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                                                                    Exhibit 10.3


                          ALNYLAM PHARMACEUTICALS, INC

                            2004 STOCK INCENTIVE PLAN

1.    Purpose

      The purpose of this 2004 Stock Incentive Plan (the "Plan") of Alnylam
Pharmaceuticals, Inc., a Delaware corporation (the "Company"), is to advance the
interests of the Company's stockholders by enhancing the Company's ability to
attract, retain and motivate persons who make (or are expected to make)
important contributions to the Company by providing such persons with equity
ownership opportunities and performance-based incentives and thereby better
aligning the interests of such persons with those of the Company's stockholders.
Except where the context otherwise requires, the term "Company" shall include
any of the Company's present or future parent or subsidiary corporations as
defined in Sections 424(e) or (f) of the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder (the "Code") and any other
business venture (including, without limitation, joint venture or limited
liability company) in which the Company has a controlling interest, as
determined by the Board of Directors of the Company (the "Board").

2.    Eligibility

      All of the Company's employees, officers, directors, consultants and
advisors (including persons who have entered into an agreement with the Company
under which they will be employed by the Company in the future) are eligible to
be granted options or restricted stock awards (each, an "Award") under the Plan.
Each person who has been granted an Award under the Plan shall be deemed a
"Participant".

3.    Administration and Delegation

      (a) Administration by Board of Directors. The Plan will be administered by
the Board. The Board shall have authority to grant Awards and to adopt, amend
and repeal such administrative rules, guidelines and practices relating to the
Plan as it shall deem advisable. The Board may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or any Award in the manner
and to the extent it shall deem expedient to carry the Plan into effect and it
shall be the sole and final judge of such expediency. All decisions by the Board
shall be made in the Board's sole discretion and shall be final and binding on
all persons having or claiming any interest in the Plan or in any Award. No
director or person acting pursuant to the authority delegated by the Board shall
be liable for any action or determination relating to or under the Plan made in
good faith.

      (b) Appointment of Committees. To the extent permitted by applicable law,
the Board may delegate any or all of its powers under the Plan to one or more
committees or subcommittees of the Board (a "Committee"). All references in the
Plan to the "Board" shall mean the Board or a Committee of the Board or the
officers referred to in Section 3(c) to the extent that the Board's powers or
authority under the Plan have been delegated to such Committee or officers.
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      (c) Delegation to Officers. To the extent permitted by applicable law, the
Board may delegate to one or more officers of the Company the power to grant
Awards to employees or officers of the Company or any of its present or future
subsidiary corporations and to exercise such other powers under the Plan as the
Board may determine, provided that the Board shall fix the terms of the Awards
to be granted by such officers (including the exercise price of such Awards,
which may include a formula by which the exercise price will be determined) and
the maximum number of shares subject to Awards that the officers may grant;
provided further, however, that no officer shall be authorized to grant Awards
to any "executive officer" of the Company (as defined by Rule 3b-7 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) or to any
"officer" of the Company (as defined by Rule 16a-1 under the Exchange Act).

4.    Stock Available for Awards

      (a) Number of Shares. Subject to adjustment under Section 10, Awards may
be made under the Plan for up to the number of shares of common stock, $0.0001
par value per share, of the Company (the "Common Stock") that is equal to the
sum of:

            (1) 3,000,000 shares of Common Stock; plus

            (2) such additional number of shares of Common Stock (up to
4,407,500 shares) as is equal to the sum of (x) the number of shares of Common
Stock reserved for issuance under the Company's 2002 and 2003 Employee, Director
and Consultant Stock Plans (the "Existing Plans") that remain available for
grant under the Existing Plans immediately prior to the closing of the Company's
initial public offering and (y) the number of shares of Common Stock subject to
awards granted under the Existing Plans which awards expire, terminate or are
otherwise surrendered, canceled, forfeited or repurchased by the Company at
their original issuance price pursuant to a contractual repurchase right
(subject, however, in the case of Incentive Stock Options (as hereinafter
defined) to any limitations of the Code); plus

            (3) an annual increase to be added on the first day of each of the
Company's fiscal years during the period beginning in fiscal year 2005 and
ending on the second day of fiscal year 2014 equal to the lesser of (i)
5,000,000 shares of Common Stock, (ii) five percent (5%) of the outstanding
shares on such date or (iii) an amount determined by the Board.

