Bangalore-based Biocon Ltd and a US biotech firm Nobex Corporation will jointly develop an oral insulin product for the treatment of diabetes.

The collaboration combines the peptide production capabilities of Biocon, with the proprietary peptide oral-delivery technology of Nobex, Biocon said on Wendesday.

The two companies would focus on the development of an oral insulin product that can be used to treat the world diabetic population, which is estimated to increase to more than 20 crore (2 billion) by the year 2030, Biocon said.

The two companies indicated that the collaborative effort in developing the oral insulin product would require several years to reach the market.

Kiran Mazumdar-Shaw, chairman and managing director of Biocon and Nobex's president and CEO Christopher H Price said they expect to have significant clinical data and make firm progress towards manufacturing within two years.

Mazumdar-Shaw said the agreement provided for Biocon to invest in the equity of Nobex. Mazumdar-Shaw did not disclose other financial terms of the deal citing commercial sensitivity and confidentiality.

Nobex, a privately held drug development company based in North Carolina's Research Triangle Park and specialises in medicinal chemistry applied to optimising the delivery of therapeutic peptide drugs by oral and other non-injectable routes of administration.