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                                                                   EXHIBIT 10.21

          CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
         SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

                                    AGREEMENT

This agreement ("Agreement") is effective as of the 17th day of September, 2003
("Effective Date") between THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR
UNIVERSITY ("Stanford"), an institution of higher education having corporate
powers under the laws of the State of California, and Alnylam Pharmaceuticals,
Inc. ("Alnylam" or "Licensee"), a corporation having a principal place of
business at 790 Memorial Drive, Suite 202, Cambridge, MA 02139. Stanford and
Alnylam agree as follows:

1        BACKGROUND

1.1      Stanford has an assignment of "Efficient RNA Transfection to the Livers
         of Living Mice" from the laboratory of Mark Kay ("Invention"), as
         described in Stanford Docket S00-012 and any Licensed Patent, as
         defined below, which may issue to the Invention.

1.2      Stanford wants to have the Invention perfected and marketed as soon as
         possible so that resulting products may be available for public use and
         benefit.

1.3      Alnylam wants a license under the Invention, and Licensed Patent to
         develop, manufacture, use, and sell Licensed Product in the field of
         use of Delivery of synthesized siRNA molecules for research and
         therapeutic use.

1.4      The Technology and Invention were made in the course of research
         supported by the National Institutes of Health (NIH).

2        DEFINITIONS

2.1      "Licensed Patents" means all patent applications filed on the Invention
         and all patents issuing thereon including

         (A)      Stanford's U.S. Patent Application, Serial Number [**]
                  entitled [**],[**],

         (B)      Stanford's U.S. Patent Application, Serial Number [**]
                  entitled [**],

         (C)      [**]the Continuation-in-Part, Serial Number [**] entitled
                  [**], and

         (D)      any divisions, continuations and any foreign patent
                  application or equivalent corresponding thereto, and any
                  Letters patent or equivalent thereof issuing thereon or
                  reissue, reexamination or extension thereof.

         (E)      Continuation-in-part applications (CIPs) that are offered to
                  the other co-exclusive licensee will also be offered to
                  Alnylam for licensing in the Licensed Field of Use.

2.2      "Licensed Product" means any product or part in the Licensed Field of
         Use, the manufacture, use, or sale of which:

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         (A)      is covered by a valid claim of an issued, unexpired Licensed
                  Patent directed to the Invention in the country in which it is
                  made, used or sold. A claim of an issued, unexpired Licensed
                  Patent is presumed to be valid unless it has been held to be
                  invalid or unenforceable by a final judgment of a court of
                  competent jurisdiction from which no appeal can be or is
                  taken; rendered unenforceable through disclaimer or otherwise;
                  donated to the public; or lost through an interference
                  proceeding; or

         (B)      is covered by any claim being prosecuted in a pending
                  application of Licensed Patents in the country in which it is
                  made, used or sold unless such claim has been pending in such
                  application or an earlier application of Licensed Patents for
                  greater than [**] years.

2.3      "Net Sales" means the gross commercialization revenue derived by
         Alnylam and any sublicensee from Licensed Product, less the following
         items but only as they actually pertain to the disposition of Licensed
         Product by Alnylam and any sublicensee, are included in gross revenue,
         and are separately billed:

         (A)      [**];

         (B)      costs of [**];

         (C)      costs of [**]; and

         (D)      [**]; and

         (E)      [**].

         (F)      Where Licensed Products are not sold separately, but are sold
                  in combination with or as parts of other therapeutic products,
                  hereinafter such combinations referred to as a "Combination
                  Product" and the Licensed Product and each such other product
                  being referred to as a "Component Product", the Net Sales
                  price to be used for the purpose of calculating royalties
                  payable in respect of Combination Products must be determined
                  by multiplying the Net Sales price of the Combination Product
                  by the percentage value of the Licensed Product comprising a
                  Component Product contained in the Combination Product, such
                  percentage value being determined by dividing the current
                  market value of the Licensed Product comprising a Component
                  Product by a sum of the separate current market values of each
                  of the Component Products which are contained in the
                  Combination Product. The current market value of each of the
                  Component Products must be for a quantity comparable to that
                  contained in the Combination Product and of the same class,
                  purity and potency. When no current market value is available
                  for a Component Product, a reasonable hypothetical market
                  value for such Component Product based upon the allocation of
                  the same proportions of costs, reasonable overhead and profits
                  (all of which must be determined on the basis of generally
                  accepted accounting principles) as are or should be allocated
                  to similar Component Products and having an ascertainable
                  market value.

2.4      "siRNA Molecule" means an agent that modulates expression of a target
         gene by an RNA interference mechanism.

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2.5      "Licensed Field of Use" means delivery of ex-vivo synthesized siRNA
         Molecules for research, development and therapeutic uses (including a
         diagnostic necessary for development, sale or reimbursement of a
         therapeutic Licensed Product). The Licensed Field of Use specifically
         excludes delivery of any system producing in vivo expressed siRNAs for
         therapeutic use, including but not limited to episomal and integrated
         vectors, and recombinant viruses.

2.6      "Licensed Territory" means worldwide.

2.7      "Co-Exclusive" means that, subject to Article 4, Stanford will only
         grant one further license in the Licensed Territory in the Licensed
         Field of Use.

2.8      "Affiliate" means any legal entity (such as a corporation, partnership,
         or limited liability company) that directly, or indirectly through one
         or more intermediaries, controls or is controlled by, or is under
         common control with Company and that is bound by the terms and
         conditions of this Agreement. For the purposes of this definition, the
         term "control" means (i) beneficial ownership of at least fifty percent
         (50%) of the voting securities of a corporation or other business
         organization with voting securities or (ii) a fifty percent (50%) or
         greater interest in the net assets or profits of a partnership or other
         business organization without voting securities. For purposes of this
         Agreement, the term Alnylam shall include its Affiliates, unless the
         context indicates otherwise.

3        GRANT

3.1      GRANT. Stanford grants and Alnylam accepts a license in the Licensed
         Field of Use to make, have made, use, have used, sell, have sold,
         import and have imported Licensed Product in the Licensed Territory.

3.2      CO-EXCLUSIVITY. The license is Co-Exclusive, including the right to
         sublicense pursuant to Article 13, in the Licensed Field of Use for a
         term beginning on the Effective Date, and ending, on a
         country-by-country basis, on the expiration of the last to expire of
         Licensed Patents.

3.3      RETAINED RIGHTS. Stanford may practice the Invention and use the
         Technology for its own bona fide research, including sponsored research
         and collaborations. Stanford has the right to publish any information
         included in Technology and Licensed Patent.

3.4      EXCLUSIVITY.

         (A)      If the other Co-Licensee discontinues licensing this Field of
                  Use, then the Field of Use will become exclusive for Alnylam.

         (B)      If the other Co-Licensee discontinues any other therapeutic
                  license under the Licensed Patents, Stanford shall so inform
                  Alnylam and Alnylam shall have the option to obtain an
                  exclusive, worldwide sublicensable license to such therapeutic
                  field. The terms of any such license shall be negotiated in
                  good faith by Stanford and Alnylam. This option may be
                  exercised by Alnylam by written notice to Stanford at any time
                  during a period of ninety (90) days after notification by
                  Stanford.

4        GOVERNMENT RIGHTS

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This Agreement is subject to all of the terms and conditions of Title 35 United
States Code Sections 200 through 204, including an obligation that Licensed
Product sold or produced in the United States be "manufactured substantially in
the United States." Alnylam will take all reasonable action necessary on its
part as licensee to enable Stanford to satisfy its obligations to the U.S.
Government under Title 35. If Alnylam reasonably desires an exception to the
government requirement of substantial manufacture in the United States then
Stanford shall reasonably cooperate with Alnylam in obtaining such exception.

5        DILIGENCE

5.1      MILESTONES. As an inducement to Stanford to enter into this Agreement,
         Alnylam will use all commercially reasonable efforts and diligence to
         develop, manufacture, and sell or lease Licensed Product and to
         diligently develop markets for the Licensed Product. In particular,
         Alnylam will meet the milestones shown in Appendix A, which shall
         satisfy Alnylam's diligence obligations. If Alnylam in good faith fails
         to meet a milestone set forth in Appendix A, then Alnylam shall have a
         [**] period of time to reestablish diligence towards its objectives,
         and if Alnylam reestablishes diligence towards its objectives during
         this [**] period, any prior lack of diligence will be deemed cured. If
         Alnylam does not reestablish diligence towards its objectives during
         this [**] period, Stanford may terminate this Agreement if Alnylam has
         not met the milestones. Stanford may terminate this Agreement if
         Alnylam or a sublicensee has not sold Licensed Product for any [**]
         period after Alnylam's or a sublicensee's first commercial sale of
         Licensed Product. Efforts by Alnylam's sublicensees or Affiliates shall
         be considered efforts of Alnylam under this section.

5.2      PROGRESS REPORT. Alnylam acknowledges that diligent development of
         Licensed Product is of utmost importance to Stanford. On or before
         September 30 of each year until Alnylam markets a Licensed Product,
         Alnylam will make a written annual report in confidence to Stanford
         covering the preceding year ending June 30, regarding the progress of
         Alnylam toward commercialization of Licensed Product. The report will
         include, as a minimum, information (e.g., summary of work completed,
         key scientific discoveries, summary of work in progress, current
         schedule of anticipated events or milestones and market plans for
         introduction of Licensed Product) sufficient to enable Stanford to
         satisfy reporting requirements of the U.S. Government and for Stanford
         to ascertain progress by Alnylam toward meeting the diligence
         requirements of this Article 5.

6        ROYALTIES

6.1      ISSUE ROYALTY. Alnylam will pay to Stanford a noncreditable,
         nonrefundable license issue royalty of $[**] on signing this Agreement.

6.2      MINIMUM ROYALTY. Beginning one year from the Effective Date, and each
         anniversary thereafter, Alnylam will pay to Stanford a yearly royalty
         of $[**]. Yearly royalty payments are nonrefundable, but they are
         creditable against earned royalties to the extent provided in Section
         6.4.

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6.3      EARNED ROYALTY. In addition, Alnylam will pay Stanford earned royalties
         on Net Sales as follows:

         (A)      [**]% of Net Sales for a Licensed Product subject to the
                  following;

         (B)      Such royalty payments shall be reduced up to [**]% (from [**]%
                  of Net Sales down to [**]% of Net Sales) by the amount of
                  royalty paid to access additional intellectual property
                  necessary in order to sell Licensed Products ("Additional
                  Earned Royalties").

         (C)      Such royalty payments shall be reduced as follows:

                  (1)      [**]% if Additional Earned Royalties are [**]% or
                           less.

                  (2)      [**]% if Additional Earned Royalties are greater than
                           [**]% but less than [**]%.

                  (3)      [**]% if Additional Earned Royalties are equal to or
                           greater than [**]% but less than [**]%.

                  (4)      [**]% if Additional Earned Royalties are equal to or
                           greater than [**]% but less than [**]%.

                  (5)      [**]% if Additional Earned Royalties are equal to or
                           higher than [**]%.

         (D)      Only one royalty is due on each Licensed Product sold by
                  Alnylam or its sublicensees regardless of whether its
                  manufacture, use, importation or sale are or shall be covered
                  by more than one patent or patent application included in
                  Licensed Patents under this Agreement, and no further
                  royalties will be due for use of such Licensed Product by
                  Alnylam or its sublicensee's customers.

6.4      CREDITABLE PAYMENTS. Creditable payments under this Agreement will be
         an offset to Alnylam against each earned royalty payment which Alnylam
         would be required to pay under Section 6.3 until the entire credit is
         exhausted.

6.5      MILESTONE PAYMENTS.

         (A)      For the first Licensed Product, Alnylam will make the
                  following payments for the filing of [**] ("Milestone
                  Payments"):

                  (1)      $[**] for [**].

                  (2)      $[**] for [**].

                  (3)      $[**] for [**].

                  (4)      $[**] for [**].

         (B)      For the second Licensed Product, Alnylam will make the
                  following Milestone Payments:

                  (1)      $[**] for [**].

                  (2)      $[**] for [**].

                  (3)      $[**] for [**].

                  (4)      $[**] for [**].

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         (C)      For the third and every subsequent Licensed Product, Alnylam
                  will make the following Milestone Payments:

                  (1)      $[**] for [**].

                  (2)      $[**] for [**].

                  (3)      $[**] for [**].

                  (4)      $[**] for [**].

         (D)      Notwithstanding the above, at the time that Stanford receives
                  a Milestone Payment from Alnylam on behalf of a sublicensee
                  under Section 13.6, the corresponding Milestone Payment under
                  this Section 6.5 will not be due.

6.6      OBLIGATION TO PAY ROYALTIES. If this Agreement is not terminated in
         accordance with other provisions, Alnylam will be obligated to pay
         royalties on all Licensed Product that is either sold or produced under
         the license granted in Article 3, whether or not the Licensed Product
         is produced before the Effective Date of this Agreement or sold after
         the Licensed Patent has expired.

6.7      CURRENCY. The royalty on sales in currencies other than U.S. Dollars
         will be calculated using the appropriate foreign exchange rate for the
         currency quoted by the Bank of America (San Francisco) foreign exchange
         desk, on the close of business on the last banking day of each calendar
         quarter. Royalty payments to Stanford will be in U.S. Dollars. All
         non-U.S. taxes related to royalty payments will be paid by Alnylam and
         are not deductible from the payments due Stanford. Stanford shall
         assist Alnylam as reasonably requested by Alnylam and at Alnylam's
         expense, in recovering such taxes to the extent possible under
         applicable tax laws and treaties.

6.8      PATENT COSTS. Within thirty days after receiving a statement from
         Stanford during the Co-Exclusive period, Alnylam will reimburse
         Stanford:

         (A)      [**] of the Licensed Patent patenting expenses incurred by
                  Stanford before the Effective Date; and

         (B)      $[**] per year for Licensed Patent patenting expenses incurred
                  by Stanford after the Effective Date.

         (C)      If the Field of Use covered in this license becomes Exclusive
                  for Alnylam, Stanford and Alnylam will negotiate coverage of
                  patent expenses in good faith.

6.9      PATENT PROSECUTION.

         (A)      Stanford will be responsible for the filing, prosecution and
                  maintenance of the Licensed Patents. Alnylam shall be kept
                  informed of and shall receive copies of all documentation and
                  substantive actions pertaining to the filing, prosecution and
                  maintenance of Licensed Patents. Alnylam shall have reasonable
                  opportunities to participate in decision making and Stanford
                  will use diligent efforts to incorporate Alnylam's reasonable
                  suggestion.

         (B)      Throughout the term of this agreement, Alnylam will retain
                  rights to any claims that have support in the Licensed Patents
                  (defined in Section 2.1), whether or not they are in a CIP.

         (C)      If Stanford elects not to continue to seek or maintain patent
                  prosecution on any Licensed Patent in any country during the
                  co-exclusive term of the license despite

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                  Alnylam's willingness to pay its share of the prosecution
                  costs, Alnylam shall have the right, at its expense, to
                  procure, maintain and enforce in any country such Licensed
                  Patent.

6.10     MOST FAVORED LICENSEE Stanford warrants and represents that it has not
         granted a license in the Field of Use to another party and shall not do
         so in the future on terms that are more favorable than those hereby
         granted to Alnylam.

7        ROYALTY REPORTS, PAYMENTS, AND ACCOUNTING

7.1      QUARTERLY EARNED ROYALTY PAYMENT AND REPORT. Beginning with the first
         sale of a Licensed Product, Alnylam will make written reports (even if
         there are no sales) and earned royalty payments to Stanford within
         thirty days after the end of each calendar quarter. This report will be
         in the form of the report of Appendix B and will state the number,
         description, and aggregate Net Sales of Licensed Product during the
         completed calendar quarter, and resulting calculation pursuant to
         Section 6.3 of earned royalty payment due Stanford for the completed
         calendar quarter. With each report, Alnylam will include payment due
         Stanford of royalties for the completed calendar quarter.

7.2      TERMINATION REPORT. Alnylam will make a written report to Stanford
         within ninety days after the license expires under Section 3.2. Alnylam
         will continue to make reports after the license has expired, until all
         Licensed Product produced under the license have been sold or
         destroyed. Concurrent with the submittal of each post-termination
         report, Alnylam will pay Stanford all applicable royalties.

7.3      ACCOUNTING. Alnylam will keep and maintain records for a period of
         three years showing the manufacture, sale, use, and other disposition
         of products sold or otherwise disposed of under the license. Records
         will include general-ledger records showing cash receipts and expenses,
         and records that include production records, customers, serial numbers,
         and related information in sufficient detail to enable Alnylam to
         determine the royalties payable under this Agreement.

7.4      AUDIT BY STANFORD. Alnylam will permit an independent certified public
         accountant selected by Stanford and acceptable to Alnylam to examine
         Alnylam's books and records from time to time (but no more than one
         time a year) to the extent necessary to verify reports provided for in
         Sections 7.1 and 7.2. Stanford will pay for the cost of such audit,
         unless the results of the audit reveal an underreporting of royalties
         due Stanford of five percent or more, in which case, Alnylam will pay
         the audit costs.

8        NEGATION OF WARRANTIES

8.1      To the best of Stanford's OTL knowledge, Stanford is the sole owner of
         Licensed Patent and has the right to enter into this Agreement and to
         grant the rights and licenses set forth herein.

8.2      NEGATION OF WARRANTIES. Nothing in this Agreement is construed as:

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         (A)      Stanford's warranty or representation as to the validity or
                  scope of any Licensed Patent;

         (B)      A warranty or representation that anything made, used, sold,
                  or otherwise disposed of under any license granted in this
                  Agreement is or will be free from infringement of patents,
                  copyrights, and other rights of third parties;

         (C)      An obligation to bring suit against third parties for
                  infringement, except as described in Article 12;

         (D)      Granting by implication, estoppel, or otherwise any licenses
                  or rights under patents or other rights of Stanford or other
                  persons other than Licensed Patent, regardless of whether the
                  patents or other rights are dominant or subordinate to any
                  Licensed Patent; or

         (E)      An obligation to furnish any technology or technological
                  information.

8.3      NO WARRANTIES. Except as expressly set forth in this Agreement,
         Stanford makes no representations and extends no warranties of any
         kind, either express or implied. There are no express or implied
         warranties of merchantability or fitness for a particular purpose, or
         that Licensed Product will not infringe any patent, copyright,
         trademark, or other rights, or any other express or implied warranties.

8.4      SPECIFIC EXCLUSION. Nothing in this Agreement grants Alnylam any
         express or implied license or right under or to U.S. Patent 4,656,134
         entitled "Amplification of Eucaryotic Genes" or any patent application
         corresponding thereto.

9        INDEMNITY

9.1      INDEMNIFICATION. Alnylam will indemnify, hold harmless, and defend
         Stanford and Stanford Hospitals and Clinics, and their respective
         trustees, officers, employees, students, and agents against all claims
         for death, illness, personal injury, property damage, and improper
         business practices arising out of the manufacture, use, sale, or other
         disposition of Invention, Licensed Patent, Licensed Product, by Alnylam
         or any sublicensee, or their customers except to the extent such claims
         are due to the gross negligence or willful misconduct of Stanford.
         Stanford agreed to promptly notify Alnylam in writing of any such claim
         and Alnylam shall manage and control, at its own expense, the defense
         of such claim and its settlement. Alnylam agrees not to settle any such
         claim against Stanford without Stanford's written consent where such
         settlement would include any admission of liability on the part of
         Stanford, where the settlement would impose any restriction on the
         conduct by Stanford of any of its activities, or where the settlement
         would not include an unconditional release of Stanford from all
         liability for claims that are the subject matter of such claim.

9.2      NO LIABILITY. Subject to Section 9.1, neither party will be liable to
         each other for any loss profit, expectation, punitive or other
         indirect, special, consequential, or other damages whatsoever, in
         connection with any claim arising out of or related to this Agreement
         whether grounded in tort (including negligence), strict liability,
         contract, or otherwise.

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9.3      WORKERS' COMPENSATION. Alnylam will at all times comply, through
         insurance or self-insurance, with all statutory workers' compensation
         and employers' liability requirements covering all employees with
         respect to activities performed under this Agreement.

9.4      INSURANCE. Alnylam will maintain, during the term of this Agreement,
         Comprehensive General Liability Insurance, including Product Liability
         Insurance prior to commercialization, with a reputable and financially
         secure insurance carrier to cover the activities of Alnylam and its
         sublicensees. Upon initiation of human clinical trials of Licensed
         Product, such insurance will provide minimum limits of liability of
         Five Million Dollars and will include Stanford and Stanford Hospitals
         and Clinics, and their respective trustees, directors, officers,
         employees, students, and agents as additional insureds. Insurance will
         be written to cover claims incurred, discovered, manifested, or made
         during or after the expiration of this Agreement and must be placed
         with carriers with ratings of at least A- as rated by A.M. Best.
         Alnylam will furnish a Certificate of Insurance evidencing primary
         coverage and additional insured requirements and requiring thirty (30)
         days prior written notice of cancellation or material change to
         Stanford. Alnylam will advise Stanford, in writing, that it maintains
         excess liability coverage (following form) over primary insurance for
         at least the minimum limits set forth above. All insurance of Alnylam
         will be primary coverage; insurance of Stanford and Stanford Hospitals
         and Clinics will be excess and noncontributory.

10       MARKING

Before the issuance of Licensed Patents, Alnylam will mark Licensed Product (or
their containers or labels) made, sold, or otherwise disposed of by it under the
license granted in this Agreement with the words "Patent Pending," and following
the issuance of one or more patents, with the numbers of the Licensed Patent.

11       STANFORD NAMES AND MARKS

Alnylam will not identify Stanford in any promotional advertising or other
promotional materials to be disseminated to the public or to use the name of any
Stanford faculty member, employee, or student, or any trademark, service mark,
trade name, or symbol of Stanford or Stanford Hospitals and Clinics, or any that
is associated with any of them, without Stanford's prior written consent, except
as may be required by law. Any use of Stanford's name will be limited to
statements of fact, e.g., that Stanford has co-exclusively licensed Licensed
Patents to Alnylam, and will not imply endorsement of Alnylam's products or
services.

12       INFRINGEMENT BY OTHERS: PROTECTION OF PATENTS

12.1     INFRINGEMENT ACTION.

         (A)      The parties will promptly inform each other of any suspected
                  infringement of any Licensed Patent by a third party.

         (B)      Stanford, Licensee and the other Co-Exclusive licensee will
                  meet to discuss the matter during the Co-Exclusive period of
                  this Agreement.

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         (C)      If the Field-of-Use becomes Exclusive for Licensee, Stanford
                  and Licensee will meet to discuss the matter during the
                  Exclusive period of this Agreement.

         (D)      If Stanford does not choose to institute suit against said
                  third party within sixty days of notification, then the suit
                  may be brought in both Licensee's and the other Co-Exclusive
                  licensee's names, and Stanford's name if necessary and the
                  out-of-pocket costs thereof shall be borne equally by Licensee
                  and the other Co-Exclusive licensee and any recovery or
                  settlement shall be shared equally between Licensee and the
                  other Co-Exclusive licensee. In such situation, Licensee and
                  the other Co-Exclusive licensee shall agree to the manner in
                  which they exercise control over such action and if either
                  party desires to also be represented by separate counsel of
                  its own selection, the fees for such counsel shall be paid by
                  such party.

         (E)      If both, Stanford and the other Co-Exclusive licensee, or
                  Stanford if there is no other Co-Exclusive Licensee, choose
                  not to institute suit against said third party within sixty
                  days of notification, then Licensee shall have the right to
                  institute suit in its own name or if necessary, in Stanford's
                  name, to enjoin such infringement. Licensee shall bear the
                  entire cost of such litigation and shall be entitled to retain
                  the entire amount of any recovery or settlement. However, any
                  recovery in excess of litigation/settlement costs will be
                  considered Net Sales and Licensee will pay Stanford royalties
                  as indicated in Article 6 hereof. Stanford shall provide
                  reasonable assistance to Licensee in the prosecution of any
                  such suit brought by Licensee, at Licensee's expense.

13       SUBLICENSING

13.1     PERMITTED SUBLICENSING FOR LICENSED CO-EXCLUSIVE FIELD OF USE. Alnylam
         may grant sublicenses in the Co-exclusive Licensed Field of Use during
         the Co-Exclusive period:

         (A)      only in conjunction with intellectual property under Alnylam's
                  control; and

         (B)      only if Alnylam is developing or selling Licensed Products in
                  the Co-Exclusive Licensed Field of Use.

13.2     REQUIRED SUBLICENSING FOR LICENSED CO-EXCLUSIVE FIELD OF USE.

         (A)      If Alnylam or its sublicensee(s) is unable or unwilling to
                  serve or develop a potential market or market territory for
                  which there is a willing sublicensee, Alnylam will, at
                  Stanford's request, negotiate in good faith a sublicense under
                  the Licensed Patents, provided that the same request has been
                  made of the other Co-Exclusive licensee.

         (B)      Bona fide business concerns of Alnylam will be considered in
                  any good faith negotiations for a sublicense under this
                  Agreement and Alnylam shall not be required to
                  license/sublicense any other intellectual property to such
                  sublicensee.

         (C)      If the other Co-Exclusive licensee itself or through its
                  sublicensees is already developing a product in the market or
                  market territory for which there is a willing sublicensee,
                  Alnylam will not be required to sublicense to such party.

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         (D)      In case that any other issue arises in the context of Required
                  Sublicensing, Stanford will discuss and try to resolve such
                  issue with Alnylam in good faith.

13.3     SUBLICENSE REQUIREMENTS. Any sublicense granted by Alnylam under this
         Agreement will be subject and subordinate to terms and conditions of
         this Agreement, except:

         (A)      Sublicense terms and conditions will reflect that any
                  sublicensee will not further sublicense, with the exception
                  that sublicensee may further sublicense rights under Licensed
                  Patents only as needed or implied in the course of
                  distribution or performance of service as required for the
                  sale to an end user of Licensed Products; and

         (B)      The earned royalty rate specified in the sublicense may be at
                  different rates than the rates in this Agreement.

13.4     SUBLICENSES REVERT TO STANFORD. Any sublicense will expressly include
         the provisions of Articles 7, 8, and 9 for the benefit of Stanford. If
         a sublicensee desires that its sublicense survive the termination of
         this agreement, Stanford agrees that the sublicense will revert to
         Stanford subject to the transfer of all obligations, including the
         payment of royalties specified in the sublicense, to Stanford or its
         designee, if this Agreement is terminated.

13.5     COPY OF SUBLICENSES. Alnylam will provide Stanford in confidence a copy
         of all relevant portions of any sublicenses granted pursuant to this
         Article 13.

