10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2012

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number: 0-21696

ARIAD Pharmaceuticals, Inc.

(Exact name of registrant as specified in its charter)

Delaware	22-3106987
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

26 Landsdowne Street, Cambridge, Massachusetts 02139

(Address of principal executive offices) (Zip Code)

Registrant’s Telephone Number, Including Area Code: (617) 494-0400

Former Name, Former Address and Former Fiscal Year,

If Changed Since Last Report: Not Applicable

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Check one:

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b - 2 of the Exchange Act).    Yes  ¨    No  x

The number of shares of the registrant’s common stock outstanding as of April 30, 2012 was 165,728,859.

ARIAD PHARMACEUTICALS, INC.

TABLE OF CONTENTS

		Page
PART I.	FINANCIAL INFORMATION		1
ITEM 1.	UNAUDITED FINANCIAL STATEMENTS		1
	Condensed Consolidated Balance Sheets – March 31, 2012 and December 31, 2011		1
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2012 and 2011		2
	Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2012 and 2011		2
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2012 and 2011		3
	Notes to Unaudited Condensed Consolidated Financial Statements		4
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		11
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		23
ITEM 4.	CONTROLS AND PROCEDURES		23
PART II.	OTHER INFORMATION		24
ITEM 1A.	RISK FACTORS		24
ITEM 6.	EXHIBITS		24
	SIGNATURES		25
	EXHIBIT INDEX		26

PART I. FINANCIAL INFORMATION

ITEM 1. UNAUDITED FINANCIAL STATEMENTS

ARIAD PHARMACEUTICALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

In thousands, except share and per share data	March 31, 2012			December 31, 2011
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	198,222		$	306,256
Marketable securities		89,532			—
Other current assets		3,085			1,311
Total current assets		290,839			307,567
Restricted cash		749			749
Property and equipment, net		6,699			6,611
Intangible and other assets, net		5,627			5,785
Total assets	$	303,914		$	320,712
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	6,722		$	5,728
Current portion of long-term debt and capital lease obligations		1,626			1,454
Accrued compensation and benefits		3,858			1,209
Accrued product development expenses		10,961			11,948
Other accrued expenses		4,704			3,634
Current portion of deferred executive compensation		963			1,032
Current portion of deferred revenue		231			231
Other current liabilities		136			136
Total current liabilities		29,201			25,372
Long-term debt and capital lease obligations		10,678			11,215
Deferred executive compensation		3,527			2,723
Deferred revenue		711			768
Other long-term liabilities		2,532			1,854
Warrant liability		—			58,639
Stockholders’ equity:
Preferred stock, $.01 par value; authorized 10,000,000 shares, none issued and outstanding
Common stock, $.001 par value; authorized, 240,000,000 shares in 2012 and 2011; issued and outstanding, 165,474,108 shares in 2012 and 157,608,702 shares in 2011		165			158
Additional paid-in capital		869,972			776,946
Accumulated other comprehensive loss		(15	)		—
Accumulated deficit		(612,857	)		(556,963	)
Total stockholders’ equity		257,265			220,141
Total liabilities and stockholders’ equity	$	303,914		$	320,712

See notes to unaudited condensed consolidated financial statements.

1

ARIAD PHARMACEUTICALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended March 31,
In thousands, except per share data	2012			2011
Revenue:
License revenue	$	64		$	—
Service revenue		17			56
Total revenue		81			56
Operating expenses:
Research and development		28,774			14,574
General and administrative		11,288			4,854
Total operating expenses		40,062			19,428
Loss from operations		(39,981	)		(19,372	)
Other income (expense):
Interest income		68			55
Interest expense		(57	)		(60	)
Revaluation of warrant liability		(15,924	)		(18,572	)
Other income (expense), net		(15,913	)		(18,577	)
Net loss	$	(55,894	)	$	(37,949	)
Net loss per share – basic and diluted	$	(0.35	)	$	(0.29	)
Weighted-average number of shares of common stock outstanding – basic and diluted		160,970			128,998

ARIAD PHARMACEUTICALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS

OF COMPREHENSIVE LOSS

(Unaudited)

	Three Months Ended March 31,
In thousands	2012			2011
Net loss	$	(55,894	)	$	(37,949	)
Other comprehensive loss:
Net unrealized losses on marketable securities		(15	)		—
Other comprehensive loss		(15	)		—
Comprehensive loss	$	(55,909	)	$	(37,949	)

See notes to unaudited condensed consolidated financial statements.

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ARIAD PHARMACEUTICALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31,
In thousands	2012			2011
Cash flows from operating activities:
Net loss	$	(55,894	)	$	(37,949	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,015			946
Amortization of premium on marketable securities		7			—
Stock-based compensation		4,913			2,404
Deferred executive compensation expense		633			380
Revaluation of warrant liability		15,924			18,572
Increase (decrease) from:
Other current assets		(1,773	)		(594	)
Other assets		(22	)		2
Accounts payable		616			(63	)
Accrued compensation and benefits		2,649			(319	)
Accrued product development expenses		(988	)		(1,134	)
Other accrued expenses		1,601			486
Other current liabilities		712			—
Deferred revenue		(57	)		—
Deferred executive compensation paid		103			—
Net cash used in operating activities		(30,561	)		(17,269	)
Cash flows from investing activities:
Acquisitions of marketable securities		(89,554	)		—
Investment in property and equipment		(916	)		(423	)
Investment in intangible assets		(195	)		(241	)
Net cash used in investing activities		(90,665	)		(664	)
Cash flows from financing activities:
Proceeds from long-term borrowings		—			4,375
Repayment of long-term borrowings		(350	)		(350	)
Principal payments under capital lease obligation		(15	)		(24	)
Proceeds from issuance of common stock pursuant to warrants		12,482			7,580
Payment of tax withholding obligations related to stock compensation		(2,302	)		(324	)
Proceeds from issuance of common stock pursuant to stock option and purchase plans		3,377			1,402
Net cash provided by financing activities		13,192			12,659
Net decrease in cash and cash equivalents		(108,034	)		(5,274	)
Cash and cash equivalents, beginning of period		306,256			103,630
Cash and cash equivalents, end of period	$	198,222		$	98,356
Supplemental disclosure:
Non-cash transaction – investment in property and equipment included in accounts payable or accruals	$	758		$	—

See notes to unaudited condensed consolidated financial statements.

