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Project Mercury was a LuthorCorp project that Lex Luthor and Milton Fine worked together on in Season Five. Although, most of the activity was seen off screen (as part of AOL/WB interactive fan project), it is alluded to in Fragile and Fade as LuthorCorp agents hunt down Milton Fine who has been appearing all over the globe simultaneously. The end results are ultimately revealed in Oracle.
Ostensibly, the aim of the project was to create a supervaccine that could fight all human disease. In Hypnotic, Fine told Lex that he believed that the alien race he'd been tracking planned to unleash a strange disease on Earth. In following that idea, Fine helped Lex smuggle many deadly viruses and bacteria into the United States in order to create this supervaccine. LuthorCorp spent over $10 million dollars on the project.
At the same time, Lex never truly trusted Fine and had him followed. Lex's agents would then find that Fine was appearing around the globe simultaneously, in Myanmar, Cairo collecting more than viruses. In Fade, Lex would then wonder who or what Fine was. He came pretty close to a conclusion in Oracle right before Fine revealed his true identity Brainiac. Brainiac's true intentions for the project was to create a vaccine with the intention of injecting Lex so he would be a suitable host for the return of General Zod.
It's most likely that the strange, Kryptonian disease in Solitude was to be used on the Earth by Zod during Dark Thursday in order to wipe humanity. Thus being the reason for Braniac's manipulation of Lex in Hypnotic which ultimately lead to Project Mercury, Lex's injection and the aftermath in Vessel and Zod.
- In keeping with Lex's predilection for naming his projects after mythological characters, the project could have been named after Mercury; the messenger of the Deities in Roman mythology.