13.6     SHARING OF SUBLICENSING INCOME. In addition to the earned royalties
         defined in Article 6, Alnylam will pay Stanford [**] percent ([**]%) of
         the amount received by Alnylam, that is specifically attributable to
         the Licensed Patents, from a sublicensee in

         (A)      up-front license fees, and

         (B)      clinical Milestone Payments as defined in Article 6.5.

13.7     ROYALTY-FREE SUBLICENSES. Alnylam may grant royalty-free or noncash
         sublicenses or cross-licenses if Alnylam pays all royalties due
         Stanford from sublicensee's Net Sales.

14       TERMINATION

14.1     TERMINATION BY ALNYLAM - Alnylam may terminate this Agreement by giving
         Stanford notice in writing at least thirty days in advance of the
         effective date of termination selected by Alnylam.

14.2     TERMINATION BY STANFORD - Stanford may terminate this Agreement if:

         (A)      Alnylam is:

                  (1)      delinquent on any royalty payment or report;

                  (2)      not diligently developing and commercializing
                           Licensed Product in accordance with Article 5 hereof;

                  (3)      in breach of any material provision; or

                  (4)      provides any false report; and

         (B)      Alnylam fails to remedy the breach within sixty days after
                  written notice by Stanford.

                                                                  Page: 11 of 16
<PAGE>

14.3     SURVIVING PROVISIONS - Surviving any termination or expiration are:

         (A)      Alnylam's obligation to pay royalties accrued or accruable
                  based on Licensed Product made, used or sold during the term
                  of this Agreement;

         (B)      Any cause of action or claim of Alnylam or Stanford, accrued
                  or to accrue, because of any breach or default by the other
                  party; and

         (C)      The provisions of Articles 6, 7, 8, and 9, 18.8and any other
                  provisions that by their nature are intended to survive.

15       ASSIGNMENT

15.1     ASSIGNMENT BY ALNYLAM - Alnylam may assign this Agreement to an
         Affiliate or, subject to Section 15.2 as part of:

         (A)      A sale or other transfer of Alnylam's entire business; or

         (B)      Sale or other transfer of that part of Alnylam's business to
                  which the license granted hereby relates.

15.2     CONDITIONS OF ASSIGNMENT - Prior to any assignment,

         (A)      Alnylam must give Stanford written notice of the assignment,
                  including the new assignee's contact information and;

         (B)      The new assignee must agree in writing to Stanford to be bound
                  by this Agreement.

         (C)      If the new assignee is a pharmaceutical or biotechnology
                  company having aggregate annual sales revenues of at least 3
                  times higher than the aggregate annual sales revenues of
                  Alnylam, Stanford must have received a $40,000 assignment fee.

15.3     AFTER THE ASSIGNMENT - Upon assignment of this Agreement, Alnylam will
         be released of liability under this Agreement and the term "Alnylam" as
         used in this Agreement will mean the new assignee.

16       ARBITRATION

16.1     DISPUTE RESOLUTION BY ARBITRATION. Any controversy arising under or
         related to this Agreement, and any disputed claim by either party
         against the other under this Agreement excluding any dispute relating
         to patent validity or infringement arising under this Agreement, will
         be settled by arbitration in accordance with the Licensing Agreement
         Arbitration Rules of the American Arbitration Association.

16.2     REQUEST FOR ARBITRATION. Either party may request arbitration. Stanford
         and Alnylam will mutually agree in writing on a third party arbitrator
         within thirty days of the arbitration request. The arbitrator's
         decision will be final and nonappealable and may be entered in any
         court having jurisdiction.

                                                                  Page: 12 of 16
<PAGE>

16.3     DISCOVERY. The parties will be entitled to discovery as if the
         arbitration were a civil suit in the California Superior Court. The
         arbitrator may limit the scope, time, and issues involved in discovery.

16.4     PLACE OF ARBITRATION. The parties will mutually agree in writing to a
         place where arbitration will be held.

17       NOTICES

All notices under this Agreement will be sent by first class mail, registered or
certified with return receipt requested, by reputable overnight courier or
delivered personally and shall be deemed to have been fully given upon receipt:

All general notices to Alnylam will be sent to:

                                    John Maraganore, Ph.D.
                                    President and Chief Executive Officer
                                    Alnylam Pharmaceuticals, Inc.
                                    790 Memorial Drive, Suite 202
                                    Cambridge, MA 02139

All financial invoices to Alnylam (i.e., accounting contact) will be sent in
writing to:

                                    Mary Trueblood
                                    Controller
                                    Alnylam Pharmaceuticals, Inc.
                                    790 Memorial Drive, Suite 202
                                    Cambridge, MA 02139

                                                                  Page: 13 of 16
<PAGE>

All progress report invoices to Alnylam (i.e., technical contact) will be sent
in writing to:

                                    Nagesh Mahanthappa, Ph.D., M.BA.
                                    Director, Corporate Development
                                    Alnylam Pharmaceuticals, Inc.
                                    790 Memorial Drive, Suite 202
                                    Cambridge, MA 02139

All general notices to Stanford will be e-mailed or mailed to:

                                    Office of Technology Licensing
                                    900 Welch Road, Suite 350
                                    Palo Alto, CA 94304-1080
                                    info@otlmail.Stanford.edu

All payments to Stanford will be mailed to:

                                    Stanford University
                                    Office of Technology Licensing
                                    Department #44439
                                    P.O. Box 44000
                                    San Francisco, CA 94144-4439

All progress reports to Stanford will be e-mailed or mailed to:

                                    Office of Technology Licensing
                                    1705 El Camino Real
                                    Palo Alto, CA 94306-1106
                                    info@otlmail.Stanford.edu

Either party may change its address with written notice to the other party.

18       MISCELLANEOUS

18.1     WAIVER AND AMENDMENT. This Agreement may be amended, supplemented or
         otherwise modified only by means of a written instrument signed by both
         parties. None of the terms of this Agreement can be waived except by
         the written consent of the party waiving compliance.

18.2     CHOICE OF LAW. This Agreement will be governed by the laws of the State
         of California applicable to agreements negotiated, executed, and
         performed within California.

18.3     HEADINGS. The headings in this Agreement are for convenience of
         reference only and do not constitute a part of it. The headings do not
         affect its interpretation.

                                                                  Page: 14 of 16
<PAGE>

18.4     FORCE MAJEURE. Neither party will be responsible for delays resulting
         from causes beyond the reasonable control of such party, including
         without limitation fire, explosion, flood, war, strike, or riot,
         provided that the nonperforming party uses commercially reasonable
         efforts to avoid or remove such causes of nonperformance and continues
         performance under this Agreement with reasonable dispatch whenever such
         causes are removed.

18.5     BINDING EFFECT. This Agreement shall be binding upon and inure to the
         benefit of the parties and their respective permitted successors and
         assigns.

18.6     SEVERABILITY In the event that any provision of this Agreement shall be
         held invalid or unenforceable for any reason, such invalidity or
         unenforceability shall not affect any other provision of this
         Agreement, and the parties shall negotiate in good faith to modify the
         Agreement to preserve (to the extent possible) their original intent.

18.7     ENTIRE AGREEMENT This Agreement constitutes the entire agreement
         between the parties with respect to its subject matter and supercedes
         all prior agreements or understandings between the parties relating to
         its subject matter.

18.8     CONFIDENTIALITY. Stanford agrees that diligent efforts shall be used to
         maintain the confidentiality of reports or documents received from
         Alnylam or its Affiliate or sublicensees pursuant to this Agreement.

The parties execute this Agreement in duplicate originals by their duly
authorized officers or representatives.

                           THE BOARD OF TRUSTEES OF THE LELAND

                           STANFORD JUNIOR UNIVERSITY

                                    Signature __________________________________
                                    Name    ____________________________________
                                    Title   ____________________________________
                                    Date    ____________________________________

                           LICENSEE

                                    Signature /s/John Maraganore
                                              _________________________________

                                    Name John Maraganore

                                    Title President and CEO

                                    Date    ____________________________________

                                                                  Page: 15 of 16
<PAGE>

                             APPENDIX A: MILESTONES

1.       By the end of the year [**], Alnylam will [**].

2.       By the end of the year [**], Alnylam will [**].

3.       By the end of the year [**], Alnylam will [**].

                                                                  Page: 16 of 16<PAGE>

                                                                   EXHIBIT 10.22

          CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
         SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

                                                                  EXECUTION COPY

                  RESEARCH COLLABORATION AND LICENSE AGREEMENT

                                  BY AND AMONG

                               MERCK & CO., INC.,

                         ALNYLAM PHARMACEUTICALS, INC.,

                                       AND

                               ALNYLAM HOLDING CO.

<PAGE>

                  RESEARCH COLLABORATION AND LICENSE AGREEMENT

         THIS AGREEMENT effective as of September 8, 2003 (the "EFFECTIVE
DATE"), by and among MERCK & CO., INC., a corporation organized and existing
under the laws of New Jersey ("MERCK") on the one hand, and ALNYLAM
Pharmaceuticals, Inc., a corporation organized under the laws of Delaware and
ALNYLAM HOLDING CO. ("ALNYLAM HOLDING"), a corporation organized and existing
under the laws of Delaware (collectively, "ALNYLAM") on the other hand.

                                    RECITALS:

         WHEREAS, MERCK and ALNYLAM desire to enter into a research
collaboration to develop technology useful for in vitro and/or in vivo target
identification and/or target validation using RNAi and to develop RNAi
therapeutic products upon the terms and conditions set forth herein;

         WHEREAS, ALNYLAM has developed ALNYLAM RNAi Technology (as hereinafter
defined) and has rights to ALNYLAM RNAi Patent Rights (as hereinafter defined);

         WHEREAS, MERCK desires to obtain a license under the ALNYLAM RNAi
Patent Rights and the ALNYLAM RNAi Technology upon the terms and conditions set
forth herein and ALNYLAM desires to grant such a license;

         WHEREAS, MERCK has developed MERCK RNAi Technology (as hereinafter
defined) and has rights to MERCK RNAi Patent Rights (as hereinafter defined);

         WHEREAS, ALNYLAM desires to obtain a license under the MERCK RNAi
Patent Rights and MERCK RNAi Technology upon the terms and conditions set forth
herein and MERCK desires to grant such a license; and

         NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, the Parties hereby agree as follows:

1.  DEFINITIONS

Unless specifically set forth to the contrary herein, the following terms,
whether used in the singular or plural, shall have the respective meanings set
forth below:

1.1      "AAA" has the meaning set forth in Section 9.6.1 of this Agreement.

1.2      "ABANDONED MERCK RNAi NOVEL TARGET" has the meaning set forth in
         Section 2.14.2 of this Agreement.

                                       2
<PAGE>

1.3      "AFFILIATE" means (except as provided for in Section 3.1.8) (i) any
         corporation or business entity of which fifty percent (50%) or more 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 MERCK or ALNYLAM, as the case may
         be; (ii) any corporation or business entity, which, directly or
         indirectly, owns, controls or holds fifty percent (50%) (or the maximum
         ownership interest permitted by law) or more of the securities or other
         ownership interests representing the equity, the voting stock or, if
         applicable, the general partnership interest, of MERCK or ALNYLAM, as
         the case may be, or (iii) any corporation or business entity, fifty
         percent (50%) or more of the securities or other ownership interests
         representing the equity of which is directly or indirectly, owned,
         controlled or held by the same corporation, business entity or security
         holders, or holders of ownership interests who own, control or hold
         fifty percent (50%) or more of the securities or other ownership
         interests representing the equity or the voting stock of MERCK or
         ALNYLAM, as the case may be.

1.4      "ALNYLAM" has the meaning set forth in the preamble to this Agreement.

1.5      "ALNYLAM-ASSIGNED THERAPEUTIC COLLABORATION INVENTIONS" has the meaning
         set forth in Section 2.7(d).

1.6      "ALNYLAM COLLABORATION INVENTIONS" means ALNYLAM Technology
         Collaboration Inventions, ALNYLAM Therapeutic Collaboration Inventions,
         ALNYLAM's interest in Joint Technology Collaboration Inventions, and
         ALNYLAM's interest in Joint Therapeutic Collaboration Inventions,
         collectively.

1.7      "ALNYLAM PRODUCT AGREEMENT" has the meaning set forth in Section
         3.1.5(c).

1.8      "ALNYLAM RNAi PATENT RIGHTS" means any and all patents and patent
         applications in the Territory (which for the purposes of this Agreement
         shall be deemed to include certificates of invention and applications
         for certificates of invention and to exclude Joint Collaboration Patent
         Rights) which, as of the Effective Date and/or during the Collaboration
         Term, are Controlled by ALNYLAM or its Affiliates and which are
         necessary or useful to MERCK in connection with the Technology
         Collaboration and/or for in vitro and/or in vivo target identification
         and/or target validation ("ALNYLAM TARGET IDENTIFICATION AND TARGET
         VALIDATION RNAi PATENT RIGHTS") and/or in the research, development,
         manufacture, marketing, use, import or sale of RNAi Therapeutic
         Products within the Therapeutic Collaboration ("ALNYLAM THERAPEUTIC
         RNAi PATENT RIGHTS"), including, but not limited to, those listed on
         Schedule 1.8. "ALNYLAM RNAi Patent Rights" include but are not limited
         to those which: (i) claim, cover or relate to RNAi Therapeutic Products
         including but not limited to improvements; or (ii) claim, cover or
         relate to ALNYLAM Collaboration Inventions; or (iii) are divisions,
         continuations, any portions of continuations-in-part that are
         themselves within the definition of ALNYLAM RNAi Patent Rights,
         reissues, renewals, extensions, supplementary protection certificates,
         and the like of any covered patents and patent applications and foreign
         equivalents thereof.

                                       3
<PAGE>

1.9      "ALNYLAM RNAi TECHNOLOGY" means any and all technology, information,
         material, and know-how, including but not limited to inventions
         (including without limitation ALNYLAM Collaboration Inventions and
         ALNYLAM's rights in Joint Collaboration Inventions), discoveries,
         improvements, processes, methods, protocols, formulas, data, and trade
         secrets patentable or otherwise, which: (a) as of the Effective Date
         and/or during the Collaboration Term, is in the Control of ALNYLAM or
         its Affiliates, including without limitation, all technology,
         information, and material, including inventions, discoveries and
         know-how, patentable or otherwise, of ALNYLAM's scientific advisors and
         consultants which are Controlled by ALNYLAM or its Affiliates, and (b)
         is necessary or useful to MERCK for the Collaboration and/or for in
         vitro and/or in vivo target identification and/or target validation
         and/or for the research, development, manufacturing, marketing, use,
         import or sale of Therapeutic Collaboration Products within the
         Therapeutic Collaboration in the Territory including, but not limited
         to, knowledge related to (i) the RNAi pathway and mechanism of action
         in mammalian cells, (ii) informatics approaches to optimal siRNA design
         for targeting specific genes and minimizing off-target effects, (iii)
         optimal RNA chemistry for siRNA in vivo stability and delivery, (iv)
         bio-analytical methods for measurement of pharmacokinetics and
         biodistribution of siRNAs, and (v) RNAi delivery methods.

1.10     "ALNYLAM TARGET IDENTIFICATION AND TARGET VALIDATION RNAi PATENT
         RIGHTS" has the meaning set forth in Section 1.8 of this Agreement.

1.11     "ALNYLAM TECHNOLOGY COLLABORATION INVENTIONS" means any and all
         discoveries, improvements, processes, methods, protocols, formulas,
         data, Inventions, know-how and trade secrets, patentable or otherwise,
         arising from the Technology Collaboration and developed or invented
         solely by employees of ALNYLAM or its Affiliates or other persons not
         employed by MERCK acting on behalf of ALNYLAM during the Technology
         Collaboration Term and/or during the one (1) year period following the
         termination or expiration of the Technology Collaboration Term.

1.12     "ALNYLAM THERAPEUTIC COLLABORATION INVENTIONS" means any and all
         discoveries, improvements, processes, methods, protocols, formulas,
         data, Inventions, know-how and trade secrets, patentable or otherwise,
         arising from the Therapeutic Collaboration and developed or invented
         solely by employees of ALNYLAM or its Affiliates or other persons not
         employed by MERCK acting on behalf of ALNYLAM during the Therapeutic
         Collaboration Term and/or during the one (1) year period following the
         termination or expiration of the Therapeutic Collaboration Term,
         including but not limited to ALNYLAM-Assigned Therapeutic Collaboration
         Inventions (as defined in Section 2.7(d)).

1.13     "ALNYLAM THERAPEUTIC COLLABORATION IP" means any and all technology,
         information, material, know-how, including, but not limited to
         Inventions (including ALNYLAM Therapeutic Collaboration Inventions and
         ALNYLAM's rights in Joint Therapeutic Collaboration Inventions),
         discoveries, improvements, processes, methods, protocols, formulas,
         data, and trade secrets, patentable or otherwise, patents and patent
         applications, which: (a) are Controlled by ALNYLAM or its Affiliates as
         of the Effective Date or during the Collaboration Term, and (b) are
         necessary or useful to MERCK in

                                       4
<PAGE>

         connection with the Therapeutic Collaboration and/or in the research,
         development, manufacture, marketing, use, import or sale of Therapeutic
         Collaboration Products.

1.14     "ALNYLAM THERAPEUTIC RNAi PATENT RIGHTS" has the meaning set forth in
         Section 1.8 of this Agreement.

1.15     "CALENDAR QUARTER" means the respective periods of three (3)
         consecutive calendar months ending on March 31, June 30, September 30
         and December 31.

1.16     "CALENDAR YEAR" means each successive period of twelve (12) months
         commencing on January 1 and ending on December 31.

1.17     "CHANGE OF CONTROL" has the meaning set forth in Section 9.2 of this
         Agreement.

1.18     "CODE" has the meaning set forth in Section 8.2.2(c) of this Agreement.

1.19     "CO-EXCLUSIVE" means with respect to any license of rights hereunder,
         the grant of exclusive rights, but for the retention by the granting
         Party of the same rights for itself and/or its Affiliates.

1.20     "COLLABORATION" means the Technology Collaboration and the Therapeutic
         Collaboration, collectively.

1.21     "COLLABORATION TERM" means the duration of the Collaboration, as
         described more fully in Section 2.8.

1.22     "COMBINATION PRODUCT" means an RNAi Therapeutic Product combined with
         any other clinically active therapeutic ingredient. All references to
         RNAi Therapeutic Product in this Agreement shall be deemed to include
         Combination Product, to the extent applicable.

1.23     "COMPETING RNAi PRODUCT" has the meaning set forth in Section 7.3(a) of
         this Agreement.

1.24     "COMPLETE MERCK NON-DRUGGABLE TARGET INFORMATION" has the meaning set
         forth in Section 2.14.2(2) of this Agreement.

1.25     "CONTROL", "CONTROLS" OR "CONTROLLED BY" means, with respect to any
         item of or right under ALNYLAM RNAi Patent Rights, MERCK RNAi Patent
         Rights, ALNYLAM RNAi Technology, MERCK RNAi Technology, ALNYLAM
         Therapeutic Collaboration IP, or MERCK RNAi Novel Target IP, the
         possession of (whether by ownership or license, other than pursuant to
         this Agreement) the ability by a Party to grant access to, or a license
         or sublicense of, such items or right as provided for herein without
         violating the terms of any agreement or other arrangement with any
         Third Party existing at the time such Party would be required hereunder
         to grant the other Party such access or license or sublicense.

1.26     "DISPUTE" has the meaning set forth in Section 9.6.1 of this Agreement.

                                       5
<PAGE>

1.27     "EFFECTIVE DATE" has the meaning set forth in the preamble of this
         Agreement.

1.28     "EXCLUDED CLAIM" has the meaning set forth in Section 9.6.1 of this
         Agreement.

1.29     "EXTENDED THERAPEUTIC COLLABORATION TERM" has the meaning set forth in
         Section 1.87 of this Agreement.

1.30     "FILING" of an NDA means the acceptance by a Regulatory Authority of an
         NDA for filing.

1.31     "FIRST COMMERCIAL SALE" means, with respect to any Therapeutic
         Collaboration Product, the first sale for end use or consumption of
         such Therapeutic Collaboration Product in a country after all required
         approvals, including Marketing Authorization, have been granted by the
         Regulatory Authority of such country.

1.32     "FULL-TIME EQUIVALENT" or "FTE" means the equivalent of a full-time
         scientist's work time over a twelve-month period (including normal
         vacations, sick days and holidays). The portion of an FTE year devoted
         by a scientist to the Technology Collaboration shall be determined by
         dividing the number of full days (including full days consisting of
         multiple partial days) during any twelve-month period devoted by such
         scientist to the Technology Collaboration by the total number of
         working days (excluding vacations, sick days and holidays) during such
         twelve-month period.

1.33     "HUMAN MATERIALS" has the meaning set forth in Section 2.12 of this
         Agreement.

1.34     "IND" means an Investigational New Drug application, Clinical Study
         Application, Clinical Trial Exemption, or similar application or
         submission for approval to conduct human clinical investigations filed
         with or submitted to a Regulatory Authority in conformance with the
         requirements of such Regulatory Authority.

1.35     "IND-ENABLING GLP TOXICOLOGY STUDIES" means genotoxicity, acute
         toxicology, safety pharmacology, and sub-chronic toxicology studies in
         species that satisfy applicable regulatory requirements using
         applicable good laboratory practices which meet the standard necessary
         for submission as part of an IND filing with a Regulatory Authority.

1.36     "INFORMATION" means any and all information and data, including without
         limitation all ALNYLAM RNAi Technology and MERCK RNAi Technology, and
         all other scientific, pre-clinical, clinical, regulatory,
         manufacturing, marketing, financial and commercial information or data,
         whether communicated in writing or orally or by any other method, which
         is provided by one Party to the other Party in connection with this
         Agreement.

1.37     "INITIAL MERCK NON-DRUGGABLE TARGET INFORMATION" has the meaning set
         forth in Section 2.14.2(1) of this Agreement.

1.38     "INITIAL OPT-IN NEGOTIATION PERIOD" has the meaning set forth in
         Section 2.14.3.3 of this Agreement.

                                       6
<PAGE>

1.39     "INVENTION" means any process, method, composition of matter, article
         of manufacture, discovery or finding that is conceived and/or reduced
         to practice in the course of the Collaboration.

1.40     "JOINT COLLABORATION INVENTIONS" means Joint Technology Collaboration
         Inventions and Joint Therapeutic Collaboration Inventions,
         collectively.

1.41     "JOINT COLLABORATION PATENT RIGHTS" means any and all patent
         applications and patents in the Territory (which for the purposes of
         this Agreement shall be deemed to include certificates of invention and
         applications for certificates of invention) which claim, cover or
         relate to any Joint Collaboration Inventions. "Joint Collaboration
         Patent Rights" include, but are not limited to, those patent
         applications and patents which claim, cover or relate to Joint
         Technology Collaboration Inventions or Joint Therapeutic Collaboration
         Inventions; or are divisions, continuations, any portion of
         continuations-in-part that are themselves within the definition of
         Joint Collaboration Patent Rights, reissues, renewals, extensions,
         supplementary protection certificates, and the like of any covered
         patents and patent applications and foreign equivalents thereof.

1.42     "JOINT STEERING COMMITTEE" or "JSC" means the joint steering committee
         as more fully described in Section 2.4.

1.43     "JOINT TECHNOLOGY COLLABORATION INVENTIONS" means any and all
         discoveries, improvements, processes, methods, protocols, formulas,
         data, Inventions, know-how and trade secrets, patentable or otherwise,
         arising from the Technology Collaboration and developed or invented
         jointly by employees of MERCK and ALNYLAM or their Affiliates or others
         acting on behalf of MERCK and ALNYLAM during the Technology
         Collaboration Term and/or during the one (1) year period following the
         termination or expiration of the Technology Collaboration Term.

1.44     "JOINT THERAPEUTIC COLLABORATION INVENTIONS" means any and all
         discoveries, improvements, processes, methods, protocols, formulas,
         data, Inventions, know-how and trade secrets, patentable or otherwise,
         arising from the Therapeutic Collaboration and developed or invented
         jointly by employees of MERCK and ALNYLAM or their Affiliates or others
         acting on behalf of MERCK and ALNYLAM during the Therapeutic
         Collaboration Term and/or during the one (1) year period following the
         termination or expiration of the Therapeutic Collaboration Term.

1.45     "LIMMER PATENTS" means those patent rights set forth on Schedule 1.45
         of this Agreement.

1.46     "MARKETING AUTHORIZATION" means any and all approvals (including
         without limitation all applicable pricing and governmental
         reimbursement approvals) necessary to receive permission from the
         relevant Regulatory Authority to market and sell an RNAi Therapeutic
         Product in any country.

1.47     "MATERIALS" has the meaning set forth in Section 2.10 of this
         Agreement.

                                       7
<PAGE>

1.48     "MERCK-ASSIGNED THERAPEUTIC COLLABORATION INVENTIONS" has the meaning
         set forth in Section 2.7(d).

1.49     "MERCK BROAD RNAi PATENT RIGHTS" means any and all patent applications
         and patents in the Territory (which for the purposes of this Agreement
         shall be deemed to include certificates of invention and applications
         for certificates of invention and to exclude Joint Collaboration Patent
         Rights), which, as of the Effective Date and/or during the
         Collaboration Term, are Controlled by MERCK or Rosetta Inpharmatics LLC
         ("ROSETTA") or their wholly-owned subsidiaries and which are necessary
         or useful to ALNYLAM for the Technology Collaboration and/or for in
         vitro and/or in vivo target identification and/or target validation.
         MERCK Broad RNAi Patent Rights include but are not limited to those
         which: (i) claim, cover or relate to MERCK Technology Collaboration
         Inventions; or (ii) are divisions, continuations, any portions of
         continuations-in-part that are themselves within the definition of
         MERCK Broad RNAi Patent Rights, reissues, renewals, extensions,
         supplementary protection certificates, and the like of any covered
         patents and patent applications and foreign equivalents thereof. "MERCK
         Broad RNAi Patent Rights" shall include, without limitation, those
         patents and patent applications set forth in Schedule 1.49. The term
         "MERCK Broad RNAi Patent Rights" does not include any patents or patent
         applications relating to MERCK Non-Druggable Targets, including but not
         limited to patents or patent applications relating to MERCK RNAi Novel
         Target IP.

1.50     "MERCK BROAD RNAi TECHNOLOGY" means any and all technology,
         information, material, and know-how, including, but not limited to
         inventions (including MERCK Technology Collaboration Inventions and
         MERCK's rights in Joint Technology Collaboration Inventions),
         discoveries, improvements, processes, methods, protocols, formulas,
         data, and trade secrets, patentable or otherwise which: (a) as of the
         Effective Date and/or during the Collaboration Term, is in the Control
         of MERCK or ROSETTA or their wholly-owned subsidiaries, and (b) is
         necessary or useful to ALNYLAM for the Technology Collaboration and/or
         for in vitro and/or in vivo target identification and/or target
         validation including (i) data and methods for monitoring RNAi
         selectivity and potency, and (ii) approaches to optimal design of
         siRNAs, including but not limited to informatics approaches. "MERCK
         Broad RNAi Technology" does not include technology, information, or
         material, including inventions, discoveries and know-how, patentable or
         otherwise, relating to MERCK Non-Druggable Targets, including but not
         limited to MERCK RNAi Novel Target IP.

