Alliance brings together world-leading capabilities in genetics and drug development to speed the discovery of new treatments

Reykjavik, ICELAND, September 27, 2002 — deCODE genetics (Nasdaq/Nasdaq Europe:DCGN) and Merck & Co., Inc. (NYSE:MRK) today announced the formation of a major alliance aimed at developing new treatments for obesity. Under the alliance, deCODE and Merck will combine their cutting-edge research efforts in the genetics of obesity to identify, validate and prioritize a series of drug targets to take into development. The goal of the alliance is to accelerate the discovery of new drugs to fight obesity, a condition that now represents one of the fastest-growing public health challenges in the industrialized world. A conference call to discuss today’s announcements will be webcast live today, Friday, September 27, at 8:00am EDT/12:00 noon GMT (details below).

Under the terms of the three-year agreement, deCODE will receive substantial research funding, technology access and license fees, milestone payments as compounds developed under the alliance advance in the development process, as well as royalties on successfully marketed alliance drugs. Exclusive of royalties, the agreement has a potential value to deCODE of more than $90 million if Merck were to develop and market more than one product from the alliance.

One quarter of adults in the United States and Europe are clinically overweight, as are an increasing number of children. Obesity is recognized as a leading risk factor for a range of serious diseases, including heart disease, stroke and diabetes, and its treatment represents an area of compelling unmet medical need. Current approaches focus on important behavioral factors such as diet and exercise, as well as appetite suppression. Yet inherited factors play a fundamental role in the biological processes underlying obesity. deCODE and Merck aim to tap the significant opportunity their genetics research represents for discovering therapies that can help to counteract the causes of obesity, not just its manifestations.

In its population gene discovery work, deCODE has mapped several key genes linked to obesity and has gathered detailed genotypic and clinical data from more than 10,000 adult volunteers among the Icelandic population. While advancing this target discovery work, deCODE will also bring to the alliance its Clinical Genome Miner™ system in order to validate and prioritize targets emerging from Merck’s substantial research programs in mice and gene-expression. The companies will use the Clinical Genome Miner™, which combines genealogical, genotypic and disease data, to develop more detailed understanding of the role of Merck targets in the human biology of obesity, and to establish which targets offer the most promising avenues for the development of new drugs. The companies also plan to initiate a significant new program of genetic research based on the analysis of tissue samples from obese individuals.

“This alliance is a major validation of the power of our population approach to human genetics and an important means for us to turn our unique capabilities into valuable products for the market,” said Kari Stefansson, CEO of deCODE. “We are pleased to have an opportunity to combine our know-how and Merck’s complementary approach to genetics and global leadership in the development of innovative therapeutics, to bring into development a series of novel, population-validated targets that may lead to a qualitative leap in our approach to treating obesity.”

“We are excited to work with deCODE on this important initiative to obtain human validation of targets and to dissect the heterogeneity of obesity,” said Stephen Friend, M.D., Ph.D., Vice President of Molecular Profiling at Merck and President of Rosetta Inpharmatics. “This is an opportunity to combine the world-class genomics and vast resources of deCODE with the state-of-art expression profiling and informatics expertise that came to Merck with the acquisition of Rosetta Inpharmatics last year.”

About deCODE

deCODE genetics is using population genomics to create a new paradigm for healthcare. With its uniquely comprehensive population data, deCODE is turning research on the genetic causes of common diseases into a growing range of products and services — in gene discovery, pharmaceuticals, DNA-based diagnostics, pharmacogenomics, in silico discovery tools, bioinformatics and medical decision support systems. deCODE’s pharmaceuticals group, based in Chicago, and deCODE’s biostructures group, based in Seattle, conduct downstream development work on targets derived from deCODE’s proprietary research in human genetics as well as contract service work for pharmaceutical and biotechnology companies. deCODE is delivering on the promise of the new genetics.SM Visit us on the web at www.decode.com.

About Merck
Merck & Co., Inc. is a leading research-driven pharmaceutical products and services company. Merck discovers, develops, manufactures and markets a broad range of innovative products to improve human and animal health, directly and through its joint ventures.

Conference Call Information

A conference call, during which deCODE President and CEO Kari Stefansson and Executive Vice President and Senior Business Officer Hannes Smarason will discuss today’s announcements, will be webcast live today, Friday, September 27, at 8:00am EDT/12:00 noon GMT. The webcast can be accessed by clicking on the icon on the “Investor Events” page on deCODE’s website, www.decode.com, through www.streetevents.com, or, for non-subscribers to StreetEvents, on www.companyboardroom.com. A replay of the call will be available on these websites for the following week. A digitized telephone replay of the call will be available from noon today and can be accessed for the following week by dialing

1 800 475 6701 from the US, or +1 320 365 3844 from outside the US. The access code is 653842.

Any statements contained in this presentation that relate to future plans, events or performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, among others, those relating to technology and product development, integration of acquired businesses, market acceptance, government regulation and regulatory approval processes, intellectual property rights and litigation, dependence on collaborative relationships, ability to obtain financing, competitive products, industry trends and other risks identified in deCODE’s filings with the Securities and Exchange Commission. deCODE undertakes no obligation to update or alter these forward-looking statements as a result of new information, future events or otherwise.