3

ARIAD PHARMACEUTICALS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

1. Management Statement

In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of items of a normal and recurring nature) necessary to present fairly the financial position as of March 31, 2012, and the results of operations and cash flows for the three-month periods ended March 31, 2012 and 2011. The results of operations for the three-month period ended March 31, 2012 are not necessarily indicative of the results to be expected for any other period or the full year. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, which includes consolidated financial statements and notes thereto for the years ended December 31, 2011, 2010 and 2009.

2. Marketable Securities

The Company has classified its marketable securities as available-for-sale and, accordingly, carries such securities at fair value. At March 31, 2012, all of the Company’s marketable securities consisted of United States government or agency securities.

At March 31, 2012, the aggregate fair value and amortized cost of the Company’s marketable securities were $89,532,000 and 89,547,000, respectively. Gross unrealized gains and losses were $10,000 and $25,000, respectively, at March 31, 2012.

At December 31, 2011, the Company had no marketable securities.

3. Property and Equipment, Net

Property and equipment, net, was comprised of the following at March 31, 2012 and December 31, 2011:

In thousands	March 31, 2012			December 31, 2011
Leasehold improvements	$	22,259		$	22,252
Construction in progress		770			699
Equipment and furniture		17,696			17,032
		40,725			39,983
Less accumulated depreciation and amortization		(34,026	)		(33,372	)
	$	6,699		$	6,611

Depreciation and amortization expense for the three-month periods ended March 31, 2012 and 2011 amounted to $654,000 and $766,000, respectively.

4

The Company leases certain assets under capital leases having terms up to four years. Assets under capital leases included in property and equipment were as follows at March 31, 2012 and December 31, 2011:

In thousands	March 31, 2012			December 31, 2011
Equipment and furniture	$	392		$	392
Less accumulated depreciation and amortization		(278	)		(257	)
	$	114		$	135

4. Intangible and Other Assets, Net

Intangible and other assets, net, were comprised of the following at March 31, 2012 and December 31, 2011:

In thousands	March 31, 2012			December 31, 2011
Capitalized patent and license costs	$	6,139		$	6,799
Purchased technology		5,901			5,901
		12,040			12,700
Less accumulated amortization		(6,476	)		(6,957	)
		5,564			5,743
Other assets		63			42
	$	5,627		$	5,785

Amortization expense for intangible assets amounted to $169,000 and $214,000 for the three-month periods ended March 31, 2012 and 2011, respectively. The weighted average amortization period for intangible assets was 14.3 years in 2012 and 14.8 years in 2011.

5. Long-term Debt and Capital Lease Obligations

Long-term debt and capital lease obligations were comprised of the following at March 31, 2012 and December 31, 2011:

In thousands	March 31, 2012			December 31, 2011
Bank term loan	$	12,250		$	12,600
Capital lease obligations		54			69
		12,304			12,669
Less current portion		(1,626	)		(1,454	)
	$	10,678		$	11,215

The term loan provides for quarterly payments of principal and interest with final scheduled maturity on December 31, 2015. The loan bears interest at LIBOR plus 1.25 to 2.25 percent, depending on the percentage of the Company’s liquid assets on deposit with or invested through the bank, or at the prime rate. The effective interest rate on the loan was 1.76 percent at March 31, 2012. The loan is secured by a lien on all assets of the Company excluding intellectual property, which the Company has agreed not to pledge to any other party. The loan requires the Company to maintain a minimum of $15.0 million in unrestricted cash, cash equivalents and investments. The loan also contains certain covenants that restrict additional indebtedness, additional liens and sales of assets, and dividends, distributions or repurchases of common stock.

In addition, the Company leases certain equipment under capital leases with original terms of up to four years. These leases have effective interest rates ranging from 5.6 percent to 7.2 percent and are secured by the underlying leased assets.

5

The future scheduled principal payments due under these financing obligations were as follows at March 31, 2012:

In thousands	Bank Term Loan			Capital Lease Obligations
Year ended December 31:
2012	$	1,050		$	39
2013		2,100			15
2014		4,200			—
2015		4,900			—
		12,250			54
Less current portion		(1,575	)		(51	)
Long-term portion	$	10,675		$	3

6. Executive Compensation Plan

Under the Company’s deferred executive compensation plan, the Company accrues a liability for the value of the awards ratably over the vesting period. The grant-date value of awards made in March 2012 was $1.1 million. No awards were made in the first quarter of 2011. The net expense for this plan was $839,000 and $380,000 for the three-month periods ended March 31, 2012 and 2011, respectively.

7. Stockholders’ Equity and Warrants

Authorized Common Stock

At March 31, 2012, the Company had 240,000,000 shares of common stock authorized.