1.51     "MERCK COLLABORATION INVENTIONS" means MERCK Technology Collaboration
         Inventions and MERCK Therapeutic Collaboration Inventions, MERCK's
         interest in Joint Technology Collaboration Inventions, and MERCK's
         interest in Joint Therapeutic Collaboration Inventions, collectively.

1.52     "MERCK NON-DRUGGABLE TARGETS" means [**] Controlled by MERCK or its
         Affiliates and which MERCK deems to be [**]. Such targets [**] include
         targets for which [**].

         A MERCK Non-Druggable Target may also include:

                                       8
<PAGE>

         1. [**] for which [**] have been i[**], for example in [**];

         2. [**] whereby [**] has been [**]; and

         3. [**] where [**] in the [**].

         MERCK Non-Druggable Targets must be [**]; that is they must be targets
         for which: (a) MERCK [**] the target that is [**] which, [**], provides
         [**] the MERCK Non-Druggable Target, [**] (b) MERCK believes there are
         [**] of which would be [**] (i) by [**] the MERCK Non-Druggable Target
         [**], or (ii) by the [**] MERCK Non-Druggable Target [**] in the [**].

1.53     "MERCK PRODUCT AGREEMENT" has the meaning set forth in Section
         3.1.6(c).

1.54     "MERCK PRODUCT-SPECIFIC RNAi PATENT RIGHTS" means any and all patent
         applications and patents in the Territory (which for the purposes of
         this Agreement shall be deemed to include certificates of invention and
         applications for certificates of invention and exclude Joint
         Collaboration Patent Rights) which: (a) as of the Effective Date and/or
         during the Collaboration Term, are Controlled by MERCK or ROSETTA or
         their wholly-owned subsidiaries, and (b) are necessary or useful to
         ALNYLAM in connection with the research, development, manufacture,
         marketing, use, import or sale of a specific RNAi Therapeutic Product
         within the Therapeutic Collaboration. MERCK Product-Specific RNAi
         Patent Rights include but are not limited to those which: (i) claim,
         cover or relate to a specific RNAi Therapeutic Product within the
         Therapeutic Collaboration; or (ii) claim, cover or relate to MERCK
         Therapeutic Collaboration Inventions; or (iii) are divisions,
         continuations, any portions of continuations-in-part that are
         themselves within the definition of MERCK Product-Specific RNAi Patent
         Rights, reissues, renewals, extensions, supplementary protection
         certificates, and the like of any covered patents and patent
         applications and foreign equivalents thereof. "MERCK Product-Specific
         RNAi Patent Rights" include, without limitation, those patents and
         patent applications set forth in Schedule 1.54. The term "MERCK
         Product-Specific RNAi Patent Rights" does not include any patents or
         patent applications relating to MERCK Non-Druggable Targets, including
         but not limited to patents or patent applications relating to MERCK
         RNAi Novel Target IP.

1.55     "MERCK PRODUCT-SPECIFIC RNAi TECHNOLOGY" means any and all technology,
         information, material, and know-how, including, but not limited to
         inventions (including MERCK Therapeutic Collaboration Inventions and
         MERCK's rights in Joint Therapeutic Collaboration Inventions),
         discoveries, improvements, processes, methods, protocols, formulas,
         data, and trade secrets, patentable or otherwise which: (a) as of the
         Effective Date and/or during the Collaboration Term, is in the Control
         of MERCK or ROSETTA or their wholly-owned subsidiaries, and (b) is
         necessary or useful to ALNYLAM for the research, development,
         manufacturing, marketing, use, sale or import of a specific RNAi
         Therapeutic Product within the Therapeutic Collaboration, and (c) is
         not included in MERCK Broad RNAi Technology. The term "MERCK
         Product-Specific Technology" does not include technology, information,
         or material, including but not limited to

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<PAGE>

         inventions, discoveries and know-how, patentable or otherwise, relating
         to MERCK Non-Druggable Targets, including but not limited to MERCK RNAi
         Novel Target IP.

1.56     "MERCK RNAi NOVEL TARGET" means a MERCK Non-Druggable Target that
         ALNYLAM, in its sole discretion, deems to be of sufficient scientific
         interest and possesses sufficient intellectual property such that
         ALNYLAM elects to develop an RNAi Therapeutic Product directed at such
         MERCK Non-Druggable Target under the Therapeutic Collaboration. For
         purposes of clarity, the term "MERCK RNAi Novel Target," shall not
         include any Abandoned MERCK RNAi Novel Target.

1.57     "MERCK RNAi NOVEL TARGET IP" means any and all information, material,
         know-how, patents and patent applications Controlled by MERCK or
         ROSETTA or their wholly-owned subsidiaries as of the Effective Date
         and/or during the Collaboration Term, and that both: (i) are necessary
         or useful to ALNYLAM for research, development, manufacturing,
         marketing, use, import or sale of RNAi Therapeutic Products within the
         Therapeutic Collaboration, and (ii) claim, cover or relate to specific
         MERCK RNAi Novel Targets.

1.58     "MERCK RNAi PATENT RIGHTS" means MERCK Broad RNAi Patent Rights and
         MERCK Product-Specific Patent Rights, collectively. The term "MERCK
         RNAi Patent Rights" shall not include patents or patent applications
         that claim, cover or relate to MERCK Non-Druggable Targets or MERCK
         RNAi Novel Target IP.

1.59     "MERCK RNAi TECHNOLOGY" means MERCK Broad RNAi Technology and MERCK
         Product-Specific RNAi Technology, collectively.

1.60     "MERCK TECHNOLOGY COLLABORATION INVENTIONS" means any and all
         discoveries, improvements, processes, methods, protocols, formulas,
         data, Inventions, know-how and trade secrets, patentable or otherwise,
         arising from the Technology Collaboration and developed or invented
         solely by employees of MERCK or its Affiliates or other persons not
         employed by ALNYLAM acting on behalf of MERCK during the Technology
         Collaboration Term and/or during the one (1) year period following the
         expiration or termination of the Technology Collaboration Term.

1.61     "MERCK THERAPEUTIC COLLABORATION INVENTIONS" means any and all
         discoveries, improvements, processes, methods, protocols, formulas,
         data, Inventions, know-how and trade secrets, patentable or otherwise,
         arising from the Therapeutic Collaboration and developed or invented
         solely by employees of MERCK or its Affiliates or other persons not
         employed by ALNYLAM acting on behalf of MERCK during the Therapeutic
         Collaboration Term and/or during the one (1) year period following the
         expiration or termination of the Therapeutic Collaboration Term,
         including but not limited to MERCK-Assigned Therapeutic Collaboration
         Inventions (as defined in Section 2.7(d)).

1.62     "NDA" means a New Drug Application, Biologics License Application,
         Worldwide Marketing Application, Marketing Application Authorization,
         Section 510(k) filing or similar application or submission for
         Marketing Authorization of a Therapeutic Collaboration Product filed
         with a Regulatory Authority in a country or group of

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<PAGE>

         countries to obtain marketing approval for a biological, pharmaceutical
         or other therapeutic product in that country or in that group of
         countries.

1.63     "NET SALES" means the gross invoice price of a Therapeutic
         Collaboration Product sold by MERCK or its Related Parties or by
         ALNYLAM or its Related Parties to the first Third Party (other than a
         sublicensee of a Party) after deducting, if not previously deducted,
         from the amount invoiced or received:

         (a)      trade and quantity discounts actually given other than early
                  pay cash discounts;

         (b)      returns, rebates, chargebacks and other allowances actually
                  given;

         (c)      retroactive price reductions that are actually granted; and

         (d)      a fixed amount equal to [**] percent ([**]%) of the amount
                  invoiced to cover bad debt, sales or excise taxes, early
                  payment cash discounts, transportation and insurance, custom
                  duties, and other governmental charges.

         With respect to sales of Combination Products, Net Sales shall be
         calculated on the basis of the gross invoice price of the Therapeutic
         Collaboration Product(s) containing the same composition and
         concentration of RNAi oligonucleotide(s) or oligonucleotide-derivatives
         sold without other clinically active ingredients.

         In the event that the Therapeutic Collaboration Product is sold only as
         a Combination Product and not sold without other clinically active
         therapeutic ingredients, the Parties shall negotiate in good faith
         another basis on which to calculate Net Sales with respect to a
         Combination Product that fairly reflects the value of the Therapeutic
         Collaboration Product relative to the other clinically active
         therapeutic ingredients in the Combination Product, but in no event
         shall such calculation result in the gross invoice price on which to
         base Net Sales being less than [**] percent ([**]%) of the gross
         invoice price of such Therapeutic Combination Product.

         A percentage of the deductions set forth in paragraphs (a) through (d)
         above equal to the ratio of the Net Sales for the Therapeutic
         Collaboration Product to the Net Sales of the entire Combination
         Product will be applied in calculating Net Sales for a Combination
         Product.

1.64     "OPT-IN FEE" has the meaning set forth in Section 2.14.3.2.

1.65     "OPT-IN INFORMATION" has the meaning set forth in Section 2.14.3.2 and
         as provided in Schedule 2.14.3.2.

1.66     "OPT-IN NEGOTIATION PERIOD" has the meaning set forth in Section
         2.14.3.3.

1.67     "OPT-IN NOTICE" has the meaning set forth in Section 2.14.3.2.

1.68     "OPT-IN RIGHT" means MERCK's right, to be exercised upon the completion
         of IND-Enabling GLP Toxicology Studies and MERCK's receipt of all
         Opt-In Information from

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<PAGE>

         ALNYLAM, to elect to enter into a Therapeutic Collaboration Product
         Agreement with ALNYLAM for a Therapeutic Collaboration Product as part
         of the Therapeutic Collaboration, as described in Section 2.14.3.2.

1.69     "PARTY" means MERCK and/or ALNYLAM.

1.70     "PROVIDERS" has the meaning set forth in Section 2.12 of this
         Agreement.

1.71     "R&D COSTS" has the meaning set forth in Section 2.14.3.2.

1.72     "REGULATORY AUTHORITY" means any applicable government regulatory
         authority involved in granting approvals for the manufacturing,
         marketing, reimbursement and/or pricing of an RNAi Therapeutic Product
         in the Territory, including, in the United States, the United States
         Food and Drug Administration and any successor governmental authority
         having substantially the same function.

1.73     "RELATED PARTY" means the Party, its Affiliates and permitted
         sublicensees ,which term does not include wholesale distributors of the
         Party or its Affiliates who purchase Therapeutic Collaboration Products
         from such Party or its Affiliates in an arm's length transaction and
         who have no other obligation, including but not limited to a reporting
         obligation, to such Party or its Affiliates. For purposes of clarity,
         such wholesale distributors do not include those distributors whose
         obligations to such Party or Affiliate include responsibility for sales
         and/or marketing efforts in a Territory or sharing of costs and
         expenses with respect to sales and/or marketing on behalf of a Party or
         its Affiliates, which distributors shall be deemed to be permitted
         sublicensees for purposes of this definition.

1.74     "RIBOPHARMA" means RIBOPHARMA AG, a company organized under the laws of
         Germany and an Affiliate of ALNYLAM.

1.75     "RNAi TECHNOLOGY" means technology useful for in vitro and/or in vivo
         target identification and/or target validation using RNA interference.

1.76     "RNAi THERAPEUTIC PRODUCTS" means oligonucleotide- or oligonucleotide
         derivative-based therapeutic modalities for gene function modulation or
         other moieties effective in gene function modulation that function
         through RNA interference and which are discovered, derived or developed
         by ALNYLAM or any person or entity acting on its behalf, including its
         Affiliates, consultants and scientific advisors during the
         Collaboration, and which are directed at MERCK RNAi Novel Targets.
         "RNAi Therapeutic Products" include, but are not limited to, any and
         all: (i) ALNYLAM Therapeutic Collaboration Inventions that are (a)
         oligonucleotide- or oligonucleotide derivative-based therapeutic
         modalities for gene function modulation or (b) moieties which are
         effective in gene function modulation, and (c) function through RNA
         interference and are directed at MERCK RNAi Novel Targets; and (ii)
         therapeutic preparations of the RNAi Therapeutic Product in final form
         for sale by prescription, over-the-counter or any other method for
         therapeutic use, including, without limitation, any Combination
         Product.

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1.77     "STOCK PURCHASE AGREEMENT" has the meaning set forth in Section 5.1.3
         of this Agreement.

1.78     "SUBSEQUENT OPT-IN NEGOTIATION PERIODS" has the meaning set forth in
         Section 2.14.3.3 of this Agreement.

1.79     "TECHNOLOGY COLLABORATION" means the research activities undertaken by
         the Parties hereto as set forth in Article 2 and Schedule 2.1.

1.80     "TECHNOLOGY COLLABORATION MILESTONE" means the [**], as provided in
         Section 5.1.4, by ALNYLAM, or its Affiliates, or its permitted
         collaborators (as provided for in Sections 2.2 and 2.13) if but only if
         MERCK receives the same rights for in vitro and/or in vivo target
         identification and/or target validation as ALNYLAM and its Affiliates
         to any intellectual property relating to the Collaboration which is
         developed by ALNYLAM or its Affiliates or such permitted collaborators,
         during the Technology Collaboration Term, of [**] where [**] through
         [**], excluding, however, [**].

1.81     "TECHNOLOGY COLLABORATION TERM" means the duration of the Technology
         Collaboration and "Extended Technology Collaboration Term" means any
         period of the Technology Collaboration as it may be extended by mutual
         agreement of the Parties, as described more fully in Section 2.8.

1.82     "TECHNOLOGY MILESTONE DISPUTE" has the meaning set forth in Section
         5.1.4.

1.83     "TERRITORY" means all of the countries in the world, and their
         territories and possessions.

1.84     "THERAPEUTIC COLLABORATION" means the research, development and
         commercialization activities undertaken by the Parties as set forth in
         Article 2.

1.85     "THERAPEUTIC COLLABORATION PRODUCT" has the meaning set forth in
         Section 2.14.3.2.

1.86     "THERAPEUTIC COLLABORATION PRODUCT AGREEMENT" has the meaning set forth
         in Section 2.14.3.3 of this Agreement.

1.87     "THERAPEUTIC COLLABORATION TERM" means the duration of the Therapeutic
         Collaboration and "Extended Therapeutic Collaboration Term" means any
         period of the Therapeutic Collaboration as it may be extended by mutual
         agreement of the Parties, as described more fully in Section 2.8.

1.88     "THIRD PARTY" means an entity other than a Party and its Affiliates.

1.89     "THIRD PARTY PATENT LICENSES" has the meaning set forth in Section
         5.2.5 of this Agreement.

1.90     "VALID PATENT CLAIM" means a claim of: (a) an issued and unexpired
         patent included within the ALNYLAM RNAi Patent Rights, the MERCK RNAi
         Patent Rights, or the Joint Collaboration Patent Rights which (i)
         covers the manufacture, use, sale or import of a Therapeutic
         Collaboration Product; (ii) has not been revoked or held unenforceable
         or

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<PAGE>

         invalid by a decision of a court or other governmental agency of
         competent jurisdiction, which is not appealable or has not been
         appealed within the time allowed for appeal, and (iii) has not been
         abandoned, disclaimed, denied or admitted to be invalid or
         unenforceable through reissue, re-examination or disclaimer or
         otherwise, or (b) a patent application within the Territory, which
         covers the manufacture, use, sale or import of a Therapeutic
         Collaboration Product, included within the ALNYLAM RNAi Patent Rights,
         the MERCK RNAi Patent Rights or the Joint Collaboration Patent Rights
         that has been pending less than [**] years from the earliest date on
         which such patent application claims priority and such patent claim has
         not been cancelled, withdrawn or abandoned.

2.       COLLABORATION

2.1      GENERAL. ALNYLAM and MERCK shall engage in the Collaboration upon the
         terms and conditions set forth in this Agreement. The activities to be
         undertaken in the course of the Technology Collaboration are set forth
         in the workplan attached hereto as Schedule 2.1, which may be amended
         from time to time upon the mutual written agreement of authorized
         representatives of the Parties.

2.2      CONDUCT OF RESEARCH. Each Party or its Affiliates shall commit the
         following resources to carry out the activities set forth in Schedule
         2.1:

         -        First year of the Technology Collaboration Term -    [**] FTEs

         -        Second year of the Technology Collaboration Term -   [**] FTEs

         -        Third year of the Technology Collaboration Term -    [**] FTEs

         ALNYLAM and MERCK shall be entitled to utilize the services of Third
         Parties (including Third Party contract research organizations) to
         perform their respective Technology Collaboration activities; provided
         that each Party shall remain at all times fully liable for its
         respective responsibilities under the Technology Collaboration. Neither
         Party shall use Third Party contract resources to conduct part or all
         of its obligations under the Technology Collaboration unless the other
         Party's rights under the agreement with the Third Party contract
         research organization guarantee the non-contracting Party the same
         rights under this Agreement as if the contracting Party had done the
         work itself. Third Party collaborations shall be governed by the terms
         of Section 2.13.

2.2.1    MERCK FTE SUPPORT. Notwithstanding the above, MERCK may cease to
         provide FTEs commencing one year after the Effective Date by written
         notice to ALNYLAM specifying the date on which MERCK's FTEs will cease
         work, in which event the license grant from ALNYLAM to MERCK shall be
         modified as set forth in Section 3.1.1.1.

2.3      PRINCIPAL SCIENTISTS. The principal scientists for the Technology
         Collaboration are Dr. [**] for ALNYLAM and Dr. [**] for MERCK. The
         Technology Collaboration and all work assignments to be performed by
         ALNYLAM and MERCK shall be carried out under the direction and
         supervision of the principal scientists noted above. Each Party

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<PAGE>

         shall immediately notify the other Party in the event that the Party's
         principal scientist is not or will not direct or supervise the
         Technology Collaboration or leaves the Party's employ.

2.4      JOINT STEERING COMMITTEE. The Parties hereby establish a committee to
         facilitate the Technology Collaboration as follows:

2.4.1    COMPOSITION OF THE JOINT STEERING COMMITTEE. The Technology
         Collaboration shall be conducted under the direction of a joint
         steering committee (the "JSC") comprised of two (2) named
         representatives of MERCK and two (2) named representatives of ALNYLAM,
         one of whom shall be the Senior Vice President, Research and
         Development of ALNYLAM. Each Party shall appoint its respective
         representatives to the JSC from time to time, and may substitute one or
         more of its representatives, in its sole discretion, effective upon
         notice to the other Party of such change. These representatives shall
         have appropriate technical credentials, experience and knowledge, and
         ongoing familiarity with the Technology Collaboration. Additional
         representatives or consultants may from time to time, by mutual consent
         of the Parties, be invited to attend JSC meetings, subject to such
         representative's and consultant's written agreement to comply with the
         requirements of Section 4.1. Each Party shall bear its own expenses
         relating to attendance at such meetings by its representatives.

2.4.2    JSC CHAIRPERSON. The JSC Chairperson shall rotate every six (6) months
         between ALNYLAM and MERCK. The initial JSC Chairperson shall be a
         representative of ALNYLAM. The Chairperson's responsibilities shall
         include:

         1.       scheduling meetings at least quarterly, but more frequently if
                  the JSC determines it necessary;

         2.       setting agenda for meetings with solicited input from other
                  members;

         3.       delivering minutes to the JSC for review and approval; and

         4.       conducting effective meetings, including ensuring that
                  objectives for each meeting are set and achieved.

2.4.3    MEETINGS. The JSC shall meet in accordance with a schedule established
         by mutual written agreement of the Parties, but no less frequently than
         once per Calendar Quarter, with the location for such meetings
         alternating between ALNYLAM and MERCK facilities (or such other
         locations as is determined by the JSC). Alternatively, the JSC may meet
         by means of teleconference, videoconference or other similar
         communications equipment, but at least two meetings per year shall be
         conducted in person.

2.4.4    JSC RESPONSIBILITIES. The JSC shall have the following responsibilities
         with respect to the Technology Collaboration:

         1.       oversight of all activities relating to the Technology
                  Collaboration;

         2.       approving annual workplans, timelines, goals and objectives;

         3.       determining each Party's responsibilities under the workplans;

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<PAGE>

         4.       monitoring the progress of the Technology Collaboration,
                  including reviewing relevant data;

         5.       considering issues of priority;

         6.       monitoring the diligence of each Party in performing its
                  obligations hereunder;

         7.       identifying and prioritizing academic collaborations for
                  review by the appropriate level of management of ALNYLAM and
                  MERCK;

         8.       approving any material changes to workplans;

         9.       discussing the content of the data package to be provided to
                  the JSC to enable the JSC to determine if the Technology
                  Collaboration Milestone has been achieved pursuant to Section
                  5.1.4, provided, however, that there is no obligation on the
                  JSC to agree to the final content of the data package prior to
                  submission to the JSC; and

         10.      considering and advising on technical issues that arise.

         The JSC shall attempt to resolve any and all disputes relating to the
         Technology Collaboration by unanimous consensus; provided, however,
         that all issues relating to budgets, expenditures or other economic
         matters shall be made by the appropriate level of management of the
         Parties and the JSC shall not have final decision-making authority
         regarding such matters.

         In the event the JSC is unable to reach a unanimous consensus with
         respect to any Dispute, then the two (2) senior members of the JSC, one
         from MERCK and one from ALNYLAM, shall attempt to resolve such Dispute.
         If the senior members of the JSC are unable to resolve such Dispute,
         then the Dispute shall be resolved in accordance with Section 9.6.1.

2.5      EXCHANGE OF INFORMATION. In accordance with the provisions of Article
         3, upon execution of this Agreement and on an ongoing basis during the
         Collaboration Term:

         (a)      ALNYLAM shall disclose to MERCK all ALNYLAM RNAi Technology
                  that is Controlled by ALNYLAM or its Affiliates as of the
                  Effective Date and/or during the first [**] years of the
                  Collaboration Term which has not been previously disclosed and
                  shall provide updates, at least quarterly, with regard to
                  ALNYLAM RNAi Technology that is Controlled by ALNYLAM or its
                  Affiliates as of the Effective Date and/or during the first
                  [**] years of the Collaboration Term, and ALNYLAM RNAi Patent
                  Rights that are Controlled by ALNYLAM or its Affiliates as of
                  the Effective Date and/or during the first [**] years of the
                  Collaboration Term, including but not limited to any and all
                  ALNYLAM RNAi Patent Rights filings related thereto, and
                  ALNYLAM Therapeutic Collaboration IP that is Controlled by
                  ALNYLAM or its Affiliates as of the Effective Date and/or
                  during the first [**] years of the Collaboration Term,
                  including but not limited to any and all ALNYLAM RNAi Patent
                  Rights filings related thereto;

         (b)      MERCK shall disclose to ALNYLAM all MERCK Broad RNAi
                  Technology that is Controlled by MERCK or ROSETTA or their
                  wholly-owned subsidiaries as of the Effective Date and/or
                  during the first [**] years of the Collaboration Term and

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<PAGE>

                  MERCK Product-Specific RNAi Technology that is Controlled by
                  MERCK or ROSETTA or their wholly-owned subsidiaries as of the
                  Effective Date and/or during the first [**] years of the
                  Collaboration Term which has not been previously disclosed and
                  shall provide updates, at least quarterly, with regard to such
                  MERCK Broad RNAi Technology that is Controlled by MERCK or
                  ROSETTA or their wholly-owned subsidiaries as of the Effective
                  Date and/or during the first [**] years of the Collaboration
                  Term and MERCK Product-Specific RNAi Technology that is
                  Controlled by MERCK or ROSETTA or their wholly-owned
                  subsidiaries as of the Effective Date and/or during the first
                  [**] years of the Collaboration Term and MERCK Broad RNAi
                  Patent Rights that are Controlled by MERCK or ROSETTA or their
                  wholly-owned subsidiaries as of the Effective Date and/or
                  during the first [**] years of the Collaboration Term,
                  including but not limited to any and all MERCK RNAi Patent
                  Rights filings related thereto; and

         (c)      each Party shall disclose to the other any and all Joint
                  Collaboration Inventions and Joint Collaboration Patent Rights
                  not previously disclosed and shall provide updates, at least
                  quarterly, with regard to such Joint Collaboration Inventions.
                  Disclosures required by this Section 2.5 shall be subject to
                  the confidentiality and non-use obligations of Third Party
                  agreements and the confidentiality provisions of Section 4.1
                  of this Agreement.

2.6      RECORDS AND REPORTS.

2.6.1    RECORDS. Each Party shall maintain records, in sufficient detail and in
         good scientific manner appropriate for patent and regulatory purposes,
         which shall fully and properly reflect all work done and results
         achieved in the performance of the Collaboration by such Party.

2.6.2    COPIES AND INSPECTION OF RECORDS. Each Party shall have the right,
         during normal business hours and upon reasonable notice, to inspect and
         copy all records of the other Party referred to in Section 2.6.1
         related to the Technology Collaboration and/or each Therapeutic
         Collaboration Product with respect to which such Party has elected to
         co-develop and co-promote pursuant to Section 2.14.3 or for which such
         Party has received an exclusive license pursuant to Section 3.1.5 or
         Section 3.1.6. The record-reviewing Party shall maintain such records
         and the information disclosed therein in confidence in accordance with
         Section 4.1. The record-reviewing Party shall have the right to arrange
         for its employees and/or consultants involved in the activities
         contemplated hereunder to visit the offices and laboratories of the
         record-keeping Party, and any of its Third Party contractors as
         permitted under Section 2.2, during normal business hours and upon
         reasonable notice, to discuss the Technology Collaboration work and its
         results in detail with the technical personnel and consultants of the
         record-keeping Party. Upon request, the record-keeping Party shall
         provide copies of the records described in Section 2.6.1 above.

2.6.3    REPORTS.

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<PAGE>

2.6.3.1  TECHNOLOGY COLLABORATION. Within thirty (30) days following the end of
         each Calendar Quarter during the Technology Collaboration Term, each
         Party shall provide to the other Party a written progress report in
         English which shall describe the work performed to date by such Party
         on the Technology Collaboration, provide an evaluation of the work by
         such Party performed in relation to the goals, deliverables and
         timelines of the Technology Collaboration, and provide such other
         information required by the Technology Collaboration or reasonably
         requested by the other Party relating to the progress of the goals,
         deliverables, timelines or performance of the Technology Collaboration,
         including the status and results of Third Party Collaborations covered
         by Section 2.13.

