Cipla director Amar Lulla told The Financial Express that the marketing tie-up broadly covers a range of 23 products including antibiotics and anti-ashthma drugs. "The arrangement essentially revolves around products that are off-patent or scheduled to go off patent between 2001-2005. Neolab will market our range in all major European markets," he said.

Significantly, the arrangement also incorporates a royalty clause, wherein Cipla will receive a 5 per cent royalty on sales when the active ingredient has not been supplied by the company. "In cases where the active ingredient has been supplied by Cipla, the royalty would be lower at 2.5 per cent," Lullasaid.

Analysts maintained that this is not the first time that Cipla has bucked the general industry trend on outflows in terms of technical knowhow fees and royalties. "For the fiscal ended 1997-98, Cipla's earnings in the form of royalty receipts and technical knowhow fees exceeded Rs 1 crore and the company is expected to more-or-less maintain, if not improve on this," an analyst added.

These inflows essentially come from Cipla's strategic alliances in Canada (with Novopharm), Saudi (with formulations manufacturer MCPC), Africa (with Cipharm in the Ivory Coast) and Egypt (with Heliopharm). The arrangement with Neolab is also expected to supplement Cipla's existing marketing tie-up with the $40 million Irish firm Chanelle for a range of human health and veterinary products. The alliance covers cardiovascular drugs, antivirals and anthelmintics services in markets like the UK, France and Holland.

Meanwhile, Lulla added that product registrations through the new alliance in the UK are expected to takeover a year, after which the company sees export earnings from the arrangement touching approximately 5 million pounds.

Cipla's latest tie-up in the international market comes close on the heels of the company's strategic partnership with the Delhi-based Ranbaxy Laboratories for a select basket of drugs. The arrangement in India covers the "strongly emerging cardiovascular segment and the perennial anti-infectives market." Cipla and Ranbaxy Laboratories, had on February 16, unveiled plans to kickstart the partnership with the joint marketing of two molecules carvedilol, a new generation anti-hypertensive and cefpodoxime proxetil, an advanced third generation oral cephalosporin.