Ranbaxy has signed a collaboration agreement with US-based Merck for drug discovery and clinical development in anti-infective drugs. Ranbaxy and Merck will work together to develop clinically validated anti-bacterial and anti-fungal drug candidates. Ranbaxy will carry out drug discovery and clinical development through Phase IIa clinical trials, with Merck conducting development and commercialization of drug candidates after that. Ranbaxy CEO and MD, Malvinder M Singh told TOI: The agreement has already been signed and returns will start flowing to the company from this (second) quarter itself'. He, however, did not provide details of the revenues expected from the deal this year. Ranbaxy will be paid an undisclosed sum, with potential to receive payments over $100 million (per drug) associated with achievement of various R&D and regulatory approval for each target included in the collaboration. Ranbaxy will also receive significant royalties on worldwide net sales of any products commercialized under the agreement. TOI had first reported the Ranbaxy-Merck deal in May 10 edition. The collaboration will begin with an initial term of five years and can be extended further with mutual agreements.