The licensing agreement extends Ranbaxy's current relationship with Cipher, under which it is marketing isotretinoin capsules in the US under the brand 'Absorica', Ranbaxy Laboratories said in a statement.
Isotretinoin is used in the treatment of severe recalcitrant nodular acne.
Under the terms of the agreement, Cipher will receive an upfront payment and is eligible for additional pre-commercial milestone payments, it added.
Further, Cipher will be supplying the product and Ranbaxy will be responsible for gaining regulatory approval of the product in Brazil.
"We are pleased to take this novel formulation of isotretinoin to the additional large market of Brazil...We will utilise our strong front-end capabilities in making this product available in Brazil," Ranbaxy Executive Vice President & Head, Global Strategy, Sanjeev I Dani said.
The company plans to promote the product through a brand dermatology division in Brazil.
"The isotretinoin formulation is expected to be a flagship product in Ranbaxy's dermatology franchise in Brazil, once it achieves regulatory approval," it added.
The Ranbaxy scrip closed at Rs 561.30, up 0.12 per cent from its previous close, on the BSE.