Under the deal, GVK will be responsible for identifying drug candidates, which will subsequently be transferred to Wyeth who will move them through the clinical study phases. In order to do this, the Hyderabad-based contract research organisation (CRO) will use its in-house capabilities in discovery chemistry, informatics, biology and absorption, metabolism, distribution and elimination (ADME). The two firms have worked together on various chemistry research activities since 2006. Under this agreement, GVK will receive an undisclosed, upfront payment, and will also be eligible to receive success-based milestone payments further down the line. G V Sanjay Reddy, managing director of GVK Biosciences said: "This agreement further validates India's capability to do innovative research along with leading pharmaceutical and biotech companies". The partnership between the two firms is one of a number of such deals being struck up between pharmaceutical companies and drug discovery services providers across the world as the competition and costs to bring innovative molecules to the market intensifies. Earlier this month Merck & Co has forged a deal with Indian firm Ranbaxy for the development of new anti-infective treatments. Under its alliance with Merck, Ranbaxy will conduct drug discovery and clinical trials on certain antibacterial and antifungal drug candidates up until the Phase IIa stage, after which point Merck will take over and carry out the remaining phases of clinical development, along with any eventual commercialisation. As part of the five-year deal, Ranbaxy will be entitled to over $100m for each drug target to successfully emerge from the collaboration, in addition to royalties on any sales. The firm will also receive an undisclosed up-front payment. India has been predicted to become a major player in preclinical and drug discovery services, helped both by the emergence of the country's internal research-based drug industry as well as interest from western pharma firms seeking to cut back spiralling R&D costs. Outsourced contract research in India (part of which will be preclinical) is expected to approach $2bn by 2010, according to data supplied by market research firm Frost & Sullivan. GVK, for example, claims to already work with 15 of the top 20 pharmaceutical companies, and clearly has further ambitions outside India. Last year it cut a joint venture deal with US CRO INC Research, centred on giving the US firm access to its Phase I-IV clinical trial facilities in Hyderabad, Chennai and Delhi. Following this, it received a 100-crore ($25m) push from a private investment company, with the funds being planned for use in expanding its drug discovery services and pushing its offerngs further into preclinical and clinical development. Meanwhile, it also recently teamed up with the US Food and Drug Administration (FDA) to validate its database of biomarkers, a move which will no doubt raise the profile of GVK's informatics division amongst the international pharma industry.