The Rs 3,600-crore Aurobindo Pharma has entered into licensing and supply agreement with AstraZeneca, one of the world?s leading biopharmaceutical businesses, to supply a slew of solid dosage and sterile products for emerging markets.

According to sources, this is a five-year deal and there is an upfront payment of over $70 million for the same though there was no official confirmation about the deal or payment from the company. The agreements will support AstraZeneca?s investment in branded generics sold in emerging markets. These products fall under a broad range of important therapeutic segments such as anti-infective, cardiovascular system and central nervous systems.

Commenting on the alliance, PV Ramprasad Reddy, chairman, Aurobindo Pharma said, ?Aurobindo?s proven track record in building strong, collaborative working relationships is a key driver for these strategic agreements with AstraZeneca which will accelerate our growth plans and support our earnings.?

Kaushik Banerjee, head of branded generics operations at AstraZeneca, said these agreements will enable it to extend the range of branded medicines for emerging markets, where it sees continued opportunities to grow its business.

AstraZeneca had formed a similar branded generics supply deal with Torrent Pharmaceuticals in March and expects emerging markets to account for 25% of group sales by 2014, up from 13%, or $4.35 billion, in 2009.

Some of the recent MNC deals in the generics segment are testimony to the growing interest of the pharma in the emerging markets such as the expanded relationship of Pfizer with Aurobindo as well as a deal with Claris Lifesciences; acquisition of Ranbaxy by Daiichi Sankyo; acquisition of South-Africa based Aspen by GSK and thereafter the license and supply agreement with Strides Arcolab and Onco Therapies and Dr Reddy?s Laboratories arrangement with GSK.

Dr Reddy?s has also inked a marketing deal with GlaxoSmithKline (GSK) in June last year to foray into these fast-growing pharmaceutical markets.

The company has around 7,000 sales representatives of GSK in the emerging markets, through which products would flow to patients everywhere around the globe. In fact, the company crossed the Rs 1,000-crore mark in FY10 in India driven by volume growth of 16% by brands such as Nixe, Omez, Stamlo, Razo D and Reditux.

IMS Health first coined the term ?pharmerging market? in recognition of the major shift in growth away from the mature, developed economies to the seven fast-growing markets such as China, Brazil, Russia, India, Mexico, Turkey and South Korea as there were apprehensions about the emerging markets.

According to a recent IMS Health market prognosis, while the key developed markets of the US, Europe and Japan will continue to dominate the market and contribute almost 82% ($660 billion) of the global pharmaceuticals market, they are estimated to grow at a slower rate of 3-6%. The rest of world markets are projected to grow at a 14-17% pace through 2014.