Dr Reddy’s lab said its subsidiary had signed an agreement with US-based Olema Pharmaceuticals Inc to research, develop and commercialise novel small molecule inhibitors of undisclosed tumour targets.

Olema has signed an exclusive worldwide license agreement with Aurigene Discovery Technologies, a wholly-owned subsidiary of Dr Reddy’s laboratory.

Under the terms of the agreement, Olema will pay an upfront license fee of $8 million for rights to the pre-existing Aurigene program.

Aurigene will also be eligible to receive up to $60 million in potential clinical development and regulatory milestones, up to $370 million in potential commercial milestones, and mid-single-digit to low-double-digit royalties based on annual net sales.

During the study, Olema will provide funding to Aurigene to facilitate ongoing discovery efforts, Dr Reddy said in a regulatory filing.

It added that Olema and Aurigene would jointly direct further preclinical work and, if successful, Olema will lead clinical development and regulatory and commercial activities.