Orchid Chemicals & Pharmaceuticals has said that it has entered into an agreement with Europe-based Allecra Therapeutics for jointly developing novel antibiotics to fight multi-drug resistant bacterial infections.

"As part of its investment into Allecra, Orchid has assigned to Allecra IP (Intellectual Property) related to an antibiotic discovery program which will then be pursued through further trials by Allecra," the company said in a statement.

The company said that along with the shareholding, Orchid will receive an upfront sum and will also be eligible to receive further royalties and exit bonuses based on Allecra's progress under the agreement between the two firms. Orchid Chairman and Managing Director K Raghavendra Rao said that the partnership between the two firms will create value by combining relative strengths of tow two firms.

Allecra CEO Nicholas Benedict said that Allecra was established with an aim to find cures for some of the most widespread and hardest to treat resistant infections. Bacterial resistance has been growing against the currently used antibiotics and there is a need to address the issues with improved cures for the diseases.

Orchid Chemicals & Pharmaceuticals were trading 2.39 per cent higher at Rs 68.50 on the Bombay Stock Exchange (BSE)