Dr Reddy’s Laboratories, an India-based pharmaceutical, has signed a deal worth $279m with Melbourne University spinout Hatchtech for its head lice treatment.

The company will pay an upfront fee of an unknown amount, up to $85m in pre-commercialisation milestone payments, and the rest dependent on sales linked milestones.

Hatchtech has previously raised $35.6m in external backing. Its shareholders include OneVentures, Bowles, GBS Venture Partners, the University of Melbourne Endowment Trust, Queensland Biotechnology Funds, Uniseed, AustralianSuper, Blue Sky Venture Capital, and private investors.