Stock in Biocon gained Rs 6.10, or 1.99 per cent, a share after the company announced that it had hit an option agreement with Bristol-Myers Squibb Co for its prandial oral insulin product candidate called IN-105.

The stock hit an intraday high of Rs 321.50 and a low of Rs 311.10. In the prior trading session, the stock gained Rs 12.25 or 4.16 per cent to close at Rs 306.80 a share.

The option agreement gives Bristol-Myers Squibb the right to exercise an option to get an exclusive international license to the program. Biocon will carry out clinical researches to advance characterization of IN-105's clinical profile up to the conclusion of Phase II.

In case Bristol-Myers Squibb uses the option to license IN-105 after the conclusion of the Phase II trial, Bristol-Myers Squibb will take complete responsibility for the development program as well as commercialization activities outside India.

Kiran Mazumdar-Shaw, Chairman and Managing Director of Biocon, said, "This agreement is one huge step closer to realizing the dream of bringing oral insulin to market."

In return, Biocon will get a license fee along with potential regulatory & commercial milestone payments and royalties on potential sales of IN-105 outside the country. In India, Biocon will keep exclusive rights to IN-105.

Diabetes affects nearly 350 million people worldwide, and the list of this chronic disease's long-term complications includes cardiovascular complications, kidney failure and peripheral vascular disease.