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No more Bayer payments in 2001, says Ranbaxy

India's top drugmaker Ranbaxy Laboratories Ltd said it expected no further payments in calendar 2001 from German giant Bayer AG for an anti-infective drug it licensed to Bayer two years ago.

"We have received one milestone payment in March and we don't expect any more this year," Ranbaxy's managing director D S Brar told a results news conference late on Monday.

Milestone payments are made when the drug gets past various stages of development, and are seen by analysts as key to Ranbaxy's share price performance.

A Ranbaxy statement said that the drug was "progressing well" with its phase-III studies in India and the US

Phase III is the final stage of trials before a drug can be brought to market.

Ranbaxy's shares were up 1.65 per cent at Rs 490 on Tuesday morning at the Bombay exchange, while the Sensex was up 0.89 per cent.

Ranbaxy developed a once-a-day form of the anti-infective drug ciprofloxacin which it licensed to Bayer in 1999.

Industry estimates say that Ranbaxy is likely to receive over $60 million from Bayer in "milestone" payments for the deal besides royalties on the sales of the drug once it goes to market.

On Monday, Ranbaxy Labs reported a 22 per cent rise in net profit to Rs 493 million for the quarter ended June 30 over the year ago period, substantially above analysts' expectations.

New Delhi-headquartered Ranbaxy said sales increased 17.9 per cent to Rs 4.99 billion from Rs 4.24 billion.

Bayer paid Ranbaxy $5.0 million in March as part of the milestone payment, and $10 million when it signed the licensing deal in 1999.

The German drug and chemicals giant holds the original patent on ciprofloxacin, and hopes to retain its hold on the markets for the drug even after it goes off patent over the next few years by switching to the form developed by Ranbaxy.

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