2.6.3.2  THERAPEUTIC COLLABORATION. At least two (2) times a year during the
         Therapeutic Collaboration Term, two (2) named representatives of MERCK
         and two (2) named representatives of ALNYLAM shall meet to exchange
         information relating to the Therapeutic Collaboration, to discuss
         possible changes to Schedule 2.14.3.2 based on interactions with
         Regulatory Authorities, and the provision by ALNYLAM to MERCK of a
         brief, written summary progress report in English which shall describe
         the work performed to date on the Therapeutic Collaboration, the
         progress of the development of all RNAi Therapeutic Products and
         Therapeutic Collaboration Products that are not yet the subject of a
         Therapeutic Collaboration Product Agreement, a MERCK Product Agreement
         or an ALNYLAM Product Agreement. Each Party shall appoint its
         respective representatives from time to time, and may substitute one or
         more of its representatives, in its sole discretion, effective upon
         notice to the other Party of such change. These representatives shall
         have appropriate technical credentials, experience and knowledge, and
         ongoing familiarity with the Therapeutic Collaboration. Additional
         representatives or consultants may from time to time, by mutual consent
         of the Parties, be invited to attend meetings, subject to such
         representative's and consultant's written agreement to comply with the
         requirements of Section 4.1.

2.7      COLLABORATION INVENTIONS.

         The entire right, title and interest in:

         (a)      ALNYLAM Technology Collaboration Inventions and ALNYLAM
                  Therapeutic Collaboration Inventions shall be owned solely by
                  ALNYLAM;

         (b)      MERCK Technology Collaboration Inventions and MERCK
                  Therapeutic Collaboration Inventions shall be owned solely by
                  MERCK;

         (c)      Joint Collaboration Inventions shall be owned jointly by
                  ALNYLAM and MERCK; and

         (d)      In the event MERCK, solely or jointly with ALNYLAM, makes any
                  discovery, improvement, or Invention with respect to a
                  Therapeutic Collaboration Product after receiving the Opt-In
                  Information for such Therapeutic Collaboration Product, and

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<PAGE>

                  prior to the earlier of ALNYLAM's opt-out pursuant to Section
                  2.14.3.3.1 or the execution of a Therapeutic Collaboration
                  Agreement or an ALNYLAM Product Agreement or a MERCK Product
                  Agreement or the expiration or termination of the Therapeutic
                  Collaboration Term, then MERCK shall assign the same to
                  ALNYLAM and it shall be an "ALNYLAM-ASSIGNED THERAPEUTIC
                  COLLABORATION INVENTION" and shall be included within the
                  definition of an ALNYLAM Therapeutic Collaboration Invention.
                  In the event ALNYLAM, solely or jointly with MERCK, makes any
                  discovery, improvement, or Invention with respect to a MERCK
                  Non-Druggable Target after receiving the Initial MERCK
                  Non-Druggable Target Information for such MERCK Non-Druggable
                  Target, and prior to its election either: (i) to select such
                  MERCK Non-Druggable Target as a MERCK RNAi Novel Target or
                  (ii) to decline to do so and ALNYLAM's return to MERCK of all
                  information and materials relating to the MERCK Non-Druggable
                  Target (as provided in Section 2.14.2), then ALNYLAM shall
                  assign the same to MERCK and it shall be a "MERCK-ASSIGNED
                  THERAPEUTIC COLLABORATION INVENTION" and shall be included
                  within the definition of a MERCK Therapeutic Collaboration
                  Invention.

         ALNYLAM shall promptly disclose to MERCK the development, making,
         conception or reduction to practice of ALNYLAM Technology Collaboration
         Inventions and Joint Collaboration Inventions and MERCK shall promptly
         disclose to ALNYLAM the development, making, conception or reduction to
         practice of MERCK Technology Collaboration Inventions and Joint
         Collaboration Inventions.

2.8      COLLABORATION TERM. Except as otherwise provided herein, the term of
         the Collaboration shall commence on the Effective Date and continue
         until the end of the Therapeutic Collaboration Term as set forth below
         ("COLLABORATION TERM"). The Technology Collaboration shall commence on
         the Effective Date and continue for a period of [**] years ("TECHNOLOGY
         COLLABORATION TERM"), and the term of the Therapeutic Collaboration
         shall commence on the [**] year anniversary of the Effective Date and
         continue for a period of [**] years and thereafter until (a) all Opt-In
         Negotiation Periods with respect to all Therapeutic Collaboration
         Products hereunder have expired and/or resulted in the execution of a
         Therapeutic Collaboration Agreement, a MERCK Product Agreement or an
         ALNYLAM Product Agreement, and (b) ALNYLAM has notified MERCK that
         there are no MERCK RNAi Novel Targets that have not either become the
         subject of such an agreement or become an Abandoned MERCK RNAi Novel
         Target ("THERAPEUTIC COLLABORATION TERM"). The Parties may extend the
         term of the Collaboration, the Technology Collaboration and/or the
         Therapeutic Collaboration by mutual written agreement of authorized
         representatives of the Parties, and shall, in such case, amend Schedule
         2.1 as applicable.

2.9      COMPLIANCE. Each Party shall conduct the Collaboration in accordance
         with all applicable laws, rules and regulations, including, without
         limitation, all current governmental regulatory requirements concerning
         good laboratory practices. In addition, if animals are used in research
         hereunder, each Party shall comply with the Animal Welfare Act or any
         other applicable local, state, national and international laws or
         regulations relating to the care and use of laboratory animals. The
         Parties encourage each other to use the highest standards, such as
         those set forth in the Guide for the Care

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<PAGE>

         and Use of Laboratory Animals (NRC, 1996), for the humane handling,
         care and treatment of such research animals. Any animals which are used
         in the course of the Collaboration, or products derived from those
         animals, such as eggs or milk, will not be used for food purposes, nor
         will these animals be used for commercial breeding purposes. Each Party
         shall notify the other Party in writing of any deviations from
         applicable regulatory or legal requirements. Each Party hereby
         certifies that it will not and has not employed or otherwise used in
         any capacity the services of any person debarred under Section 21 USC
         335a in performing any services hereunder.

2.10     MATERIALS. Each Party shall provide the other Party with sufficient
         quantities of the materials set forth in Schedule 2.10 ("MATERIALS"),
         as updated from time to time, solely for the purposes of carrying out
         the Parties' respective activities under the Technology Collaboration
         in accordance with the terms of this Agreement. Each Party acknowledges
         and agrees that Materials received from the other Party are not to be
         used in humans. In addition, none of the Materials received from the
         other Party, or any derivatives, analogs, modifications or components
         thereof, shall be transferred, delivered or disclosed to any Third
         Party, without the prior written approval of the Party which provided
         the Materials, other than a permitted collaborator under Section 2.13,
         a permitted Third Party under Section 2.2, or a Third Party performing
         services on behalf of a Party in the development of a Therapeutic
         Collaboration Product. Any unused Materials shall be, at the providing
         Party's option, either returned to the providing Party or destroyed in
         accordance with the providing Party's instructions.

2.11     EXCLUSIVE EFFORTS. Except as provided in Sections 2.13 and 3.1.1,
         during the Technology Collaboration Term, ALNYLAM and RIBOPHARMA and
         their Affiliates shall not enter into any agreement with a Third Party
         to develop RNAi Technology for use in in vitro and/or in vivo target
         identification and/or target validation; provided, however, that
         ALNYLAM and RIBOPHARMA and their Affiliates may enter into a
         collaboration with a Third Party, the primary purpose of which is the
         development of therapeutic products using RNA interference and, if RNAi
         Technology is developed therein for use in in vitro and/or in vivo
         target identification and/or target validation, then it may only be
         developed in the course of developing such therapeutic products.

         Notwithstanding the foregoing, each of ALNYLAM and RIBOPHARMA and their
         wholly-owned subsidiaries may, in its sole discretion, grant
         non-exclusive licenses under the Limmer Patents for the purpose of in
         vitro and/or in vivo target identification and/or target validation
         solely to Third Parties:

         (i)      with whom neither ALNYLAM nor RIBOPHARMA nor any of their
                  Affiliates has a collaboration or strategic alliance
                  agreement, or

         (ii)     with whom ALNYLAM or RIBOPHARMA or any of their Affiliates has
                  a collaboration or strategic alliance agreement, which has as
                  its primary purpose the development of therapeutic products
                  using RNA interference and, if RNAi Technology is developed
                  therein for use in in vitro and/or in vivo target
                  identification and/or target validation, then it may only be
                  developed in the course of developing such therapeutic
                  products, or

                                       20
<PAGE>

         (iii)    with whom ALNYLAM or RIBOPHARMA or any of their Affiliates has
                  a collaboration or strategic alliance agreement which does not
                  have in vitro and/or in vivo target identification and/or
                  target validation as a purpose.

2.12      USE OF HUMAN MATERIALS. If any human cell lines, tissue, human
          clinical isolates or similar human-derived materials ("HUMAN
          MATERIALS") have been or are to be collected and/or used in the
          Collaboration, each Party represents and warrants (i) that it has
          complied, or shall comply, with all applicable laws, guidelines and
          regulations relating to the collection and/or use of the Human
          Materials, and (ii) that it has obtained, or shall obtain, all
          necessary approvals and appropriate informed consents, in writing, for
          the collection and/or use of such Human Materials. Each Party shall
          provide documentation of such approvals and consents upon the other
          Party's request. Each Party further represents and warrants that such
          Human Materials may be used as contemplated in this Agreement without
          any obligation to the individuals or entities ("PROVIDERS") who
          contributed the Human Materials, including, without limitation, any
          obligation of compensation to such Providers or any other Third Party
          for the intellectual property associated with, or commercial use of,
          the Human Materials for any purposes.

2.13     THIRD PARTY COLLABORATIONS. In addition to the right to utilize the
         services of Third Parties to perform Technology Collaboration
         activities pursuant to Section 2.2, during the Technology Collaboration
         Term, ALNYLAM and MERCK agree that it may be necessary or useful to
         enter into Third Party collaborations which provide technology,
         information, data or know-how, patentable or otherwise, which is
         necessary or useful for MERCK and/or ALNYLAM to perform its obligations
         under the Technology Collaboration. Such Third Party collaborations
         shall not conflict with the terms and conditions of this Agreement,
         including but not limited to Sections 2.11, 2.13 and 3.1.1, and shall
         be structured consistently with ALNYLAM and RIBOPHARMA's obligations
         and rights pursuant to this Agreement, including but not limited to
         Sections 2.11, 2.13 and 3.1.1. In the event that any such Third Party
         collaborations are contemplated in connection with the Technology
         Collaboration, the JSC shall discuss, subject to Third Party
         confidentiality obligations, whether to enter into such Third Party
         collaborations. The costs of such Third Party collaborations shall be
         borne by the Party(ies) entering into the agreement and such agreements
         shall include confidentiality and non-use provisions which are no less
         stringent than those set forth in Section 4.1 of this Agreement.

         The Parties shall use good faith efforts to ensure that, to the extent
         possible, all such Third Party collaborations shall provide that any
         and all data and results, discoveries and inventions, whether
         patentable or not, arising out of the Third Party collaboration may be
         used by bona fide collaborators of the Party entering into the Third
         Party collaboration agreement. In addition, the Party entering into
         such Third Party collaborations shall use reasonable efforts to obtain
         a right to sublicense to the other Party and its Affiliates any
         intellectual property arising out of the Third Party collaboration for
         use in connection with the Collaboration.

2.14     THERAPEUTIC COLLABORATION.

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<PAGE>

2.14.1   GOAL. The goal of the Therapeutic Collaboration is to develop RNAi
         Therapeutic Products for disease-associated targets which are not
         amenable to therapeutic intervention by conventional small molecule
         chemistry. The activities to be undertaken in the course of the
         Therapeutic Collaboration for each MERCK RNAi Novel Target shall be set
         forth in a detailed workplan promptly after ALNYLAM has selected such
         MERCK RNAi Novel Target as provided in Section 2.14.2(3).

2.14.2   PROVISION, SELECTION AND ABANDONMENT OF MERCK NON-DRUGGABLE TARGETS.
         During the Therapeutic Collaboration Term, MERCK shall provide to
         ALNYLAM a minimum of [**] MERCK Non-Druggable Targets which are
         candidates for RNAi Therapeutic Products during the first [**] of each
         of the first [**] years of the Therapeutic Collaboration Term,
         beginning with the year starting September 1, 2004, in accordance with
         the procedures set forth below. ALNYLAM shall notify MERCK, within [**]
         of receiving the Complete MERCK Non-Druggable Target Information (as
         defined below) for the last MERCK Non-Druggable Target received by
         ALNYLAM during each year of the Therapeutic Collaboration Term for
         which ALNYLAM requests the Complete MERCK Non-Druggable Target
         Information, if it chooses to develop an RNAi Therapeutic Product
         directed at any or all of such MERCK Non-Druggable Targets (whereupon
         such MERCK Non-Druggable Target chosen by ALNYLAM for development shall
         be a "MERCK RNAi NOVEL TARGET"). After selecting a MERCK RNAi Novel
         Target, ALNYLAM shall use commercially reasonable efforts to develop an
         RNAi Therapeutic Product directed at such MERCK RNAi Novel Target.

         ALNYLAM may at any time notify MERCK that it has stopped work on a
         particular MERCK RNAi Novel Target because the target is no longer
         scientifically or commercially interesting to ALNYLAM ("ABANDONED MERCK
         RNAi NOVEL TARGET"). Upon such abandonment, ALNYLAM and its Affiliates:
         (a) shall immediately return to MERCK all information (including
         Information), data and materials (including all MERCK intellectual
         property) relating to the Abandoned MERCK RNAi Novel Target, including,
         but not limited to that which was provided pursuant to Schedules
         2.14.2(1) and 2.14.2(2), (b) shall have no rights to the Abandoned
         MERCK RNAi Novel Target, and (c) shall be prohibited from researching,
         developing or commercializing products, either alone or in
         collaboration with another party, directed at the Abandoned MERCK RNAi
         Novel Target or any fragment or common genetic variant thereof that
         results from a point mutation in, or a single nucleotide polymorphism
         with respect to, such Abandoned MERCK RNAi Novel Target for a period of
         [**] commencing on the date of notification to MERCK of the abandonment
         by ALNYLAM.

         With regard to the provision of MERCK Non-Druggable Targets to ALNYLAM
         by MERCK and notification to MERCK by ALNYLAM of its interest in
         selecting such MERCK Non-Druggable Targets, the following step-wise
         process shall apply:

         (1)      For each MERCK Non-Druggable Target provided by MERCK to
                  ALNYLAM, MERCK shall initially disclose to an individual
                  specified by ALNYLAM a limited amount of information as
                  provided in Schedule 2.14.2(1) ("INITIAL MERCK NON-DRUGGABLE
                  TARGET INFORMATION").

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<PAGE>

         (2)      Within [**] of receiving the Initial MERCK Non-Druggable
                  Target Information for the third MERCK Non-Druggable Target,
                  ALNYLAM shall notify MERCK if it wants to view the complete
                  MERCK Non-Druggable Target information relating to any or all
                  of the [**] MERCK Non-Druggable Targets provided in such year
                  as provided in Schedule 2.14.2(2) ("COMPLETE MERCK
                  NON-DRUGGABLE TARGET INFORMATION"), and MERCK will provide the
                  Complete MERCK Non-Druggable Target Information to an
                  individual specified by ALNYLAM within [**] of receipt of such
                  notice from ALNYLAM. If ALNYLAM has not received all Complete
                  MERCK Non-Druggable Target Information set forth in Schedule
                  2.14.2(2), or any portion thereof, ALNYLAM shall notify MERCK
                  of same, which notice shall specify any missing Complete MERCK
                  Non-Druggable Target Information or any portion thereof; and
                  MERCK shall, promptly after receipt of such notice, provide
                  any missing Complete MERCK Non-Druggable Target Information
                  identified in the notice to ALNYLAM. "Complete MERCK
                  Non-Druggable Target Information" shall include all
                  information, materials and/or data listed on Schedule
                  2.14.2(2) which is in MERCK's or ROSETTA's or their
                  fully-owned subsidiaries' possession (either by ownership or
                  license) and is directly relevant to the MERCK Non-Druggable
                  Target.

         (3)      Within [**] of receiving the Complete MERCK Non-Druggable
                  Target Information for the last MERCK Non-Druggable Target
                  received by ALNYLAM during each year for which ALNYLAM
                  requests the Complete MERCK Non-Druggable Target Information,
                  ALNYLAM shall notify MERCK in writing if it selects any of the
                  MERCK Non-Druggable Targets as a MERCK RNAi Novel Target.

         In the event that ALNYLAM reviews the Complete MERCK Non-Druggable
         Target Information for a MERCK Non-Druggable Target and then elects not
         to select it as a MERCK RNAi Novel Target, ALNYLAM and its Affiliates
         shall (a) immediately return to MERCK all information (including
         Information), data and materials (including all MERCK intellectual
         property) relating to the MERCK Non-Druggable Target, including, but
         not limited to that which was provided pursuant to Schedules 2.14.2(1)
         and 2.14.2(2), (b) have no rights to the MERCK Non-Druggable Target,
         and (c) be prohibited from researching, developing or commercializing
         products, either alone or in collaboration with another party, directed
         at such MERCK Non-Druggable Target or any fragment or common genetic
         variant thereof that results from a point mutation in, or a single
         nucleotide polymorphism with respect to, such MERCK Non-Druggable
         Target, for a period of [**] commencing on the date of notification to
         MERCK of ALNYLAM's decision not to select such MERCK Non-Druggable
         Target as a MERCK RNAi Novel Target.

         In the event that ALNYLAM selects a MERCK Non-Druggable Target as a
         MERCK RNAi Novel Target, MERCK shall be prohibited from researching,
         developing or commercializing therapeutic products that involve the use
         of RNA interference against such MERCK RNAi Novel Target, either alone
         or in collaboration with another party, unless and until the earlier
         of: (1) ALNYLAM has notified MERCK that such MERCK RNAi Novel Target is
         an Abandoned MERCK RNAi Novel Target, or (2) the Agreement has been
         terminated by MERCK pursuant to Section 8.2.1(a), or (3) ALNYLAM fails
         to use commercially reasonable efforts to develop an RNAi Therapeutic
         Product directed at

                                       23
<PAGE>

         such MERCK RNAi Novel Target as provided for in Section 2.14.2, or (4)
         [**] years following ALNYLAM's provision to MERCK of Opt-In Information
         and MERCK's decision not to "opt-in" on co-development of such
         Therapeutic Collaboration Product, provided, however, that nothing in
         this paragraph shall limit the rights granted to ALNYLAM in Section
         3.1.3.

2.14.3   OPT-IN.

2.14.3.1 DEVELOPMENT OF MERCK RNAi NOVEL TARGETS. ALNYLAM shall fund and be
         responsible for conducting all research and development of MERCK RNAi
         Novel Targets for discovery and development of RNAi Therapeutic
         Products as set forth herein and in the workplan developed pursuant to
         Section 2.14.1 through the completion of IND-Enabling GLP Toxicology
         Studies, at which time MERCK may exercise its Opt-In Right as set forth
         below. ALNYLAM shall not use Third Party contract resources to conduct
         part or all of its research obligations under the Therapeutic
         Collaboration unless ALNYLAM's rights under the agreement with the
         Third Party contract research organization are sufficient to guarantee
         MERCK the same rights under this Agreement as if ALNYLAM had done the
         work itself. At the time of negotiating an agreement for Third Party
         contract resources, the Parties agree to discuss a possible royalty due
         to a Third Party contract manufacturer for development and transfer of
         a manufacturing process.

2.14.3.2 OPT-IN PROCESS. Within [**] of completing the IND-Enabling GLP
         Toxicology Studies for any RNAi Therapeutic Product, ALNYLAM shall
         provide MERCK with all information, materials and data listed on
         Schedule 2.14.3.2 (provided that, with respect to those categories
         normally required for an IND filing, such information, materials or
         data may be omitted if the omission is approved by the relevant
         Regulatory Authority for an IND filing) ("OPT-IN INFORMATION") to
         enable MERCK to evaluate and decide whether to "opt-in" on
         co-development of such RNAi Therapeutic Product discovered by ALNYLAM
         (any RNAi Therapeutic Product for which ALNYLAM provides the Opt-In
         Information, whether or not chosen by MERCK, a "THERAPEUTIC
         COLLABORATION PRODUCT"). Notwithstanding the above, "Opt-In
         Information" shall include all information, materials and/or data
         listed on Schedule 2.14.3.2 which is in ALNYLAM's or its Affiliate's
         possession (either by ownership or license) and relating to the RNAi
         Therapeutic Product.

         MERCK shall have a period of [**] after receiving from ALNYLAM all
         Opt-In Information relating to the Therapeutic Collaboration Product in
         which to exercise its Opt-In Right with regard to such Therapeutic
         Collaboration Product by written notice ("OPT-IN NOTICE") to ALNYLAM.
         If MERCK has not received all Opt-In Information set forth in Schedule
         2.14.3.2, or any portion thereof (other than the materials and data
         which may be omitted pursuant to the first sentence of this Section
         2.14.3.2), MERCK shall notify ALNYLAM of same, which notice shall
         specify any missing Opt-In Information or any portion thereof; and
         ALNYLAM shall, promptly after receipt of such notice, provide any
         missing Opt-In Information identified in the notice to MERCK. If MERCK
         does not deliver such Opt-In Notice to ALNYLAM in such [**] period,
         then MERCK shall be deemed to have declined to exercise its Opt-

                                       24
<PAGE>

         In Right and ALNYLAM shall have no further obligation to MERCK with
         respect to such Therapeutic Collaboration Product, except as set forth
         in Section 5.2.1(a) of this Agreement. In the event that MERCK does not
         deliver such Opt-In Notice to Alnylam, MERCK and its Affiliates shall
         (a) immediately return to ALNYLAM all information (including
         Information), data and materials (including all ALNYLAM intellectual
         property) relating to the Therapeutic Collaboration Product, including,
         but not limited to that which was provided pursuant to Schedule
         2.14.3.2.

         Upon MERCK's giving an Opt-In Notice to ALNYLAM, MERCK shall deposit
         into an escrow account a fee of [**] Dollars ($[**]) (the "OPT-IN-FEE")
         plus [**] percent ([**]%) of the FTE and out-of-pocket research costs
         which ALNYLAM incurred in developing the MERCK RNAi Novel Target from
         the date ALNYLAM elected to develop the MERCK RNAi Novel Target until
         the date of delivery of the Opt-In Information to MERCK ("R&D COSTS").
         If the Parties fail to enter into a Therapeutic Collaboration Product
         Agreement or a MERCK Product Agreement, then the total Opt-In Fee and
         R&D Costs shall be returned promptly to MERCK. If the Parties enter
         into a Therapeutic Collaboration Product Agreement or if the Parties
         enter into a MERCK Product Agreement, then MERCK: (1) shall cause the
         Opt-In Fee and the R&D Costs to be promptly released within [**] of the
         execution thereof from such escrow account and delivered to ALNYLAM,
         and (2) shall pay to ALNYLAM [**]percent ([**]%) of the FTE and
         out-of-pocket research costs incurred by ALNYLAM from the date of
         delivery of all Opt-In Information to MERCK until the effective date of
         the Therapeutic Collaboration Product Agreement or MERCK Product
         Agreement, as the case may be, within [**] of receiving such
         information from ALNYLAM.

2.14.3.3 THERAPEUTIC COLLABORATION PRODUCT AGREEMENT. After MERCK provides
         ALNYLAM with the applicable Opt-In Notice, the Parties shall negotiate
         in good faith a definitive agreement to co-develop and co-promote a
         Therapeutic Collaboration Product ("THERAPEUTIC COLLABORATION PRODUCT
         AGREEMENT"). The provisions of any Therapeutic Collaboration Product
         Agreement shall address the sharing of expenses and of net profits.
         Such Therapeutic Collaboration Product Agreement shall contain terms
         substantially similar to those set forth in Schedule 2.14.3.3. The
         Therapeutic Collaboration Product Agreement with respect to the first
         Therapeutic Collaboration Product that is entered into by the Parties
         shall be completed and executed within [**] of ALNYLAM's receipt of
         MERCK's Opt-In Notice ("INITIAL OPT-IN NEGOTIATION PERIOD"). The
         Parties may mutually agree to extend the Initial Opt-In Negotiation
         Period. Each additional Therapeutic Collaboration Product Agreement
         entered into by the Parties, subsequent to the first Therapeutic
         Collaboration Product Agreement between the Parties shall be completed
         and executed by the Parties within [**] of ALNYLAM's receipt of the
         relevant MERCK Opt-In Notice, unless otherwise agreed by the Parties
         ("SUBSEQUENT OPT-IN NEGOTIATION PERIODS") (the Initial and Subsequent
         Opt-In Negotiation Periods shall each be referred to as an "OPT-IN
         NEGOTIATION PERIOD" and collectively referred to as the "OPT-IN
         NEGOTIATION PERIODS").

                                       25
<PAGE>

           During each Opt-In Negotiation Period, the Parties shall establish an
           Interim Joint Development Committee, comprised of an equal number of
           representatives from MERCK and ALNYLAM, to monitor and advise on the
           development of the relevant Therapeutic Collaboration Product;
           provided, however, that ALNYLAM shall be responsible for continuing
           the development of the Therapeutic Collaboration Product, including
           filing the IND and initiating clinical trials, and ALNYLAM shall have
           final decision-making authority with respect thereto during the
           relevant Opt-In Negotiation Period and may proceed with continuing
           development of the Therapeutic Collaboration Product without
           requiring a decision of the Interim Joint Development Committee.

           The Parties shall act in good faith to reach reasonable commercial
           terms during the Opt-In Negotiation Periods. If the Parties do not
           enter into a Therapeutic Collaboration Product Agreement during any
           Opt-In Negotiation Period, then the unresolved issues shall be
           submitted to the President of MERCK Research Laboratories and the CEO
           of ALNYLAM for resolution. If such President and CEO cannot reach an
           agreement regarding the unresolved issues, then such issues shall be
           submitted to arbitration in accordance with Section 9.6.3.

2.14.3.3.1 ALNYLAM'S OPT-OUT RIGHT. With respect to each Therapeutic
           Collaboration Product, during the first [**] of any Initial Opt-In
           Negotiation Period or Subsequent Opt-In Negotiation Period, ALNYLAM
           shall have the right to "opt-out" of co-developing and co-promoting
           such Therapeutic Collaboration Product, in which case MERCK may
           proceed to develop and promote such Therapeutic Collaboration Product
           independently without ALNYLAM, subject to Sections 5.2.1(b) and 3.1.6
           and the other terms and conditions of this Agreement and ALNYLAM
           shall: (a) immediately cease development of such Therapeutic
           Collaboration Product, (b) immediately return to MERCK all
           information (including Information), data and materials (including
           all MERCK intellectual property) relating to such Therapeutic
           Collaboration Product, (c) have no rights to the MERCK RNAi Novel
           Target against which such Therapeutic Collaboration Product is
           directed, (d) be prohibited from researching, developing or
           commercializing products, either alone or in collaboration with
           another party, directed at such MERCK RNAi Novel Target until the
           earlier of: (1) the Agreement has been terminated by ALNYLAM pursuant
           to Section 8.2.1(a), or (2) MERCK fails to use commercially
           reasonable efforts to develop such Therapeutic Collaboration Product
           directed at such MERCK RNAi Novel Target, or (3) [**] years following
           its notice to MERCK that it has elected to "opt-out" of the
           co-development and co-promotion of such Therapeutic Collaboration
           Product, provided, however, that nothing in this paragraph shall
           limit the rights granted to MERCK in Article 3.