Financings

On February 25, 2009, the Company sold 14,378,698 shares of its common stock in a registered direct offering to institutional investors, at a purchase price of $1.69 per share, resulting in net proceeds after fees and expenses of $22.8 million. The investors also received warrants to purchase an additional 10,784,024 shares of the Company’s common stock exercisable at a price of $2.15 per share in cash or pursuant to the net exercise provisions of the warrants. The warrants became exercisable on August 25, 2009 and were scheduled to expire if not exercised on February 25, 2012. During the year ended December 31, 2010, 1,220,414 warrants were exercised for proceeds to the Company of $2.6 million. During the year ended December 31, 2011, a total of 3,757,767 warrants were exercised by the holders for proceeds to the Company of approximately $8.1 million. In the first quarter of 2012, the remaining 5,805,843 warrants were exercised by the holders for proceeds to the Company of approximately $12.5 million. Prior to exercise, the warrants were recorded at fair value, with the adjustment to carrying value recognized in earnings. Upon exercise, the sum of the fair value of the exercised warrants and the proceeds received were credited to additional paid-in-capital and totaled $87.0 million in the first quarter of 2012. Upon the exercise of these remaining warrants, the balance of the warrant liability was credited to stockholders’ equity and the liability was eliminated.

On December 20, 2011, the Company sold 24,725,000 shares of its common stock in an underwritten public offering at a purchase price of $10.42 per share. Net proceeds of this offering, after underwriting discounts and commissions and expenses, were approximately $243.1 million.

6

On January 11, 2010, the Company filed a shelf registration statement with the U.S. Securities and Exchange Commission (“SEC”) for the issuance of common stock, preferred stock, various series of debt securities and/or warrants or rights to purchase any of such securities, either individually or in units, with a total value of up to $125 million, from time to time at prices and on terms to be determined at the time of any such offering. This filing was declared effective on January 21, 2010. The Company has approximately $65.8 million of securities remaining available under this shelf registration statement.

On December 14, 2011, the Company filed a shelf registration statement with the SEC for the issuance of an unspecified amount of common stock, preferred stock, various series of debt securities and/or warrants to purchase any of such securities, either individually or in units, from time to time at prices and on terms to be determined at the time of any such offering. This filing was effective upon filing and will remain in effect for up to three years from filing.

Changes in Stockholders’ Equity

The changes in stockholders’ equity for the three-month period ended March 31, 2012 were as follows:

	Common Stock				Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total
$ in thousands	Shares		Amount
Balance, January 1, 2012		157,608,702	$	158	$	776,946		$	—		$	(556,963	)	$	220,141
Issuance of common stock pursuant to warrant exercises		5,805,843		5		87,040									87,045
Issuance of common stock pursuant to ARIAD stock plans		2,059,563		2		3,375									3,377
Stock-based compensation						4,913									4,913
Payment of tax withholding obligations related to stock-based compensation						(2,302	)								(2,302	)
Net unrealized losses on marketable securities									(15	)					(15	)
Net loss												(55,894	)		(55,894	)
Balance, March 31, 2012		165,474,108	$	165	$	869,972		$	(15	)	$	(612,857	)	$	257,265

8. Fair Value of Financial Instruments

The Company provides disclosure of financial assets and financial liabilities that are carried at fair value based on the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements may be classified based on the amount of subjectivity associated with the inputs to the fair valuation of these assets and liabilities using the following three levels:

Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2—Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.) and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

7

Level 3—Unobservable inputs that reflect the Company’s estimates of the assumptions that market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available, including its own data.

The following table presents information about the Company’s assets and liabilities as of March 31, 2012 and December 31, 2011 that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value:

	March 31, 2012
In thousands	Total		Level 1		Level 2		Level 3
Marketable securities	$	89,532	$	—	$	89,532	$	—

	December 31, 2011
In thousands	Total		Level 1		Level 2		Level 3
Warrant liability	$	58,639	$	—	$	58,639	$	—

The Company’s marketable securities are carried at fair value. Marketable securities are classified as Level 2 in the fair value hierarchy as they are traded in a dealer market where the price at which the dealer is willing to pay or to sell is more readily available than closing prices. Therefore, their fair value is based on observable inputs other than quoted prices included within Level 1.

The Company’s warrant liability was carried at fair value and, at December 31, 2011, was classified as Level 2 in the fair value hierarchy as the unobservable inputs did not have a significant impact on the valuation of the warrant liability. This classification as Level 2 reflects that the warrants’ exercise price was significantly lower than the market price of the underlying common stock on the reporting date. The fair value of the warrants on December 31, 2011 was determined to be $58.6 million using the Black-Scholes option valuation model applying the following assumptions: (i) the market price of the Company’s common stock of $12.25 on that date, (ii) a risk-free rate of 0.015%, (iii) an expected term of 0.2 years, (iv) no dividend yield, and (v) a volatility of 59.9%. As of March 31, 2012, all warrants have been exercised and the fair value of the warrants on the exercise date plus the proceeds from exercise were recorded in equity. The changes in the fair value of the warrant liability for the three-month periods ended March 31, 2012 and 2011 were as follows:

In thousands	Three Months Ended March 31,
	2012			2011
Balance at beginning of period	$	58,639		$	28,815
Exercise of warrants		(74,563	)		(14,863	)
Revaluation of warrant liability		15,924			18,572
Balance at end of period	$	—		$	32,524

The carrying amounts of cash equivalents, accounts payable and accrued liabilities approximate fair value because of their short-term nature. The carrying amount of the Company’s bank term loan approximates fair value due to its variable interest rate and other terms. The Company’s obligation under its executive compensation plan is based in part on the current fair market value of specified mutual funds, which is therefore stated at its estimated fair value. The carrying amounts of cash equivalents, accounts payable, accrued liabilities, bank term loan liability and executive compensation liability are classified as Level 2 in the fair value hierarchy.

