"The potential is absolutely fantastic," said Mr Randal Tierney, managing director of Cross Vetpharm, commenting on his company's new research deal with the National Agriculture and Veterinary Centre at UCD. The two partners hope to tap into a global market for poultry vaccine products worth $500 million (£343 million) a year.

The deal was announced last week but this only marks the beginning of a two-year collaboration that could bring significant profits to both parties. The UCD group has developed a possible new vaccine treatment for one of the commonest illnesses affecting intensive poultry production.

Under the terms of the arrangement, Cross Vetpharm will fund the research needed to develop, test and commercialise a poultry vaccine. BioResearch Ireland, (BRI) will also continue to contribute to these costs.

No research value was given but it includes the expense of hiring three post-doctoral researchers and possibly a postgraduate researcher for at least two years and covers ongoing laboratory-costs. A typical postdoctoral researcher might receive about £17,000 a year and a fully-funded graduate up to £10,000 a year.

The work is being carried out at one of BioResearch Ireland's (BRI) university-based biotechnology laboratories. BRI was established in 1988 to help commercialise Irish biotechnology research.

"This deal is highly significant in that it is the largest biotechnology agreement which we have negotiated with an Irish company and has potential to generate significant revenues," stated Dr Jim Ryan director of BRI. It was also the first time an agreement for vaccine work had been made with an Irish firm, he added. Most of the vaccine research here is taken up by international companies.

Cross Vetpharm is the largest manufacturer of veterinary pharmaceutical products in Ireland and is wholly Irish-owned. The company has plants in Tallaght and Canada and has marketing and distribution companies for its products in the US, the Far East, Africa and the Middle East. It employs 280 in its various offices and plants.

The disease, coccidiosis, can wipe out poultry and is as common in birds as is mastitis in cows, Mr Tierney stated. This was the company's first foray into vaccine products. Mr Tierney said that in the past Irish researchers had tended to take their discoveries to foreign manufacturers. "There is much more co-operation between researchers and Irish companies. This is fantastically encouraging."

Coccidiosis causes weight loss, cutting into the profitability of broiler bird production, explained Dr Grace Mulcahy who has led the initial BRI-funded work at UCD since 1994. She is a lecturer in parasitology at the veterinary faculty of UCD.

It was "ubiquitous" in poultry production so there was huge potential for a successful coccidiosis vaccine, she said. Ireland alone produced between 55 and 60 million birds a year. Annual worldwide sales of poultry health products stands at $3.5 billion.

"Producers worry about clinical effects but also sub-clinical effects," she said, including delayed growth as the bird's system fought the illness which produces a diarrhoea-like condition. "Because of the prevalence most chickens are reared using treated feeds" which contained anti-microbial agents.

"People are not happy with this method of control," she added because it is expensive; some strains of the illness could become resistant to treatment and there is also a withdrawal period before birds are brought to market.

There are seven species of the bug which causes the disease, but Dr Mulcahy's treatment would vaccinate against all of these at once. It was not necessary to completely eradicate the disease she said, only clear it so that there were "no economic effects".

One competitor company was on the market with a costly coccidiosis vaccine for breeder birds, Mr Tierney said, but the new vaccine was expected to cost only a fifth of this product, making it suitable for all intensively produced birds.

The company was "a few years away from production" he said, but all of the parties to the agreement were confident that the new vaccine would be brought to market.

"We think we have enough money and facilities in place to progress this rapidly," Dr Mulcahy said.

The UCD group will work in conjunction with researchers in the department of microbiology at UCC under Dr Douwe von Sinderin. The company will cover costs in both locations.