CO-EXCLUSIVE LICENSE AGREEMENT



between



Garching Innovation GmbH,

Hofgartenstrasse 8, 80539 Munchen, Germany,

represented by the Managing Director, Dr. Bernhard Hertel,

- as licensor, hereinafter called "GI"-



and



Alnylam Pharmaceuticals Inc.,

790 Memorial Drive, Suite 202, Cambridge, MA 02139, USA

represented by the Chief Executive Officer, John Maraganore,

 - as licensee, hereinafter called "COMPANY" -



                                                                          page 1



{PAGE}



PREAMBLE



WHEREAS, Massachusetts Institute of Technology ("M.I.T."), Whitehead Institute

for Biomedical Research ("WHITEHEAD"), Max-Planck-Gesellschaft zur Foerderung

der Wissenschaften e.V. ("MAX-PLANCK") and University of Massachusetts

("UMASS"), are joint owners of certain JOINT PATENT RIGHTS (as later defined

herein) relating to "RNA Sequence-Specific Mediators of RNA Interference", by

David P. Bartel, Phillip A. Sharp, Thomas Tuschl, and Phillip D. Zamore

(MAX-PLANCK Case No. GI 2716 KTM).



WHEREAS, MAX-PLANCK is the owner of certain MAX PLANCK PATENT RIGHTS (as later

defined herein) relating to "RNA Interference Mediating Small RNA Molecules," by

Thomas Tuschl, Sayda Elbashir and Winfried Lendeckel (MAX-PLANCK Case No. GI

2782 KTM).



WHEREAS, M.I.T., WHITEHEAD, MAX-PLANCK and UMASS have the right to grant

licenses under the JOINT PATENT RIGHTS and the MAX PLANCK PATENT RIGHTS, subject

to a royalty-free, nonexclusive license granted to the United States and the

German Governments to practice the JOINT PATENT RIGHTS and the MAX PLANCK PATENT

RIGHTS for government purposes.



WHEREAS, MAX-PLANCK has authorized Garching Innovation GmbH ("GI") to act as its

agent for the purposes of licensing its ownership position of JOINT PATENT

RIGHTS and the MAX PLANCK PATENT RIGHTS.



WHEREAS, WHITEHEAD, M.I.T. and UMASS have not authorized GI to act as their

agent for the purposes of licensing the JOINT PATENT RIGHTS and the MAX PLANCK

PATENT RIGHTS for therapeutic purposes, and therefore, this Agreement is not

binding on each of WHITEHEAD, M.I.T. and UMASS unless and until it gives its

respective individual approval.



WHEREAS, COMPANY is an early-stage therapeutics company which was founded in

2002 by an international group of scientists that helped discover the novel

biological phenomenon of RNA interference.



WHEREAS, COMPANY desires to obtain one co-exclusive license, with the right to

grant sublicenses, under the JOINT PATENT RIGHTS and the MAX PLANCK PATENT

RIGHTS for the purpose of developing and commercializing therapeutic products,

and GI desires to grant such license on the terms and conditions hereinafter set

forth.



WHEREAS, the shareholders of COMPANY desire to found and finance EuropeRNAi (as

later defined herein) under certain REQUIREMENTS (as later defined herein) as an

European-based therapeutics company.



WHEREAS, GI intends to grant to EuropeRNAi, upon fulfillment of the

REQUIREMENTS, one



                                                      Alnylam; GI 2716, 2782 ZTM

                                                           Dec. 19, 2002; page 2



{PAGE}



additional co-exclusive license, with the right to grant sublicenses, under the

JOINT PATENT RIGHTS and the MAX PLANCK PATENT RIGHTS for the purpose of

developing and commercializing therapeutic products.



NOW, THEREFORE, GI and COMPANY hereby agree as follows:



ARTICLE 1 - DEFINITIONS



1.1      "JOINT PATENT RIGHTS"



shall mean:



(a)      the United States and international patent and provisional applications

         listed on Appendix A and the resulting patents,



(b)      any patent applications resulting from the provisional applications

         listed on Appendix A, and any divisionals, continuations,

         continuation-in-part applications, and continued prosecution

         applications (and their relevant international equivalents) of the

         patent applications listed on Appendix A and of such patent

         applications that result from the provisional applications listed on

         Appendix A, to the extent the claims are directed to subject matter

         specifically described in the patent applications listed on Appendix A,

         and the resulting patents,



(c)      any patents resulting from reissues, reexaminations, or extensions (and

         their relevant international equivalents) of the patents described in

         (a) and (b) above, and



(d)      international (non-United States) patent applications and provisional

         applications filed after the EFFECTIVE DATE and the relevant

         international equivalents to divisionals, continuations,

         continuations-in-part applications and continued prosecution

         applications of the patent applications to the extent the claims are

         directed to subject matter specifically described in the patents or

         patent applications referred to in (a), (b), and (c) above, and the

         resulting patents.



