Exhibit 10.7
Execution Copy
09/18/07

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
TERMINATION AGREEMENT
     THIS TERMINATION AGREEMENT, dated September 18, 2007 (this “Agreement”), is
made by and between MERCK & Co., Inc., a corporation organized and existing
under the laws of New Jersey (“MERCK”) and ALNYLAM Pharmaceuticals, Inc., a
corporation organized and existing under the laws of Delaware (“ALNYLAM”; MERCK
and ALNYLAM together are referred to herein as the “Parties”).
     WHEREAS, the Parties entered into an Amended and Restated Research
Collaboration and License Agreement, effective as of July 3, 2006 (the
“Collaboration Agreement”), pursuant to which the Parties agreed to collaborate
in the research, development and commercialization of RNAi Products directed to
certain Targets;
     WHEREAS, pursuant to Section 6.8 of the Collaboration Agreement, on May 21,
2007, MERCK provided an Initial Notice to ALNYLAM of the discontinuation by
MERCK of the development of all RNAi Products directed to the MERCK Development
Targets under the Collaboration Agreement and such MERCK Development Targets
thus became Dropped MERCK Development Targets. On July 3, 2007, ALNYLAM informed
MERCK in writing that it was not interested in developing and/or commercializing
any of the Dropped MERCK Development Targets and thus ALNYLAM’s right of first
negotiation under Section 6.8 of the Collaboration Agreement with respect to
such Dropped MERCK Development Targets has expired;
     WHEREAS, ALNYLAM is developing the [**] Target pursuant to Section 2.2 of
the Collaboration Agreement subject to MERCK’s Opt-in Right; and the Parties are
collaborating in the development of the Co-Development Target known as [**]
pursuant to Article 3 of the Collaboration Agreement;
     WHEREAS, MERCK and ALNYLAM no longer desire to collaborate in the research,
development or commercialization of RNAi Products directed to any Targets;
     WHEREAS, the Parties now desire to terminate the Collaboration Agreement
and all licenses to Develop, Manufacture and Commercialize RNAi Products
thereunder;
     NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties hereby agree as follows:

1.   Termination. Effective as of the date of this Agreement (the “Termination
Date”) the Parties hereby terminate the Collaboration Agreement. Notwithstanding
Section 12.5 of the Collaboration Agreement, except as otherwise expressly set
forth in this Agreement all rights and obligations of the Parties under the
Collaboration Agreement shall cease, including without limitation, (a) the
obligation to complete a final report pursuant to Section 2.1 of the
Collaboration Agreement, (b) MERCK’s Opt-In Right with respect to the [**]
Target pursuant to Section 2.2 of the Collaboration Agreement and any all
license grants from

Confidential

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    MERCK to ALNYLAM relating to the [**] Target, (c) the Parties’ obligation to
exchange information pursuant to Section 2.3 of the Collaboration Agreement,
(d) MERCK’s right and obligation to nominate additional MERCK RNAi Novel Targets
pursuant to Section 3.2 of the Collaboration Agreement, (e) the Therapeutic
Collaboration with respect to [**] and any and all license grants from one Party
to the other Party relating to [**], and (f) all license grants to Develop,
Manufacture and/or Commercialize RNAi Therapeutic Products under the
Collaboration Agreement.   2.   Definitions. Terms defined in the Collaboration
Agreement and used either in this Agreement (except to the extent separately
defined herein) or in the provisions of the Collaboration Agreement which,
pursuant to this Agreement, shall continue to apply, shall have the meanings
given to them in the Collaboration Agreement.   3.   Collaboration Funding and
Payments. As of the Termination Date, each Party has made all payments payable
to the other Party pursuant to the Collaboration Agreement, if any, including
pursuant to Sections 3.9 and 9 of the Collaboration Agreement.   4.   Licenses.

