Merck and Alnylam Establish Industry's First Strategic Alliance to Apply RNA Interference for Human Therapeutics

For therapeutics development, Merck will provide Alnylam with a series of proprietary drug targets that have well-validated roles in disease and are attractive candidates for a new therapeutic approach using RNAi. Alnylam will develop RNAi compounds against these targets and advance RNAi-based drug candidates through preclinical development. Alnylam and Merck will then decide whether Alnylam, Merck or the two companies together will proceed with the further development and commercialization of each RNAi-based drug candidate. For technology development, Merck and Alnylam will each commit significant resources and expertise to the collaborative development of advanced RNAi technology, building on Alnylam's leading position in intellectual property, technology and know-how for RNAi-based therapeutics.

Under the terms of the agreement, Merck will make an upfront and annual cash payments and also make an equity investment in Alnylam. An additional cash payment and equity investment will be triggered by achievement of a pre-specified technology milestone. Merck will also make further payments to Alnylam for each RNAi-based drug candidate for which Merck elects to participate in further development and commercialization. Merck will receive a co-exclusive license to Alnylam intellectual property for use in in vitro and in vivo target identification and validation.

"This alliance with Alnylam exemplifies our commitment at Merck to stay at the forefront of pharmaceutical innovation," said Peter S. Kim, Ph. D., president, Merck Research Laboratories. "We believe that this collaboration will harness the exciting new advances in RNA interference to help deliver important new medicines for patients."

"We have recognized the leadership of Alnylam and their intellectual property in the promising field of RNA interference," said Stephen Friend, M.D., Ph.D., senior vice president, Molecular Profiling and Cancer Research at Merck. "We are making a strategic commitment to the development of RNAi as a new discovery platform which offers a compelling new approach for Merck to discover novel drug products."

"Our collaboration with Merck enables us to accelerate the development of a pipeline of RNAi-based products," said John Maraganore, Ph. D., president and chief executive officer of Alnylam. "With Merck, we have a world-class partner who is dedicating significant investment, resources, and proprietary targets to this alliance. We are committed to working together to convert the exciting scientific breakthroughs in RNA interference into a new class of therapeutics for a range of diseases.

About Alnylam
Alnylam Holding Co. is the leading company in the emerging field of RNA interference (RNAi) whose vision is to Harness a Revolution in Biology for Human HealthTM. Growing from its foundation as the world's first company focused on RNAi-based therapeutics, the company is built around the leading capabilities of its two operating units, Alnylam Pharmaceuticals of Cambridge, Mass., and Ribopharma of Kulmbach, Germany. Over the last several years, RNAi has been identified as a fundamental cellular mechanism for gene silencing. The company's leadership in the field of RNAi is supported by its preeminent founders and advisors and its strengths in fundamental patents, technology, and know-how that underlie the commercialization of RNAi-based therapeutics. The company's focus is to discover, develop, and commercialize therapeutic products based on RNAi for a broad range of therapeutic indications including viral, oncologic, metabolic, CNS and autoimmune diseases. The company's mission is to lead research in the field of RNAi, to build the leading pipeline of RNAi-based therapeutics, and to emerge as business leaders. Its global headquarters are in Cambridge, Mass. For more information, please visit www.alnylam.com.

About Merck
Merck & Co., Inc. is a global, research-driven pharmaceutical products and services company. Merck discovers, develops, manufactures and markets a broad range of innovative products to improve human and animal health, directly and through joint ventures.

Merck Forward-Looking Statement
This press release contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties which may cause results to differ materially from those set forth in the statements. The forward-looking statements include statements regarding product development. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. Additional detailed information concerning a number of factors that could cause actual results to differ materially is available in Item 1 of Merck's Annual Report on Form 10-K for the year ended Dec. 31, 2002, in its periodic reports on Form 10-Q and in its reports on Form 8-K (if any). Copies of these forms are available on request to Merck's Office of Stockholder Services.

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