As part of the alliance, health and life sciences company MDS will be part of IBM's Blue Gene initiative, which is a five-year exploratory project to create the world's fastest computer.

International Business Machines Corp. will provide MDS Proteomics, a wholly owned subsidiary of MDS Inc., with the super-computing power necessary to crunch and store data gleaned from the analysis of how proteins trigger chemical reactions in cells.

It is hoped the laborious process of analyzing how proteins interact with each other, will give researchers the tools to understand what goes wrong in a diseased cell. "IBM is potentially the most crucial element in the discovery and identifying of new targets for disease intervention," said MDS Proteomics chief executive Frank Gleeson at a press conference.

The alliance will give MDS Proteomics the computational power necessary to study proteins and build a public database of these proteins, called BIND (Biomolecular Interaction Network Database), said IBM and MDS. The public database will allow academics to store and retrieve proteomic information, with IBM providing the hardware for the project and MDS the software.

No financial terms were disclosed regarding the alliance. IBM has also made an undisclosed equity investment in MDS Proteomics in advance of what analysts expect, to be an initial public offering of the MDS unit, although Mr Gleeson declined to comment on the progress of the IPO.

"Our company will require over its life a considerable amount of capital...the endorsement by partners like IBM is a significant sign we are are building something of value," Mr Gleeson said in response to whether the IBM alliance will speed along, the public offering of shares in MDS Proteomics.

Shares of MDS Inc. rose C$1.20 to close at C$25.90 on the Toronto Stock Exchange. On the New York Stock Exchange, the stock rose 80 cents to $17.35. IBM's shares closed up $1.37 in New York at $116.61.

MDS Proteomics will work toward designing and developing drugs from the proteomic research, and will also sell "targets" - or specific data on particular proteins - to its partners, which should result in profits within five years, said Mr Gleeson.

IBM has been forging alliances with biotechnology companies, since August 2000, when it announced it would spend $100 million to develop partnerships and technology to interpret the genetic code.