  (a)   ALNYLAM Grant to MERCK. ALNYLAM hereby grants to MERCK a non-exclusive,
royalty-free license in the Territory, with a right to sublicense to its
Affiliates, (i) under ALNYLAM Target Identification and Target Validation RNAi
Patent Rights, (ii) under ALNYLAM Technology Collaboration Inventions, (iii) to
ALNYLAM RNAi Technology and (iv) under ALNYLAM-Assigned Therapeutic
Collaboration Inventions, that in the case of each of (i), (ii) and (iii) were
Controlled by ALNYLAM or its Affiliates during the Technology Collaboration
Term; in each case during and after the Collaboration Term, for the sole purpose
of in vitro and/or in vivo target identification and/or target validation
research relating to drug discovery and/or development activities of MERCK
and/or its Affiliates, including in collaborations with Third Parties in which
MERCK and/or its Affiliates has any rights (but not necessarily all rights) to
discoveries made. Notwithstanding any other provisions of this Agreement, the
license grant to MERCK under ALNYLAM-Assigned Therapeutic Collaboration
Inventions shall be perpetual. Notwithstanding anything to the contrary herein,
the licenses to ALNYLAM Technology hereunder shall not include licenses to
Patent Rights licensed by ALNYLAM or its Affiliates under [**].     (b)   MERCK
Grant to ALNYLAM. MERCK hereby grants to ALNYLAM a non-exclusive, royalty-free
license in the Territory, with a right to sublicense its Affiliates (except as
set forth in Section 4(d)(ii)), under (i) MERCK Broad RNAi Patent Rights that
were Controlled by MERCK or ROSETTA or their wholly-owned subsidiaries during
the Technology Collaboration Term, (ii) MERCK Broad RNAi Technology that was
Controlled by MERCK or ROSETTA or their wholly-owned subsidiaries during the
Technology Collaboration Term, and (iii) MERCK-Assigned Therapeutic
Collaboration Inventions; in each case during and after the Collaboration Term,
for the sole

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      purpose of research (including, without limitation, for internal in vitro
and/or in vivo target validation and/or target identification research by
ALNYLAM or its Affiliates), development, manufacture, use, import or sale of
therapeutic products based on RNA interference, which products are to be sold by
ALNYLAM, its Affiliates, or its Third Party collaborators. For the avoidance of
doubt, it is acknowledged that, with regard to research and development
activities, such license grant shall apply only to research and development
activities using RNA interference. ALNYLAM’s license under MERCK-Assigned
Therapeutic Collaboration Inventions shall be perpetual.         The Parties
agree that neither ALNYLAM nor its Affiliates have the right to sublicense any
MERCK intellectual property, including without limitation MERCK RNAi Patent
Rights and/or MERCK RNAi Technology, to any Third Party (including without
limitation any Third Party collaborator) other than as expressly provided in
Section 4(d). The Parties further agree that neither ALNYLAM nor its Affiliates
have the right to deliver or disclose to any Third Party (including without
limitation any Third Party collaborator) any MERCK RNAi Technology other than as
expressly provided in Section 4(d); provided, further that, under no
circumstance shall ALNYLAM or its Affiliates provide any Third Party with MERCK
Product-Specific RNAi Technology or MERCK Product-Specific RNAi Patent Rights.  
  (c)   Joint Collaboration IP. Each Party hereby acknowledges and agrees that
no Joint Collaboration Inventions were created during the Technology
Collaboration Term or the Therapeutic Collaboration Term and no patent
applications claiming Joint Collaboration Inventions were filed by either Party
or its Affiliates.     (d)   Sublicenses.         (i) Affiliates. Subject to
Section 4(d)(ii), each Party shall be entitled to grant sublicenses of its
rights under this Agreement to its Affiliates for so long as such entity remains
an Affiliate.         (ii) ALNYLAM Affiliate Restrictions. For purposes of
Section 4(b), where noted, the term “Affiliate” with respect to ALNYLAM shall
not include any corporation or business entity of which any of the securities or
other ownership interests representing the equity, the voting stock or general
partnership interest are owned, controlled or held, directly or indirectly, by
ALNYLAM and of which thirty percent (30%) or more of the securities or other
ownership interests representing the equity or voting stock or general
partnership interest are owned, controlled or held by a Significant
Pharmaceutical Company or by any investment entity affiliated with any such
Significant Pharmaceutical Company.         (iii) Liability. Each Party shall at
all times be responsible for the performance of its sublicensees of its rights
and obligations under this Agreement.