      Notwithstanding the foregoing, no more than 25,000,000 shares of Common
Stock (subject to adjustment under Section 8) may be issued pursuant to all
Awards other than Options (each as hereinafter defined). Furthermore,
notwithstanding clause (3) above, in no event shall the number of shares
available under this Plan be increased as set forth in clause (3) to the extent
such increase, in addition to any other increases proposed by the Board in the
number of shares available for issuance under all other employee or director
stock plans, would result in the total number of shares then available for
issuance under all employee and director stock plans exceeding 25% of the
outstanding shares of the Company on the first day of the applicable fiscal
year.

      If any Award expires or is terminated, surrendered or canceled without
having been fully exercised or is forfeited in whole or in part (including as
the result of shares of Common Stock

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subject to such Award being repurchased by the Company at the original issuance
price pursuant to a contractual repurchase right) or results in any Common Stock
not being issued, the unused Common Stock covered by such Award shall again be
available for the grant of Awards under the Plan, subject, however, in the case
of Incentive Stock Options (as hereinafter defined), to any limitations under
the Code. Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.

      (b) Per-Participant Limit. Subject to adjustment under Section 10, the
maximum number of shares of Common Stock with respect to which Awards may be
granted to any Participant under the Plan shall be 1,000,000 per calendar year.
The per-Participant limit described in this Section 4(b) shall be construed and
applied consistently with Section 162(m) of the Code ("Section 162(m)").

5.    Stock Options

      (a) General. The Board may grant options to purchase Common Stock (each,
an "Option") and determine the number of shares of Common Stock to be covered by
each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option which is not intended to be an Incentive Stock
Option (as hereinafter defined) shall be designated a "Nonstatutory Stock
Option".

      (b) Incentive Stock Options. An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall only be granted to employees of Alnylam Pharmaceuticals,
Inc., any of Alnylam Pharmaceuticals, Inc.'s present or future parent or
subsidiary corporations as defined in Sections 424(e) or (f) of the Code, and
any other entities the employees of which are eligible to receive Incentive
Stock Options under the Code, and shall be subject to and shall be construed
consistently with the requirements of Section 422 of the Code. The Company shall
have no liability to a Participant, or any other party, if an Option (or any
part thereof) that is intended to be an Incentive Stock Option is not an
Incentive Stock Option.

      (c) Exercise Price. The Board shall establish the exercise price at the
time each Option is granted and specify it in the applicable option agreement;
provided, however, that the exercise price shall be not less than 100% of the
Fair Market Value (as hereinafter defined) at the time the Option is granted.

      (d) Duration of Options. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Board may specify in the
applicable option agreement; provided, however, that no Option will be granted
for a term in excess of 10 years.

      (e) Exercise of Option. Options may be exercised by delivery to the
Company of a written notice of exercise signed by the proper person or by any
other form of notice (including electronic notice) approved by the Board
together with payment in full as specified in Section 5(f) for the number of
shares for which the Option is exercised.

      (f) Payment Upon Exercise. Common Stock purchased upon the exercise of an
Option granted under the Plan shall be paid for as follows:


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            (1) in cash or by check, payable to the order of the Company;

            (2) except as the Board may otherwise provide in an option
agreement, by (i) delivery of an irrevocable and unconditional undertaking by a
creditworthy broker to deliver promptly to the Company sufficient funds to pay
the exercise price and any required tax withholding or (ii) delivery by the
Participant to the Company of a copy of irrevocable and unconditional
instructions to a creditworthy broker to pay promptly to the Company the
exercise price and any required tax withholding;

            (3) if provided for in the option agreement or approved by the
Company in its sole discretion, by delivery of shares of Common Stock owned by
the Participant valued at their fair market value as determined by (or in a
manner approved by) the Board ("Fair Market Value"), provided (i) such method of
payment is then permitted under applicable law, (ii) such Common Stock, if
acquired directly from the Company, was owned by the Participant at least six
months prior to such delivery and (iii) such Common Stock is not subject to any
repurchase, forfeiture, unfulfilled vesting or other similar requirements; or

            (4) by any combination of the above permitted forms of payment.

      (g) Options Granted In Connection With Acquisitions. In connection with a
merger or consolidation of an entity with the Company or the acquisition by the
Company of property or stock of an entity, the Board may grant Options in
substitution for any options or other stock or stock-based awards granted by
such entity or an affiliate thereof. Substitute Options may be granted on such
terms as the Board deems appropriate in the circumstances, notwithstanding any
limitations on Options contained in the other sections of this Section 5 or in
Section 2.

