Shares in biotechnology and research services company, Epistem (AIM: EHP) jumped 16% after the company announced that it had entered into a research and development collaboration with Novartis (VTX:NOVN).

The deal will see Novartis pay Epistem US$4 million in an upfront payment and provide research funding for 2 years to identify new drug targets and therapeutics across a wide range of disease areas.  Epistem will provide its stem cell expertise and drug discovery experience with Novartis’s knowledge of disease pathways and bioinformatics. Novartis will have an option to licence any drug targets in exchange for license fees, milestone payments and royalties.

Matthew Walls, Epistem CEO, commented:

"The collaboration will enable us to accelerate the development of our existing targets with a world class pharmaceutical collaborator and to jointly explore disease opportunities in regenerative medicine".