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  (e)   In-Licenses. All licenses and other rights granted to MERCK under this
Agreement are subject to the rights granted to ALNYLAM under the ALNYLAM
In-Licenses, and are also subject to and limited to the extent of the rights
ALNYLAM has granted and is required to grant to Third Parties pursuant to
Pre-Existing ALNYLAM Alliance Agreements. All licenses and other rights granted
to ALNYLAM under this Agreement are subject to the rights granted to MERCK under
the MERCK In-Licenses, and are also subject to and limited to the extent of the
rights MERCK has granted and is required to grant to Third Parties pursuant to
Pre-Existing MERCK Alliance Agreements.     (f)   No Other Rights. Except as
otherwise expressly provided in this Agreement, under no circumstances shall a
Party hereto, as a result of this Agreement, obtain any ownership interest or
other right in any Know-How or Patent Rights of the other Party, including items
owned, controlled or developed by the other Party, or provided by the other
Party to the receiving Party at any time pursuant to this Agreement.

5.   Confidentiality.

  (a)   Nondisclosure Obligation. As used in this Agreement, “Information” shall
have the meaning ascribed thereto in the Collaboration Agreement, but shall also
include any and all information provided by a Party to the other Party in
connection with this Agreement. All Information disclosed by one Party to the
other Party hereunder shall be maintained in confidence by the receiving Party
and shall not be disclosed to a non-Party or used for any purpose except as set
forth herein without the prior written consent of the disclosing Party, except
to the extent that such Information:         (i) is known by the receiving Party
at the time of its receipt, and not through a prior disclosure by the disclosing
Party, as documented by the receiving Party’s business records;         (ii) is
in the public domain by use and/or publication before its receipt from the
disclosing Party, or thereafter enters the public domain through no fault of the
receiving Party;         (iii) is subsequently disclosed to the receiving Party
by a Third Party who may lawfully do so and is not under an obligation of
confidentiality to the disclosing Party;         (iv) is developed by the
receiving Party independently of Information received from the disclosing Party,
as documented by the receiving Party’s business records; or         (v) is
deemed necessary by counsel to the receiving Party to be disclosed to such
Party’s attorneys or independent accountants for the sole purpose of enabling
such attorneys or independent accountants to provide advice to the receiving
Party, on the condition that such attorneys and independent

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      accountants agree to be bound by confidentiality and non-use obligations
substantially similar to those contained in this Agreement; provided, however,
that the term of confidentiality for such attorneys and independent accountants
shall be no less than [**] years.         Any combination of features or
disclosures shall not be deemed to fall within the foregoing exclusions merely
because individual features are published or available to the general public or
in the rightful possession of the receiving Party unless the combination itself
and principle of operation are published or available to the general public or
in the rightful possession of the receiving Party.         Notwithstanding the
obligations of confidentiality and non-use set forth above, a receiving Party
may provide Information disclosed to it to (x) governmental authorities in order
to obtain patents as provided in Section 6; provided, that such disclosure shall
be subject to the prior written consent of the Party whose Information is
intended to be disclosed (which consent shall not be unreasonably withheld), and
such Information shall be disclosed only to the extent reasonably necessary to
obtain patents, (y) the extent required by applicable law, including without
limitation by the rules or regulations of the United States Securities and
Exchange Commission or similar regulatory agency in a country other than the
United States or of any stock exchange or Nasdaq, and (z) any bona fide actual
or prospective underwriters, investors, lenders or other financing sources who
are obligated to keep such information confidential, to the extent reasonably
necessary to enable such actual or prospective underwriters, investors, lenders
or other financing sources to determine their interest in underwriting or making
an investment in, or otherwise providing financing to, the receiving Party;
provided, however, that in the case of an investor that is a Significant
Pharmaceutical Company, such disclosure shall be subject to the prior written
consent of the Party whose Information is intended to be disclosed (which
consent shall not be unreasonably withheld).         If a Party is required by
judicial or administrative process to disclose Information that is subject to
the non-disclosure provisions of this Section 5, such Party shall promptly
inform the other Party of the disclosure that is being sought in order to
provide the other Party an opportunity to challenge or limit the disclosure
obligations. Information that is disclosed by judicial or administrative process
shall remain otherwise subject to the confidentiality and non-use provisions of
this Section 5, and the Party disclosing Information pursuant to law or court
order shall take all steps reasonably practical, including without limitation
seeking an order of confidentiality, to ensure the continued confidential
treatment of such Information. In addition to the foregoing restrictions on
public disclosure, if either Party concludes that a copy of this Agreement must
be filed with the Securities and Exchange Commission, such Party shall provide
the other Party with a copy of this Agreement showing any sections as to which
the Party proposes to request