6.    Director Options.

      (a) Initial Grant. Upon the commencement of service on the Board by any
individual who is not then an employee of the Company or any subsidiary of the
Company, the Company shall grant to such person a Nonstatutory Stock Option to
purchase 13,500 shares of Common Stock (subject to adjustment under Section 8).

      (b) Annual Grant. On the date of each annual meeting of stockholders of
the Company, the Company shall grant a Nonstatutory Stock Option to purchase
10,000 shares of Common Stock (subject to adjustment under Section 8) to each
member of the Board of Directors of the Company (1) who is both serving as a
director of the Company immediately prior to and immediately following such
annual meeting, (2) who is not then an employee of the Company or any of its
subsidiaries, (3) who has served as a director of the Company for at least six
months, (4) who does not beneficially own more than 1.5% of the outstanding
capital stock of the Company on the date of such annual meeting and (5) who
during the preceding full fiscal year has attended at least 75% of the aggregate
of the (i) total number of meetings of the Board (held during the period for
which he or she has been a director) and (ii) the total number of meetings held
by all committees of the Board on which he or she served (during the periods
that he or she served).

      (c) Terms of Director Options. Options granted under this Section 6 shall
(i) have an exercise price equal to the last reported sale price of the Common
Stock on The Nasdaq Stock

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Market or the national securities exchange on which the Common Stock is then
traded on the date of grant (and if the Common Stock is not then traded on The
Nasdaq Stock Market or a national securities exchange, the fair market value of
the Common Stock on such date as determined by the Board), (ii) vest in full on
the first anniversary of the date of grant provided that the individual is
serving as a director on such date, (iii) expire on the earlier of 10 years from
the date of grant or three months following termination of service as a director
and (iv) contain such other terms and conditions as the Board shall determine.

      (d) Board Discretion. The Board retains the specific authority to from
time to time increase or decrease the number of shares subject to Options
granted under this Section 6.

7.    Restricted Stock

      (a) Grants. The Board may grant Awards entitling recipients to acquire
shares of Common Stock, subject to the right of the Company to repurchase all or
part of such shares at their issue price or other stated or formula price (or to
require forfeiture of such shares if issued at no cost) from the recipient in
the event that conditions specified by the Board in the applicable Award are not
satisfied prior to the end of the applicable restriction period or periods
established by the Board for such Award (each, a "Restricted Stock Award").

      (b) Terms and Conditions. The Board shall determine the terms and
conditions of a Restricted Stock Award, including the conditions for repurchase
(or forfeiture) and the issue price, if any.

      (c) Stock Certificates. Any stock certificates issued in respect of a
Restricted Stock Award shall be registered in the name of the Participant and,
unless otherwise determined by the Board, deposited by the Participant, together
with a stock power endorsed in blank, with the Company (or its designee). At the
expiration of the applicable restriction periods, the Company (or such designee)
shall deliver the certificates no longer subject to such restrictions to the
Participant or if the Participant has died, to the beneficiary designated, in a
manner determined by the Board, by a Participant to receive amounts due or
exercise rights of the Participant in the event of the Participant's death (the
"Designated Beneficiary"). In the absence of an effective designation by a
Participant, "Designated Beneficiary" shall mean the Participant's estate.

8.    Adjustments for Changes in Common Stock and Certain Other Events

      (a) Changes in Capitalization. In the event of any stock split, reverse
stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any distribution to holders of Common Stock other than an ordinary
cash dividend, (i) the number and class of securities available under this Plan,
(ii) the amount of the annual increase in the number of securities available
under this Plan set forth in Section 4(a)(3)(i); (iii) the limit on the number
of securities available under this Plan for Awards other than Options set forth
in Section 4(a), (iv) the per-Participant limit set forth in Section 4(b), (v)
the number and class of securities and exercise price per share subject to each
outstanding Option and each Option issuable under Section 6, and (vi) the
repurchase price per share subject to each outstanding Restricted Stock Award,
shall be appropriately adjusted by the

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Company (or substituted Awards may be made, if applicable) to the extent
determined by the Board.

      (b)   Reorganization Events.

            (1) Definition. A "Reorganization Event" shall mean: (a) any merger
or consolidation of the Company with or into another entity as a result of which
all of the Common Stock of the Company is converted into or exchanged for the
right to receive cash, securities or other property, (b) any exchange of all of
the Common Stock of the Company for cash, securities or other property pursuant
to a share exchange transaction or (c) any liquidation or dissolution of the
Company.

