912183--2/29/2008--CUBIST_PHARMACEUTICALS

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Risks Related to Our Business We depend heavily on the success of our sole marketed product CUBICIN, which may not continue to be widely accepted in the United States by physicians, patients, third-party payors, or the medical community in general for the treatment of cSSSI and bacteremia, including right-sided endocarditis, caused by MRSA and MSSA. We may not be able to obtain, maintain or protect certain proprietary rights necessary for the development and commercialization of CUBICIN, our other drug candidates and our research technologies. We face significant competition from other biotechnology and pharmaceutical companies, particularly with respect to CUBICIN, and our operating results will suffer if we fail to compete effectively. We are completely dependent on third parties to manufacture CUBICIN, and our commercialization of CUBICIN could be stopped, delayed, or made less profitable if those third parties fail to provide us with sufficient quantities of CUBICIN or fail to do so at acceptable prices. If we are unable to maintain satisfactory sales and marketing capabilities, we may not succeed in commercializing CUBICIN. If we are unable to discover, in-license, or acquire drug candidates, we will not be able to implement our current business strategy. If pre-clinical or clinical trials for our drug candidates are unsuccessful or delayed, we will be unable to meet our anticipated development and commercialization timelines, which could harm our business. We will need to obtain regulatory approvals for any other drug candidates, and our ability to generate revenues from the commercialization and sale of products resulting from our development efforts will be limited by any failure to obtain these approvals. The FDA may change its approval requirements or policies for antibiotics, or apply interpretations to its requirements or policies, in a manner that could delay or prevent commercialization of any new antibiotic product candidates or any additional indications for CUBICIN that we may seek in the United States. If we are unable to generate revenues from any drug products other than CUBICIN, our ability to create long-term shareholder value may be limited. If we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy. We have recently and may in the future undertake strategic acquisitions and we may not realize the benefits of such acquisitions. The investment of our cash is subject to risks which could result in losses. Our ability to grow revenues from the commercialization and sale of CUBICIN will be limited if we or our partners do not obtain approval to market CUBICIN for any additional indications in countries where CUBICIN is approved, or if our partners do not receive approvals to market CUBICIN at all in countries where CUBICIN is not yet approved, or if we fail to fulfill certain post-approval requirements of the FDA relating to CUBICIN. We have collaborative relationships that expose us to a number of risks. A variety of risks associated with our international business relationships could materially adversely affect our business. We depend on third parties in the conduct of our clinical trials for CUBICIN and expect to do so with respect to other drug candidates, and any failure of those parties to fulfill their obligations could adversely affect our development and commercialization plans. We have incurred substantial losses in the past and may incur additional losses. We may require additional funds and we do not know if additional funds would be available to us at all, or on terms that we find acceptable. Our business may suffer if we fail to manage our growth effectively. Risks Related to Our Industry We may become involved in patent litigation or other intellectual property proceedings relating to our products or processes that could result in liability for damage or stop our development and commercialization efforts. Competitors may develop drug products that make our drug products obsolete, less cost effective or otherwise less attractive to use. Revenues generated by products we currently market or that we successfully develop and for which we obtain regulatory approval depend on reimbursement from third-party payors such that if reimbursement for our products is reduced or is insufficient, there could be a negative impact on the utilization of our products. Our industry is highly regulated and our products are subject to ongoing regulatory review. New accounting pronouncements or guidance may require us to change the way in which we account for our operational or business activities. Our corporate compliance program cannot ensure that we are in compliance with all applicable "fraud and abuse" laws and regulations and other applicable laws and regulations in the jurisdictions in which we sell CUBICIN, and a failure to comply with such regulations or prevail in litigation related to noncompliance could harm our business. We could incur substantial costs resulting from product liability claims relating to our pharmaceutical products. Our use of hazardous materials, chemicals, microorganisms and radioactive compounds exposes us to potential liabilities. If we are unable to adequately protect our confidential, electronically stored, transmitted and communicated information, it could significantly harm our business. Risks Related to Ownership of Our Common Stock Our stock price may be volatile, and the value of our stock could decline. If our officers, directors and certain stockholders choose to act together, they would be able to influence our management and operations, acting in their best interests and not necessarily those of other stockholders. We have implemented anti-takeover provisions that could discourage, prevent or delay a takeover, even if the acquisition would be beneficial to our stockholders.

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912183--2/29/2008--CUBIST_PHARMACEUTICALS_INC