The Denmark-based Novo Nordisk has cleared the anti-diabetes compound of Dr Reddy's for entry into Phase II development, the company release said. This molecule, which is suprior to known insulin sensitizers, was licensed to Novo Nordisk by Dr Reddy's Research Foundation (DRF).

As part of the agreement, the Novo Nordisk had paid about Rs 15.15 crore towards the first milestone payment including intellectual property rights for the compound licensed to it. The company will continue to receive further milestone payments as the compound progresses through the clinical development cycle, said the company sources.

Dr Reddy's Research Foundation (DRF), had already received US patents for a new compound on anti-infective resistent namely `Vencomycin.'

DRF had licenced the second anti-diabetes compound DRF-2725also to Novo Nordisk, for which phase I clinical trials are expected to commence shortly, according to company sources. The milestone payment for this compound is also in the offing.

DRL group has identified basic research as an important aspect for growth and decided to invest about 5 per cent of the turnover every year. The foundation, which is sponsored by DRL, has employed about 85 discovery scientists apart from the support staff.