            (2) Consequences of a Reorganization Event on Awards. In connection
with a Reorganization Event, the Board shall take any one or more of the
following actions as to all or any outstanding Awards on such terms as the Board
determines: (i) provide that Awards shall be assumed, or substantially
equivalent Awards shall be substituted, by the acquiring or succeeding
corporation (or an affiliate thereof), (ii) upon written notice to a
Participant, provide that the Participant's unexercised Options or other
unexercised Awards shall become exercisable in full and will terminate
immediately prior to the consummation of such Reorganization Event unless
exercised by the Participant within a specified period following the date of
such notice, (iii) in the event of a Reorganization Event under the terms of
which holders of Common Stock will receive upon consummation thereof a cash
payment for each share surrendered in the Reorganization Event (the "Acquisition
Price"), make or provide for a cash payment to a Participant equal to (A) the
Acquisition Price times the number of shares of Common Stock subject to the
Participant's Options or other Awards (to the extent the exercise price does not
exceed the Acquisition Price) minus (B) the aggregate exercise price of all such
outstanding Options or other Awards, in exchange for the termination of such
Options or other Awards, (iv) provide that outstanding Awards shall become
realizable or deliverable, or restrictions applicable to an Award shall lapse,
in whole or in part prior to or upon such Reorganization Event, (v) provide
that, in connection with a liquidation or dissolution of the Company, Awards
shall convert into the right to receive liquidation proceeds (if applicable, net
of the exercise price thereof) and (vi) any combination of the foregoing.

                  For purposes of clause (i) above, an Option shall be
considered assumed if, following consummation of the Reorganization Event, the
Option confers the right to purchase, for each share of Common Stock subject to
the Option immediately prior to the consummation of the Reorganization Event,
the consideration (whether cash, securities or other property) received as a
result of the Reorganization Event by holders of Common Stock for each share of
Common Stock held immediately prior to the consummation of the Reorganization
Event (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares of
Common Stock); provided, however, that if the consideration received as a result
of the Reorganization Event is not solely common stock of the acquiring or
succeeding corporation (or an affiliate thereof), the Company may, with the
consent of the acquiring or succeeding corporation, provide for the
consideration to be received upon the exercise of Options to consist solely of
common stock of the acquiring or succeeding corporation (or an affiliate
thereof) equivalent in fair market value to the per share consideration

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received by holders of outstanding shares of Common Stock as a result of the
Reorganization Event.

                  To the extent all or any portion of an Option becomes
exercisable solely as a result of clause (ii) above, the Board may provide that
upon exercise of such Option the Participant shall receive shares subject to a
right of repurchase by the Company or its successor at the Option exercise
price; such repurchase right (x) shall lapse at the same rate as the Option
would have become exercisable under its terms and (y) shall not apply to any
shares subject to the Option that were exercisable under its terms without
regard to clause (ii) above.

                  Without limiting the generality of Sections 9(f) and 10(d)
below, the Board shall have the right to amend this Section 8(b)(2) to the
extent it deems necessary or advisable.

            (3) Consequences of a Reorganization Event on Restricted Stock
Awards. Upon the occurrence of a Reorganization Event other than a liquidation
or dissolution of the Company, the repurchase and other rights of the Company
under each outstanding Restricted Stock Award shall inure to the benefit of the
Company's successor and shall apply to the cash, securities or other property
which the Common Stock was converted into or exchanged for pursuant to such
Reorganization Event in the same manner and to the same extent as they applied
to the Common Stock subject to such Restricted Stock Award. Upon the occurrence
of a Reorganization Event involving the liquidation or dissolution of the
Company, except to the extent specifically provided to the contrary in the
instrument evidencing any Restricted Stock Award or any other agreement between
a Participant and the Company, all restrictions and conditions on all Restricted
Stock Awards then outstanding shall automatically be deemed terminated or
satisfied.

9.    General Provisions Applicable to Awards

      (a) Transferability of Awards. Except as the Board may otherwise determine
or provide in an Award, Awards shall not be sold, assigned, transferred, pledged
or otherwise encumbered by the person to whom they are granted, either
voluntarily or by operation of law, except by will or the laws of descent and
distribution or, other than in the case of an Option intended to be an Incentive
Stock Option, pursuant to a qualified domestic relations order, and, during the
life of the Participant, shall be exercisable only by the Participant.
References to a Participant, to the extent relevant in the context, shall
include references to authorized transferees.

