Axys Pharmaceuticals and Merck Extend Osteoporosis Collaboration.

Business Editors/Medical Writers

SOUTH SAN FRANCISCO, Calif.--(BW HealthWire)--Nov. 28, 2000

Axys Pharmaceuticals, Inc. (Nasdaq:AXPH) announced today that Merck & Co., Inc. (NYSE:MRK) has extended their osteoporosis drug discovery collaboration for a fifth year until November 2001.

This is the third extension for the collaboration. The focus of the research collaboration is the development of small molecule inhibitors of cathepsin K, a cysteine protease target that has been demonstrated to play a role in bone resorption. In November 1996, Axys signed a two-year drug discovery collaboration with Merck to develop small molecule inhibitors of cathepsin K as a treatment for osteoporosis. In February 1997, Axys published the three-dimensional crystal structure of cathepsin K. The collaboration announced attainment of in vivo proof of concept in an animal model of osteoporosis in December 1999, and work continues toward selection of clinical development candidates.

Cathepsin K is a member of a large family of cysteine proteases, and has been highly associated with the ability of osteoclasts to degrade bone, a condition which is exacerbated in osteoporosis. Inhibiting this excessive enzyme activity may slow or reverse this condition, providing a potential new avenue of chronic therapy.

Axys Pharmaceuticals, Inc. is an integrated small molecule drug discovery and development company. Axys has a broad pipeline of products for chronic therapeutic applications that are partnered with world-class pharmaceutical companies and a proprietary product portfolio in oncology. Axys is also building shareholder value through affiliated businesses that leverage the Axys technologies in order to provide capital for Axys' drug discovery and development programs. In addition to the minority interest in Discovery Partners International, Inc. (Nasdaq:DPII) resulting from the merger of Axys Advanced Technologies into DPII earlier this year, Axys' technology leveraging businesses are: PPGx, a majority-owned pharmacogenomics company, and Akkadix Corp., an agricultural biotechnology company.

Merck & Co., Inc. is a leading research-driven pharmaceutical products and service company. Merck discovers, develops, manufactures and markets a broad range of innovative products to improve human and animal health. Merck-Medco Managed Care, Inc. manages pharmacy benefits for approximately 60 million Americans, encouraging the appropriate use of medicines and providing health management programs. Through these complementary capabilities, Merck works to improve quality of life and contain overall health-care costs.

Except for the historical information contained herein, this press release contains forward-looking statements that involve risks and uncertainties which could cause Axys' actual results to differ materially from those discussed here, including the reliance on the efforts of collaborative partners, the risk that this or other Axys collaborations will not be successful, the risk that clinical trials will not proceed as anticipated or may not be successful, the risks inherent in early stage development, the risk that Axys will not be successful in entering into new collaborations, competition and marketing risk, the risk of unexpected difficulties and delays in the development of new technologies, and general economic conditions that may affect Axys' actual results and developments. Additional factors that could cause or contribute to such differences include, but are not limited to, those discussed in the sections entitled "What Factors Could Cause Our Results to Differ Significantly from Those You Might Expect?" and "Additional Risk Factors" in the Axys' SEC Reports, including Axys' report on Form 10-K for the fiscal year ended Dec. 31, 1999.

This press release may contain so called "forward-looking statements," all of which are subject to risks and uncertainties. One can identify these forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements are likely to address Merck's growth strategy, financial results, product approvals and development programs. One must carefully consider any such statement and should understand that many factors could cause actual results to differ from Merck's forward-looking statements. These factors include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward-looking statement can be guaranteed and actual future results may vary materially. Merck does not assume the obligation to update any forward-looking statement. One should carefully evaluate such statements in light of factors described in Merck's filings with the Securities and Exchange Commission, especially on Forms 10-K, 10-Q and 8K (if any). In Item 1of Merck's annual report on Form 10-K for the year ended Dec. 31, 1999, Merck discusses in more detail various important factors that could cause actual results to differ from expected or historic results. One should understand that is not possible to predict or identify all such factors. Consequently, the reader should not consider any such list to be a complete statement of all potential risks or uncertainties.

For more information about Axys Pharmaceuticals, Inc., please visit the company's website at http://www.axyspharm.com. For more information about Merck & Co., Inc., please visit the company's website at http://www.merck.com.