2.15     PAYMENTS TO THIRD PARTIES RESULTING FROM SUBLICENSES. During the
         Collaboration Term, ALNYLAM and MERCK agree that it may be necessary or
         useful to enter into license agreements with a Third Party which
         provide technology, patentable or otherwise, which is necessary or
         useful for MERCK and/or ALNYLAM to perform its obligations under the
         Collaboration. Such Third Party license agreements shall not grant
         rights to any Third Party that conflict with the terms and conditions
         of this Agreement, including

                                       26
<PAGE>

         but not limited to Sections 2.11, 2.15 and 3.1.1, and shall be
         structured consistently with the Parties' obligations and rights
         hereunder. The costs of such Third Party license agreements shall be
         borne by the Party(ies) entering into the agreement and such agreements
         shall include confidentiality and non-use provisions which are no less
         stringent than those set forth in Section 4.1 of this Agreement. The
         Party entering into such Third Party license agreement shall use
         commercially reasonable efforts to obtain a right to sublicense to the
         other Party and its Affiliates any intellectual property licensed under
         or arising out of the Third Party license agreement for use in
         connection with the Collaboration and shall offer the other Party such
         a sublicense. In the event that either Party is obligated to make a
         payment (other than a royalty payment) to a Third Party under a license
         agreement with respect to the sublicense of rights to the other Party
         hereunder, the Party receiving the sublicense shall reimburse the other
         Party for such payments which are solely attributable to the grant of
         such sublicense. The Parties agree that this Section 2.15 shall not
         apply to any agreement entered into by either Party or its Affiliates
         prior to the Effective Date of this Agreement.

3.       LICENSES

3.1      LICENSE GRANTS.

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<PAGE>

3.1.1    ALNYLAM TARGET IDENTIFICATION AND TARGET VALIDATION PATENT RIGHTS,
         ALNYLAM RNAi PATENT RIGHTS AND ALNYLAM RNAi TECHNOLOGY. ALNYLAM hereby
         grants to MERCK a royalty-free license in the Territory, with a right
         to sublicense to its Affiliates, to the rights set forth below:

         (a)      under ALNYLAM Target Identification and Target Validation RNAi
                  Patent Rights, and

         (b)      under ALNYLAM's interest in Joint Collaboration Patent Rights
                  and Joint Collaboration Inventions, and

         (c)      under ALNYLAM Technology Collaboration Inventions, and

         (d)      to ALNYLAM RNAi Technology, and

         (e)      under ALNYLAM-Assigned Therapeutic Collaboration Inventions;

         which license: (1) shall include and be Co-exclusive for (a) through
         (e) that are Controlled by ALNYLAM or its Affiliates: (A) during the
         Technology Collaboration Term, and (B) with regard to Joint
         Collaboration Inventions and ALNYLAM Collaboration Inventions, during
         the one (1) year period following the termination or expiration of the
         Technology Collaboration Term, and (2) shall include and, to the extent
         not Co-exclusive under (1) (A), be non-exclusive for (a) through (e)
         that are owned and Controlled by ALNYLAM or its Affiliates during the
         fourth and fifth years following the Effective Date:

         (i)      during the Collaboration Term to perform its obligations under
                  the Collaboration; and

         (ii)     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 to discoveries made;

         provided, however, that ALNYLAM shall retain the right, during and
         after the Collaboration Term, including the right to sublicense to its
         Affiliates (except as otherwise set forth in Section 3.1.8), to
         practice the ALNYLAM RNAi Patent Rights, ALNYLAM's interest in Joint
         Collaboration Patent Rights and under ALNYLAM Technology Collaboration
         Inventions and ALNYLAM RNAi Technology (excluding ALNYLAM Therapeutic
         Collaboration Inventions which are RNAi Therapeutic Products) for: (1)
         internal research purposes, including without limitation, in vitro
         and/or in vivo target identification and/or target validation research,
         and (2) in collaborations with Third Parties the primary purpose of
         which is the development of therapeutic products using RNA interference
         and, if RNAi Technology is developed therein for use in in vitro and/or
         in vivo target identification and/or target validation, then it may
         only be developed in the course of developing such therapeutic
         products.

                                       28
<PAGE>

         Notwithstanding the foregoing, ALNYLAM's retained rights during the
         Collaboration Term to practice any and all of such ALNYLAM Target
         Identification and Target Validation RNAi Patent Rights, ALNYLAM RNAi
         Patent Rights, ALNYLAM's interest in Joint Collaboration Patent Rights,
         ALNYLAM Technology Collaboration Inventions, and/or ALNYLAM RNAi
         Technology in collaboration with Third Parties shall not include the
         right to perform in vitro and/or in vivo target identification and/or
         target validation research for Third Parties unless such research is
         performed in the course of a Third Party collaboration permitted under
         subsection (2) of the preceding paragraph.

         Notwithstanding any other provisions of this Agreement, the license
         grant to MERCK under ALNYLAM-Assigned Collaboration Inventions shall be
         perpetual.

3.1.1.1  TERMINATION OF MERCK FTE SUPPORT. If MERCK ceases to provide the
         required FTEs commencing [**] after the Effective Date as provided in
         Section 2.2.1, then: (1) the license grants provided by ALNYLAM to
         MERCK under Section 3.1.1 shall become non-exclusive, and (2) if MERCK
         has not paid the Technology Collaboration Milestone, then the license
         grant provided by ALNYLAM to MERCK in Section 3.1.1 shall be modified
         as follows: the definitions of ALNYLAM RNAi Patent Rights, ALNYLAM RNAi
         Technology and ALNYLAM Technology Collaboration Inventions shall be
         modified to exclude intellectual property rights Controlled by ALNYLAM
         or its Affiliates which come into the Control of Alnylam or its
         Affiliates more than one (1) year after the date specified in MERCK's
         notice under Section 2.2.1 of this Agreement; provided, however, that,
         if MERCK pays the Technology Collaboration Milestone at any time after
         MERCK ceases to provide the required FTEs as set forth in the first
         sentence of this paragraph, then the definitions of ALNYLAM RNAi Patent
         Rights, ALNYLAM RNAi Technology and ALNYLAM Technology Collaboration
         Inventions shall be modified to only exclude intellectual property
         rights Controlled by ALNYLAM or its Affiliates which come into the
         Control of ALNYLAM or its Affiliates after the later of: (1) the
         earlier of: (a) the date upon which MERCK paid the Technology
         Collaboration Milestone, or (b) the date upon which a Technology
         Milestone Dispute relating to the Technology Collaboration Milestone
         which was paid by MERCK was submitted to arbitration pursuant to
         Section 9.7, or (2) [**] after the date specified in MERCK's notice
         under Section 2.2.1 of this Agreement, and ALNYLAM and its Affiliates
         shall immediately disclose and provide to MERCK all applicable
         intellectual property not previously disclosed, including ALNYLAM RNAi
         Patent Rights, ALNYLAM RNAi Technology, and ALNYLAM Technology
         Collaboration Inventions.

3.1.2    MERCK BROAD RNAi PATENT RIGHTS, MERCK BROAD RNAi TECHNOLOGY, MERCK
         PRODUCT-SPECIFIC RNAi PATENT RIGHTS AND MERCK PRODUCT-SPECIFIC RNAi
         TECHNOLOGY. 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 3.1.8):

         (i)      under MERCK Broad RNAi Patent Rights that are Controlled by
                  MERCK or ROSETTA or their wholly-owned subsidiaries as of the
                  Effective Date and/or during the first [**] years of the
                  Collaboration Term; MERCK-Assigned Therapeutic

                                       29
<PAGE>

                  Collaboration Inventions; MERCK's interest in Joint
                  Collaboration Patent Rights; and MERCK Broad RNAi Technology
                  that is Controlled by MERCK or ROSETTA or their wholly-owned
                  subsidiaries as of the Effective Date and/or during the first
                  [**] years of the Collaboration Term, during the Collaboration
                  Term solely to perform its obligations under the
                  Collaboration; and

         (ii)     under MERCK Product-Specific RNAi Patent Rights that are
                  Controlled by MERCK or ROSETTA or their wholly-owned
                  subsidiaries as of the Effective Date and/or during the first
                  [**] years of the Collaboration Term, MERCK Product-Specific
                  RNAi Technology that is Controlled by MERCK or ROSETTA or
                  their wholly-owned subsidiaries as of the Effective Date
                  and/or during the first [**] years of the Collaboration Term,
                  and MERCK's interest in Joint Therapeutic Collaboration Patent
                  Rights, during the Therapeutic Collaboration Term solely to
                  perform its obligations under the Therapeutic Collaboration
                  with regard to a specific RNAi Therapeutic Product within the
                  Therapeutic Collaboration; and

         (iii)    under MERCK Broad RNAi Patent Rights that are Controlled by
                  MERCK or ROSETTA or their wholly-owned subsidiaries as of the
                  Effective Date and/or during the first [**] years of the
                  Collaboration Term, MERCK Broad RNAi Technology that is
                  Controlled by MERCK or ROSETTA or their wholly-owned
                  subsidiaries as of the Effective Date and/or during the first
                  [**] years of the Collaboration Term, MERCK's interest in
                  Joint Collaboration Patent Rights, and MERCK-Assigned
                  Therapeutic Collaboration Inventions, during and after the
                  Collaboration Term for the sole purpose of research
                  (including, without limitation, for internal in vitro and/or
                  in vivo target validation and/or target identification
                  research), development, manufacture, use, import or sale of
                  therapeutic products based on RNA interference 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 under Sections 3.1.2(i)-(iii), 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 MERCK
         RNAi Patent Rights, MERCK's interest in Joint Collaboration Patent
         Rights, and/or MERCK RNAi Technology to any Third Party other than as
         provided in Section 3.1.5. The Parties further agree that neither
         ALNYLAM nor its Affiliates have the right to provide any Third Party
         with MERCK RNAi Technology, MERCK RNAi Patent Rights, or MERCK's
         interest in Joint Collaboration Patent Rights as part of a research
         collaboration unless the primary purpose of such collaboration is the
         development of therapeutic products using RNA interference and, if RNAi
         Technology is developed therein for use in in vitro and/or in vivo
         target identification and/or target validation, then it may only be
         developed in the course of developing such therapeutic products;
         provided, further that, under no circumstance other than pursuant to
         Section 3.1.5(a) or an ALNYLAM Product

                                       30
<PAGE>

         Agreement, shall ALNYLAM or its Affiliates provide any Third Party with
         MERCK Product-Specific RNAi Technology or MERCK Product-Specific RNAi
         Patent Rights.

3.1.3    MERCK RNAi NOVEL TARGET IP. MERCK hereby grants ALNYLAM a worldwide,
         royalty-free, Co-exclusive license, with the right to sublicense its
         Affiliates (except as otherwise set forth in Section 3.1.8), to MERCK
         RNAi Novel Target IP Controlled by MERCK or ROSETTA or their
         wholly-owned subsidiaries solely to perform its obligations under the
         Therapeutic Collaboration during the Therapeutic Collaboration Term
         (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).

3.1.4    MERCK AND ALNYLAM CO-DEVELOP AND CO-COMMERCIALIZE A THERAPEUTIC
         COLLABORATION PRODUCT. If MERCK exercises its Opt-In Right pursuant to
         Section 2.14.3 and the Parties enter into a Therapeutic Collaboration
         Product Agreement for a specific Therapeutic Collaboration Product,
         then, as part of the Therapeutic Collaboration Product Agreement:

         (a)      ALNYLAM will grant to MERCK a worldwide, royalty-free,
                  Co-exclusive license, sublicensable to its Affiliates, to any
                  and all ALNYLAM RNAi Technology, ALNYLAM Collaboration
                  Inventions, ALNYLAM Therapeutic Collaboration IP, and ALNYLAM
                  RNAi Patent Rights, solely to perform its obligations under
                  the Therapeutic Collaboration Product Agreement to develop and
                  commercialize such Therapeutic Collaboration Product; and

         (b)      MERCK will grant to ALNYLAM a worldwide, royalty-free,
                  Co-exclusive license, sublicenseable to its Affiliates (except
                  as otherwise set forth in Section 3.1.8), to any and all MERCK
                  RNAi Technology, MERCK RNAi Patent Rights, MERCK Collaboration
                  Inventions and MERCK RNAi Novel Target IP which are Controlled
                  by MERCK or ROSETTA or their wholly-owned subsidiaries, solely
                  to perform its obligations under the Therapeutic Collaboration
                  Product Agreement to develop and commercialize such
                  Therapeutic Collaboration Product (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).

3.1.5    ALNYLAM DEVELOPS THERAPEUTIC COLLABORATION PRODUCT WITHOUT MERCK. If
         MERCK elects, pursuant to Section 2.14.3, not to opt-in on development
         and commercialization of a specific Therapeutic Collaboration Product
         with ALNYLAM or if the relevant Opt-In Negotiation Periods expire
         without any action taken by MERCK, then:

         (a)      MERCK will grant to ALNYLAM a worldwide, royalty-bearing,
                  exclusive license, with the right to sublicense, to any and
                  all MERCK Product-Specific RNAi Technology, MERCK Broad RNAi
                  Technology, MERCK RNAi Novel Target IP, MERCK Product-Specific
                  RNAi Patent Rights and MERCK Broad RNAi Patent Rights which
                  are Controlled by MERCK or ROSETTA or their wholly-owned

                                       31
<PAGE>

                  subsidiaries and MERCK's interest in Joint Collaboration
                  Patent Rights which are applicable to the specific Therapeutic
                  Collaboration Product solely to research, develop,
                  manufacture, use, import, sell and commercialize such
                  Therapeutic Collaboration Product (for the avoidance of doubt,
                  it is acknowledged that such license grant shall apply only to
                  such Therapeutic Collaboration Product and shall not apply to
                  any other product, and shall apply only to research and
                  development activities using RNA interference); and

         (b)      ALNYLAM shall pay MERCK the royalties as provided in Section
                  5.2.1(a); and

         (c)      The Parties shall enter into an agreement with respect to such
                  license and royalties and patent ownership, patent
                  prosecution, patent enforcement and such other matters as the
                  Parties may agree upon (an "ALNYLAM PRODUCT AGREEMENT"). Such
                  agreement will contain the terms set forth in Sections
                  3.1.5(a), 5.2.1(a), 5.2.1(c) and 5.2.2 through 5.5 and will be
                  negotiated in the manner set forth in the last paragraph of
                  Section 2.14.3.3, with unresolved issues resolved as set forth
                  therein.

3.1.6    MERCK DEVELOPS A THERAPEUTIC COLLABORATION PRODUCT WITHOUT ALNYLAM. If
         MERCK elects, pursuant to Section 2.14.3, to opt-in on development and
         commercialization of a specific Therapeutic Collaboration Product but
         ALNYLAM "opts-out" of developing and commercializing such Therapeutic
         Collaboration Product with MERCK pursuant to Section 2.14.3.3.1, then
         with respect to each such Therapeutic Collaboration Product:

         (a)      ALNYLAM will grant to MERCK a worldwide, royalty-bearing,
                  exclusive license, with the right to sublicense, to any and
                  all ALNYLAM RNAi Technology, ALNYLAM Collaboration Inventions,
                  ALNYLAM Therapeutic Collaboration IP, ALNYLAM RNAi Patents and
                  ALNYLAM's interest in Joint Collaboration Patent Rights which
                  are applicable to the Therapeutic Collaboration Product solely
                  to research, develop, manufacture, use, import, sell and
                  commercialize such Therapeutic Collaboration Product (for the
                  avoidance of doubt, it is acknowledged that such license shall
                  apply only to such Therapeutic Collaboration Product and shall
                  not apply to any other product);

         (b)      MERCK shall pay ALNYLAM the royalties as provided in Section
                  5.2.1(b); and

         (c)      The Parties will enter into an agreement with respect to such
                  license and royalties and patent ownership, patent
                  prosecution, patent enforcement and such other matters as the
                  Parties may agree upon (a "MERCK PRODUCT AGREEMENT"). Such
                  agreement will contain the terms set forth in Sections
                  3.1.6(a), 5.2.1(b), 5.2.1(c) and 5.2.2 through 5.5 and will be
                  negotiated in the manner set forth in the last paragraph of
                  Section 2.14.3.3, with unresolved issues resolved as set forth
                  therein.

3.1.7    JOINT COLLABORATION INVENTIONS. Each Party shall have the right to
         practice and to license to Third Parties any Joint Collaboration
         Inventions except to the extent either has Co-exclusive or exclusive
         rights hereunder, and/or under a Therapeutic Collaboration Product
         Agreement, an ALNYLAM Product Agreement or a MERCK Product

                                       32
<PAGE>

         Agreement; provided, however, that ALNYLAM does not have the right to
         license to Third Parties or to any Affiliate excluded under Section
         3.1.8 any Joint Collaboration Invention for the purpose of target
         identification and/or target validation research except in a
         collaboration with Third Parties in which the primary purpose of such
         collaboration is the development of therapeutic products using RNA
         interference and, if RNAi Technology is developed therein for use in in
         vitro and/or in vivo target identification and/or target validation,
         then it may only be developed in the course of developing such
         therapeutic products.

3.1.8    ALNYLAM AFFILIATE RESTRICTIONS. For purposes of subsections 3.1.1 (but
         not 3.1.1.1), 3.1.2, 3.1.3, 3.1.4 and 3.1.7, 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 [**] percent ([**]%) 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 pharmaceutical company, a biotechnology company, or a group
         of such companies acting in concert, having annual sales revenues in
         the aggregate amount of [**] U.S. dollars ($[**]) or by any investment
         entity affiliated with any such pharmaceutical or biotechnology
         company.

4.       CONFIDENTIALITY AND PUBLICATION

4.1      NONDISCLOSURE OBLIGATION. 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:

         (a)      is known by 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;

         (b)      is properly in the public domain;

         (c)      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;

         (d)      is developed by the receiving Party independently of
                  Information received from the disclosing Party, as documented
                  by the receiving Party's business records;

         (e)      is deemed necessary by a Party to be disclosed to Related
                  Parties, agents, consultants, and/or other Third Parties for
                  any and all purposes such Party and its Affiliates deem
                  necessary or advisable in the ordinary course of business in
                  accordance with this Agreement on the condition that such
                  Third Parties agree to be bound by the confidentiality and
                  non-use obligations contained this Agreement; provided the
                  term of confidentiality for such Third Parties shall be no
                  less than seven (7) years.

                                       33
<PAGE>

         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 (a) governmental or other regulatory agencies in order to obtain
         patents or to gain or maintain approval to conduct clinical trials or
         to market Therapeutic Collaboration Products; 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 or authorizations,
         (b) governmental or other regulatory agencies to the extent required by
         law or by the requirements of any nationally-recognized securities
         exchange, quotation system or over-the-counter market on which such
         Party has its securities listed or traded, (c) any actual or
         prospective investors, lenders and other financing sources, provided,
         however, that neither the Party nor its Affiliates shall disclose the
         work plan or any portion thereof to such persons or entities, and (d)
         actual or prospective collaborators or strategic partners who are
         obligated to keep such information confidential; provided, however,
         that the Party and/or its Affiliates shall only disclose to actual or
         prospective collaborators and strategic partners the general subject
         matter of this Agreement, the licenses granted hereunder, the
         exclusivity provision set forth in Section 2.11, the provisions of
         Article 4 and the patent provisions as set forth in Article 7.

         If a Party is required by judicial or administrative process to
         disclose Information that is subject to the non-disclosure provisions
         of this Section 4.1 or Section 4.2, 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 4.1 and Section
         4.2, 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.

4.2      PUBLICATION. MERCK and ALNYLAM each acknowledge the other Party's
         interest in publishing the results of its research in order to obtain
         recognition within the scientific community and to advance the state of
         scientific knowledge. Each Party also recognizes the mutual interest in
         obtaining valid patent protection and in protecting business interests
         and trade secret information. Consequently, except for disclosures
         permitted pursuant to Section 4.1, either Party, its employees or
         consultants wishing to make a publication, or a disclosure to a Third
         Party relating to the Collaboration, shall deliver to the other Party a
         copy of the proposed written publication or an outline of an oral
         disclosure at least thirty (30) days prior to submission for
         publication or presentation. The reviewing Party shall have the right
         (a) to propose modifications to the publication or presentation for
         patent reasons, trade secret reasons or business reasons, or (b) to
         request a reasonable delay in publication or presentation in order to
         protect patentable

                                       34
<PAGE>

         information. If the reviewing Party requests a delay, the publishing
         Party shall delay submission or presentation for a period of sixty (60)
         days to enable patent applications protecting each Party's rights in
         such information to be filed in accordance with Article 7 below. Upon
         expiration of such sixty (60) days, the publishing Party shall be free
         to proceed with the publication or presentation. If the reviewing Party
         requests modifications to the publication or presentation, the
         publishing Party shall edit such publication to prevent disclosure of
         trade secret or proprietary business information prior to submission of
         the publication or presentation.

4.3      PUBLICITY/USE OF NAMES. No disclosure of the existence of, or the terms
         of, this Agreement may be made by either Party, and no Party shall use
         the name, trademark, trade name or logo of the other Party or its
         employees in any publicity, news release or disclosure relating to this
         Agreement or its subject matter, without the prior express written
         permission of the other Party, except as may be required by law or
         expressly permitted by the terms hereof.

         Notwithstanding the foregoing, within five (5) business days following
         the execution of this Agreement by both Parties, the Parties shall
         agree in writing upon a press release and ALNYLAM may thereafter issue
         such press release publicizing the Collaboration. Upon MERCK's prior
         written agreement as to the text of the release, which agreement shall
         be executed within ten (10) business days of MERCK's receipt of such
         press release and shall not be unreasonably withheld, ALNYLAM may also
         issue a press release announcing the achievement of the Technology
         Collaboration Milestone. Once any press release or any other written
         statement is approved in writing by both Parties, either Party may make
         subsequent public disclosure of the information contained in such press
         release or other written statement without the further approval of the
         other Party.

5.       PAYMENTS; ROYALTIES AND REPORTS

5.1      PAYMENTS.

5.1.1    SIGNATURE PAYMENT. Within twenty (20) days of the Effective Date, MERCK
         shall pay ALNYLAM HOLDING Two Million Dollars ($2,000,000.00).

5.1.2    MAINTENANCE FEE. MERCK shall pay ALNYLAM HOLDING a maintenance fee of
         [**] Dollars ($[**]) per annum for a period of [**] years upon the
         terms and conditions contained herein. The first installment of [**]
         Dollars ($[**]) shall be payable within [**] of the Effective Date and
         the second installment of [**] Dollars ($[**]) shall be payable within
         [**] of the Effective Date.

                                       35
<PAGE>

5.1.3    EQUITY INVESTMENT. Upon the terms and conditions set forth in the Stock
         Purchase Agreement between the Parties and dated as of the Effective
         Date (the "STOCK PURCHASE AGREEMENT"), MERCK shall purchase Five
         Million Dollars ($5,000,000.00) of ALNYLAM HOLDING Series C Convertible
         Preferred Stock at the purchase price per share set forth in the Stock
         Purchase Agreement.

5.1.4    MILESTONE PAYMENTS. Subject to the terms and conditions of this
         Agreement, MERCK shall pay to ALNYLAM HOLDING a milestone payment of
         [**] Dollars ($[**]), and shall purchase [**] Dollars ($[**]) of
         ALNYLAM HOLDING Series C Convertible Preferred Stock upon the terms and
         conditions set forth in the Stock Purchase Agreement upon ALNYLAM's
         achievement of the Technology Collaboration Milestone.

         ALNYLAM shall notify the JSC and shall prepare and deliver a data
         package for presentation to the JSC when ALNYLAM determines that it has
         achieved the Technology Collaboration Milestone. Within fifteen (15)
         business days following receipt of such data package, the JSC shall
         convene to review the data package and determine whether the data is
         sufficient to conclude that the Technology Collaboration Milestone has
         been achieved. If the JSC determines that there is not sufficient data
         to support the conclusion that the Technology Collaboration Milestone
         has been achieved, the JSC shall provide written notice to ALNYLAM of
         same, which notice shall specify all additional data that the JSC
         determines in good faith is necessary to make the data package
         sufficient to conclude that the Technology Collaboration Milestone has
         been achieved. Thereafter, ALNYLAM shall either submit the additional
         data to the JSC or notify the JSC that the sufficiency of the data is
         in dispute. Any additional data provided by ALNYLAM at the JSC's
         request shall be reviewed by the JSC within ten (10) business days
         following the JSC's receipt thereof.

         If the JSC determines there is sufficient data to support the
         conclusion that the Technology Collaboration Milestone has been
         achieved, the MERCK members of the JSC shall have thirty (30) days to
         conduct an internal review of the data package with MERCK's management
         and promptly thereafter and in any event no later than ten (10)
         business days following the expiration of MERCK's internal review
         period, the JSC shall determine whether the Technology Collaboration
         Milestone has been achieved. If the JSC determines that the Technology
         Milestone has been achieved, then MERCK shall make the milestone
         payment and purchase the Series C Convertible Preferred Stock as set
         forth in this Section 5.1.4 within ten (10) business days of such
         determination. If MERCK or ALNYLAM disputes the sufficiency of the data
         presented to the JSC or the determination of the JSC as to whether the
         Technology Collaboration Milestone has been achieved or the JSC fails,
         or the MERCK members of the JSC fail, to take action within the time
         periods above, then the Parties shall be deemed to have a Technology
         Milestone Dispute (the "TECHNOLOGY MILESTONE DISPUTE") which shall be
         resolved as follows: In the event of a Technology Milestone Dispute,
         the Parties agree that such Technology Milestone Dispute shall be
         submitted to the President of MERCK Research Laboratories and the CEO
         of ALNYLAM for resolution. If such President and CEO cannot reach an
         agreement regarding the Technology Milestone Dispute within thirty (30)
         days, then it shall be submitted to arbitration by either Party
         pursuant to Section 9.7 of this Agreement. The milestone payments shall
         be payable only upon the initial achievement

                                       36
<PAGE>

         of the Technology Collaboration Milestone and no amounts shall be due
         hereunder for subsequent or repeated achievement of such milestone.

