Merck KGaA and Takeda to Co-Develop and Co-Promote Matuzumab Cancer Treatment; Agreement Covers the World's Major Pharmaceutical Markets

Under the agreement, Merck will receive an up-front payment of EUR60 million, which will be booked in the third quarter of 2005. Inaddition, Merck will receive significant milestone payments. Thecompanies have a formula for splitting profits, with Merck bookingmatuzumab sales in all regions except Japan. Matuzumab was developedby Merck and currently is in Phase II clinical trials in patients withnon-small cell lung, gastric and colorectal cancers.

Merck decided to enter into a cooperation with Takeda in order toput more resources and expertise toward this important product for thetreatment of cancer. Takeda's experience and commitment in the fieldof oncology makes it a perfect fit with Merck.

"This collaboration with Takeda, Japan's largest pharmaceuticalcompany, will allow us to move ahead quickly with development andcommercialization of this potentially important product for cancerpatients," said Elmar J. Schnee, President of Merck EthicalPharmaceuticals. "Our complementary strengths in clinical developmentand commercialization will help us bring matuzumab to cancer patientsaround the world."

The two companies will collaborate on development andcommercialization efforts in the major pharmaceutical markets of theworld, excluding Australia and Latin America.

Merck's Other Oncology Activities

Matuzumab is Merck's second EGFR (epidermal growth factorreceptor)-specific monoclonal antibody aimed at fighting canceroustumors. Merck gained Swissmedic approval of Erbitux for the treatmentof colorectal cancer in November 2003 followed by European Unionapproval in June 2004. Erbitux is now approved in more than 40countries within Merck's marketing territory. Merck submittedapplications to the EMEA and Swissmedic on August 30, 2005, for theuse of Erbitux to treat head and neck cancer. Merck's second-quartersales of Erbitux amounted to EUR 52 million.

Merck focuses on four therapeutic technology platforms inoncology:

-- EGFR-targeting monoclonal antibodies that may block tumor growth;

-- Immunocytokines that may provide local stimulation of the immune system;

-- Angiogenesis inhibitors that may starve tumors of the blood supply they need to grow and spread; and

-- Cancer vaccines that may stimulate a specific immune response against tumors.

Matuzumab Clinical Trials

Data from clinical trials involving matuzumab presented at theAmerican Society of Clinical Oncology conference in May 2005 included:

-- Advanced non-small cell lung cancer (NSCLC). Response to treatment with matuzumab and paclitaxel was not reliant on mutations in the kinase domain of the EGFR.1 These mutations are found in about 2 percent to 25 percent of NSCLC patients and some research has shown that the efficacy of EGFR tyrosine kinase inhibitors is correlated with the presence of mutations, whereas matuzumab appears not to rely on this mutation, based on the data presented.

-- Advanced esophago-gastric adenocarcinoma. Preliminary results from two studies indicate that the combination of matuzumab and two commonly used chemotherapy regimens - cisplatin, 5-fluorouracil and leucovorin (PFL), and epirubicin, cisplatin and capecitabine (ECX) - appear to be well tolerated in the first-line setting.2,3

1. Oechsle K et al. Proc Am Soc Clin Oncol, Orlando, Florida, 2005: abstr 8166.

2. Trarbach T et al. Proc Am Soc Clin Oncol, Orlando, Florida, 2005: abstr 3156.

3. Cunningham D et al. Presented at ASCO, Orlando, Florida, 2005: abstr 4001.

About Takeda

Takeda, located in Osaka, Japan, is a research-based globalcompany with its main focus on pharmaceuticals. As the largestpharmaceutical company in Japan and one of the global leaders of theindustry, Takeda is committed to striving toward better health forindividuals and progress in medicine by developing superiorpharmaceutical products. Additional information about Takeda isavailable at: www.takeda.com.

Takeda contact: Seizo Masuda, tel. +81-(0)6-6204-2060

Masuda_Seizo@takeda.co.jp

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Merck is a global pharmaceutical and chemical company with salesof EUR 5.9 billion in 2004, a history that began in 1668, and a futureshaped by 28,600 employees in 54 countries. Its success ischaracterized by innovations from entrepreneurial employees. Merck'soperating activities come under the umbrella of Merck KGaA, in whichthe Merck family holds a 73% interest and free shareholders own theremaining 27%. The former U.S. subsidiary, Merck & Co., has beencompletely independent of the Merck Group since 1917.