Indian drug maker Lupin has signed a pact with U.S.-based Medicis Pharmaceutical to develop multiple therapeutic compounds using Lupin's formulation technologies.

Lupin would receive an up front payment of $20 million from Medicis in addition to various milestone payments of up to $38 million, according to Reuters.

Medicis would have global exclusive rights for the products developed under the agreement. Lupin would receive single digit royalty on sales achieved by Medicis and hold marketing rights in India, it said.

"This partnership is a fairly long-term one and the products to be developed are from a variety of segments although Medicis primarily works in dermatology sector," Nilesh Gupta, group president and executive director of Lupin told Reuters. The development would further help Lupin build a strong specialty business, he said.

Lupin's U.S. unit has settled the litigation over Solodyn extended release tablets with Medicis, the Indian firm said. The settlement allows Lupin to sell the generic version of Solodyn, a drug used to treat pimples and red bumps, commencing November this year or earlier under certain conditions in the U.S.  The settlement also lets Lupin sell the same drug with different strengths from 2018 and 2019 onwards.