Lars Juhl Jensen & al. wrote a great review about Literature mining in Nature Reviews Genetics. There are many links and many references about algorithms, hypothesis generation and biological discovery.
Literature mining for the biologist: from information retrieval to biological discovery (info)
Nature Reviews Genetics 7 (2), 119 (2006)
Dr Jensen said :
"Due to popular request, I have also compiled two zip archives with additional reprints in case you are interested:
The former contains all literature mining papers published by the Peer Bork's group. The latter archive contains the papers highlighted in the bibliography of the review (with the exception of one for which I unfortunately have not been able to obtain a PDF file)."