8

9. Stock-Based Compensation

The Company awards stock options and other equity-based instruments to its employees, directors and consultants and provides employees the right to purchase common stock (collectively “share-based payments”), pursuant to stockholder approved plans. The Company’s statement of operations included total compensation cost from share-based payments for the three-month periods ended March 31, 2012 and 2011, as follows:

	Three Months Ended March  31,
In thousands	2012		2011
Compensation cost from:
Stock options	$	2,889	$	889
Stock and stock units		1,975		1,461
Purchases of common stock at a discount		49		54
	$	4,913	$	2,404
Compensation cost included in:
Research and development expenses	$	2,516	$	1,158
General and administrative expenses		2,397		1,246
	$	4,913	$	2,404

Stock Options

Stock options are granted with an exercise price equal to the closing market price of the Company’s common stock on the date of grant. Stock options generally vest ratably over four years and have contractual terms of ten years. Stock options are valued using the Black-Scholes option valuation model and compensation cost is recognized based on such fair value over the period of vesting on a straight-line basis.

Stock option activity under the Company’s stock plans for the year ended March 31, 2012 was as follows:

	Number of Shares			Weighted Average Exercise  Price Per Share
Options outstanding, January 1, 2012		7,381,329		$	5.22
Granted		1,531,750		$	14.90
Forfeited		(12,063	)	$	2.89
Exercised		(775,107	)	$	4.23
Options outstanding, March 31, 2012		8,125,909		$	7.14

Stock and Stock Unit Grants

Stock and stock unit grants are provided to non-employee directors as compensation and generally carry no restrictions as to resale or are fully vested upon grant. Stock and stock unit grants to officers carry restrictions as to resale for periods of time or vesting provisions over time as specified in the grant. Stock and stock unit grants are valued at the closing market price of the Company’s common stock on the date of grant and compensation expense is recognized over the requisite service period, vesting period or period during which restrictions remain on the common stock or stock units granted.

9

Stock and stock unit activity under the Company’s stock plans for the year ended March 31, 2012 was as follows:

	Number of Shares			Weighted Average Grant  Date Fair Value
Outstanding, January 1, 2012		2,785,026		$	4.51
Granted		901,677		$	15.00
Forfeited		(6,800	)	$	4.13
Vested or restrictions lapsed		(1,420,406	)	$	3.73
Outstanding, March 31, 2012		2,259,497		$	9.19

Included in stock and stock units outstanding in the above table are 392,500 performance share units, awarded in March 2011, that will vest upon regulatory approval of ponatinib by the U.S. Food and Drug Administration on or before December 31, 2016 and 352,000 performance share units, awarded in March 2012, that will vest upon regulatory approval of ponatinib by the European Medicines Agency on or before December 31, 2016. The number of shares that may vest, if any, related to the March 2012 awards is dependent on the timing of approval. The compensation costs for such performance-based stock awards will be based on the awards that ultimately vest and the grant date fair value of those awards. Compensation expense related to these performance share units will begin to be recognized when achievement of the performance condition is probable. The unrecognized stock compensation expense associated with the maximum number of shares that may be issued upon achievement of the performance conditions was $11.5 million at March 31, 2012.

10. Net Loss Per Share

Net loss per share amounts have been computed based on the weighted-average number of common shares outstanding during each period. Because of the net loss reported in each period, diluted and basic net loss per share amounts are the same. For the three-month periods ended March 31, 2012 and 2011, the following potentially dilutive securities were not included in the computation of net loss per share because the effect would be anti-dilutive:

	Three Months Ended March  31,
In thousands	2012		2011
Outstanding stock options		8,126		6,884
Outstanding restricted stock and restricted stock units		2,259		2,394
Warrants to purchase common stock		—		6,038
		10,385		15,316

11. Recently Adopted or Issued Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-05, Presentation of Comprehensive Income, which requires the presentation of other comprehensive income in either a continuous statement of comprehensive income or in two separate but consecutive statements. ASU No. 2011-05 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2011 and requires retrospective application. The Company adopted this ASU on January 1, 2012, and included a separate consolidated statement of comprehensive income (loss).

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ITEM 2. MANAGEMENTS’ DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information set forth below should be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto included herein, as well as our audited consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2011. Unless stated otherwise, references in this Quarterly Report on Form 10-Q to “we,” “us,” or “our” refer to ARIAD Pharmaceuticals, Inc., a Delaware corporation, and our subsidiaries unless the context requires otherwise.

Overview

Our vision is to transform the lives of cancer patients with breakthrough medicines. Our mission is to discover, develop and commercialize small-molecule drugs to treat cancer in patients with the greatest and most urgent unmet medical need – aggressive cancers where current therapies are inadequate. Our goal is to build a fully integrated oncology company focused on novel, molecularly targeted therapies to treat solid tumors and hematologic cancers.

Financial Condition and Results of Operations

At March 31, 2012, we had cash, cash equivalents and marketable securities of $287.8 million, working capital of $261.6 million, and total stockholders’ equity of $257.3 million compared to cash and cash equivalents of $306.3 million, working capital of $282.2 million, and total stockholders’ equity of $220.1 million at December 31, 2011. For the three-month period ended March 31, 2012, we reported a net loss of $55.9 million and cash used in operating activities of $30.6 million. Based on our current operating plan, we believe that our cash and cash equivalents at March 31, 2012 will be sufficient to fund our operations to the end of 2013. This estimate assumes that we receive milestone and royalty payments from Merck & Co., Inc., or Merck, during this period, related to regulatory approvals and commercialization of ridaforolimus for patients with bone and soft-tissue sarcomas, for which Merck has filed for regulatory approval in the United States, Europe and other jurisdictions. However, there can be no assurance that such regulatory approvals will be obtained.

Product Development and Discovery

Our pipeline currently contains three product candidates – ponatinib, AP26113 and ridaforolimus.

