Mumbai, Dec 16: Rallis, a Tata group company, has entered into an alliance with the UK-based Phytopharm for the development of plant-based medicinal treatments. The agreement wil be effective from January 1998.

Rallis managing director Vijay Rai told The Financial Express that the agreement will broadly cover, among others, anti-cancer drugs, while Rallis would conduct initial toxicological and clinical tests.

Phytopharm is expected to render technical assistance while Rallis will use its primary extraction plants at Aurangabad and Cuddalore, though no additional investment is envisaged, Rai added.

With regards to marketing, Rai said, while Rallis will retain marketing rights in India, international rights has been assigned to Phytopharm. Rallis wil not pay royalties.

Products, developed under the deal, will be jointly patented, though Rallis is expected to hold patents only in India. Analysts expect the deal to go a long way in enhancing Rallis' pharmaceutical fortunes given its enhanced research and development thrust.

Rallis has, over the past year, expanded its R&D focus to face stiff competition. The company added a bio-technology research facility at Bangalore, besides commissioning two new pilot plants.

Rallis, which has over 10 per cent of its employees working on various research projects, spent almost 25 per cent of its profit before tax (Rs 6.30 crore) last year on the same.

The alliance comes at a time when Rallis has reportedly finalised two marketing alliances with Norsk Hydro of Netherlands and Abbott Laboratories, US for speciality fertilisers. The Rs 1,162 crore company has interests in fine chemicals, marine products and pharmaceutical industry though it is renown for its strengths on the agrochemicals front.