Chennai-based Orchid Chemicals and Pharmaceuticals has entered into an arrangement with US drug maker Merck & Co. Inc. for discovery and development of novel anti-infective drugs.

Under the terms of deal, Orchid will receive an undisclosed upfront payment and will be eligible to get payment totaling more than $100 million in different milestones.

Apart from this, the Indian drug maker will also receive royalties on global sale of the drugs.

An official executive of the company has reported that the arrangement is designed in such a manner that at the end of the drug discovery cycle, Orchid will hold the global patent for the molecules with an exclusive arrangement with Merck for licensing for commercialization.

Orchid Research Laboratories Ltd (OPLL), the wholly owned drug discovery arm of Orchid Chemical will undertake the research and development of new drug in the anti-infective therapeutic area.