The Geneva-based Serono biotechnology and pharmaceuticals company is to forge a cooperation agreement with the United States Vertex Pharmaceuticals firm.

The deal, announced on Tuesday, aims to discover, develop and market inhibitors for the treatment of neurological and inflammatory diseases.

Under the terms of the accord, Vertex could receive up to $95 million (SFr162 million) to support and expand its drug discovery activities.

A statement said the two companies expected to select a first drug development candidate in 2001.

Vertex will receive $5 million in payments for prior research and could also receive up to $20 million in research funding over the next five years.

Vertex could also receive an additional $70 million in milestone payments for the successful development and commercialisation of more than one drug candidate.

Commenting on the deal, Serono chief executive, Ernesto Bertarelli, said it gave the company access to an established drug discovery programme with near-term product development potential.

"The combination of Serono's understanding of these diseases with Vertex's leadership in the field of caspase inhibition gives us great confidence in the powerful potential of this collaboration," he said.

In 1999, Serono achieved worldwide sales of $1.054 billion and a net income of $183.7 million, making it the third largest biotech company based on revenues.

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