Ponatinib, previously known as AP24534, is an investigational pan BCR-ABL inhibitor that we believe has potential applications in various hematological cancers and solid tumors. In the third quarter of 2011, we completed patient enrollment in a pivotal Phase 2 clinical trial of ponatinib in patients with resistant or intolerant chronic myeloid leukemia, or CML, or Philadelphia positive acute lymphoblastic leukemia, or Ph+ ALL. Subject to further patient follow-up and data analysis in this trial, we expect to file for marketing approval of ponatinib in the United States and Europe in the third quarter of 2012 with potential regulatory approval in the United States as soon as the first quarter of 2013. Subject to obtaining marketing approval, we intend to commercialize ponatinib in the United States and Europe and other select markets worldwide. We also plan to initiate additional clinical trials of ponatinib, including a Phase 3 clinical trial in newly diagnosed CML patients, and commence clinical trials of ponatinib in Japan, in the second half of 2012.

AP26113 is an investigational dual inhibitor of anaplastic lymphoma kinase, or ALK, and epidermal growth factor receptor, or EGFR – two clinically validated targets in non-small cell lung cancer, or NSCLC. We initiated patient enrollment in a Phase 1/2 clinical trial of AP26113 in the third quarter of 2011. We expect to enroll approximately 30 to 50 patients in the Phase 1 portion of the trial. The Phase 2 portion of the trial is expected to begin in the second half of 2012 and is planned to enroll approximately 80 additional patients. Depending on the results of this trial, we could conduct a potential pivotal trial of AP26113 in patients with NSCLC commencing in 2013.

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Ridaforolimus is an investigational mTOR inhibitor that we discovered internally and later licensed in 2010 to Merck. Under the license agreement, Merck is responsible for all activities and has agreed to fund 100 percent of the costs related to the development, manufacturing and commercialization of ridaforolimus in oncology. We intend to co-promote ridaforolimus in the United States, if approved by the FDA. In the third quarter of 2011, Merck filed in both Europe and the United States for regulatory approval of ridaforolimus as a maintenance therapy for patients with metastatic soft-tissue and bone sarcomas who had a favorable response to chemotherapy. In March 2012, the FDA’s Oncologic Drugs Advisory Committee, or ODAC, voted 13 to 1 that a favorable risk-benefit profile for ridaforolimus had not been demonstrated in this setting. The ODAC panel’s conclusion will be considered by the FDA when making its decision regarding the New Drug Application, or NDA, for ridaforolimus. The FDA action date for this NDA is scheduled to be on or before June 5, 2012. Merck continues to develop ridaforolimus in other oncology indications. Under the license agreement, Merck has agreed to pay us milestone payments based on successful development of ridaforolimus and achievement of specified sales thresholds, as well as tiered, double-digit royalties on global net sales.

In addition to our lead development programs, we have a focused drug discovery program centered on small-molecule therapies that are molecularly targeted to cell-signaling pathways implicated in cancer.

Critical Accounting Policies and Estimates

Our financial position and results of operations are affected by subjective and complex judgments, particularly in the areas of revenue recognition, the carrying value of intangible assets, accrued product development expenses and the fair value of warrants to purchase our common stock.

Revenue Recognition

We generate revenue from license and collaboration agreements with third parties related to use of our technology and/or development and commercialization of product candidates. Such agreements may provide for payment to us of up-front payments, periodic license payments, milestone payments and royalties. We also generate revenue from services provided under license agreements.

For the three months ended March 31, 2012, we reported total revenue of $81,000. Revenue is recognized when there is persuasive evidence that an arrangement exists, delivery has occurred, the price is fixed and determinable and collection is reasonably assured. Revenue arrangements with multiple elements are divided into separate units of accounting if certain criteria are met, including whether the delivered element has stand-alone value to the customer. When deliverables are separable, consideration received is allocated to the separate units of accounting based on the relative selling price of the elements and the appropriate revenue recognition principles are applied to each unit.

The assessment of multiple element arrangements requires judgment in order to determine the appropriate units of accounting and the points in time that, or periods over which, revenue should be recognized. Regarding our license agreement with Merck entered into in May 2010, the transition services are recognized in the period in which they are received or the services are rendered. Milestone payments under the license agreement are recognized when earned.

Intangible Assets

At March 31, 2012, we reported $5.6 million of intangible assets, consisting of capitalized costs related primarily to purchased and issued patents, patent applications and licenses and the recorded value of the technology associated with our acquisition in September 2008 of the 20-percent minority interest of

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ARIAD Gene Therapeutics, Inc. that we did not previously own, net of accumulated amortization. The carrying value of these intangible assets is evaluated for possible impairment, and losses are recorded when the evaluation indicates that the carrying value is not recoverable. This evaluation involves estimates of future net cash flows expected to be generated by the asset. Such estimates require judgment regarding future events and expected cash flows. Changes in these estimates, including decisions to discontinue using the technologies, could result in material changes to our balance sheet and charges to our statements of operations. If we were to abandon the ongoing development of the underlying product candidates or technologies or terminate our efforts to pursue collaborations or license agreements, or if our estimates of future net cash flows expected to be generated by the asset change, we may be required to write down or write off a portion of the carrying value of our intangible assets.

Accrued Product Development Expenses

We accrue expenses for our product development activities based on our estimates of services performed or progress achieved pursuant to contracts and agreements with multiple vendors including research laboratories, contract manufacturers, contract research organizations and clinical sites. These estimates are recorded in research and development expenses in our statement of operations and are reflected in accrued product development expenses on our balance sheet. At March 31, 2012, we reported accrued product development expenses of $11.0 million on our balance sheet.

Our estimates of services performed or progress achieved are based on all available information we have from reports, correspondence and discussions with our vendors. Our estimates of accrued expenses based on such information require judgment. Actual costs may vary from such estimates. When such variances become known, we adjust our expenses accordingly.

Fair Value of Warrants

Warrants outstanding at December 31, 2011 to purchase 5,805,843 shares of our common stock, issued on February 25, 2009 in connection with a registered direct offering of our common stock, were classified as a derivative liability. Accordingly, the fair value of the warrants was recorded on our balance sheet as a liability, and such fair value was adjusted in each financial reporting period with the adjustment to fair value reflected in our consolidated statement of operations. At December 31, 2011, we reported a warrant liability of $58.6 million on our balance sheet.

