CAMBRIDGE, Mass. & FREMONT, Calif., Sep 26, 2006 (BUSINESS WIRE) -- Alnylam Pharmaceuticals, Inc. (Nasdaq:ALNY), a leading RNAi therapeutics company, announced today that it has granted Quark Biotech, Inc. InterfeRx^™ licenses to discover, develop, and commercialize RNAi therapeutics targeting the p53 and RTP801 genes for certain diseases. Quark has filed investigational new drug (IND) applications for RNAi therapeutics for both targets, in the case of p53 for the treatment of renal failure, and in the case of RTP801 for the treatment of ocular diseases, specifically macular degeneration. Detailed financial terms were not disclosed, but include upfront, annual, and milestone payments, as well as royalties on sales of any products covered by the licensing agreements. Simultaneously, Quark has agreed to withdraw its support of opposition to the Kreutzer-Limmer patent series currently granted in Europe.

"We are very pleased to provide Quark with a license to Alnylam intellectual property for its innovative RNAi therapeutic programs," said John Maraganore, Ph.D., President and Chief Executive Officer of Alnylam. "With these two licenses, we have now granted six InterfeRx licenses to date, and 12 licenses in total for therapeutic RNAi applications. With the recent strengthening of our patent estate, we expect that companies working in the area of RNAi therapeutics will continue to seek licenses to our intellectual property. In fact, we anticipate that into next year, a significant number of clinical-stage RNAi therapeutic programs will be licensed under Alnylam intellectual property."

"RNAi therapeutics represent a promising approach as a new class of drugs for unmet medical needs wherever the disease targets are otherwise practically un-druggable with today's medicines," said Dr. Daniel Zurr, Chief Executive Officer of Quark. "Quark's creative way to discover new targets and concepts for treatment of devastating diseases, combined with an RNAi approach, have yielded very encouraging early results with our p53 and RTP801 drugs. We are dedicated to help society with innovative medicines by moving from novel gene targets to unique compounds and eventually commercial products. In our comprehensive review of the intellectual property landscape for the commercialization of RNAi therapeutics, it was clear that a license to Alnylam patents is required for these exciting programs, and we're pleased to have access to these assets."

Alnylam has built a leading portfolio of issued or granted patents in the world's major pharmaceutical markets that broadly claim fundamental features for all RNAi therapeutics, including the structural and functional properties of synthetic RNAi therapeutic products. The recognized potential of RNAi to provide the basis for an entirely new class of drugs to treat a broad range of human diseases has created a high level of interest among biopharmaceutical companies in gaining access to this intellectual property. Alnylam created the InterfeRx licensing program to grant licenses under this intellectual property to biotechnology and pharmaceutical companies wishing to pursue RNAi therapeutics against specific targets outside Alnylam's core strategic interests. In addition to Quark, Alnylam's InterfeRx licensees include Calando Pharmaceuticals, Nastech Pharmaceutical Company, GeneCare Research Institute Co., and, under an option agreement, Benitec Ltd.

Quark's RNAi therapeutic that specifically targets p53 is being developed to reduce tubular damage and preserve kidney function. The novel concept of the temporary and reversible inhibition of p53 to prevent apoptosis in normal cells following ischemia-reperfusion injury was first described by Quark in 1999 in the journal Science (Science 285, 1733-37 (1999)) and is covered by broad issued U.S. patents. Extensive animal studies have shown that the drug protects the animals from ischemia/reperfusion-induced acute kidney injury.

Quark's second RNAi therapeutic targets the gene RTP801. Quark reported the discovery of RTP801 in 2002 and was granted several U.S. patents covering the gene, its encoded protein and their inhibition to treat serious diseases. The inhibition of the RTP801 target has been shown to have beneficial effect in a number of oxidative (hypoxic) injury-related disease models. Extensive animal studies have shown that the drug protects the animals from the three hallmarks of macular degeneration: retinal neuronal death, blood vessel regeneration, and vascular leakiness.

About RNA Interference (RNAi)
RNA interference, or RNAi, is a naturally occurring mechanism within cells for selectively silencing and regulating specific genes. Since many diseases are caused by the inappropriate activity of specific genes, the ability to silence genes selectively through RNAi could provide a new way to treat a wide range of human diseases. RNAi is induced by small, double-stranded RNA molecules. One method to activate RNAi is with chemically synthesized small interfering RNAs, or siRNAs, which are double-stranded RNAs that are targeted to a specific disease-associated gene. The siRNA molecules are used by the natural RNAi machinery in cells to cause highly targeted gene silencing.

