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"AP26113 can be thought of as potentially two drugs in one," stated Tim P. Clackson, Ph.D., president of research and development and chief scientific officer at ARIAD. "Our goal is to develop '113 in the same way we developed ponatinib - by quickly determining its safety and tolerability profile, identifying the optimal dose, and establishing clinical proof-of-concept in a single trial, and then moving rapidly toward a pivotal trial depending on the available data. There is enormous unmet medical need in patients with non-small cell lung cancer, and the addressable patient population for '113 is well into the tens of thousands worldwide."

Financial Highlights from the Second Quarter of 2011

For the quarter ended June 30, 2011, ARIAD reported a net loss of $47.8 million, or $0.36 per share, compared to net income of $159.3 million, or $1.44 per share, for the corresponding period in 2010. For the six-month period ended June 30, 2011, ARIAD reported a net loss of $85.7 million or $0.66 per share, compared to net income of $136.0 million or $1.24 per share. The change in net income/loss for these periods was due primarily to the restructuring in May 2010 of the Company's agreement with Merck for the development, commercialization and manufacturing of ridaforolimus and non-cash charges in 2011 related to the revaluation of ARIAD's warrant liability as a result of the increase in the market price of ARIAD's common stock.

The restructuring in May 2010 of the agreement with Merck resulted in the recognition in the second quarter of 2010 of $172.3 million in revenue, including an up-front payment of $50 million and the acceleration of recognition of $109.4 million of revenue previously deferred in accordance with the Company's accounting policies. ARIAD's revenue for the three and six-month periods ended June 30, 2011 of $66,000 and $122,000, respectively, represent a decrease of $175.0 million and $177.1 million from revenues recorded in the comparable periods in 2010, primarily due to the impact of the Merck restructuring.

ARIAD reported operating expenses of $24.9 million for the three-month period ended June 30, 2011, an increase of $7.1 million over the comparable period in 2010, and operating expenses of $44.3 million for the six-month period ended June 30, 2011, also an increase of $7.1 million over the comparable period in 2010. These increases reflect primarily the continued advancement of ARIAD's product candidates, ponatinib and AP26113, expenditures for corporate and commercial development initiatives, and increases in stock-based compensation due to the impact of the increased stock price on the value of stock-based compensation awards.

Non-cash charges related to the revaluation of ARIAD's warrant liability were $22.9 million and $41.5 million for the three and six-month periods, respectively, ended June 30, 2011. These charges compare to a non-cash credit of $2.1 million in the three-month period ended June 30, 2010 and a non-cash charge of $3.9 million for the six-month period ended June 30, 2010. These charges in 2011 are primarily attributable to an increase in the market price of ARIAD's common stock from $2.82 per share at June 30, 2010 to $5.10 per share at December 31, 2010 and $11.33 per share at June 30, 2011.

For the six-month period ended June 30, 2011, cash used in operations was $35.4 million, compared to cash provided by operations of $20.2 million for the corresponding period in 2010, which included the $50 million up-front payment from Merck related to the restructured agreement. In addition, cash flows for the six months ended June 30, 2011 included $7.6 million in proceeds from the exercise of warrants and $4.4 million in proceeds resulting from an amendment to ARIAD's term-loan agreement. ARIAD ended the second quarter of 2011 with cash and cash equivalents of $80.8 million, compared to $103.6 million at December 31, 2010.

Upcoming Medical Meeting

13th International Chronic Myeloid Leukemia Foundation Conference, Estoril, Portugal, September 22 to 25, 2011

Upcoming Investor Meetings

Rodman & Renshaw Annual Global Investment Conference, New York, NY, September 11 to 13, 2011 Morgan Stanley Global Healthcare Conference, New York, NY, September 13 to 14, 2011 Jefferies 2011 Global Healthcare Conference, London, England, September 27 to 28, 2011 NewsMakers in the Biotech Industry Conference, New York, NY, October 21, 2011

Source ARIAD