During the three-month period ended March 31, 2012, all 5,805,843 warrants that were outstanding at December 31, 2011 were exercised for proceeds to us of approximately $12.5 million. Upon the exercise of these remaining warrants, the balance of the warrant liability and the proceeds received upon exercise were credited to stockholders’ equity and the liability was eliminated.

The fair value of the warrants was determined using the Black-Scholes option valuation model. Fluctuations in the assumptions and factors used in the Black-Scholes model resulted in adjustments to the fair value of the warrants recorded on our balance sheet reflected through charges or credits in our statement of operations. The primary factor in the Black-Scholes model that impacted the fair value of the warrants was the market value of our common stock on the date of the valuation.

Results of Operations

For the three months ended March 31, 2012 and 2011

Revenue

We recorded total revenue of $81,000 in the three-month period ended March 31, 2012, compared to $56,000 in the corresponding period in 2011. Total revenue in 2012 consisted primarily of license revenue

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pursuant to a license agreement related to our ARGENT technology in accordance with our revenue recognition policy. Total revenue in 2011 consisted entirely of service revenue of $56,000, reflecting services provided to Merck pursuant to our license agreement for ridaforolimus. We expect that our quarterly service revenue will decrease over the remainder of 2012 as we continue to decrease the level of services performed at the request of Merck.

We expect that our revenue in 2012 will be primarily dependent on the status of any regulatory approvals for ridaforolimus, which could result in milestone payments from Merck. Pursuant to our license agreement, Merck has agreed to pay us up to $40 million associated with regulatory approvals of ridaforolimus for the sarcoma indication, consisting of $25 million for marketing approval in the United States, $10 million for approval to sell ridaforolimus in the European Union, including first pricing and reimbursement approval granted by a regulatory authority in any major European country or by the EMA, and $5 million for marketing approval of ridaforolimus in Japan. Merck submitted applications for approval of ridaforolimus in the United States and in Europe in 2011, which are currently under review. In addition, if ridaforolimus receives regulatory approval and Merck commences sales, we would also be entitled to receive tiered double-digit royalties on global net sales under the license agreement, although in 2012 we do not expect such royalty revenue will be material to our results of operations. As noted above, there can be no assurance that ridaforolimus will receive regulatory approval, or if it does, that it will be commercially successful.

Operating Expenses

Research and Development Expenses

Research and development expenses increased by $14.2 million, or 97 percent, to $28.8 million in the three-month period ended March 31, 2012, compared to $14.6 million in the corresponding period in 2011, for the reasons set forth below. The research and development process necessary to develop a pharmaceutical product for commercialization is subject to extensive regulation by numerous governmental authorities in the United States and other countries. This process typically takes years to complete and requires the expenditure of substantial resources. Current requirements include:

• preclinical toxicology, pharmacology and metabolism studies, as well as in vivo efficacy studies in relevant animal models of disease;

• manufacturing of drug product for preclinical studies and clinical trials and ultimately for commercial supply;

• submission of the results of preclinical studies and information regarding manufacturing and control and proposed clinical protocol to the U.S. Food and Drug Administration, or FDA, in an Investigational New Drug application, or IND (or similar filings with regulatory agencies outside the United States);

• conduct of clinical trials designed to provide data and information regarding the safety and efficacy of the product candidate in humans; and

• submission of all the results of testing to the FDA in a New Drug Application, or NDA (or similar filings with regulatory agencies outside the United States).

Upon approval by the appropriate regulatory authorities, including in some countries approval of product pricing, we may commence commercial marketing and distribution of the product.

We group our research and development, or R&D, expenses into two major categories: direct external expenses and all other R&D expenses. Direct external expenses consist of costs of outside parties to

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conduct laboratory studies, to develop manufacturing processes and manufacture product candidates, to conduct and manage clinical trials and similar costs related to our clinical and preclinical studies. These costs are accumulated and tracked by product candidate. All other R&D expenses consist of costs to compensate personnel, to purchase lab supplies and services, to lease, operate and maintain our facility, equipment and overhead and similar costs of our research and development efforts. These costs apply to our clinical and preclinical candidates as well as our discovery research efforts. Direct external expenses are further categorized as costs for clinical programs and costs for preclinical programs. Preclinical programs include product candidates undergoing toxicology, pharmacology, metabolism and efficacy studies and manufacturing process development required before testing in humans can begin. Product candidates are designated as clinical programs once we have filed an IND with the FDA, or a similar filing with regulatory agencies outside the United States, for the purpose of commencing clinical trials in humans.

Our R&D expenses for the three-month period ended March 31, 2012, as compared to the corresponding period in 2011, were as follows:

	Three months ended March 31,				Increase/ (decrease)
In thousands	2012		2011
Direct external expenses:
Clinical programs	$	10,886	$	3,994	$	6,892
Preclinical programs		—		1,113		(1,113	)
All other R&D expenses		17,888		9,467		8,421
	$	28,774	$	14,574	$	14,200

In 2012, our clinical programs consisted of (i) ponatinib, our pan BCR-ABL inhibitor, for which we are conducting a pivotal Phase 2 clinical trial and other trials, and (ii) AP26113, our ALK and EGFR inhibitor for which we filed an IND in June 2011 and commenced a Phase 1/2 clinical trial in the third quarter of 2011. AP26113 was categorized as a preclinical program in 2011 until the commencement of the Phase 1/2 clinical trial in the third quarter of 2011.

