Ariad Reports 43% Reduction in Third Quarter Operating Loss and Updates Recent Progress in Development Programs.

Business & Health Editors

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Oct. 20, 2000

ARIAD Pharmaceuticals, Inc. (Nasdaq: ARIA) today reported a net loss of $3.3 million or $.12 per share for the third quarter of 2000, a reduction of $2.5 million or 43% from the net loss of $5.8 million or $.26 per share reported for the third quarter of 1999. At September 30, 2000, the Company reported cash and marketable securities of $38.2 million and working capital of $35.6 million compared to cash and cash equivalents of $28.3 million and working capital of $22.7 million at December 31, 1999.

Research revenue for the third quarter of 2000 decreased to $1,000 from $2.6 million for the same period in 1999. This decrease is due to sale in December 1999 of the Company's 50% interest in the Hoechst-ARIAD Genomics Center, LLC (the "Genomics Center") to Aventis Pharmaceuticals, Inc. and the acquisition of technology rights in a 1995 Osteoporosis Collaboration which resulted in the termination of research services provided to the Genomics Center, as well as research revenue recognized under the Osteoporosis Collaboration. As part of the restructuring of these agreements, ARIAD received all of the rights to its osteoporosis product candidates and technologies developed as part of the collaboration.

Research and development expenses for the third quarter of 2000 decreased to $3.2 million from $6.8 million reported for the third quarter of 1999. This reduction of $3.6 million or 53% is due primarily to the termination of research services provided to the Genomics Center effective December 1999. General and administrative expenses for the third quarter decreased to $705,000 from $950,000 reported for the third quarter of 1999, primarily due to reduced legal and professional fees.

For the nine-month period ended September 30, 2000, ARIAD reported revenues of $127,000, a decrease of $9.8 million from the $9.9 million reported for the same period in 1999. For the nine-month period ended September 30, 2000, ARIAD reported research and development expenses of $9.0 million, down $13.8 million from the $22.8 million reported for the same period in 1999.

The Company reported a net loss, before the cumulative effect of a change in accounting principle in 1999, of $10.0 million for the nine months ended September 30, 2000 and $16.7 million for the corresponding period in 1999 or $.40 and $.76 per share, respectively. After such cumulative effect, the Company incurred a loss of $17.2 million for the nine months ended September 30, 1999 or $.78 per share.

In June 2000, ARIAD entered into an agreement with Acqua Wellington North American Equities Fund, Ltd. providing for an equity financing facility covering the sale of up to $75 million of the Company's common stock over an eighteen-month period. On October 12, 2000 the Company completed the sale of 176,173 common shares to Acqua Wellington at a price of $12.11 per share and received proceeds of $2.1 million.

"This quarter, we have made significant progress in accelerating the development of our three lead product candidates -- our ARGENT graft-vs-host disease and orally active erythropoietin products and our dual-action osteoporosis inhibitor, " said Harvey J. Berger, chairman and chief executive officer of ARIAD.

Recent corporate achievements included:

- Presentation of initial results of in vivo studies of ARIAD's small-molecule
dual-action osteoporosis drug, demonstrating not only inhibition of bone
breakdown but also stimulation of new bone formation in animal models.

- Publication of a series of papers in the Proceedings of the National Academy
of Sciences (USA), the Journal of Cell Biology and Bone by ARIAD scientists and
international collaborators on the validation of the genomic target of ARIAD's
osteoporosis drug and the design of selective, bone-targeted Src inhibitors.

- Establishment of collaboration with NsGene A/S, a leading Danish neuroscience
company, to develop and test a series of novel small-molecule regulated gene
and cell therapy products to treat neurodegenerative diseases, such as
Parkinson's disease and Alzheimer's disease.

- Publication in Nature Genetics of the use of the ARGENT(TM) cell-growth
switch in stem cells, overcoming one of the most formidable obstacles to the
clinical development of stem cell therapy - the inability to deliver genes to a
therapeutically relevant number of stem cells and to control their in vivo
growth and differentiation.

- Issuance of a new U.S. patent covering ARIAD's targeted gene activation
technology, known as Robust Activation of Gene Expression (RAGE(TM)).

- Issuance of the first U.S. patent covering a broad class of fully synthetic,
small-molecule drugs, including AP1903, used in the ARGENT graft-vs-host
disease and stem cell therapy products.

