MERCK ADVANCES LICENSING AGENDA

MERCK AND H. LUNDBECK A/S have signed a joint development and commercialization agreement under which Merck will gain exclusive U.S. rights to Lundbeck's gaboxadol, a GABA-Areceptor agonist currendy in Phase III clinical trials for sleep disorders. Under the agreement, Merck will make an up-front payment of $70 million to Lundbeck and a total of as much as $200 million in milestone payments. Merck anticipates filing a New Drug Application with FDA between late-2006 and mid-2007. Lundbeck, which specializes in psychiatric medicine, will copromote gaboxadol and will receive a share of U.S. sales of the drug. Industry analysts applaud the move as a sign that Merck, which suffered two late-Phase III trial failures in 2003, is serious about expanding its portfolio through licensinglate- stage drug candidates. WithZcjcorCsimvastatinXMerck's $5 billion-per-year cholesterol-reducing drug, corning off patent in June, andalate-stagepipeline dominated by low-profit-margin vaccines, Merck will look to gaboxadol for g...