884731--3/16/2006--ARIAD_PHARMACEUTICALS

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{product, candidate, development}

{interest, director, officer}

{product, liability, claim}

{property, intellectual, protect}

{product, market, service}

{stock, price, share}

{debt, indebtedness, cash}

{control, financial, internal}

{operation, natural, condition}

{acquisition, growth, future}

{personnel, key, retain}

{loss, insurance, financial}

{condition, economic, financial}

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THE RISKS AND UNCERTAINTIES DESCRIBED BELOW ARE THOSE THAT WE CURRENTLY BELIEVE MAY MATERIALLY AFFECT OUR COMPANY. ADDITIONAL RISKS AND UNCERTAINTIES THAT WE ARE UNAWARE OF ALSO MAY BECOME IMPORTANT FACTORS THAT AFFECT OUR COMPANY. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, THEY MAY MATERIALLY HARM OUR BUSINESS, OUR FINANCIAL CONDITION AND OUR RESULTS OF OPERATIONS. Risks Relating to Our Business We and our partners may never succeed in developing marketable products or generating product We have incurred significant losses to date and may never be profitable. Insufficient funding may jeopardize our research and development programs and may prevent commercialization of our products and technologies. We have limited manufacturing experience and are dependent upon the ability of third parties to manufacture our product candidates, which raises uncertainty as to our ability to develop and commercialize our product The loss of key members of our scientific and management staff could delay and may prevent the achievement of our research, development and business We are dependent upon the ability of our medical device partner and potential additional partners to develop, manufacture, test and market stents or other medical devices to deliver AP23573. We will continue to expend significant resources on the enforcement and licensing of our NF- B patent portfolio and may be unable to generate material revenues from these efforts, if we are unable to enforce against, or license our NF- B patents to, pharmaceutical and biotechnology companies. Because we do not own all of the outstanding stock of our subsidiary, AGTI, we may not realize all of the potential future economic benefit from products developed based on technology licensed to or owned by our subsidiary. Because members of our management team and/or Board of Directors beneficially own a material percentage of the capital stock of our subsidiary, AGTI, and we have agreements with AGTI, there are conflicts of interest present in dealings between ARIAD and AGTI. We may not be able to protect our intellectual property relating to our research programs, technologies and products. We may be unable to develop or commercialize our product candidates, if we are unable to obtain or maintain certain licenses on commercial terms or at all. We may be unable to develop or commercialize our product candidates, if we are unable to obtain or maintain certain licenses on commercial terms or at all. Competing technologies may render some or all of our programs or future If our product candidates are not accepted by patients, physicians and insurers, we will If we are unable to establish sales, marketing and distribution capabilities or to enter into agreements with third parties to do so, we may be unable to successfully market and sell any products. If we develop a product for commercial use, a subsequent product liability-related claim or recall could have an adverse effect on our business. Significant additional losses or insufficient funding may cause us to default on certain covenants of our loan documents. Risks Relating to Governmental Approvals We have limited experience in conducting clinical trials, which may cause delays in commencing and completing clinical trials of our product candidates. We may not be able to obtain government regulatory approval to market our product candidates. We will not be able to sell our product candidates if we or our third-party manufacturers fail to comply with FDA manufacturing regulations. Even if we bring products to market, we may be unable to effectively price our products or obtain adequate reimbursement for sales of our products, which would prevent our products from becoming profitable. Risks Relating to Our Common Stock Results of our operations, general market conditions for biotechnology stocks and other factors could result in the sudden change in the value of our stock. Raising additional capital by issuing securities or through collaboration and licensing arrangements may cause dilution to existing stockholders, restrict our operations or require us to relinquish proprietary rights.

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884731--3/16/2006--ARIAD_PHARMACEUTICALS_INC