Innoviva's (INVA) Innoviva Specialty Therapeutics unit said Tuesday it has signed an exclusive distribution and licensing deal with Dr. Reddy's Laboratorie (RDY) to develop and commercialize Xacduro to treat hospital-acquired bacterial pneumonia and ventilator-associated bacterial pneumonia.

Under the terms of the agreement, Dr. Reddy's will be responsible for the development, regulatory and commercialization activities in the licensed territories, which include South America, Central America, the Caribbean, Russia and the Commonwealth of Independent States.

Meanwhile, Innoviva Specialty Therapeutics will retain rights to Xacduro in all unlicensed territories, and is eligible to receive an upfront payment, regulatory and commercial milestone payments, and tiered royalties on net sales.