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      confidential treatment, will provide the other Party with an opportunity
to comment on any such proposal and to suggest additional portions of the
Agreement for confidential treatment, and will take such Party’s reasonable
comments into consideration before filing the Agreement.     (b)   Return of
Information. Each Party shall, upon the other Party’s request, return or cause
to be returned to the requesting Party as soon as reasonably practicable, any
and all tangible manifestations and embodiments of the requesting Party’s
Information and Know-How provided by the requesting Party pursuant to the
Collaboration Agreement and all copies thereof; provided, however, that each
Party may retain any Information or Know-How reasonably necessary for such
Party’s continued practice under any license(s) granted under Section 4 hereof,
and may keep one copy of any Information or Know-How received from the other
Party in its confidential files for record purposes.

6.   Intellectual Property Ownership, Protection And Related Matters.

  (a)   Inventorship. Inventorship for patentable Inventions under the
Collaboration Agreement shall be determined in accordance with United States
patent laws for determining inventorship.     (b)   Ownership of Collaboration
Inventions. The entire right, title and interest in:

  (i)   ALNYLAM Technology Collaboration Inventions and ALNYLAM Therapeutic
Collaboration Inventions shall be owned solely by ALNYLAM;     (ii)   MERCK
Technology Collaboration Inventions and MERCK Therapeutic Collaboration
Inventions shall be owned solely by MERCK; and         ALNYLAM-Assigned
Therapeutic Collaboration Inventions shall be owned solely by ALNYLAM, shall be
assigned by MERCK to ALNYLAM and shall be included within the definition of
ALNYLAM Therapeutic Collaboration Inventions, and MERCK-Assigned Therapeutic
Collaboration Inventions shall be owned solely by MERCK, shall be assigned by
ALNYLAM to MERCK and shall be included within the definition of MERCK
Therapeutic Collaboration Inventions.

  (c)   Prosecution and Maintenance of Patent Rights.

  (i)   MERCK Technology. MERCK has the sole responsibility to, at MERCK’s
discretion, file, conduct ex parte and inter partes prosecution, and maintain
(including the defense of any interference or opposition proceedings) in the
Territory, all Patent Rights comprising MERCK Technology, in MERCK’s name.    
(ii)   ALNYLAM Technology. ALNYLAM has the sole responsibility to, at ALNYLAM’s
discretion, file, conduct ex parte and inter partes

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      prosecution, and maintain (including the defense of any interference or
opposition proceedings) in the Territory, all Patent Rights comprising ALNYLAM
Technology, in ALNYLAM’s name.     (iii)   Patent Expenses. The patent filing,
prosecution and maintenance expenses incurred after the Effective Date with
respect to Patent Rights comprised of ALNYLAM Technology and MERCK Technology
shall be borne by each Party having the right to file, prosecute and maintain
such Patent Rights under this Section 6.