Direct external expenses for ponatinib were $10.1 million in the three-month period ended March 31, 2012, an increase of $6.1 million as compared to the corresponding period in 2011. The increase is due to increases in clinical trial costs of $2.4 million, contract manufacturing costs of $2.5 million, and supporting non-clinical costs of $1.3 million. Clinical trials costs increased primarily due to increased enrollment and treatment of patients in our pivotal Phase 2 clinical trial, offset in part by a decrease in costs of our on-going Phase 1 clinical trial as treatment of patients and other activities in this trial have decreased over this time period. Contract manufacturing costs increased due primarily to the conduct of product and process development and qualification initiatives to support regulatory filings for this product candidate, as well as the production of ponatinib for use in our clinical trials. Supporting non-clinical costs increased due primarily to increased quality and stability studies and initiatives to develop and commercialize a companion diagnostic test to identify patients with the T315I mutation of the BCR-ABL gene. We expect that our direct external expenses for ponatinib will continue to increase in 2012 as we continue to treat patients in our ongoing Phase 1 and Phase 2 clinical trials, initiate additional clinical trials of this product candidate, conduct additional studies to support continued development of ponatinib, and prepare and potentially file applications for regulatory approval of this product candidate.

Direct external expenses for AP26113 were $766,000 in the three-month period ended March 31, 2012, which were entirely included in clinical programs in 2012 in the table above reflecting the transfer of this program to a clinical development status in the third quarter of 2011. Direct external expenses for AP26113 were $1.1 million for the three-month period ended March 31, 2011, which were entirely included in preclinical programs. The decrease in expenses for AP26113 was due primarily to the completion of toxicology studies and product development initiatives required for filing of the IND, offset in part by costs of the Phase 1/2 clinical trial initiated in the third quarter of 2011. We expect that our direct external expenses for AP26113 will continue to increase in 2012 as we continue to enroll patients in our on-going clinical trial of this product candidate and conduct additional studies to support continued development of AP26113.

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All other R&D expenses increased by $8.4 million in the three-month period ended March 31, 2012, as compared to the corresponding period in 2011. This increase is primarily due to an increase in personnel costs of $5.5 million due primarily to an increase in number of employees to support expanding R&D activities, salary increases, a newly instituted cash bonus program, and an increase in recruiting costs; an increase in professional services of $0.5 million due primarily to initiatives to upgrade systems and technology used in our business; an increase in stock-based compensation expense of $1.4 million as a result of the impact of a significant increase in the market value of our common stock on the value of stock-based compensation awards in 2011 and 2012; and an increase in rent expense of $0.7 million as a result of an amendment to our building lease. We expect that all other R&D expenses will continue to increase in 2012 to support the expanding development of ponatinib and AP26113, the preparation and potential filing of regulatory filings for approval of ponatinib in the United States and Europe, and our ongoing discovery research efforts.

The successful development of our product candidates is uncertain and subject to a number of risks. We cannot be certain that any of our product candidates will prove to be safe and effective or will meet all of the applicable regulatory requirements needed to receive and maintain marketing approval. Data from preclinical studies and clinical trials are susceptible to varying interpretations that could delay, limit or prevent regulatory approval. We, the FDA or other regulatory authorities may suspend clinical trials at any time if we or they believe that the subjects participating in such trials are being exposed to unacceptable risks or if such regulatory agencies find deficiencies in the conduct of the trials or other problems with our products under development. Delays or rejections may be encountered based on additional governmental regulation, legislation, administrative action or changes in FDA or other regulatory policy during development or the review process. Other risks associated with our product development programs are described in the section entitled “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K as updated from time to time in our other periodic and current reports filed with the SEC. Due to these uncertainties, accurate and meaningful estimates of the ultimate cost to bring a product to market, the timing of completion of any of our drug development programs and the period in which material net cash inflows from any of our drug development programs will commence are unavailable.

General and Administrative Expenses

General and administrative expenses increased by $6.4 million, or 131 percent, to $11.3 million in the three-month period ended March 31, 2012, compared to $4.9 million in the corresponding period in 2011. This increase was due primarily to an increase in personnel costs of $3.3 million due primarily to an increase in number of employees to support expanding R&D activities and to prepare for potential commercial launch of one or more product candidates, salary increases, a newly instituted cash bonus program and an increase in recruiting costs; an increase in professional services of $1.5 million as a result of an increase in corporate and commercial development initiatives to plan and prepare for the potential commercial launch of ponatinib; an increase in stock-based compensation expense of $1.1 million due to the impact of a significant increase in the market value of our common stock on the value of stock-based compensation awards in 2011 and 2012; as well as an increase in travel costs, insurance costs and other miscellaneous costs. We expect that general and administrative expenses will continue to increase in 2012 as we prepare for potential commercial launch of ponatinib in the United States and in Europe, including the hiring of sales, marketing and commercial operations personnel and the establishment of our European headquarters and operations, and support our expanding research and development activities.

We expect that our operating expenses in total will continue to increase substantially in 2012 for the reasons described above. Operating expenses may fluctuate from quarter to quarter. The actual amount of any increase in operating expenses will depend on, among other things, the status of regulatory

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reviews and timing of potential regulatory approvals of our product candidates, the costs to prepare for potential commercial launch of ponatinib in the United States and in Europe, the progress of our product development programs, including on-going and planned clinical trials, results of continuing non-clinical studies and the costs of product and process development activities and product manufacturing.

Other Income (Expense)

Interest Income/Expense

Interest income increased to $68,000 in the three-month period ended March 31, 2012 from $55,000 in the corresponding period in 2011, as a result of a higher average balance of funds invested in 2012.

Interest expense decreased to $57,000 in the three-month period ended March 31, 2012 from $60,000 in the corresponding period in 2011 as a result of lower average borrowings in 2012.

