New Delhi: Pharmaceutical firm Cipla Ltd has entered into an agreement with Biopharm SPA to form a joint venture company in Algeria to manufacture and market respiratory products, the company said Friday.

In a BSE filing, Cipla said: "A binding term sheet has been entered into with the company's existing partner, Biopharm SPA, for establishing a joint venture (JV) company in Algeria."

"The JV company will manufacture and market respiratory products facilitating Cipla's front-end presence in Algeria," it added.

As per the agreement, Cipla's wholly owned subsidiary, Cipla (EU) Ltd, will hold a 40 percent stake in the JV company while the remainder will be held by a Biopharm-led Algerian consortium.

Cipla said the JV company is expected to make an investment of up to USD 15 million in the construction of a manufacturing facility.

"Cipla (EU) Ltd's initial investment in cash in the JV company is expected to be USD 6 million," the company said.

The transaction is subject to execution of definitive agreement and applicable approvals, the company added.

Shares of Cipla were trading at Rs 669 apiece, up 1.06 percent from its previous close on the BSE.--PTI