7.   Miscellaneous.

  (a)   Entire Agreement. This Agreement and the provisions of the Collaboration
Agreement which, pursuant to this Agreement, shall continue to apply contain the
entire understanding of the Parties with respect to the subject matter hereof.
All express or implied agreements and understandings, either oral or written,
with regard to such subject matter are superseded by the terms of this
Agreement. This Agreement may be amended, or any term hereof modified, only by a
written instrument duly-executed by authorized representatives of both Parties
hereto.     (b)   Assignment. Except as provided in this Section 7(b), this
Agreement may not be assigned or otherwise transferred, nor may any right or
obligation hereunder be assigned or transferred, by either Party without the
consent of the other Party. However, either Party may, without the other Party’s
consent, assign this Agreement and its rights and obligations hereunder in whole
or in part to an Affiliate or to a party that acquires, by merger, sale of
assets or otherwise, all or substantially all of the business of the assigning
Party to which the subject matter of this Agreement relates. The assigning Party
shall remain responsible for the performance by its assignee of this Agreement
or any obligations hereunder so assigned to such assignee. Any assignment to an
Affiliate shall terminate, and all rights so assigned shall revert to the
assigning Party, if and when such Affiliate ceases to be an Affiliate of the
assigning Party. Any attempted assignment not in accordance with this Section
7(b) shall be void.     (c)   Representations and Warranties. Each Party
represents and warrants to the other Party that as of the Effective Date of this
Agreement:

  (i)   It is duly-organized and validly existing under the laws of its
jurisdiction of incorporation or formation, and has full corporate or other
power and authority to enter into this Agreement and to carry out the provisions
hereof.     (ii)   It is duly-authorized to execute and deliver this Agreement
and to perform its obligations hereunder, and the person or persons executing
this Agreement on its behalf has been duly-authorized to do so by all requisite
corporate action.

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  (iii)   This Agreement is legally binding upon it and enforceable in
accordance with its terms. The execution, delivery and performance of this
Agreement by it does not conflict with any agreement, instrument or
understanding, oral or written, to which it is a party and by which it may be
bound.

  (d)   Warranty Disclaimer and Limitation of Liability.

  (i)   EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY
MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTY OF ANY KIND, EITHER EXPRESS OR
IMPLIED, TO THE OTHER PARTY WITH RESPECT TO ANY TECHNOLOGY, GOODS, SERVICES,
RIGHTS OR OTHER SUBJECT MATTER OF THIS AGREEMENT OR THE COLLABORATION AGREEMENT
AND HEREBY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE AND NONINFRINGEMENT WITH RESPECT TO ANY AND ALL OF THE
FOREGOING.     (ii)   NEITHER PARTY HERETO WILL BE LIABLE FOR SPECIAL,
INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF THIS AGREEMENT OR
THE COLLABORATION AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER OR
THEREUNDER, INCLUDING LOST PROFITS ARISING FROM OR RELATING TO ANY BREACH OF
THIS AGREEMENT OR THE COLLABORATION AGREEMENT, REGARDLESS OF ANY NOTICE OF SUCH
DAMAGES, EXCEPT AS A RESULT OF A PARTY’S WILLFUL MISCONDUCT OR A MATERIAL BREACH
OF THE CONFIDENTIALITY AND NON-USE OBLIGATIONS IN ARTICLE 8 OF THE COLLABORATION
AGREEMENT OR SECTION 5 OF THIS AGREEMENT. NOTHING IN THIS SECTION 7(d)(ii) IS
INTENDED TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF
EITHER PARTY.

  (e)   Further Assurances. Each Party shall take, or cause to be taken, all
appropriate action and do, or cause to be done, all things necessary, proper or
advisable under applicable law or otherwise to consummate and make effective the
transactions contemplated by this Agreement.     (f)   Miscellaneous Provisions.
Other than Sections 13.2, 13.3, 13.8 and 13.15, the provisions of Article 13 of
the Collaboration Agreement shall also apply to this Agreement.

     IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first set forth above and Alnylam shall issue promptly the press release
attached hereto as Exhibit 1 announcing the execution of this Agreement.

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                MERCK & CO., INC.
    ALNYLAM PHARMACEUTICALS, INC.
    BY:  /s/ Mervyn Turner    BY:  /s/ Barry Greene       NAME:  Mervyn Turner  
  NAME:  Barry Greene      TITLE:  Senior Vice President,
Worldwide Licensing and External Research      TITLE:  Chief Operating Officer  

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EXHIBIT 1
Press Release
Contacts
Alnylam Pharmaceuticals, Inc.
Cynthia Clayton (Investors)
617-551-8207
Kathryn Morris (Media)
KMorrisPR
845-635-9828
Alnylam Announces the Termination of its Collaboration with Merck & Co., Inc.
CAMBRIDGE, Mass., September XX, 2007 — Alnylam Pharmaceuticals, Inc. (Nasdaq:
ALNY), a leading RNAi therapeutics company, announced today that Merck & Co.,
Inc. (“Merck”) and Alnylam have mutually agreed to terminate their July 2006
amended and restated agreement. As a result, Alnylam has rescinded all grants of
its intellectual property related to current and future Merck development
programs, including the partnership’s former co-development programs.
“It is fundamentally in our best interests to terminate our Merck
collaboration,” said John Maraganore, Ph.D., President and Chief Executive
Officer of Alnylam. “We wish our colleagues at Merck the best of luck in their
efforts.”
About Alnylam Pharmaceuticals
Alnylam is a biopharmaceutical company developing novel therapeutics based on
RNA interference, or RNAi. The company is applying its therapeutic expertise in
RNAi to address significant medical needs, many of which cannot effectively be
addressed with small molecules or antibodies, the current major classes of
drugs. Alnylam is leading the translation of RNAi as a new class of innovative
medicines with peer-reviewed research efforts published in the world’s top
scientific journals including Nature, Nature Medicine, and Cell. The company is
leveraging these capabilities to build a broad pipeline of RNAi therapeutics;
its most advanced program is in Phase II human clinical trials for the treatment
of respiratory syncytial virus (RSV) infection. In addition, the company is
developing RNAi therapeutics for the treatment of influenza,
hypercholesterolemia, and liver cancers, amongst other diseases. The company’s
leadership position in fundamental patents, technology, and know-how relating to
RNAi has enabled it to form major alliances with leading companies including
Medtronic, Novartis, Biogen Idec, and Roche. The company, founded in 2002,
maintains headquarters in Cambridge, Massachusetts. For more information, visit
www.alnylam.com.

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Alnylam Forward-Looking Statements
Various statements in this release concerning Alnylam’s future expectations,
plans and prospects, constitute forward-looking statements for the purposes of
the safe harbor provisions under The Private Securities Litigation Reform Act of
1995. Actual results may differ materially from those indicated by these
forward-looking statements as a result of various important factors, including
risks related to: our approach to discover and develop novel drugs, which is
unproven and may never lead to marketable products; our ability to attract and
retain highly qualified employees; obtaining, maintaining and protecting
intellectual property utilized by our products; our ability to enforce our
patents against infringers and to defend our patent portfolio against challenges
from third parties; our ability to obtain additional funding to support our
business activities; our dependence on third parties for development,
manufacture, marketing, sales and distribution of products; the successful
development of Alnylam’s product candidates, all of which are in early stages of
development; obtaining regulatory approval for products; competition from others
using technology similar to ours and others developing products for similar
uses; our dependence on collaborators; and our short operating history; as well
as those risks more fully discussed in the “Risk Factors” section of our most
recent quarterly report on Form 10-Q on file with the Securities and Exchange
Commission. In addition, any forward-looking statements represent our views only
as of today and should not be relied upon as representing its views as of any
subsequent date. Our does not assume any obligation to update any
forward-looking statements.

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