Shares of Pharmaceutical major Alkem Laboratories rose 1.5 percent from lows in trade Monday after the company announced that it has signed a co-development and license agreement with Biotech company Biosergen AB for BSG005, which is used for the treatment of severe and difficult-to-treat invasive fungal diseases.

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The partnership is for phase II and phase III trials of the drug, getting developed by Biosergen AB for sale in the Indian market. Alekm will be granted an exclusive license to market the drug in India.

Alkem will manage the first clinical patient trial, which is expected to start immediately after the regulatory approval. After the successful completion of two phase I studies, the first patient trial will be conducted in India on patients with severe fungus disease who are intolerant or resistant to treatment with Amphotericin B.

Once the clinical trials are successfully completed in India, Biosergen and Alkem aim to expand its use for similar patient groups in the US and EU via pivotal trials.

BSG005 is expected to provide e a suitable treatment option for patients with the safety and efficacy profile demonstrated in the preclinical studies. With India being one of the countries with the highest incidence of difficult-to-treat life threatening fungal infections, Alkem has announced an investment in the clinical development of BSG005.

"Alkem has capabilities and a strong track record in drug development. They have been very responsive and fast in their evaluation and decision making," says Biosergen CEO Peder M Andersen.

Meanwhile, Alkem’s Managing Director Sandeep Singh mentioned that this is a strategic fit for Alkem’s portfolio given company’s presence in acute care segment, especially in hospital-based treatment.

Shares of Alkem Labs were trading 0.5 percent higher at Rs 3,566.9 per share at around 10:50 am on Monday.