* Pfizer to develop and market Athersys' MultiStem

* Athersys to get up-front payment of $6 mln

* Athersys to receive milestone payments of up to $105 mln

* Athersys shares more than triple (Adds analyst comments, background, share movement)

BANGALORE, Dec 21  - Athersys Inc (ATHX.O) said it sold the rights of its stem-cell therapy to treat inflammatory bowel disease to Pfizer Inc (PFE.N), the world's biggest drugmaker, and shares of Athersys more than tripled in early morning trade.

Under the agreement, Pfizer will pay Athersys $6 million upfront and up to $105 million in milestones for the investigational stem cell therapy, MultiStem.

Athersys has been a widely undervalued stock for a while and the fact that this deal adds on to almost one-third of its total market capitalization and has potential to earn five times of its market cap, is a huge boost to the stock, Steve Brozak, an analyst with WBB Securities, said.

As of Dec. 18, Athersys had a total market capitalization of $18.9 million.

Commenting on the deal, the analyst said that the biggest hurdle for small biotechnology companies such as Athersys is to get the first deal, and for a start, this deal with Pfizer looks very positive. However, he added that what remains to be seen is how aggressive Athersys can be with Pfizer going forward.

Athersys may elect to co-develop the therapy with Pfizer and both the companies will share expenses as well as profits and losses on an agreed basis, beginning at late-stage study, Athersys said in a statement.

Inflammatory bowel disease is a group of inflammatory and autoimmune conditions that affect the colon and small intestine, typically resulting in severe abdominal pain, weight loss, vomiting and diarrhoea.

Athersys' cells, which are derived from human bone marrow, have yet to be tested in people with inflammatory bowel disease.

MultiStem is currently being developed by Athersys for several other conditions, including heart-attack, bone marrow transplant support, and ischemic stroke, which results when an artery to the brain is blocked often by a blood clot or a fatty deposit.

Stem cell research-based companies Geron Corp (GERN.O) and Cytori Therapeutics Inc (CYTX.O) have made similar deals with U.S. conglomerate General Electric Corp's (GE.N) healthcare unit. [ID:nBNG514055] [ID:nBNG387442]

Analyst Brozak believes that there are fewer small biotech companies now than the beginning of the year, and thus he sees more similar partnerships in the near future.

Shares of Athersys were up $2.12 at $3.12 in early morning trade Monday on Nasdaq. They touched an all-time high of $3.95 earlier in the day. (Reporting by Krishnakali Sengupta in Bangalore; Editing by Deepak Kannan, Maju Samuel)