FOR IMMEDIATE RELEASE

             GENOME THERAPEUTICS ANNOUNCES EXTENSION OF OSTEOPOROSIS

                       GENOMICS ALLIANCE WITH WYETH-AYERST

WALTHAM, MASS., JULY 16, 2001 -- Genome Therapeutics Corp. (Nasdaq: GENE)
announced today the extension of a genomics-based research collaboration to
develop novel therapeutics for the prevention and treatment of osteoporosis with
Wyeth-Ayerst Laboratories, the pharmaceutical division of American Home Products
Corporation (NYSE: AHP). This alliance, which began in 1999, focuses on
developing therapeutics for osteoporosis utilizing targets based on the
characterization of a gene associated with a unique high bone mass trait. The
extension provides for continuation of the sponsored research phase of the
agreement at least through December 2002.

"The extension of our relationship with Genome Therapeutics and its unique gene
discovery approach will allow us to continue pursuit of additional aspects of
the high bone mass program, as well as the potential for an accelerated
commercialization of a product to treat or prevent osteoporosis," said Robert
Ruffolo, Ph.D., Executive Vice-President, Pharmaceutical Research and
Development, at Wyeth-Ayerst Research.

Recently, Genome Therapeutics announced the receipt of milestone payments for
the completion of a major advance in this alliance. A joint publication
describing the scientific discoveries supporting this milestone is planned.

"We believe this extension substantiates the success of our research efforts and
Wyeth-Ayerst's confidence in our abilities for this multi-year alliance," said
Steven M. Rauscher, CEO and President of Genome Therapeutics. "It also helps to
validate Genome Therapeutics' approach for genomics-based drug discovery in
chronic human diseases."

Genome Therapeutics utilizes its established capabilities in positional cloning,
bioinformatics and functional genomics in conjunction with Wyeth-Ayerst's strong
genomic drug discovery capabilities, commitment to women's health, and its
expertise in bone biology and the osteoporotic disease process to develop new
pharmaceuticals through this alliance.


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Under the terms of the agreement, Wyeth-Ayerst paid Genome Therapeutics an
up-front license fee and is funding a multi-year research program. Wyeth-Ayerst
will make milestone payments and pay royalties on sales of therapeutic products
developed from the collaboration. If the research program continues for its full
term and substantially all of the milestone payments are met, total payments to
Genome Therapeutics would exceed $118 million, excluding royalties.

Genome Therapeutics (www.genomecorp.com) is a genomics-based drug discovery
company operating two lines of business: genomics services and
biopharmaceuticals. The genomics services business focuses on services that
enable other organizations to achieve their drug discovery objectives and
includes the GTC Sequencing Center and the PathoGenome(TM) Database. The
biopharmaceutical business focuses on the development of novel therapeutics,
vaccines and diagnostics to solve major medical needs, through alliances with
pharmaceutical companies including Schering-Plough, AstraZeneca, Wyeth-Ayerst
and bioMerieux and a joint venture with ArQule.

STATEMENTS IN THIS PRESS RELEASE THAT ARE NOT STRICTLY HISTORICAL ARE "FORWARD
LOOKING" STATEMENTS AS DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995. A NUMBER OF IMPORTANT FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE PROJECTED OR SUGGESTED IN THE FORWARD LOOKING STATEMENT,
INCLUDING, BUT NOT LIMITED TO, THE ABILITY OF THE COMPANY AND ITS ALLIANCE
PARTNERS TO (I) SUCCESSFULLY DEVELOP PRODUCTS BASED ON THE COMPANY'S GENOMIC
INFORMATION, (II) OBTAIN THE NECESSARY GOVERNMENTAL APPROVALS, (III) EFFECTIVELY
COMMERCIALIZE ANY PRODUCTS DEVELOPED BEFORE ITS COMPETITORS AND (IV) OBTAIN AND
ENFORCE INTELLECTUAL PROPERTY RIGHTS, AS WELL AS THE RISK FACTORS DESCRIBED IN
EXHIBIT 99 OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
AUGUST 31, 2000 AND FROM TIME TO TIME IN THE COMPANY'S OTHER REPORTS FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION.


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