- Appointment of Ms. Tamar Howson, former senior vice president and director,
worldwide business development at SmithKline Beecham, to ARIAD's Board of
Directors.

ARIAD Pharmaceuticals, Inc. (www.ariad.com) is a leader in the discovery and development of gene therapy, cell therapy, stem cell therapy and protein therapy products featuring dose-dependent regulation by small-molecule drugs, as well as small-molecule inhibitors of signal transduction.

Some of the matters discussed in this news release are forward-looking statements that involve risks and uncertainties, which include, but are not limited to, risks and uncertainties regarding the Company's preclinical studies, the ability of the Company to conduct clinical trials of its products and the results of such trials, as well as risks and uncertainties relating to economic conditions, markets, products, competition, intellectual property, services and prices, key employees, future capital needs, dependence on our collaborators and other factors under the heading "Cautionary Statement Regarding Forward-Looking Statements" in ARIAD's Annual Report on Form 10-K for the fiscal year ended December 31, 1999 filed with the Securities and Exchange Commission.

             ARIAD PHARMACEUTICALS, INC. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                              (Unaudited)

                      Three Months Ended         Nine Months Ended
                         September 30,              September 30,
                      2000       1999            2000          1999

Revenue:
 Research
  revenue
  (principally
  related
  parties
  in 1999)           $1,050    $2,583,349      $127,203    $9,889,822
 Interest income    663,303        18,284     1,422,519       334,580
                    -------     ---------     ---------    ----------
  Total revenue     664,353     2,601,633     1,549,722    10,224,402
                    -------     ---------     ---------    ----------

Operating
 expenses:
 Research and
 development      3,192,621     6,813,407     9,027,514    22,783,873
 General and
  administrative    705,065       949,851     2,348,517     2,564,441
 Interest
  expense            53,737       188,876       172,786       386,122
                    -------     ---------     ---------    ----------
  Total
   operating
   expenses       3,951,423     7,952,134    11,548,817    25,734,436
Equity in net
 loss of
 Genomics Center         --      (376,715)           --    (1,142,465)
                   --------     ---------     ---------    ----------
Loss before
 cumulative
 effect of
 change in
 accounting
 principle       (3,287,070)   (5,727,216)   (9,999,095)  (16,652,499)
                  ---------     ---------     ---------    ----------
Cumulative
 effect of
 change in
 accounting
 principle               --            --            --      (364,388)
                  ---------     ---------     ---------    ----------
Net loss         (3,287,070)    5,727,216)   (9,999,095)  (17,016,887)

Accretion cost
 attributable to
 redeemable
 convertible
 preferred stock         --       (63,013)           --      (186,986)
                  ---------     ---------      ---------   ----------
Net loss
 attributable to
 common
 stockholders   $(3,287,070)  $(5,790,229)  $(9,999,095) $(17,203,873)
                  =========    ==========    ==========   ===========
Per common share
 (basic and
 diluted):
Loss
 attributable to
 common
 stockholders
 before
 cumulative
 effect of
 change in
 accounting
 principle            $(.12)        $(.26)        $(.40)        $(.76)
Cumulative
 effect of
 change in
 accounting
 principle               --            --            --          (.02)
                    -------        -------       --------      -------
Net loss              $(.12)        $(.26)        $(.40)        $(.78)
                    =======        =======       ========      =======
Weighted average
 number of
 shares of
 common stock
 outstanding     26,943,454    22,019,122    25,405,085    21,995,799


             ARIAD PHARMACEUTICALS, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION
                              (Unaudited)

                                  September 30, 2000 December 31, 1999

Cash and marketable securities           $38,166,823   $28,319,870

Net fixed assets                           2,594,447     3,334,353

Other assets                               6,485,129    12,581,790
                                         -----------    ----------
 Total assets                            $47,246,399   $44,236,013
                                         ===========    ==========
Bank debt                                 $2,200,000    $3,100,000

Other liabilities                          2,936,319     5,998,126
                                         -----------    ----------
 Total liabilities                         5,136,319     9,098,126
                                         -----------    ----------
Redeemable convertible preferred stock                   8,070,415

Stockholders' equity                      42,110,080    27,067,472
                                         -----------    ----------
 Total liabilities and stockholders'
  equity                                 $47,246,399   $44,236,013
                                         ===========    ==========