Under the terms of the 10 year contract, Cipla will be responsible for the development, manufacturing and supply of the inhalation drug product, which is said to have a US market size worth $200m. Akorn would be responsible for the regulatory submission with the US Food and Drug Administration (FDA) and for the marketing and distribution of the drug in the US and Puerto Rico.
"This development agreement represents our first drug product targeted for inhalation therapy," Akorn president and chief executive Arthur Przybyl said in a statement.
"Our business relationship with Cipla continues to expand.
Including this transaction, we now have four drug products under development with Cipla.
We expect this drug to eventually be an excellent addition to our niche specialty pharmaceutical portfolio."
Cipla will receive milestone fees from Akorn for the development of the product but Akorn will retain the ownership of the FDA dossier.
Akorn expects the drug to be launched in 2010.
Financial details of the agreement were not disclosed.
The Cipla contract is the latest in several agreements Akorn has made recently with other companies.
In October, Akorn signed an exclusive licensing, development and supply agreement with Sofgen Pharmaceuticals, a privately-held company located in Sunrise, Florida, to develop an oral drug product for women's healthcare.
Also in October, the company signed of an Exclusive Memorandum of Understanding (MOU) with the Serum Institute of India to commercialise six vaccines for the US market.
Four of the vaccines would be: Measles, Mumps and Rubella Vaccine (MMR); Human Diploid Rabies Vaccine; Recombinant Hepatitis B Vaccine; Oncology Bladder Cancer Vaccine (BCG).
In July, Akorn announced the signing of a development and supply agreement with Hyaluron Contract Manufacturing for two of its investigational injectable suspension products, expected to launch in 2010.
Yesterday, Akorn announced the FDA approved a supplemental Biologics License Application (BLA) for a unit dose preservative free Tetanus Diphtheria vaccine, which has been developed as part of a March distribution agreement with Massachusetts Biologic Laboratories.
Since September, Akorn has been marketing a multi-dose preserved version of the Tetanus Diphtheria vaccine.
The new vaccine is expected to be launched in the first quarter of 2008 and will allow Akorn to compete in the $225m US market.