Quark Pharmaceuticals and Major Pharmaceutical Company Enter into Licensing Option Agreement for the p53 Suppressor Drug QPI-1002, the First siRNA Administered Systemically in Human

FREMONT, California, August 18, 2010 - Quark Pharmaceuticals, Inc., a world leader in the discovery and
development of RNAi-based therapeutics, today announced that it has granted
Novartis an option to obtain an exclusive worldwide license to develop and
commercialize its p53 temporary inhibitor siRNA drug QPI-1002, currently the
subject of a Phase II clinical trial.

Quark will receive initially a non-refundable fee of 10 million USD. In
the event that Novartis exercises the option, Quark would receive option
exercise fees and milestone payments that could potentially total 670 million
USD. In addition Quark would be entitled to potential royalties on sales of
licensed products.

Dr. Daniel Zurr, Quark's Chief Executive Officer, stated, "We are very
pleased to have reached this agreement with Novartis. We believe that
Novartis represents an outstanding partner for Quark. With its world-leading
expertise in transplantation and acute care Novartis will provide invaluable
support to the global development of QPI-1002, in development for the
prevention of acute kidney injury (AKI) in patients undergoing cardiac
surgery and for delayed graft function (DGF) in kidney transplant patients.
The gene target of QPI-1002, p53, is a major player in apoptotic cell death;
its temporary suppression rescues cells, prevents them from dying in
conditions of severe stress such as ischemia, potentially opening
opportunities for Novartis to novel treatments in additional indications."

About QPI-1002

QPI-1002 is designed to temporarily inhibit expression of the
stress-response gene, p53 and is the first synthetic siRNA to be administered
systemically to humans. QPI-1002 is being developed for the prevention of
acute kidney injury (AKI) in patients undergoing major cardiovascular
surgery, and for the prophylaxis of delayed graft function (DGF) in patients
receiving deceased donor kidney transplants. QPI 1002 completed Phase I
studies in these patient populations and an independent Data Safety
Monitoring Board recommended continuation of QPI-1002 clinical development in
both diseases. QPI-1002 was granted Orphan designation by the US Food and
Drug Administration (FDA) and the European Medicines Agency (EMA) for the
prophylaxis of delayed graft function in kidney transplant patients.

About Quark Pharmaceuticals, Inc.

Quark Pharmaceuticals, Inc., a world leader in novel RNAi discovery and
development, has the largest clinical-stage siRNA pipeline in the industry.
The Company's fully integrated drug development platform spans therapeutic
target identification to drug development. Quark's approach to delivery
allows targeting of tissues and organs including the eye, kidney, ear, lung,
spinal cord and brain.

In addition to QPI-1002, Quark's pipeline includes PF-655, currently in
two Phase II clinical trials for the treatment of wet age-related macular
degeneration (AMD) and diabetic macular edema (DME). The siRNA therapeutic
candidate PF-655 is licensed to Pfizer, who is conducting both trials in
collaboration with Quark. PF-655 targets Quark's proprietary gene, RTP801,
discovered using its BiFAR(TM) target discovery platform that identifies
clinically relevant critical genes and proteins that reverse the disease
phenotype when inhibited. The Company owns a family of patents covering the
RTP801 gene, its RNA and protein product sequences, specific antibodies, and
gene inhibition across different pathologies. For the structure of these
products, Quark has obtained licenses from Silence Therapeutics and from
Alnylam Pharmaceuticals.

Quark is currently conducting clinical trials of QPI-1007, its
proprietary synthetic siRNA drug candidate for ocular neuroprotection.
QPI-1007 utilizes a proprietary structure developed in collaboration with
BioSpring GmbH that provides Quark with freedom to operate in the siRNA
intellectual property arena and chemical modifications that are designed to
preserve RNAi activity while ameliorating potential off-target and
immunostimulatory effects of siRNAs.

Quark is also committed to leveraging a broad research pipeline of siRNA
drug candidates and novel siRNA structures to develop additional RNAi drug
candidates.

Quark is headquartered in Fremont, California and operates research and
development facilities in Boulder, Colorado and Ness-Ziona, Israel.
Additional information is available at www.quarkpharma.com.

    Quark Pharmaceuticals, Inc.      The Ruth Group (investors / media)
    Juliana Friedman                 Sara Pellegrino / Jason Rando
    +972-89-30-5111                  +1-646-536-7002 / 7025
    jfriedman@quarkpharma.com        spellegrino@theruthgroup.com
                                     jrando@theruthgroup.com

Juliana Friedman, Quark Pharmaceuticals, Inc., +972-89-30-5111, jfriedman at quarkpharma.com ; or Investors, Sara Pellegrino, +1-646-536-7002, spellegrino at theruthgroup.com, or Media, Jason Rando, +1-646-536-7025, jrando at theruthgroup.com, both of The Ruth Group