5.1.5    USE OF PROCEEDS. ALNYLAM shall use all payments received from MERCK
         pursuant to this Section 5.1 solely for the purpose of funding its
         proposed business operations, including the subject matter of this
         Agreement, which focus on RNAi Technology and development of drugs
         based on RNA interference. Such payments are not creditable against any
         future payments by MERCK to ALNYLAM.

5.2      ROYALTIES.

5.2.1    ROYALTIES PAYABLE BY THE PARTIES. Subject to the terms and conditions
         of this Agreement, the royalty-paying Party shall pay to the
         royalty-receiving Party the following royalties on a country-by-country
         basis for Net Sales of each Therapeutic Collaboration Product by the
         royalty-paying Party or its Related Parties pursuant to the provisions
         of Section 5.2.1(c):

         (a)      ALNYLAM DEVELOPS A THERAPEUTIC COLLABORATION PRODUCT WITHOUT
                  MERCK. If MERCK elects, pursuant to Section 2.14.3, not to
                  opt-in on development and commercialization of a Therapeutic
                  Collaboration Product with ALNYLAM or the relevant Opt-In
                  Negotiation Period expires, then (1) in the event that the
                  MERCK Non-Druggable Target against which the Therapeutic
                  Collaboration Product is directed satisfies clause (a) of the
                  definition of MERCK Non-Druggable Target and MERCK has the
                  belief set forth in clause (b) of such definition, then
                  ALNYLAM shall pay MERCK the following royalty rates with
                  respect to such Therapeutic Collaboration Product and (2) in
                  the event that such MERCK Non-Druggable Target satisfies
                  clause (a) of the definition, but MERCK does not have the
                  belief set forth in clause (b) of such definition, then
                  ALNYLAM shall pay MERCK one-half of the applicable royalty
                  rate set forth below with respect to such Therapeutic
                  Collaboration Product:

<TABLE>
<CAPTION>
  Annual Net Sales of Therapeutic
       Collaboration Product                           Royalty on Annual Net Sales
       ---------------------                           ---------------------------
<S>                                                    <C>
Portion of Annual Net Sales < or = $[**]                           [**]%

Portion of Annual Net Sales > $[**]                                [**]%

Portion of Annual Net Sales > $[**]                                [**]%

Portion of Annual Net Sales > $[**]                                [**]%
</TABLE>

         (b)      MERCK DEVELOPS A THERAPEUTIC COLLABORATION PRODUCT WITHOUT
                  ALNYLAM. If MERCK elects pursuant to Section 2.14.3, to opt-in
                  on development and commercialization of a Therapeutic
                  Collaboration Product but ALNYLAM opts-out of development and
                  commercialization of such Therapeutic Collaboration Product

                                       37
<PAGE>

                  with MERCK, then MERCK shall pay ALNYLAM the following royalty
                  rates with respect to such Therapeutic Collaboration Product:

<TABLE>
<CAPTION>
  Annual Net Sales of Therapeutic
       Collaboration Product                            Royalty on Annual Net Sales
       ---------------------                            ---------------------------
<S>                                                     <C>
Portion of Annual Net Sales < or = $[**]                            [**]%

Portion of Annual Net Sales > $[**]                                 [**]%

Portion of Annual Net Sales > $[**]                                 [**]%

Portion of Annual Net Sales > $[**]                                 [**]%
</TABLE>

         (c)      GENERAL TERMS. Royalties on each Therapeutic Collaboration
                  Product at the rates set forth in Section 5.2.1(a) and (b)
                  shall be effective as of the date of First Commercial Sale of
                  such Therapeutic Collaboration Product in a country and shall
                  continue until the later of (i) the expiration of the last
                  Valid Patent Claim covering the manufacture, use, sale or
                  import of the Therapeutic Collaboration Product in the country
                  of sale, or (ii) the tenth (10th) anniversary of the First
                  Commercial Sale in such country, subject to the following
                  conditions:

                  (x)      that only one royalty shall be due with respect to
                           the same unit of Therapeutic Collaboration Product;

                  (y)      that no royalties shall be due upon the sale or other
                           transfer among a Party or its Related Parties, but in
                           such cases the royalty shall be due and calculated
                           upon the Party's or its Related Party's Net Sales to
                           the first independent Third Party; and

                  (z)      no royalties shall accrue on the disposition of
                           Therapeutic Collaboration Product in reasonable
                           quantities by a Party or its Related Parties as
                           samples (promotion or otherwise) or as donations (for
                           example, to non-profit institutions or government
                           agencies for a non-commercial purpose).

5.2.2    ROYALTY PAYABLE UNDER MANAGED PHARMACEUTICAL CONTRACT. It is understood
         by the Parties that a Party may sell Therapeutic Collaboration Product
         to an independent Third Party (such as a retailer or wholesaler) and
         may subsequently perform services relating to a Therapeutic
         Collaboration Product and other products under a managed pharmaceutical
         benefits contract or other similar contract. In such cases, it is
         agreed by the Parties that Net Sales shall be based on the average
         invoice price at which similar quantities of such Therapeutic
         Collaboration Product are sold in the country in question to Third
         Parties without providing such services.

5.2.3    CHANGE IN SALES PRACTICES. The Parties acknowledge that during the term
         of this Agreement, the royalty-paying Party's sales practices for the
         marketing and distribution of Therapeutic Collaboration Product may
         change to the extent to which the calculation of the payment for
         royalties on Net Sales may become impractical or even impossible. In

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<PAGE>

         such event the Parties agree to meet and discuss in good faith new ways
         of compensating the royalty-receiving Party to the extent currently
         contemplated under Section 5.2.1.

5.2.4    COMPULSORY LICENSES. If a compulsory license is granted to a Third
         Party with respect to a Therapeutic Collaboration Product in any
         country in the Territory with a royalty rate lower than the applicable
         royalty rate set forth in Section 5.2.1, then the royalty rate to be
         paid by the royalty-paying Party on Net Sales in that country under
         Section 5.2.1 shall be reduced to the rate paid by the compulsory
         licensee.

5.2.5    THIRD PARTY LICENSES. In the event the sale by one Party or its Related
         Parties of a Therapeutic Collaboration Product results in an obligation
         of the other Party to pay royalties or milestones to a Third Party
         under a license that is sublicensed hereunder, then the selling Party
         shall reimburse the other Party for such royalty or milestone. In the
         event that (i) a Party is required to reimburse the other pursuant to
         the preceding sentence, or (ii) one or more patent licenses (other than
         patent licenses for delivery devices, delivery systems, formulations,
         excipients and product components other than the active pharmaceutical
         ingredients), from Third Parties are required by MERCK or its Related
         Parties or ALNYLAM or its Related Parties in order to make, have made,
         use, offer to sell, sell or import a Therapeutic Collaboration Product
         (hereinafter "THIRD PARTY PATENT LICENSES"), [**]percent ([**]%) of the
         consideration: (1) required to be reimbursed pursuant to the first
         sentence of this section or actually paid under such Third Party Patent
         Licenses by MERCK or its Related Parties or ALNYLAM or its Related
         Parties for sale of such Therapeutic Collaboration Product in a
         country, or (2) by a Party pursuant to the last sentence of Section
         2.14.3.1 of this Agreement, for a Calendar Quarter shall be creditable
         against the royalty payments due the royalty-receiving Party by the
         royalty-paying Party with respect to the sale of such Therapeutic
         Collaboration Products in such country in such Calendar Quarter;
         provided, however, that in no event shall the royalties owed by the
         royalty-paying Party to the royalty-receiving Party for such Calendar
         Quarter in such country be reduced by more than [**] percent ([**]%).

5.2.6    REPORTS; PAYMENT OF ROYALTY. During the term of the Agreement following
         the First Commercial Sale of each Therapeutic Collaboration Product,
         the royalty-paying Party shall furnish to the royalty-receiving Party a
         quarterly written report for the Calendar Quarter showing the quantity
         of each Therapeutic Collaboration Product sold in each country (as
         measured in grams of active pharmaceutical ingredient), the gross sales
         of such Therapeutic Collaboration Product in each country, total
         deductions for such Therapeutic Collaboration Product for each country
         permitted by Section 1.63, the Net Sales in each country of such
         Therapeutic Collaboration Product subject to royalty payments sold by
         the royalty-paying Party or its Related Parties in the Territory during
         the reporting period and the royalties payable under this Agreement.
         Reports shall be due on the forty-fifth (45th) day following the close
         of each Calendar Quarter. Royalties shown to have accrued by each
         royalty report shall be due and payable on the date such royalty report
         is due. The royalty-paying Party shall keep complete and accurate
         records in sufficient detail to enable the royalties payable hereunder
         to be determined.

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<PAGE>

5.3      AUDITS.

         (a)      Upon the written request of the royalty-receiving Party and
                  not more than once in each Calendar Year, the royalty-paying
                  Party and/or its Related Parties shall permit an independent
                  certified public accounting firm of nationally-recognized
                  standing selected by the royalty-receiving Party and
                  reasonably acceptable to the royalty-paying Party, at the
                  royalty-receiving Party's expense except as set forth below,
                  to have access during normal business hours to such of the
                  records of the royalty-paying Party as may be reasonably
                  necessary to verify the accuracy of the royalty reports
                  hereunder for any year ending not more than thirty-six (36)
                  months prior to the date of such request. The accounting firm
                  shall disclose to the royalty-receiving Party only whether the
                  royalty reports are correct or incorrect and the specific
                  details concerning any discrepancies. No other information
                  shall be provided to the royalty-receiving Party.

         (b)      If such accounting firm identifies a discrepancy made during
                  such period, the appropriate Party shall pay the other Party
                  the amount of the discrepancy within twenty (20) days of the
                  date the royalty-receiving Party delivers to the
                  royalty-paying Party such accounting firm's written report so
                  concluding, or as otherwise agreed by the Parties in writing.
                  Such written report shall be binding upon the Parties. The
                  fees charged by such accounting firm shall be paid by the
                  royalty-receiving Party, unless such discrepancy represents an
                  underpayment of the lesser of one million U.S. dollars
                  ($1,000,000) or five percent (5%) of the total amounts due
                  hereunder, in which case such fees shall be paid by the
                  royalty-paying Party.

         (c)      The royalty-paying Party shall include in each sublicense
                  granted by it pursuant to this Agreement a provision requiring
                  the sublicensee to make reports to the royalty-paying Party,
                  to keep and maintain records of sales made pursuant to such
                  sublicense and to grant access to such records by the
                  royalty-receiving Party's independent accountant to the same
                  extent required of the royalty-paying Party under this
                  Agreement. Upon the expiration of thirty-six (36) months
                  following the end of any year, the calculation of royalties
                  payable with respect to such year shall be binding and
                  conclusive upon the royalty-receiving Party, and the
                  royalty-paying Party and its sublicensees shall be released
                  from any further liability or accountability with respect to
                  royalties for such year.

         (d)      Unless an audit for such year has been commenced upon the
                  expiration of thirty-six (36) months following the end of any
                  year, the calculation of royalties payable with respect to
                  such year shall be binding and conclusive upon both the
                  royalty-receiving Party and the royalty-paying Party, and the
                  royalty-paying Party and its Related Parties shall be released
                  from any further liability or accountability with respect to
                  royalties for such year.

         (e)      The royalty-receiving Party shall treat all financial
                  information subject to review under this Section 5.3 or under
                  any sublicense agreement in accordance with the
                  confidentiality and non-use provisions of this Agreement, and
                  shall cause its accounting firm to enter into an acceptable
                  confidentiality agreement with the

                                       40
<PAGE>

                  royalty-paying Party and/or its Related Parties obligating it
                  to retain all such information in confidence pursuant to such
                  confidentiality agreement.

5.4      PAYMENT EXCHANGE RATE. All payments to be made under this Agreement
         shall be made in United States dollars and may be paid by check made to
         the order of the receiving Party or bank wire transfer in immediately
         available funds to such bank account in the United States designated in
         writing by the receiving Party from time to time. In the case of sales
         outside the United States (i) by MERCK and its Related Parties, the
         rate of exchange to be used in computing the amount of currency
         equivalent in United States dollars due shall be made at the rate of
         exchange utilized by MERCK in its worldwide accounting system,
         prevailing on the third to the last business day of the month preceding
         the month in which such sales are recorded, and (ii) by ALNYLAM and its
         Related Parties, the rate of exchange to be used in computing the
         amount of currency equivalent in United States dollars due shall be
         made at the prevailing commercial rate of exchange for purchasing
         dollars with such foreign currency as published in the Wall Street
         Journal for the close of the last business day of the calendar quarter
         for which the relevant royalty payment is to be made by ALNYLAM.

5.5      INCOME TAX WITHHOLDING. If laws, rules or regulations require
         withholding of income taxes or other taxes imposed upon payments set
         forth in this Article 5, the paying Party shall make such withholding
         payments as required and subtract such withholding payments from the
         payments set forth in this Article 5. The paying Party shall submit
         appropriate proof of payment of the withholding taxes to the receiving
         Party within a reasonable period of time. At the request of the
         receiving Party, the royalty-paying Party shall, at its cost, give the
         royalty-receiving Party such reasonable assistance, which shall include
         the provision of appropriate certificates of such deductions made
         together with other supporting documentation as may be required by the
         relevant tax authority, to enable the royalty-receiving Party to claim
         exemption from such withholding or other tax imposed or obtain a
         repayment thereof or reduction thereof and shall upon request provide
         such additional documentation from time to time as is reasonably
         required to confirm the payment of tax.

6.       REPRESENTATIONS AND WARRANTIES

6.1      MUTUAL REPRESENTATIONS AND WARRANTIES. Each Party represents and
         warrants to the other Party that as of the Effective Date of this
         Agreement:

         (a)      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.

         (b)      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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<PAGE>

         (c)      This Agreement is legally binding upon it, enforceable in
                  accordance with its terms. Except as set forth in Section
                  6.1(c) of Schedule 6 to this Agreement, 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)      Except as set forth in Section 6.1(d) of Schedule 6 to this
                  Agreement, It has not, and will not during the term of this
                  Agreement, grant any right to any Third Party which would
                  conflict with the rights granted to the other Party hereunder.
                  It has (or will have at the time performance is due)
                  maintained and will maintain and keep in full force and effect
                  all agreements (including license agreements) and filings
                  (including patent filings) necessary to perform its
                  obligations hereunder.

6.2      ALNYLAM REPRESENTATIONS AND WARRANTIES. ALNYLAM represents and warrants
         to MERCK that as of the Effective Date of this Agreement:

         (a)      To the best of ALNYLAM's knowledge, the ALNYLAM RNAi Patent
                  Rights and ALNYLAM RNAi Technology exist and are not invalid
                  or unenforceable, in whole or in part;

         (b)      Except as set forth in Section 6.2(b) of Schedule 6 to this
                  Agreement, it has not previously assigned, transferred,
                  conveyed or otherwise encumbered its right, title and interest
                  in the ALNYLAM RNAi Patent Rights or the ALNYLAM RNAi
                  Technology in a manner that conflicts with any rights granted
                  to MERCK hereunder; and

         (c)      Except as set forth in Section 6.2(c) of Schedule 6, there are
                  no claims, judgments or settlements against or owed by ALNYLAM
                  or pending or threatened claims or litigation relating to the
                  ALNYLAM RNAi Patent Rights or the ALNYLAM RNAi Technology.

6.3      MERCK REPRESENTATIONS AND WARRANTIES. MERCK represents and warrants to
         ALNYLAM that as of the Effective Date of this Agreement:

         (a)      to the best of MERCK's knowledge, the MERCK RNAi Patent Rights
                  and the patent rights within the MERCK RNAi Novel Target IP
                  and MERCK RNAi Technology exist and are not invalid or
                  unenforceable, in whole or in part;

         (b)      it has not previously assigned, transferred, conveyed or
                  otherwise encumbered its right, title and interest in the
                  MERCK RNAi Patent Rights, MERCK Novel Target IP or the MERCK
                  RNAi Technology in a manner that conflicts with the rights
                  granted to ALNYLAM hereunder; and

         (c)      there are no claims, judgments or settlements against or owed
                  by MERCK or pending or threatened claims or litigation
                  relating to the MERCK RNAi Patent Rights, MERCK RNAi Novel
                  Target IP or the MERCK RNAi Technology.

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<PAGE>

6.4      ASSIGNMENT BY INVENTORS. ALNYLAM shall cause and ensure that each and
         every ALNYLAM employee, agent or representative, including consultants
         and scientific advisors, working on the Collaboration has assigned or
         will assign to ALNYLAM his/her rights to Inventions. MERCK shall cause
         and ensure that each and every MERCK employee, agent or representative,
         including consultants and scientific advisors, working on the
         Collaboration has assigned or will assign to MERCK his/her rights to
         Inventions.

6.5      INDEMNIFICATION.

         (a)      MERCK shall indemnify, hold harmless, and defend ALNYLAM, its
                  Affiliates and their respective directors, officers, employees
                  and agents from and against any and all claims, suits, losses,
                  liabilities, damages, costs, fees and expenses (including
                  reasonable attorneys' fees) arising out of or resulting from
                  the exercise of any rights, under this Agreement by MERCK, its
                  Affiliates and their respective sublicensees. This
                  indemnification shall include, but is not limited to, any and
                  all claims alleging product liability in connection with
                  Therapeutic Collaboration Products. This indemnification
                  excludes claims against ALNYLAM by any Third Party for
                  infringement of such Third Party's intellectual property
                  rights resulting from MERCK's exercise in accordance with the
                  terms of this Agreement of any intellectual property rights
                  granted by ALNYLAM hereunder. Furthermore, MERCK shall have no
                  obligation to indemnify ALNYLAM to the extent that the claim,
                  suit, loss, liability, damage, cost, fee or expense arises out
                  of or results from the negligence, willful misconduct or
                  breach of the terms of this Agreement of or by ALNYLAM, its
                  Affiliates, or their directors, officers, employees,
                  consultants, scientific advisors or agents.

         (b)      ALNYLAM shall indemnify, hold harmless, and defend MERCK, its
                  Affiliates and their respective directors, officers, employees
                  and agents from and against any and all claims, suits, losses,
                  liabilities, damages, costs, fees and expenses (including
                  reasonable attorneys' fees) arising out of or resulting from
                  the exercise of any rights under this Agreement by ALNYLAM,
                  its Affiliates and their respective sublicensees. This
                  indemnification shall include, but is not limited to, any and
                  all claims alleging product liability in connection with
                  Therapeutic Collaboration Products. This indemnification
                  excludes claims against MERCK by any Third Party for
                  infringement of such Third Party's intellectual property
                  rights resulting from ALNYLAM's exercise in accordance with
                  the terms of this Agreement of any intellectual property
                  rights granted by MERCK hereunder. Furthermore, ALNYLAM shall
                  have no obligation to indemnify MERCK to the extent that the
                  claim, suit, loss, liability, damage, cost, fee or expense
                  arises out of or results from the negligence, willful
                  misconduct or breach of the terms of this Agreement of or by
                  MERCK, its Affiliates, or their directors, officers,
                  employees, consultants, scientific advisors or agents.

7.       PATENT PROVISIONS

7.1      FILING, PROSECUTION AND MAINTENANCE OF PATENTS. Except as otherwise
         provided in Schedule 2.14.3.3, the Parties agree that:

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<PAGE>

         (a)      ALNYLAM or RIBOPHARMA has the sole responsibility, to, at
                  ALNYLAM's or RIBOPHARMA's discretion, file, conduct ex parte
                  and inter partes prosecution and maintain in the Territory,
                  the ALNYLAM RNAi Patent Rights owned by ALNYLAM or licensed by
                  RIBOPHARMA to ALNYLAM and licensed to MERCK under this
                  Agreement; and

         (b)      MERCK has the sole responsibility, to, at its discretion,
                  file, conduct ex parte and inter partes prosecution and
                  maintain in the Territory the MERCK RNAi Patent Rights and the
                  patent rights contained in the MERCK RNAi Novel Target IP
                  licensed to ALNYLAM under this Agreement.

         provided, however, that, with respect to Joint Collaboration
         Inventions, ALNYLAM shall have the first right to file, conduct ex
         parte and inter partes prosecution and maintain patent applications and
         patents for such Joint Collaboration Inventions. With respect to Joint
         Collaboration Inventions, ALNYLAM may elect not to file, conduct ex
         parte and inter partes prosecution and/or maintain patent applications
         and patents and, if so, MERCK, and/or a law firm acting on its behalf,
         shall have the right to file, conduct ex parte and inter partes
         prosecution and maintain/or patent applications and patents, as
         applicable.

         In each case above, with respect to Joint Collaboration Inventions, (a)
         the filing Party shall: (i) give the non-filing Party an opportunity to
         review the text of the applications, (ii) consult with the non-filing
         Party with respect thereto and give good faith consideration to the
         requests and suggestions of the non-filing Party with respect to the
         filing thereof, (iii) supply the non-filing Party with a copy of the
         application as filed, together with notice of its filing date and
         serial number, and (iv) shall keep the other Party advised on at least
         a quarterly basis of the status of the actual and prospective patent
         filings; and (b) the prosecuting Party shall give the non-prosecuting
         Party copies of all correspondence from and to the U.S. and all other
         patent offices related to the prosecution of patents or patent
         applications covering such Joint Collaboration Inventions and give good
         faith consideration to the requests and suggestions of the
         non-prosecuting Party with respect to the prosecution thereof.

         ALNYLAM shall promptly give notice to MERCK of the grant, lapse,
         revocation, surrender, invalidation or abandonment of any ALNYLAM RNAi
         Patent Rights licensed to MERCK.

         MERCK shall promptly give notice to ALNYLAM of the grant, lapse,
         revocation, surrender, invalidation or abandonment of any MERCK RNAi
         Patent Rights and patent rights contained in MERCK RNAi Novel Target IP
         licensed to ALNYLAM.

         With respect to all filings, ex parte and inter partes prosecution and
         maintenance hereunder (including, without limitation, any interference,
         opposition, reexamination or reissue proceeding), the filing,
         prosecuting or maintaining Party shall be responsible for payment of
         all costs and expenses related to such filings, prosecution or
         maintenance; provided, however, that, with respect to Joint Technology
         Collaboration Inventions, the Parties shall equally share all costs and
         expenses related to such filings, prosecution or

                                       44
<PAGE>

         maintenance. With respect to patent applications or patents for Joint
         Collaboration Inventions, if the Party which files, begins ex parte or
         inter partes prosecution or maintenance, elects to abandon or otherwise
         cease filing, ex parte or inter partes prosecution or maintenance, and
         the other Party elects to continue, then the continuing Party shall
         bear all expenses from the time it takes over the filing, ex parte or
         inter partes prosecution or maintenance.

7.2      INTERFERENCE, OPPOSITION, REEXAMINATION AND REISSUE. Except as
         otherwise provided in Schedule 2.14.3.3, the Parties agree that:

         (a)      ALNYLAM shall, within ten (10) days of learning of such event,
                  inform MERCK of any request for, or filing or declaration of,
                  any interference, opposition or reexamination or reissue
                  relating to ALNYLAM RNAi Patent Rights.

         (b)      MERCK shall, within ten (10) days of learning of such event,
                  inform ALNYLAM of any request for, or filing or declaration
                  of, any interference, opposition, or reexamination or reissue
                  relating to MERCK RNAi Patent Rights and patent rights
                  contained in MERCK RNAi Novel Target IP.

         (c)      In connection with any interference with a Third Party patent
                  or patent application, opposition by a Third Party and not on
                  behalf of the other Party, reissue, or reexamination
                  proceeding (other than one instituted by the other Party)
                  relating to ALNYLAM RNAi Patent Rights, MERCK RNAi Patent
                  Rights, MERCK RNAi Novel Target IP, or Joint Collaboration
                  Patent Rights, MERCK and ALNYLAM shall cooperate fully and
                  shall provide each other with any information or assistance
                  that either may reasonably request. Each Party shall keep the
                  other Party informed of developments in any such action or
                  proceeding to the extent permissible by law and to the extent
                  allowed by a written agreement with a Third Party under which
                  a Party has obtained rights to the applicable patent rights.

7.3      ENFORCEMENT AND DEFENSE.

         (a)      ALNYLAM shall give MERCK notice of: (i) any infringement of
                  (x) Joint Collaboration Patent Rights relating to in vitro
                  and/or in vivo target validation and/or target identification;
                  and/or (y) ALNYLAM RNAi Patent Rights relating to in vitro
                  and/or in vivo target validation and/or target identification
                  that are (A) Controlled by ALNYLAM or its Affiliates and (B)
                  licensed co-exclusively or exclusively hereunder to MERCK by
                  ALNYLAM, and/or (ii) any misappropriation or misuse of ALNYLAM
                  RNAi Technology relating to in vitro and/or in vivo target
                  validation and/or target identification that is (A) Controlled
                  by ALNYLAM or its Affiliates and (B) licensed co-exclusively
                  or exclusively hereunder to MERCK by ALNYLAM, that may come to
                  ALNYLAM's attention. MERCK and ALNYLAM shall thereafter
                  consult and cooperate fully to determine a course of action,
                  including, but not limited to, the commencement of legal
                  action by either or both MERCK and/or ALNYLAM, to terminate
                  any infringement of such ALNYLAM RNAi Patent Rights or such
                  Joint Collaboration Patent Rights or any misappropriation or
                  misuse of such ALNYLAM RNAi Technology. However, ALNYLAM, upon
                  prompt written notice to MERCK,

                                       45
<PAGE>

                  shall have the first right to initiate and prosecute such
                  legal action at its own expense and in the name of ALNYLAM and
                  MERCK, and to control the defense of any declaratory judgment
                  action relating to such ALNYLAM RNAi Patent Rights or such
                  Joint Collaboration Patent Rights or such ALNYLAM RNAi
                  Technology at its own expense. ALNYLAM shall promptly inform
                  MERCK if it elects not to exercise such first right and MERCK
                  shall thereafter have the right to either initiate and
                  prosecute such action or to control the defense of such
                  declaratory judgment action in the name of MERCK and, if
                  necessary, ALNYLAM, only with respect to an infringement of
                  Joint Collaboration Patent Rights through the conduct of in
                  vitro and/or in vivo target identification and/or target
                  validation. Each Party shall have the right to be represented
                  by counsel of its own choice. For the avoidance of doubt, it
                  is agreed that MERCK shall have no right to initiate or
                  prosecute any action or control the defense of any declaratory
                  judgment action with respect to any ALNYLAM RNAi Patent Right
                  or misuse or misappropriation of ALNYLAM RNAi Technology.

