This is the first time an IT company has entered into an agreement to develop molecules. The Italian company has been promoted by Genextra SpA group of Italy.

M Vidyasagar, executive vice-president and head of the Hyderabad-based TCS Advanced Technology Centre (ATC) said, "This is a historic occasion for TCS, and the first contract for us where the deliverable is not a software code, but a molecule."

Vidyasagar said TCS was serious about entering the area of drug discovery, as the global pharma research and development market was about the size of $40 billion annually, and the addressable market was an estimated $6 billion a year.

The contract is worth over €1 million with a duration of 18 months and payments would be made based on the number of optimised lead molecules delivered. According to Vidyasagar, the agreement with Congenia would provide advanced fragment-based solution for drug discovery and had the potential of being ramped up in future. The research division of TCS'' life sciences department will work on "P66", identified by Congenia as a key protein involved in several age-related diseases, and will develop optimised drug leads based on this. This will be executed in the Advanced Technology Centre of TCS in Hyderabad, where the bulk of research and development work related to life sciences is done.

Genextra holds the patent for research and commercial utilisation of the gene P66 and has done pioneering work on the subject in Italy.

TCS would put in place a complete suite of offerings in the life sciences segment, including genomics and proteomics, database integration, drug discovery and preventive healthcare. It will screen a "virtual fragment library" of tens of thousands of potential lead molecules to predict which of these might bind themselves to the target protein and thereby inhibit its function.

Unlike the traditional pattern of identifying molecules in wet laboratories, TCS would generate computer simulation tests on the company''s Bio-suite, cutting short on overall time to market he said. Some of the wet chemistry and related work would be carried out by Israel based company Altiora Ventures.

TCS has identified life sciences as one of the growth engines and has invested in developing competencies and research collaborations over the past few years. It is good to see these TCS investments are yielding good results, according to Mr S. Ramadorai, chief executive officer, TCS.

According to Vidyasagar, TCS would be using modules of its own product, Bio-Suite, to work on the target protein. It would screen a ''virtual fragment library'' of tens of thousands of potential lead molecules to predict which of these might bind themselves to the target protein and thereby, inhibit its function.

The company''s ATC team comprises 35 people at present, which would gradually be ramped up to meet the needs of the new business.