      (b) Documentation. Each Award shall be evidenced in such form (written,
electronic or otherwise) as the Board shall determine. Each Award may contain
terms and conditions in addition to those set forth in the Plan.

      (c) Board Discretion. Except as otherwise provided by the Plan, each Award
may be made alone or in addition or in relation to any other Award. The terms of
each Award need not be identical, and the Board need not treat Participants
uniformly.


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      (d) Termination of Status. The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, or the Participant's legal
representative, conservator, guardian or Designated Beneficiary may exercise
rights under the Award.

      (e) Withholding. Each Participant shall pay to the Company, or make
provision satisfactory to the Company for payment of, any taxes required by law
to be withheld in connection with an Award to such Participant. Except as the
Board may otherwise provide in an Award, for so long as the Common Stock is
registered under the Exchange Act, Participants may satisfy such tax obligations
in whole or in part by delivery of shares of Common Stock, including shares
retained from the Award creating the tax obligation, valued at their Fair Market
Value; provided, however, that the total tax withholding where stock is being
used to satisfy such tax obligations cannot exceed the Company's minimum
statutory withholding obligations (based on minimum statutory withholding rates
for federal and state tax purposes, including payroll taxes, that are applicable
to such supplemental taxable income). Shares surrendered to satisfy tax
withholding requirements cannot be subject to any repurchase, forfeiture,
unfulfilled vesting or other similar requirements. The Company may, to the
extent permitted by law, deduct any such tax obligations from any payment of any
kind otherwise due to a Participant.

      (f) Amendment of Award. The Board may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that the Participant's consent to such action shall be required
unless the Board determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.

      (g) Conditions on Delivery of Stock. The Company will not be obligated to
deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.

      (h) Acceleration. The Board may at any time provide that any Award shall
become immediately exercisable in full or in part, free of some or all
restrictions or conditions, or otherwise realizable in full or in part, as the
case may be.

      (i) Deferrals. The Board may permit Participants to defer receipt of any
Common Stock issuable upon exercise of an Option or upon the lapse of any
restriction applicable to any Restricted Stock Award, subject to such rules and
procedures as it may establish.

      (j) Share Issuance. To the extent that the Plan provides for issuance of
stock certificates to reflect the issuance of shares of Common Stock or
Restricted Stock, the Board

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may provide for the issuance of such shares on a non-certificated basis, to the
extent not prohibited by applicable law or the rules of any stock exchange on
which the Common Stock is traded.

10.   Miscellaneous

      (a) No Right To Employment or Other Status. No person shall have any claim
or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan, except as expressly provided in the
applicable Award.

      (b) No Rights As Stockholder. Subject to the provisions of the applicable
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed with
respect to an Award until becoming the record holder of such shares.
Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the
number of shares subject to such Option are adjusted as of the date of the
distribution of the dividend (rather than as of the record date for such
dividend), then an optionee who exercises an Option between the record date and
the distribution date for such stock dividend shall be entitled to receive, on
the distribution date, the stock dividend with respect to the shares of Common
Stock acquired upon such Option exercise, notwithstanding the fact that such
shares were not outstanding as of the close of business on the record date for
such stock dividend.

      (c) Effective Date and Term of Plan. The Plan shall become effective on
the date on which it is adopted by the Board, but no Award may be granted unless
and until the Plan has been approved by the Company's stockholders. No Awards
shall be granted under the Plan after the completion of 10 years from the
earlier of (i) the date on which the Plan was adopted by the Board or (ii) the
date the Plan was approved by the Company's stockholders, but Awards previously
granted may extend beyond that date.

      (d) Amendment of Plan. The Board may amend, suspend or terminate the Plan
or any portion thereof at any time; provided that, to the extent determined by
the Board, no amendment requiring stockholder approval under any applicable
legal, regulatory or listing requirement shall become effective until such
stockholder approval is obtained. No Award shall be made that is conditioned
upon stockholder approval of any amendment to the Plan.

      (e) Provisions for Foreign Participants. The Board may, without amending
the Plan, modify Awards or Options granted to Participants who are foreign
nationals or employed outside the United States or establish subplans under the
Plan to recognize differences in laws, rules, regulations or customs of such
foreign jurisdictions with respect to tax, securities, currency, employee
benefit or other matters.

      (f) Governing Law. The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware, without regard to any applicable conflicts of law.


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