVID-19 patients in Japan and the U.S., and seeks to increase the drug’s production by partnering with domestic and overseas companies. Dr. Reddy’s and GRA will launch the potential drug in the market following necessary approvals in the respective countries. Avigan is already approved as an influenza antiviral drug for sale in Japan.
In addition, Fujifilm will provide Dr. Reddy’s and GRA with available data on Avigan’s preclinical and clinical studies. Dr. Reddy’s and GRA said that they will use this data for clinical studies targeting COVID-19 in regions where infection has been spreading.
Fujifilm will also grant Dr. Reddy’s the right to use Avigan’s production patents. Dr Reddy’s added that it will utilize GRA’s global sales network to supply the manufactured drugs swiftly.
The partnership comes after Dr Reddy’s last month announced a non-exclusive licensing agreement to manufacture and sell Gilead Sciences Inc.’s (GILD) coronavirus drug candidate remdesivir. The agreement grants Dr. Reddy’s the right to register, manufacture and sell Gilead’s investigational drug remdesivir, a potential treatment for COVID-19, in 127 countries including India.
Shares in Dr Reddy’s have been on an impressive gaining path surging 53% since mid-March and analysts have a cautiously optimistic Moderate Buy consensus on the stock’s outlook. However, their $45 average price target suggests shares have gone far enough and are likely to decline 15% over the coming year. (See RDY stock analysis on TipRanks).
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