Mumbai: Nicholas Piramal (NPIL), on Monday, has signed a research agreement with US-based pharmaceutical major Merck & Co to perform early detection and evolution of two new drugs for cancer treatment.

Under the agreement, Nicholas has got official approval to carry out the drug discovery programme up to human clinic trials.

The New Jersey-based company will have the alternative to conduct the large-scale third stage human experiments and promote them to the market.

Ajay Piramal, Nicholas Piramal Chairman said, “This collaboration also will go under the new research entity spun off from NPIL as Nicholas Piramal Research Company.”

Merck will give $175 million per targeted drug to NPIL, on successful completion of the second phase clinical examinations.

It would also be entitled to royalty payments on the sales of these drugs.

Merv Turner, the US company’s senior vice president for worldwide licensing and external research, told that Merck’s binding with NPIL offers Merck a chance to swell its opportunities.

“The cost of discovery and development is reaching a critically high stage. It is, therefore, important not just for pharma companies but also for patients to find ways to bring that number down,” Mr. Turner also said.

Globally, Merck has entered into 140 tie-ups (such as Nicholas Piramal) of different kinds in the last three years.

“We are increasingly looking at India and China given the expanded capabilities in the region and to complement our internal research,” Mr Turner said.