                  ALNYLAM agrees that, in the event a Therapeutic Collaboration
                  Product becomes subject to a MERCK Product Agreement, and an
                  ALNYLAM RNAi Patent Right is infringed by a Third Party by the
                  sale of a therapeutic product using RNA interference against
                  the same MERCK RNAi Novel Target as such Therapeutic
                  Collaboration Product (a "COMPETING RNAi PRODUCT") then if (a)
                  there is no patent right Controlled by MERCK and no Joint
                  Collaboration Patent Right that can be asserted against the
                  alleged infringement, and (b) ALNYLAM does not assert at least
                  one ALNYLAM RNAi Patent Right against such alleged
                  infringement, then MERCK's license to such Therapeutic
                  Collaboration Product will become royalty-free in countries in
                  which the Competing RNAi Product is sold, for as long as such
                  Competing RNAi Product is being sold in such country. The
                  foregoing provision will be reflected in each MERCK Product
                  Agreement.

                  With respect to any action or defense provided for in this
                  paragraph (a), ALNYLAM shall not admit the invalidity or
                  unenforceability of any MERCK RNAi Patent Rights, MERCK RNAi
                  Novel Target IP or Joint Collaboration Patent Rights without
                  the prior written consent of MERCK.

         (b)      In the event that ALNYLAM elects not to initiate and prosecute
                  an action as provided in paragraph (a), and MERCK elects to do
                  so, the costs of any action to terminate such infringement of
                  Joint Collaboration Patent Rights, including without
                  limitation the costs of any legal action commenced or the
                  defense of any declaratory judgment, shall be borne by MERCK.
                  No suit or negotiation arising from such action may be settled
                  by MERCK without prior written notice to ALNYLAM. With respect
                  to any action or defense provided for in this paragraph (b),
                  MERCK shall not admit the invalidity or unenforceability of
                  any ALNYLAM RNAi Patent Rights or Joint Collaboration Patent
                  Rights without the written consent of ALNYLAM.

         (c)      For any such action to terminate any infringement of Joint
                  Collaboration Patent Rights relating to in vitro and/or in
                  vivo target validation and/or target identification, in the
                  event that MERCK is unable to initiate or prosecute such
                  action solely in its

                                       46
<PAGE>

                  own name, ALNYLAM will join such action voluntarily and will
                  execute and cause its Affiliates to execute all documents
                  necessary for MERCK to initiate litigation to prosecute and
                  maintain such action, at the expense of MERCK. In connection
                  with any action, MERCK and ALNYLAM will cooperate fully and
                  will provide each other with any information or assistance
                  that either may reasonably request. Each Party shall keep the
                  other informed of developments in any action or proceeding, to
                  the extent permissible by law.

         (d)      Any recovery obtained by either or both MERCK and ALNYLAM in
                  connection with or as a result of any action contemplated by
                  this section, whether by settlement or otherwise, shall be
                  shared in order as follows:

                  (i)      the Party which initiated and prosecuted the action
                           shall recoup all of its costs and expenses incurred
                           in connection with the action;

                  (ii)     the other Party shall then, to the extent possible,
                           recover its costs and expenses incurred in connection
                           with the action; and

                  (iii)    the amount of any recovery remaining shall then be
                           allocated between the Parties as follows: (1) [**]
                           percent ([**]%) of the remaining amount to the Party
                           prosecuting such action and (2) [**] percent ([**]%)
                           to the other Party.

7.4      PATENT TERM RESTORATION. The Parties hereto shall cooperate with each
         other in obtaining patent term restoration or supplemental protection
         certificates or their equivalents in any country in the Territory where
         applicable to ALNYLAM RNAi Patent Rights, Joint Collaboration Patent
         Rights, and patent rights contained in MERCK RNAi Novel Target IP and
         MERCK RNAi Patent Rights. The Parties shall mutually agree upon any
         elections to be made with respect to obtaining such patent term
         restoration with regard to Joint Collaboration Patent Rights.

8.       TERM AND TERMINATION

8.1      TERM AND EXPIRATION. This Agreement shall be effective as of the
         Effective Date and, unless terminated earlier pursuant to Sections 8.2
         or 8.3 below, this Agreement shall continue in effect until expiration
         of all royalty obligations hereunder and under all Therapeutic
         Collaboration Product Agreements, ALNYLAM Product Agreements and MERCK
         Product Agreements. Upon expiration of this Agreement, the Parties'
         licenses pursuant to Section 3.1 shall become fully paid-up, perpetual
         licenses.

8.2      TERMINATION FOR CAUSE.

8.2.1    CAUSE FOR TERMINATION. This Agreement may be terminated at any time
         during the term of the Agreement:

         (a)      upon written notice by either Party if the other Party is in
                  breach of its material obligations hereunder by causes and
                  reasons within its control and has not cured such breach
                  within ninety (90) days after notice requesting cure of the
                  breach; provided,

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<PAGE>

                  however, in the event of a good faith dispute with respect to
                  the existence of a material breach, the ninety (90) day cure
                  period shall be tolled until such time as the Dispute is
                  resolved pursuant to Section 9.6 hereof; or

         (b)      by either Party upon the filing or institution of bankruptcy,
                  reorganization, liquidation or receivership proceedings, or
                  upon an assignment of a substantial portion of the assets for
                  the benefit of creditors by the other Party; provided,
                  however, in the case of any involuntary bankruptcy or
                  receivership proceeding such right to terminate shall only
                  become effective if the Party consents to the involuntary
                  bankruptcy, receivership or such proceeding is not dismissed
                  within ninety (90) days after the filing thereof.

8.2.2    EFFECT OF TERMINATION FOR CAUSE OR FOR CHANGE OF CONTROL.

         (a)      If MERCK terminates this Agreement under Section 8.2.1(a) or
                  terminates the Technology Collaboration or the Therapeutic
                  Collaboration or both pursuant to Section 9.2, the licenses
                  granted by ALNYLAM to MERCK pursuant to Section 3.1.1 shall
                  survive such termination. In addition,

                  (i)      not later than thirty (30) days after the date of
                           such termination, each Party shall return or cause to
                           be returned to the other Party all Information in
                           tangible form received from the other Party and all
                           copies thereof and ALNYLAM shall return to or cause
                           to be returned to MERCK all substances or
                           compositions delivered or provided by MERCK, as well
                           as any other Materials provided by MERCK in any
                           medium, except that each Party may retain all
                           Information, substances, compositions and materials
                           relevant to licenses and rights it retains hereunder
                           and may retain one copy of Information in its
                           confidential files for record purposes;

                  (ii)     MERCK shall have the right to continue to exercise
                           its rights to opt-in to develop any and all
                           Therapeutic Collaboration Products as set forth in
                           Section 2.14.3 and the licenses granted by MERCK to
                           ALNYLAM in Sections 3.1.2 and 3.1.3 shall survive
                           solely with respect to such Therapeutic Collaboration
                           Products;

                  (iii)    all then-existing Therapeutic Collaboration Product
                           Agreements, ALNYLAM Product Agreements or MERCK
                           Product Agreements shall continue in effect;

                  (iv)     with regard to termination pursuant to Section
                           8.2.1(a), ALNYLAM shall return to MERCK and cease to
                           work on, all MERCK RNAi Novel Targets and RNAi
                           Therapeutic Products for which the Opt-In Information
                           has not yet been provided by ALNYLAM to MERCK; and,

                  (v)      with regard to termination pursuant to Section 9.2,
                           then: (x) ALNYLAM may continue to work on MERCK RNAi
                           Novel Targets that it has designated as such pursuant
                           to Section 2.14.2(3) by notice to MERCK prior to the
                           date on which ALNYLAM notified MERCK of such Change
                           of Control, subject to MERCK's Opt-In Rights, and the
                           licenses granted by MERCK to

                                       48
<PAGE>

                           ALNYLAM in Sections 3.1.2 and 3.1.3 shall survive
                           with respect to such MERCK RNAi Novel Targets, and
                           (y) all Opt-In Negotiation Periods shall continue,
                           and the licenses granted by MERCK to ALNYLAM in
                           Sections 3.1.2 and 3.1.3 shall survive with respect
                           to Therapeutic Collaboration Products subject to such
                           Opt-In Negotiation Periods.

         (b)      If ALNYLAM terminates this Agreement under Section 8.2.1(a),
                  the licenses granted by MERCK to ALNYLAM pursuant to Section
                  3.1.2 and 3.1.3 shall survive such termination. In addition,

                  (i)      not later than thirty (30) days after the date of
                           such termination, each Party shall return or cause to
                           be returned to the other Party all Information,
                           substances, compositions and materials in tangible
                           form received from the other Party and all copies
                           thereof, except that each Party may retain all
                           Information relevant to licenses and rights it
                           retains hereunder and may retain one copy of
                           Information in its confidential files for record
                           purposes;

                  (ii)     ALNYLAM shall continue to have the right to develop
                           without MERCK, but subject to royalty payments to
                           MERCK, as specified in Section 5.2.1(a), Therapeutic
                           Collaboration Products then subject to an Opt-In
                           Negotiation Period;

                  (iii)    all then existing Therapeutic Collaboration Product
                           Agreements, ALNYLAM Product Agreements and MERCK
                           Product Agreements shall continue in effect; and

                  (iv)     ALNYLAM shall have the right to develop without MERCK
                           any and all MERCK RNAi Novel Targets which ALNYLAM
                           has designated as such pursuant to Section 2.14.2(3)
                           by notice to MERCK prior to the termination date,
                           subject to royalty payments to MERCK as specified in
                           Section 5.2.1(a) on the same basis as if the product
                           was a Therapeutic Collaboration Product.

         (c)      If this Agreement is terminated by MERCK pursuant to Section
                  8.2.1(b) due to the rejection of this Agreement by or on
                  behalf of ALNYLAM under Section 365 of the United States
                  Bankruptcy Code (the "CODE"), all licenses and rights to
                  licenses granted under or pursuant to this Agreement by
                  ALNYLAM to MERCK are, and shall otherwise be deemed to be, for
                  purposes of Section 365(n) of the Code, licenses of rights to
                  "intellectual property" as defined under Section 101(35A) of
                  the Code. The Parties agree that MERCK, as a licensee of such
                  rights under this Agreement, shall retain and may fully
                  exercise all of its rights and elections under the Code, and
                  that upon commencement of a bankruptcy proceeding by or
                  against ALNYLAM under the Code, MERCK shall be entitled to a
                  complete duplicate of or complete access to (as MERCK deems
                  appropriate) any such intellectual property and all
                  embodiments of such intellectual property. Such intellectual
                  property and all embodiments thereof shall be promptly
                  delivered to MERCK (i) upon any such commencement of a
                  bankruptcy proceeding upon written request therefore by MERCK,
                  unless ALNYLAM elects to continue to perform all of its
                  obligations under

                                       49
<PAGE>

                  this Agreement, or (ii) if not delivered under (i) above, upon
                  the rejection of this Agreement by or on behalf of ALNYLAM
                  upon written request therefore by MERCK. The foregoing
                  provisions of subsection 8.2.2(c) are without prejudice to any
                  rights MERCK may have arising under the Code or other
                  applicable law.

         (d)      If this Agreement is terminated by ALNYLAM pursuant to Section
                  8.2.1(b) due to the rejection of this Agreement by or on
                  behalf of MERCK under Section 365 of the Code, the provisions
                  of subparagraph (c) shall apply mutatis mutandis.

8.3      EFFECT OF EXPIRATION OR TERMINATION; SURVIVAL. Expiration or
         termination of the Agreement shall not relieve the Parties of any
         obligation accruing prior to such expiration or termination. Any
         expiration or termination of this Agreement shall be without prejudice
         to the rights of either Party against the other accrued or accruing
         under this Agreement prior to expiration or termination, including,
         without limitation, the obligation to pay royalties for Therapeutic
         Collaboration Products sold prior to such expiration or termination.
         The provisions of Section 4.1 shall survive the expiration or
         termination of the Agreement and with respect to the obligations of the
         Parties shall continue in effect for seven (7) years. In addition, the
         provisions of Articles 1, 7 and 8, and Sections 2.7, 2.10, 2.15, 5.4,
         5.5, 9.3 through 9.18 shall survive any expiration or termination of
         this Agreement. Except as set forth in this Article 8, upon termination
         or expiration of this Agreement all other rights and obligations cease.

9.       MISCELLANEOUS

9.1      FORCE MAJEURE. Neither Party shall be held liable to the other Party
         nor be deemed to have defaulted under or breached the Agreement for
         failure or delay in performing any obligation under this Agreement when
         such failure or delay is caused by or results from causes beyond the
         reasonable control of the affected Party including, but not limited to,
         embargoes, war, acts of war (whether war be declared or not),
         insurrections, riots, civil commotions, strikes, lockouts or other
         labor disturbances, fire, floods, or other acts of God, or acts,
         omissions or delays in acting by any governmental authority or the
         other Party. The affected Party shall notify the other Party of such
         force majeure circumstances as soon as reasonably practical, and shall
         promptly undertake all reasonable efforts necessary to cure such force
         majeure circumstances.

9.2      ASSIGNMENT/CHANGE OF CONTROL. Except as provided in this Section 9.2,
         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. MERCK may, without
         ALNYLAM's consent, assign this Agreement and its rights and obligations
         hereunder in whole or in part to a MERCK Affiliate or in whole in
         connection with a Change of Control (as defined below) upon twenty (20)
         days prior written notification to ALNYLAM. ALNYLAM may, without
         MERCK's consent, assign this Agreement and its rights and obligations
         hereunder in whole or in part to any wholly-owned subsidiary of ALNYLAM
         or RIBOPHARMA (except as provided below) or in whole (except as
         provided below) in connection with a Change of Control; provided,
         however, that: (a) ALNYLAM must notify MERCK at least twenty (20) days

                                       50
<PAGE>

         prior to completion of any such Change of Control, (b) MERCK shall have
         the right, at any time after receipt of such notice but prior to the
         end of the twenty (20) day period, to notify ALNYLAM of the termination
         of the Technology Collaboration, the Therapeutic Collaboration
         (including MERCK's obligation to deliver additional MERCK Non-Druggable
         Targets), or both, (c) all ALNYLAM Product Agreements and MERCK Product
         Agreements shall continue and each Therapeutic Collaboration Product
         Agreement shall remain in effect or terminate as provided therein, (d)
         ALNYLAM may continue to work on MERCK RNAi Novel Targets which it
         designated as such pursuant to Section 2.14.2(3) by notice to MERCK
         prior to the date on which ALNYLAM notified MERCK of the Change of
         Control, subject to MERCK's Opt-In Rights, and (e) all Opt-In
         Negotiation Periods shall continue. Upon such assignment or Change of
         Control, MERCK's obligation to provide royalty reports pursuant to
         Section 5.2.6 shall be limited to reporting Net Sales for each country
         and MERCK's total worldwide royalty obligations.

         Notwithstanding the foregoing, the rights of any permitted assignee of
         ALNYLAM's rights to practice any of MERCK's intellectual property,
         including but not limited to MERCK RNAi Patent Rights, MERCK RNAi
         Technology and MERCK RNAi Novel Target IP, shall remain subject to the
         limitations set forth in this Agreement. Any permitted assignee shall
         assume all obligations of its assignor under this Agreement. Any
         attempted assignment not in accordance with this Section 9.2 shall be
         void. For purposes of this Section 9.2, a "CHANGE OF CONTROL" of a
         Party shall be deemed to occur if such Party is involved in a merger,
         reorganization or consolidation in which its shareholders immediately
         prior to such transaction would hold less than fifty percent (50%) of
         the securities or other ownership or voting interests representing the
         equity of the surviving entity immediately after such merger,
         reorganization or consolidation, or if there is a sale of all or
         substantially all of such Party's assets or business relating to this
         Agreement, or if a "Health Company Acquirer" (as defined below)
         effectively acquires control of the management and policies of such
         Party. [**].

9.3      SEVERABILITY. If any one or more of the provisions contained in this
         Agreement is held invalid, illegal or unenforceable in any respect, the
         validity, legality and enforceability of the remaining provisions
         contained herein shall not in any way be affected or impaired thereby,
         unless the absence of the invalidated provision(s) adversely affects
         the substantive rights of the Parties. The Parties shall in such an
         instance use their best efforts to replace the invalid, illegal or
         unenforceable provision(s) with valid, legal and enforceable
         provision(s) which, insofar as practical, implement the purposes of
         this Agreement.

9.4      NOTICES. All notices which are required or permitted hereunder shall be
         in writing and sufficient if delivered personally, sent by facsimile
         (and promptly confirmed by personal delivery, registered or certified
         mail or overnight courier), sent by nationally-recognized overnight
         courier or sent by registered or certified mail, postage prepaid,
         return receipt requested, addressed as follows:

         If to ALNYLAM, to:                  ALNYLAM PHARMACEUTICALS, INC. and
                                             ALNYLAM HOLDING CO.

                                       51
<PAGE>

                                             790 Memorial Drive
                                             Suite 202
                                             Cambridge, MA 02139
                                             Attention: Chief Executive Officer
                                             Facsimile No.: (617) 252-0011

                     and:                    MINTZ, LEVIN, COHN, FERRIS, GLOVSKY
                                             AND POPEO, P.C.
                                             One Financial Center
                                             Boston, MA 02111
                                             Attention: Jeffrey M. Wiesen
                                             Facsimile No.: (617) 542-2241

         If to MERCK, to:                    MERCK & CO., INC.
                                             One Merck Drive
                                             P.O. Box 100, WS3A-65
                                             Whitehouse Station, NJ 08889-0100
                                             Attention: Office of Secretary
                                             Facsimile No.: (908) 735-1246

                     and:                    MERCK & CO., INC.
                                             One Merck Drive
                                             P.O. Box 100, WS2A-30
                                             Whitehouse Station, NJ 08889-0100
                                             Attention: Chief Licensing Officer
                                             Facsimile: (908) 735-1214

         or to such other address as the Party to whom notice is to be given may
         have furnished to the other Party in writing in accordance herewith.
         Any such notice shall be deemed to have been given: (a) when delivered
         if personally delivered or sent by facsimile on a business day; (b) on
         receipt if sent by nationally-recognized overnight courier; and/or (c)
         on receipt if sent by mail.

9.5      APPLICABLE LAW. The Agreement shall be governed by and construed in
         accordance with the laws of the State of New York and the patent laws
         of the United States without reference to any rules of conflict of laws
         or renvoi.

9.6      DISPUTE RESOLUTION.

9.6.1    The Parties shall negotiate in good faith and use reasonable efforts to
         settle any dispute, controversy or claim arising from, or related to,
         this Agreement or to the breach hereof, and to resolve any disagreement
         between the Parties with respect to any Therapeutic Collaboration
         Product Agreement, MERCK Product Agreement or ALNYLAM Product
         Agreement, except as provided below and in Section 9.7 (collectively,
         "DISPUTE"). In particular, the CEO of ALNYLAM and the Executive
         Vice-President of Worldwide Basic Research for MERCK shall attempt to
         resolve all Disputes except as otherwise provided for in Section 9.7
         below. In the event that the CEO and the Executive Vice-

                                       52
<PAGE>

         President cannot reach an agreement regarding a Dispute, and a Party
         wishes to pursue the matter, each such Dispute that is not an "Excluded
         Claim" shall be finally resolved by binding arbitration in accordance
         with the Commercial Arbitration Rules and Supplementary Procedures for
         Large Complex Disputes of the American Arbitration Association ("AAA")
         and Section 9.6.2 below, and judgment on the arbitration award may be
         entered in any court having jurisdiction thereof. As used in this
         Section 9.6, the term "EXCLUDED CLAIM" shall mean a dispute that
         concerns (a) the validity or infringement of a patent, trademark or
         copyright, or (b) any antitrust, anti-monopoly or competition law or
         regulation, whether or not statutory.

9.6.2    FULL ARBITRATION. Except as provided in Section 9.6.3, the arbitration
         shall be conducted by a panel of three (3) persons experienced in the
         pharmaceutical business who are independent of both Parties and neutral
         with respect to the Dispute presented for arbitration. Within thirty
         (30) days after initiation of arbitration, each Party shall select one
         person to act as arbitrator and the two Party-selected arbitrators
         shall select a third arbitrator within thirty (30) days of their
         appointment. If the arbitrators selected by the Parties are unable or
         fail to agree upon the third arbitrator, the third arbitrator shall be
         appointed by the AAA. The place of arbitration shall be New York, New
         York, and all proceedings and communications shall be in English.

         (a)      Either Party may apply to the arbitrators for interim
                  injunctive relief until the arbitration award is rendered or
                  the controversy is otherwise resolved. Either Party also may,
                  without waiving any remedy under this Agreement, seek from any
                  court having jurisdiction any injunctive or provisional relief
                  necessary to protect the rights or property of that Party
                  pending the arbitration award. The arbitrators shall have no
                  authority to award punitive or any other type of damages not
                  measured by a Party's compensatory damages. Each Party shall
                  bear its own costs and expenses and attorneys' fees, and the
                  Party that does not prevail in the arbitration proceeding
                  shall pay the arbitrators' and any administrative fees of
                  arbitration.

         (b)      Except to the extent necessary to confirm an award or as may
                  be required by law, neither a Party nor an arbitrator may
                  disclose the existence, content, or results of an arbitration
                  without the prior written consent of both Parties. In no event
                  shall an arbitration be initiated after the date when
                  commencement of a legal or equitable proceeding based on the
                  dispute, controversy or claim would be barred by the
                  applicable New York statute of limitations.

         (c)      The Parties agree that, in the event of a Dispute over the
                  nature or quality of performance under this Agreement, neither
                  Party may terminate the Agreement until final resolution of
                  the Dispute through arbitration or other judicial
                  determination. The Parties further agree that any payments
                  made pursuant to this Agreement pending resolution of the
                  Dispute shall be refunded if an arbitrator or court determines
                  that such payments are not due.

         (d)      The Parties hereby agree that any disputed performance or
                  suspended performances pending the resolution of the
                  arbitration that the arbitrator determines to be required

                                       53
<PAGE>

                  to be performed by a Party must be completed within a
                  reasonable time period following the final decision of the
                  arbitrator.

         (e)      The Parties hereby agree that any monetary payment to be made
                  by a Party pursuant to a decision of the arbitrator shall be
                  made in United States dollars, free of any tax or other
                  deduction. The Parties further agree that the decision of the
                  arbitrator shall be the sole, exclusive and binding remedy
                  between them regarding determination of the matters presented
                  to the arbitrator.

9.6.3    "BASEBALL STYLE" ARBITRATION. If the Parties cannot otherwise agree
         upon reasonable commercial terms during the Opt-In Negotiation Periods
         for any Therapeutic Collaboration Agreement as provided in Section
         2.14.3.3, or any MERCK Product Agreement or ALNYLAM Product Agreement,
         then such matters, shall be determined by binding arbitration pursuant
         to this Section 9.6.3 by one (1) independent, neutral arbitrator who is
         (i) mutually-acceptable to the Parties, and (ii) an expert in the
         pharmaceutical industry. If the Parties are unable to agree upon a
         mutually-acceptable arbitrator, the arbitrator shall be an independent
         expert as described in the preceding sentence selected by the AAA
         encompassing New York, New York. Except as set forth in this Section
         9.6.3, any arbitration of a Dispute pursuant to this Section 9.6.3
         shall be governed by the Commercial Arbitration Rules and Supplementary
         Procedures for Large Complex Disputes of the AAA. The place of
         arbitration shall be New York, New York, and all proceedings and
         communications shall be in English.

         (a)      Either Party may apply to the arbitrator for interim
                  injunctive relief until the arbitration award is rendered or
                  the controversy is otherwise resolved. Either Party also may,
                  without waiving any remedy under this Agreement, seek from any
                  court having jurisdiction any injunctive or provisional relief
                  necessary to protect the rights or property of that Party
                  pending the arbitration award. Each Party shall bear its own
                  attorneys' fees. Except to the extent necessary to confirm an
                  award or as may be required by law, neither a Party nor an
                  arbitrator may disclose the existence, content, or results of
                  an arbitration without the prior written consent of both
                  Parties. In no event shall an arbitration be initiated after
                  the date when commencement of a legal or equitable proceeding
                  based on the dispute, controversy or claim would be barred by
                  the applicable New York statute of limitations.

         (b)      The Parties hereby agree that any disputed performance or
                  suspended performances pending the resolution of the
                  arbitration that the arbitrator determines to be required to
                  be performed by a Party must be completed within a reasonable
                  time period following the final decision of the arbitrator.

         (c)      The Parties further agree that the decision of the arbitrator
                  shall be the sole, exclusive and binding remedy between them
                  regarding determination of the matters presented to the
                  arbitrator.

9.6.4    For arbitration of Disputes subject to Section 9.6.3, each Party to the
         arbitration shall prepare and submit a written proposal setting forth
         its proposed commercial terms, which must include, without change, the
         terms set forth in Schedule 2.14.3.3, Section 3.1.5 or

                                       54
<PAGE>

         3.1.6, as applicable, Section 5.2.1 (a) or (b) as applicable, and other
         terms agreed upon hereunder in the negotiation preceding the submission
         to arbitration, together with a written explanation setting forth the
         reasons for its position. After the arbitrator has received written
         proposals from both Parties, the arbitrator shall forward a copy of the
         other Party's proposal to each. Each Party shall have thirty (30) days
         to prepare and submit a written rebuttal to such proposal and may then
         amend its original proposal. Each Party shall have the right to make
         oral presentations or present evidence as determined by the arbitrator
         during the arbitration proceeding. The arbitrator shall select the
         proposal of one of the Parties as his/her decision, and shall not have
         the authority to render any substantive decision other than to so
         select in its entirety the summary or proposal of one Party or the
         other. Each Party shall bear its own costs and expenses and attorneys
         fees. The administrative and arbitrator's fees shall be paid by the
         non-prevailing Party. The arbitrator shall be directed that any
         arbitration subject to Section 9.6.3 shall be completed within three
         (3) months from the filing of notice of a request for such arbitration.
         The arbitration proceedings and the decision shall not be made public
         without the joint consent of the Parties and each Party shall maintain
         the confidentiality of such proceedings and decision unless otherwise
         permitted by the other Party.

9.7      TECHNOLOGY MILESTONE ARBITRATION. In the event of a Technology
         Milestone Dispute, the Parties shall mutually select a single,
         independent, neutral arbitrator who shall have sufficient scientific
         background and experience, including, without limitation, expertise in
         RNA interference, to make a reasonable scientific determination as to
         whether the Technology Milestone has been achieved. If the Parties are
         unable to reach agreement within fifteen (15) business days after
         submission to arbitration under Section 5.1.4 on the selection of an
         arbitrator, then either or both Parties shall immediately request the
         AAA of New York, New York to select an arbitrator with such scientific
         background, experience and expertise as set forth herein. Except as set
         forth in this Section 9.7, any arbitration of the Technology Milestone
         Dispute shall be governed by the Commercial Arbitration Rules and
         Supplementary Procedures for Large Complex Disputes of the AAA. The
         place of arbitration shall be New York, New York, and all proceedings
         and communications shall be in English.