1.2      "MAX PLANCK PATENT RIGHTS"



shall mean:



(a)      the United States and international patent and provisional applications

         listed on Appendix B and the resulting patents,



(b)      any patent applications resulting from the provisional applications

         listed on Appendix B, and any divisionals, continuations,

         continuation-in-part applications, and continued prosecution

         applications (and their relevant international equivalents) of the

         patent applications listed on Appendix B and of such patent

         applications that result from the provisional applications listed on

         Appendix B, to the extent the claims are directed to subject matter

         specifically described in the patent applications listed on Appendix B,

         and the resulting patents,



(c)      any patents resulting from reissues, reexaminations, or extensions (and

         their relevant international equivalents) of the patents described in

         (a) and (b) above, and



(d)      international (non-United States) patent applications and provisional

         applications filed after



                                                      Alnylam; GI 2716, 2782 ZTM

                                                           Dec. 19, 2002; page 3



{PAGE}



         the EFFECTIVE DATE and the relevant international equivalents to

         divisionals, continuations, continuations-in-part applications and

         continued prosecution applications of the patent applications to the

         extent the claims are directed to subject matter specifically described

         in the patents or patent applications referred to in (a), (b), and (c)

         above, and the resulting patents.



1.3      "PATENT RIGHTS"



shall mean the JOINT PATENT RIGHTS and MAX PLANCK PATENT RIGHTS together.



1.4      "OWNERS"



shall mean M.I.T., WHITEHEAD, UMASS and MAX-PLANCK collectively.



1.5      "LICENSED PRODUCTS"



shall mean any product or part thereof the manufacture, use or sale of which

would, absent the license granted hereunder, infringe one or more issued claims

of the PATENT RIGHTS or one or more pending claims of the PATENT RIGHTS that

have not been pending for more than 5 (five) years after filing national patent

applications in the country in question.



1.6      "FIELD"



shall mean all uses other than the commercial sale or use of the LICENSED

PRODUCTS as a research reagent, including in a kit format, for research or

educational purposes, including without limitation,



(i) COMPANY'S internal and collaborative research use, and



(ii) all therapeutic and prophylactic uses, and



(iii) diagnostic uses for purposes of therapeutic monitoring, but excluding all

other diagnostic uses,



specifically including human and veterinary diseases, initially for all

indications, but with a later split of indications according to Section 2.3.



1.7      "SUBLICENSEE"



shall mean any third party who sells or intends to commercialize LICENSED

PRODUCTS under a sublicense from COMPANY to develop, make, use and sell LICENSED

PRODUCTS. SUBLICENSEE shall not include a distributor which purchases LICENSED

PRODUCTS (whether in packaged form or bulk form) from COMPANY and resells such

LICENSED PRODUCTS to third parties in a manner consistent with normal trade

practices in the pharmaceutical industry.



1.8      "NET SALES"



shall mean the gross amount invoiced by COMPANY and its SUBLICENSEES to third

parties for LICENSED PRODUCTS, less the following: (i) to the extent separately

stated on the document of sale, any taxes or duties imposed on the manufacture,

use, sale or import of LICENSED PRODUCTS which are paid by COMPANY, (ii)

outbound transportation costs and costs of insurance in transit, (iii)

customary trade, cash or quantity discounts or rebates, to the extent actually

allowed and taken, and (iv) amounts repaid or credited by reason of rejection

or return. No deductions shall be made for commissions paid to individuals or

entities, or for cost of collections. NET SALES shall occur on the date of the

invoice for a





                                                      Alnylam; GI 2716, 2782 ZTM

                                                           Dec. 19, 2002; page 4



{PAGE}



LICENSED PRODUCT.



Non-cash consideration shall not be accepted by COMPANY or any SUBLICENSEE for

LICENSED PRODUCTS without the prior written consent of GI.



In the event that a LICENSED PRODUCT is sold in combination with one or more

active ingredients (excluding, without limitation, any formulation,

stabilisation and delivery technology) which are not LICENSED PRODUCTS, which

active ingredients are also independently marketed during the royalty period in

question in the FIELD (or the non-exclusive field licensed in the second

paragraph of Section 2.1, as the case may be) in the country in question, then

NET SALES, for purposes of determining royalty payments on the combination

product, shall be calculated by multiplying the NET SALES of the combination

product by the fraction A/A+B, where A is the average gross selling price of the

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