Merck

(MRK) - Get Report

is teaming up with

Alnylam

(ALNY) - Get Report

on treatments for eye diseases.

The two companies said the multiyear deal will focus on age-related macular degeneration and other ocular diseases caused by abnormal growth or leakage of small blood vessels. Alnylam's existing program to develop a direct RNAi therapeutic will be incorporated into the new collaboration.

Under terms of the agreement, Alnylam will receive an initial cash payment from Merck and is eligible for additional payments depending on results of the project.

Merck and Alnylam will share development and profits in the U.S., while the nation's No. 2 drugmaker will handle international marketing and sales and pay royalties.

RNAi technology uses a natural biological mechanism to inhibit the expression of disease-causing genes.

The two companies signed a previous agreement over the technology in 2003.

According to the companies, the National Eye Institute estimates that more than 1.6 million adults over the age of 50 in the U.S. suffer from advanced age-related macular degeneration, a condition that causes severe deterioration of vision and possibly blindness.

Pfizer

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and

Eyetech Pharmaceuticals

(EYET)

recently announced that they had completed a new drug application with the Food and Drug Administration to use the drug Macugen to treat macular degeneration.

The FDA has given Macugen fast-track status as a potential treatment for wet age-related macular degeneration.