         For arbitration of the Technology Milestone Dispute subject to this
         Section 9.7, each Party shall prepare and submit one written summary of
         such Party's position and any relevant evidence with respect to the
         Technology Milestone Dispute to the arbitrator within thirty (30) days
         of the selection of the arbitrator. Upon receipt of such summaries from
         each Party, the arbitrator shall provide copies of the same to the
         other Party. Within fifteen (15) days of the delivery of such
         summaries, each Party shall submit a written rebuttal of the other
         Party's summary and may then amend its original summary. Oral
         presentations during the arbitration proceeding for any Technology
         Milestone Dispute shall not be permitted unless otherwise requested by
         the arbitrator. The arbitrator shall make a final decision with respect
         to a Technology Milestone Dispute within thirty (30) days following
         receipt of the last of such rebuttal statements submitted by the
         Parties.

         (a)      Either Party may apply to the arbitrator for interim
                  injunctive relief until the arbitration award is rendered or
                  the controversy is otherwise resolved. Either Party also may,
                  without waiving any remedy under this Agreement, seek from any
                  court

                                       55
<PAGE>

                  having jurisdiction any injunctive or provisional relief
                  necessary to protect the rights or property of that Party
                  pending the arbitration award. Each Party shall bear its own
                  costs and expenses and attorneys' fees. The administrative and
                  arbitrator's fees shall be reimbursed and/or paid by the
                  non-prevailing Party.

         (b)      Except to the extent necessary to confirm an award or as may
                  be required by law, neither Party nor the arbitrator may
                  disclose the existence, content, or results of an arbitration
                  without the prior written consent of both Parties. In no event
                  shall an arbitration be initiated after the date when
                  commencement of a legal or equitable proceeding based on the
                  dispute, controversy or claim would be barred by the
                  applicable New York statute of limitations.

         (c)      The Parties agree that, in the event of a Technology Milestone
                  Dispute, neither Party may terminate the Agreement until final
                  resolution of the Technology Milestone Dispute through
                  arbitration or other judicial determination. The Parties
                  further agree that any payments made pursuant to this
                  Agreement made pending resolution of the Dispute shall be
                  refunded if the arbitrator or court determines that such
                  payments are not due.

         (d)      The Parties hereby agree that if the arbitrator determines
                  that the Technology Collaboration Milestone has been met,
                  MERCK shall pay the milestone payment under Section 5.1.4
                  within ten (10) business days of the arbitrator's
                  determination.

         (e)      The Parties hereby agree that any payment to be made by a
                  Party pursuant to a decision of the arbitrator shall be made
                  in United States dollars, free of any tax or other deduction.
                  The Parties further agree that the decision of the arbitrator
                  shall be the sole, exclusive and binding remedy between them
                  regarding determination of the matters presented to the
                  arbitrator.

9.8      ENTIRE AGREEMENT; AMENDMENTS. The Agreement contains the entire
         understanding of the Parties with respect to the Collaboration and
         licenses granted hereunder. All express or implied agreements and
         understandings, either oral or written, with regard to the
         Collaboration and the licenses granted hereunder are superseded by the
         terms of this Agreement. The Agreement (including Schedules hereto) may
         be amended, or any term hereof modified, only by a written instrument
         duly-executed by authorized representatives of both Parties hereto.

9.9      HEADINGS. The captions to the Articles and Sections hereof are not a
         part of the Agreement, but are merely for convenience to assist in
         locating and reading the several Articles and Sections hereof.

9.10     INDEPENDENT CONTRACTORS. It is expressly agreed that ALNYLAM and MERCK
         shall be independent contractors and that the relationship between
         ALNYLAM and MERCK shall not constitute a partnership, joint venture or
         agency. ALNYLAM shall not have the authority to make any statements,
         representations or commitments of any kind, or to take any action,
         which shall be binding on MERCK, without the prior written consent of
         MERCK, and MERCK shall not have the authority to make any statements,

                                       56
<PAGE>

         representations or commitments of any kind, or to take any action,
         which shall be binding on ALNYLAM without the prior written consent of
         such Party.

9.11     WAIVER. The waiver by either Party hereto of any right hereunder, or of
         the failure of the other Party to perform, or of a breach by the other
         Party, shall not be deemed a waiver of any other right hereunder or of
         any other breach or failure by such other Party whether of a similar
         nature or otherwise.

9.12     CUMULATIVE REMEDIES. No remedy referred to in this Agreement is
         intended to be exclusive, but each shall be cumulative and in addition
         to any other remedy referred to in this Agreement or otherwise
         available under law.

9.13     WAIVER OF RULE OF CONSTRUCTION. Each Party has had the opportunity to
         consult with counsel in connection with the review, drafting and
         negotiation of this Agreement. Accordingly, the rule of construction
         that any ambiguity in this Agreement shall be construed against the
         drafting Party shall not apply.

9.14     COUNTERPARTS. The Agreement may be executed in two or more
         counterparts, each of which shall be deemed an original, but all of
         which together shall constitute one and the same instrument.

9.15     WARRANTY DISCLAIMER. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
         AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY WITH RESPECT TO ANY
         TECHNOLOGY, GOODS, SERVICES, RIGHTS OR OTHER SUBJECT MATTER OF THIS
         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.

9.16     LIMITATION OF LIABILITY. UNLESS RESULTING FROM A PARTY'S WILLFUL
         MISCONDUCT OR EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT,
         NEITHER PARTY WILL BE LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF THIS
         AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER
         LEGAL OR EQUITABLE THEORY FOR (I) ANY INDIRECT, INCIDENTAL, SPECIAL,
         CONSEQUENTIAL OR PUNITIVE DAMAGES OR LOST PROFITS, OR (II) COST OF
         PROCUREMENT OF SUBSTITUTE GOODS, TECHNOLOGY OR SERVICES.

9.17     BINDING EFFECT. As of the Effective Date, this Agreement shall be
         binding upon and inure to the benefit of the Parties and their
         respective permitted successors and permitted assigns.

9.18     NO THIRD PARTY BENEFICIARIES. Except as expressly contemplated herein,
         no Third Party, including any employee of any Party to this Agreement,
         shall have or acquire any rights by reason of this Agreement.

         [THE REMAINDER OF THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK]

                                       57
<PAGE>

         IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first set forth above.

         MERCK & CO., INC.                        ALNYLAM HOLDING CO.

         BY: Raymond V. Gilmartin                 BY: /s/ John Maraganore
             __________________________               __________________________
               [NAME]                                   [NAME]

         TITLE: Chairman, President & CEO         TITLE: President and CEO

         DATE:_________________________           DATE:_________________________

         ALNYLAM PHARMACEUTICALS, INC.

         BY: /s/ John Maraganore
             __________________________
               [NAME]

         TITLE:  President and CEO

         DATE:_________________________

                                       58
<PAGE>

                                  SCHEDULE 1.8

                           ALNYLAM RNAi PATENT RIGHTS

A.       ALNYLAM Therapeutic RNAi Patent Rights

<TABLE>
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[**]* Under ALNYLAM's rights from MIT, Whitehead Institute for Biomedical
Research, and Garching Innovation GmbH.

** Explicitly excluding claims No. 30-47 and the equivalent claims in any patent
applications and patents resulting from this PCT application.

*** Under ALNYLAM's co-ownership rights.

**** Licenses for applicable ALNYLAM Therapeutic RNAi Patent Rights shall be
granted for each specific Therapeutic Collaboration Product under each
Therapeutic Collaboration Product Agreement or MERCK Product Agreement upon the
execution thereof pursuant to Section 3.1.4 or 3.1.6, respectively.

                                       61
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                              SCHEDULE 1.8 (CONT'D)

                           ALNYLAM RNAi PATENT RIGHTS

B.       ALNYLAM Target Identification and Target Validation RNAi Patent Rights

EXCLUDED FROM THESE PATENT RIGHTS ARE THE SHARP, TUSCHL, ZAMORE & BARTEL PATENT
APPLICATION WO 01/75164, AND ITS FAMILY MEMBERS AND THE TUSCHL, ELBASHIR &
LENDECKEL PATENT APPLICATION WO 02/44321 AND ITS FAMILY MEMBERS

<TABLE>
<CAPTION>
CASE NO.     FILING DATE    INT. PUB. NO.    SERIAL NO.
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                                       63
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                                  SCHEDULE 1.45

                                 LIMMER PATENTS

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any divisions, continuations, continuations-in-part thereof, any patents issuing
thereon and any reissues, reexams, renewals, extensions, supplementary
protection certificates and the like of any such patents or patent applications
and all foreign equivalents thereof

                                       65
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                                  SCHEDULE 1.49

                         MERCK BROAD RNAi PATENT RIGHTS

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TITLE           FILING DATE     INT. PUB. NO.   SERIAL NO.
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                                       66
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                                  SCHEDULE 1.54

                    MERCK PRODUCT-SPECIFIC RNAi PATENT RIGHTS

                                      [**]

                                       67
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                                  SCHEDULE 2.1

                        TECHNOLOGY COLLABORATION WORKPLAN

BACKGROUND:

MERCK is interested in developing and exploiting genetic knockdown technologies
to validate potential therapeutic targets in vivo. ALNYLAM is developing RNA
interference (RNAi) technology to use directly as a therapeutic. Both parties
could benefit from a collaborative effort that seeks to improve RNAi technology.
The collaboration will consist of two phases: an optimization phase and an
implementation phase. The aims of this collaboration are:

Phase I: Optimization (Years [**])

1)       Understand the [**] in vitro.

2)       Develop [**] in vivo.

3)       Develop [**].

4)       Develop [**] in vivo.

5)       [**] in vitro and in vivo [**].

Phase II: Implementation (Years [**])

1)       Continue [**] in vitro. (if necessary)

2)       Apply knowledge [**] in vivo.

3)       Continue [**] in vivo.

4)       Develop [**] in vivo.

5)       Evaluation of [**] efficacy.

PHASE I

IN VITRO [**] (MERCK AND ALNYLAM)

Aim 1a. Identification of [**] efficacy and specificity [**]

The current rules for [**] of the specific target. Efforts will be made [**].
MERCK proposes to [**] based on MERCK's prior experience. [**] will likely have
[**]. [**] will be designed [**] will be performed by MERCK's [**]. [**] will be
provided by ALNYLAM, who will [**]. [**] will be assessed by [**]. [**] will be
determined by [**] by MERCK. [**] will be quantitated by [**]. In addition, the
[**] will be assessed by [**]. All data will be evaluated by [**] the most [**]
amount [**].

In addition to the [**]indicated above, MERCK will [**]. [**] will be developed
to [**]. This [**] allows [**]. As this system is [**] can be [**]. [**] will be
subjected to [**]. These studies will [**] for in vivo studies, as well as [**]
to subject to [**] in vitro.

                                       68
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Aim 1b. (cont.) [**].

ALNYLAM's [**] will introduce [**]. Such [**]include, but are not limited to,
[**] that may [**] to the [**]. [**]will be subjected to [**]. [**] will
determine whether [**]. [**] of the [**] will determine whether these [**].

         1. [**]

[**] will improve the [**]. This approach will be [**]. [**] will also [**].
[**] will be [**]. [**] will be [**] with the [**]. To this end, we will
determine the [**].

         2. [**]

         [**] will improve the [**]. [**] will include [**].

         3. [**]

         ALNYLAM will also determine the [**] (such as [**] etc.,), [**], on the
         [**] achieved.

                                       69
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IN VIVO OPTIMIZATION (ALNYLAM)

Aim 2. [**] in vivo [**].

The development of [**]. [**] will include [**]. To identify [**], we will
generate [**]s. These will be [**]. The most [**] in vivo is to [**].

[**] that the [**] to the [**] and to the [**] of the [**]. Additionally, the
[**] for the [**]. Finally, the [**]can be [**], allowing for [**] in the [**].

[**] and will be used for [**] will be performed, by MERCK, [**] in vitro [**]
will be obtained. [**] in vitro [**] will be [**] with [**] will be tested for
efficacy in vivo [**]. Initial studies will utilize [**]. [**] activities in Aim
1 of in vitro [**] will be applied to the [**] for in vivo analysis.

For in vivo experiments, techniques will be developed[**]. These [**] techniques
will be developed in consultation with MERCK.

         1. [**]

This [**] is distributed throughout [**] in the [**] in the [**].

         2. [**]

This [**] which is [**] to the [**] in the liver [**] such as [**].

         3. [**]

This [**] and shows [**] in the [**] can be [**] in the [**] can be [**] in the
[**] such as [**] in the [**].

         4. [**]

                                       70
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This [**] and shows [**] in the [**] can be [**] in these [**] making [**]Recent
published reports have demonstrated in vivo efficacy [**] could be [**], as was
described in the literature, [**].

         5.  [**]

[**] can be generated [**]. Upon [**] can be monitored [**]. As is true for the
above models, the [**].

Aim 3. Identify [**] in vitro and in vivo models.

As a first step, [**] will be tested for their stability in vitro. [**] will be
[**] and possibly [**].

         1. [**]

Will introduce [**] at the end of each strand

         2. [**]

These [**] are more [**] than the [**] having [**] will be [**].

                                       71
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         3. [**]

[**] are expected to [**]. Appropriate [**]will be placed at the [**].

         4. [**]

Placement of [**] such as [**] and will be [**].

Aim 4a. [**].

Additional [**] will be used to [**] that will [**]. These [**] and will be [**]
with an [**] will be evaluated [**] in vivo.

         1. [**]

[**] is expected to improve [**] will deliver [**] may be required [**].

         2. [**]

                                       72
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[**] are expected to have [**] is expected to [**]. [**] should be sufficient.

3. [**] will be used to deliver [**] should be sufficient.

Aim 4b. Identify [**] as well as [**]

         [**]

[**] are expected to target [**]. With appropriate [**] such as [**] is
     expected. Similarly, [**] is expected to [**]

         2. [**]

[**] will improve the [**] from the [**].

Aim 5. Correlate [**]effectiveness in vitro and in vivo with [**].

[**] as proposed in Aims 1, 3 and 4 above will be evaluated for [**].

                                       73
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PHASE II

IN VITRO [**]

Aim 1. Identification of [**]. (Will be continued from Phase I only if
necessary.)

The experiments described in Phase I are designed to cover [**]. Based on the
results of Phase I, it may be desirable to [**].

IN VIVO [**]

Aim 2. Develop in vivo models to [**].

In the second phase of the work ALNYLAM will introduce [**] into the program.
Stability chemistries developed in Phase I will be incorporated into [**]will be
made as in Phase I.

[**] will be designed using knowledge gained in Phase I. [**] the in vivo [**]
will be assessed for efficacy in vitro [**]. If the [**] will be employed for
determination of [**] will determine the best [**].

Once [**] issues have been addressed in [**] in Phase I, ALNYLAM will move to
[**]. Discoveries in Phase I will help determine the best model system and
target for these Phase II studies. [**] is a therapeutic area of interest to
both parties, Phase II studies may include [**]. If so, ALNYLAM will investigate
[**].

Aim 3. Continue investigation of [**]in vivo.

1. [**] will direct [**] which are [**] on many [**] of the [**] of these [**]
but the [**] for the [**] may be of value. [**] should be sufficient.

Aim 4. Develop [**] in vivo.

[**] methods will be developed using [**] will be useful in developing methods
for [**] and these will be analyzed by [**]. Additionally, these [**] will be
used for [**], to determine [**]

                                       74
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Aim 5. Evaluation of [**].

ALNYLAM will determine the [**] and the [**] caused by the [**]. This knowledge
will help us to understand the factors [**]. This information will help to
design and develop [**]. ALNYLAM will determine the [**] and also by [**] with
the [**]

SPECIFIC RESPONSIBILITIES OF ALNYLAM:

         -        ALNYLAM will provide all [**] required in this study,
                  including [**]. ALNYLAM will do [**] (in vitro and in vivo),
                  on all [**] developed for in vivo delivery and supply RNA to
                  MERCK for [**].

         -        ALNYLAM will perform all in vivo [**], and provide RNA to
                  MERCK for expression profiling.

SPECIFIC RESPONSIBILITIES OF MERCK:

         -        MERCK will design [**] in vitro [**].

         -        MERCK will perform all [**] data.

                                       75
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PROJECT SCHEDULE:

   Diagram of project phases and projected completion dates has been deleted.

<PAGE>

SCHEDULE 2.10

                                    MATERIALS

Materials to be provided by MERCK:

PHASE I - OPTIMIZATION TECHNOLOGY COLLABORATION WORKPLAN

[**]

Materials to be provided by ALNYLAM:

PHASE I - OPTIMIZATION TECHNOLOGY COLLABORATION WORKPLAN

                  [**]5-Me-C

         [**]

PHASE II - IMPLEMENTATION TECHNOLOGY COLLABORATION WORK PLAN

[To be completed and updated pursuant to Section 2.10 at the appropriate time]

                                       77
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                               SCHEDULE 2.14.2(1)

                 INITIAL MERCK NON-DRUGGABLE TARGET INFORMATION

1.       General project description

2.       Target name or gene accession number

3.       [**]

4.       [**]

5.       [**]

6.       Brief description [**], as applicable.

7.       [**].

Notwithstanding the above, MERCK shall not provide any data, information,
patents, opinions or know-how which MERCK believes may be subject to
attorney/client privilege.

                                       78
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                               SCHEDULE 2.14.2(2)

                 COMPLETE MERCK NON-DRUGGABLE TARGET INFORMATION

1.       Executive Summary providing [**] the MERCK Non-Druggable Target.

         -        Supporting data [**] as may be available.

         -        [**], which is directly relevant to the MERCK Non-Druggable
                  Target.

         -        [**] the MERCK Non-Druggable Target [**].

2.       MERCK Non-Druggable Target [**].

         -        Copies of [**] relating to the MERCK Non-Druggable Target.

         -        Copies of [**] with regard to the MERCK Non-Druggable Target.

3.       [**] the MERCK Non-Druggable Target and which is [**] a MERCK
         Non-Druggable Target [**].

Notwithstanding the above, MERCK shall not provide any data, information,
patents, opinions or know-how which MERCK believes may be subject to
attorney/client privilege.

                                       79
<PAGE>

                               SCHEDULE 2.14.3.2

                               OPT-IN INFORMATION

1.       Product description

2.       Chemical structure (RNAi sequence)

3.       Physicochemical properties

4.       Patent status

5.       Biochemical mechanism (activity, specificity)

                  -        In vitro

                  -        Animal model data (disease relevant)

6.       Preclinical pharmacology (PK, PD, biodistribution)

7.       Toxicology studies status

                           -        Genotoxicity tests

                           -        Acute and chronic toxicity tests

                           -        Safety pharmacology tests

8.       Dosage forms and formulations

9.       Preclinical ADME

10.      Projected dose regimen

11.      Anticipated clinical safety issues, including expected adverse events,
         anticipated precautions, and drug interactions

12.      Anticipated product claims at launch

13.      Known or suspected competitive agents

14.      Possible promotable advantages over available agents in development, to
         the extent known

15.      Chemistry/manufacturing

            -        Raw materials

                                       80
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            -        Process & product development

            -        Chemical manufacturing

16.      Total research and development expenses incurred by ALNYLAM on the
         MERCK RNAi Novel Target from the date MERCK presented the MERCK RNAi
         Novel Target to ALNYLAM until the date on which ALNYLAM provided MERCK
         with Opt-In Information, including but not limited to all expenses
         incurred relating to FTEs and all out-of-pocket expenses.

                                       81
<PAGE>

                                SCHEDULE 2.14.3.3

              THERAPEUTIC COLLABORATION PRODUCT AGREEMENT TEMPLATE

Note: These terms are non-binding and are subject to further due diligence,
MERCK Senior Management approval and the negotiation and execution of the
definitive agreements.

Purpose:

         MERCK and ALNYLAM mutually agree to co-develop and co-commercialize a
         Therapeutic Collaboration Product for therapeutic use in the field of
         [insert indications].

Territory:

         Worldwide, as applicable.

Licenses:

         ALNYLAM shall provide MERCK with a worldwide, royalty-free,
         Co-exclusive license, sublicensable to Affiliates, to ALNYLAM RNAi
         Technology, ALNYLAM Collaboration Inventions, ALNYLAM Therapeutic
         Collaboration IP, and ALNYLAM RNAi Patent Rights, solely to perform its
         obligations under the Therapeutic Collaboration to develop and
         commercialize the Therapeutic Collaboration Product.

         MERCK shall provide ALNYLAM with a worldwide, royalty-free,
         Co-exclusive license, sublicensable to Affiliates, MERCK Collaboration
         Inventions to MERCK RNAi Novel Target IP solely to perform its
         obligations under the Therapeutic Collaboration to develop and
         commercialize the Therapeutic Collaboration Product.

Co-Development:

         The Parties agree to co-develop an Therapeutic Collaboration Product
         according to the Therapeutic Collaboration Workplan. Such Workplan
         shall be agreed upon by the Parties prior to execution of the
         Therapeutic Collaboration Product Agreement. The Workplan will define
         specific roles and responsibilities of each Party in the development of
         the Therapeutic Collaboration Product. Upon execution of the
         Therapeutic Collaboration Product Agreement, the Parties shall
         establish a Joint Development Committee, which shall be comprised of an
         equal number of representatives from MERCK and ALNYLAM, to work
         collaboratively through final regulatory approval on issues relating to
         clinical development, including regulatory issues, of the Therapeutic
         Collaboration Product.

                                       82
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Commercialization:

         -        MERCK shall be responsible for the worldwide commercialization
                  of Therapeutic Collaboration Products.

         -        ALNYLAM shall have the option to co-promote Therapeutic
                  Collaboration Products in the US by providing a minimum number
                  of representatives, such minimum number to be determined by
                  the Parties based upon the physician audience to which the
                  Therapeutic Collaboration Products will be marketed and to be
                  set forth in the Therapeutic Collaboration Product Agreement.
                  ALNYLAM must exercise its option to co-promote within the
                  required time period, set by MERCK, prior to launch, but no
                  sooner than [**] prior to filing the US NDA or equivalent.

         -        The Parties shall establish a Joint Commercialization
                  Committee, which shall be led by MERCK, responsible for all
                  strategic decisions relating to the commercialization of RNAi
                  Therapeutic Products.

         -        ALNYLAM's US co-promotion activity shall be fully-integrated
                  into MERCK's US promotion effort.

Development and Commercial Expenses:

         -        Parties shall equally share all development expenses
                  applicable to a US NDA through FDA approval.

         -        Parties shall equally share all US commercialization expenses.

         -        Each Party has the option to reduce its respective
                  US-applicable expense obligation, but in no event shall either
                  Party reduce its obligation to below [**]% of the total
                  expenses applicable to a US NDA approval and US
                  commercialization. This election shall be made prior to
                  execution of the Therapeutic Collaboration Product Agreement.

         -        MERCK shall bear all ex-US development and commercial
                  expenses.

Profit-Sharing:

         -        The Parties shall allocate the US net operating profits in the
                  percentage equal to the US-applicable development and
                  commercialization expenses contributed by each Party. "US Net
                  Operating Profits", "US Development Expenses," "US
                  Commercialization Expenses," "ex-US Development Expenses" and
                  "ex-US Commercialization Expenses" shall be defined in the
                  Therapeutic Collaboration Product Agreement.

         -        MERCK shall realize all operating profits ex-U.S. MERCK shall
                  pay to ALNYLAM a royalty of [**]%-[**]% on ex-US net product
                  sales as follows:

                                       83
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         For incremental net product sales of:

                  < or = to $[**], royalty shall be [**]%

                  > $[**] to < or = to $[**], royalty shall be [**] %

                  $[**] to < or = to $[**], royalty shall be [**]%

                  $[**], royalty shall be [**]%

         There shall be a maximum offset of [**]% to the above royalties in the
         event that additional third party licenses are required to
         appropriately protect and/or commercialize the Therapeutic
         Collaboration Product.

Manufacturing:

         The Parties shall agree on a cost-effective strategy for commercial
         manufacturing of the Therapeutic Collaboration Product, taking into
         full consideration the expertise and cost of goods offered by Third
         Party contractors.

Regulatory Filings:

         -        The Parties, through the Joint Development Committee, shall
                  work together collaboratively on all regulatory issues and
                  filings.

         -        Specific regulatory roles and responsibilities of each Party
                  during the various phases of development will be defined in
                  the Therapeutic Collaboration Workplan. MERCK shall be the
                  worldwide holder of the marketing authorization, and each
                  Party shall provide all relevant data and information in its
                  possession to assist MERCK in its regulatory filings
                  worldwide.

Intellectual Property:

         -        MERCK shall have full responsibility for all intellectual
                  property filings of Therapeutic Collaboration Products.

         -        All costs associated with any intellectual property filings
                  relating to Therapeutic Collaboration Products will be treated
                  as development expenses and shared as such by the Parties.

All terms not defined herein shall have the meaning set forth in the Agreement.

                                       84
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                                   SCHEDULE 6

                                   EXCEPTIONS

Section 6.1(c):

Pursuant to a certain License and Cooperation Agreement with a third party (the
"License and Cooperation Agreement"), RIBOPHARMA has granted a non-exclusive
license to such third party under the Limmer Patents for use in target
identification and validation and has agreed to provide a specific quantity of
siRNAs to such third party.

Pursuant to a certain Feasibility Agreement with a third party (the "FEASIBILITY
AGREEMENT"), RIBOPHARMA has granted a non-exclusive license to such third party
under the Limmer Patents for use in in vitro studies for target validation and
has agreed to provide a limited number of RNAi molecules against a limited
number of such third party's targets.

Section 6.1(d):

Pursuant to the License and Cooperation Agreement, RIBOPHARMA has granted a
non-exclusive license to a third party under the Limmer Patents for use in
target identification and validation and has agreed to provide a specific
quantity of siRNAs to such third party.

Pursuant to the Feasibility Agreement, RIBOPHARMA has granted a non-exclusive
license to a third party under the Limmer Patents for use in in vitro studies
for target validation and has agreed to provide a limited number of RNAi
molecules against a limited number of such third party's targets.

Section 6.2(b):

Pursuant to the License and Cooperation Agreement, RIBOPHARMA has granted a
non-exclusive license to a third party under the Limmer Patents for use in
target identification and validation and has agreed to provide a specific
quantity of siRNAs to such third party.

Pursuant to the Feasibility Agreement, RIBOPHARMA has granted a non-exclusive
license to a third party under the Limmer Patents for use in in vitro studies
for target validation and has agreed to provide a limited number of RNAi
molecules against a limited number of such third party's targets.

Section 6.2(c):

There are currently multi-party oppositions against RIBOPHARMA European patent
1144623.

ALNYLAM has received a letter from Isis Pharmaceuticals dated July 28, 2003
regarding a licensing opportunity for RNA chemistry modifications, a copy of
which has been furnished to MERCK.

                                       85

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