UPDATE 1-Novartis signs up to $200 mln deal with biotech firm

* Heptares may get up to $200 million in fees, milestones

* Deal focused on new GPCR drugs in unspecified area

(Adds detail, background)

LONDON, Oct 12 (Reuters) - Novartis AG (NOVN.VX) signed a drug discovery deal potentially worth up to $200 million with British biotech company Heptares Therapeutics, boosting the Swiss drugmaker's early-stage research.

Heptares said on Monday the Novartis Option Fund would make upfront and potential milestone payments to Heptares totalling as much as $200 million, plus royalties. Full financial terms were not disclosed.

Novartis is interested in the two-year-old company's ability to identify novel drug candidates against G-protein-coupled receptors (GPCRs), an important family of drug targets in the human body.

Heptares will apply its proprietary technology to generate novel drug leads against a nominated, unspecified GPCR target of interest to Novartis, Heptares said.

The deal is the latest in a string of biotech alliances by Novartis and other big drugmakers, all of which are keen to access promising technology developed by smaller companies.

Novartis already has a link with Heptares, having invested 7 million pounds ($11.1 million) in the group's 21 million pounds fundraising in February 2009 through its option fund. Other backers include MVM Life Science Partners and Clarus Ventures. (Reporting by Ben Hirschler; Editing by David Holmes) ($1=.6304 Pound)