About Alnylam
Alnylam is a biopharmaceutical company developing novel therapeutics based on RNA interference, or RNAi. The company is applying its therapeutic expertise in RNAi to address significant medical needs, many of which cannot effectively be addressed with small molecules or antibodies, the current major classes of drugs. Alnylam is building a pipeline of RNAi therapeutics; its lead program is in Phase I human clinical trials for the treatment of respiratory syncytial virus (RSV) infection, which is the leading cause of hospitalization in infants in the U.S. The company's leadership position in fundamental patents, technology, and know-how relating to RNAi has enabled it to form major alliances with leading companies including Merck, Medtronic, Novartis, and Biogen Idec. The company, founded in 2002, maintains global headquarters in Cambridge, Massachusetts, and has an additional operating unit in Kulmbach, Germany. Alnylam is honored to be the "emerging/mid-cap" company recipient of the 2006 James D. Watson Helix Award, the biotechnology industry's award for outstanding achievement. For more information, visit www.alnylam.com.

• The Tuschl II '704 patent (U.S. Patent No. 7,056,704) issued in June 2006, which broadly covers methods of making siRNAs to silence any and all disease targets;



• The Tuschl II '196 patent (U.S. Patent No. 7,078,196) issued in July 2006, which broadly covers methods of making siRNAs with or without chemical modifications;



• The Kreutzer-Limmer I '623 patent (EP 1144623) granted in August 2002, and upheld in June 2006, covering methods, medicaments, and uses of siRNAs having, among other structural features, a length of 15-21 base pairs;



• The Kreutzer-Limmer I '945 patent (EP 1214945) granted in June 2005, covering compositions, methods, and uses of siRNAs with a length between 15 and 49 nucleotides;



• Additional fundamental patents and patent applications licensed to Alnylam on an exclusive or non-exclusive basis, including those of Crooke (U.S. Patent Nos. 5,898,031 and 6,107,094), Fire and Mello (U.S. Patent No. 6,506,559), and Glover et al. (EP 1230375); and,

Several divisional patent applications pending of the aforementioned issued or granted patents and additional patent applications pending including Tuschl I.

In addition, Alnylam has a broad worldwide license for RNAi therapeutics from Isis Pharmaceuticals, Inc. for more than 150 issued patents pertaining to specific chemical modification of oligonucleotides used to introduce drug-like properties in siRNAs. These include:

• Phosphorothioate and 2'-O-methyl modifications (Buhr, U.S. Patent No. 6,476,205); and,



• 2'-Fluoro modifications (Cook, U.S. Patent Nos. 5,670,633; 6,005,087; and 6,531,584).

Alnylam invites interested licensees to view issued or granted claims for these and other key Alnylam patents at www.alnylam.com/patent-estate.

About Quark
Quark Biotech, Inc. is a privately held development-stage, biopharmaceutical company headquartered in Fremont, California. Through innovative combination of gene silencing and DNA microarray technology, Quark has pioneered and patented its BiFAR^™ platform for high-throughput functional profiling, allowing significant advances in the identification of target genes and proteins. This technology allows the company to develop conceptually novel drugs that provide previously unavailable benefits to patients. Quark is currently investigating novel targets identified using this enabling foundation technology. Quark has focused development efforts on treatment of fibrotic and ischemic diseases of the eye, kidney and lungs, in indications with clear unmet medical needs. Quark corporate product development teams and research facilities are based in Fremont with additional research facilities in Ness-Ziona, Israel. Additional information is available at www.quarkbiotech.com.

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

SOURCE: Alnylam Pharmaceuticals, Inc.

CONTACT:
Investors:
Cynthia Clayton,
Alnylam Pharmaceuticals, Inc.
1+617-551-8207, or
Media:
Kathryn Morris,
1+845-635-9828, or
Juliana Friedmann,
Quark Biotech, Inc.,
1+ 972-8-9305-111, or
Cynthia Isaac,
Ogilvy Public Relations Worldwide
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