Revaluation of Warrant Liability

In the first quarter of 2012, all 5,805,843 warrants that were outstanding at December 31, 2011 were exercised for proceeds to us of approximately $12.5 million. During the first quarter of 2012, the value of the warrant liability on our balance sheet was adjusted, resulting in a non-cash charge of $15.9 million for the three-month period ended March 31, 2012, due primarily to the increase in the market price of our common stock from December 31, 2011 to the date the warrants were exercised. The revaluation of our warrant liability in the corresponding period in 2011 resulted in a non-cash charge of $18.6 million. Upon exercise of those remaining warrants, the balance of the warrant liability and the associated exercise proceeds were credited to stockholders’ equity and the liability was eliminated.

Operating Results

We reported a loss from operations of $40.0 million in the three-month period ended March 31, 2012 compared to a loss from operations of $19.4 million in the corresponding period in 2011, an increase of $20.6 million, or 106 percent. We also reported a net loss of $55.9 million in the three-month period ended March 31, 2012, compared to a net loss of $38.0 million in the corresponding period in 2011, an increase in net loss of $17.9 million or 47 percent, and a net loss per share of $0.35 and $0.29, respectively. The increase in net loss is largely due to the increase in our operating expenses described above. Our results of operations for the remaining quarters of 2012 will vary from those of the quarter ended March 31, 2012 and actual results will depend on a number of factors, including the receipt of any milestone payments from Merck under our license agreement, the progress of our product development programs, increases in number of employees and related personnel costs, preparations for anticipated commercial launch of our product candidates, the progress of our discovery research programs, the impact of any commercial and business development activities and other factors. The extent of changes in our results of operations will also depend on the sufficiency of funds on hand or available from time to time, which will influence the amount we will spend on operations and capital expenditures and the development timelines for our product candidates.

Liquidity and Capital Resources

We have financed our operations and investments to date primarily through sales of our common stock in public and private offerings, through the receipt of up-front and milestone payments from collaborations and licenses with pharmaceutical and biotechnology companies and, to a lesser extent, through issuances of our common stock pursuant to our stock option and employee stock purchase plans, supplemented by the borrowing of long-term debt from commercial lenders. We sell securities and incur debt when the terms of such transactions are deemed favorable to us and as necessary to fund our current and projected cash needs. We seek to balance the level of cash, cash equivalents and marketable securities on hand with our projected needs and to allow us to withstand periods of uncertainty relative to the availability of funding on favorable terms.

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For the purpose of the following discussion, our funds consist of cash, cash equivalents and marketable securities as follows:

In thousands	March 31, 2012		December 31, 2011
Cash and cash equivalents	$	198,222	$	306,256
Marketable securities		89,532		—
	$	287,754	$	306,256

We manage our marketable securities portfolio to maintain liquidity for payment of our obligations and to maximize yields. We purchase marketable securities to enhance our yield on invested funds and when such amounts are not needed for near-term payment of obligations. We generally hold our marketable securities to maturity. Upon maturity of such marketable securities, a portion may be retained as cash to provide for payment of current obligations while the remainder will be reinvested in accordance with our investment policy. For the three-month period ended March 31, 2012, we made purchases of marketable securities in the amount of $89.6 million. For the three-month period ended March 31, 2011, there were no purchases or sales of marketable securities.

Sources of Funds

For the three months ended March 31, 2012 and 2011, our sources of funds were as follows:

	Three Months Ended March 31,
In thousands	2012		2011
Sales/issuances of common stock:
Pursuant to warrant exercises	$	12,482	$	7,580
Pursuant to stock option and purchase plans		3,377		1,402
Proceeds from long-term borrowings		—		4,375
	$	15,859	$	13,357

The amount of funding we raise through sales of our common stock or other securities depends on many factors, including, but not limited to, the status and progress of our product development programs, projected cash needs, availability of funding from other sources, our stock price and the status of the capital markets.

On February 25, 2009, we sold 14,378,698 shares of our common stock in a registered direct offering to institutional investors, at a purchase price of $1.69 per share, resulting in net proceeds after fees and expenses of $22.8 million. The investors also received warrants to purchase an additional 10,784,024 shares of our common stock exercisable at a price of $2.15 per share in cash or pursuant to the net exercise provisions of the warrants. During the three-month period ended March 31, 2011, 3,525,777 warrants were exercised for proceeds to us of approximately $7.6 million. During the three-month period ended March 31, 2012, all 5,805,843 warrants that remained outstanding at December 31, 2011 were exercised for proceeds to us of approximately $12.5 million and no warrants remained outstanding as of March 31, 2012.

On December 20, 2011, we sold 24,725,000 shares of our common stock in an underwritten public offering at a purchase price of $10.42 per share. Net proceeds of this offering, after underwriting discounts and commissions and expenses, were approximately $243.1 million.

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We have filed shelf registration statements with the U.S. Securities and Exchange Commission, or SEC, from time to time, to register shares of our common stock or other securities for sale, giving us the opportunity to raise funding when needed or otherwise considered appropriate. Under SEC rules, we currently qualify as a “well-known seasoned issuer,” which allows us to file shelf registration statements to register an unspecified amount of securities that are effective upon filing. On December 14, 2011, we filed such a shelf registration statement with the SEC for the issuance of an unspecified amount of common stock, preferred stock, various series of debt securities and/or warrants to purchase any of such securities, either individually or in units, from time to time at prices and on terms to be determined at the time of any such offering. This filing was effective upon filing and will remain in effect for up to three years from filing. In addition, before we qualified as a “well-known seasoned issuer,” we filed a shelf registration statement for various classes of securities under which we have approximately $65.8 million of securities remaining available for issuance prior to January 21, 2013.

In January 2011, we amended our existing term loan with a bank. The amendment increased the outstanding balance of the loan from $9.6 million at December 31, 2010 to $14.0 million, extended the maturity date from March 31, 2013 to December 31, 2015, and re-set the quarterly repayment provisions, with payments increasing from 2.5 percent of the principal amount in the first quarter, commencing on March 31, 2011, to 8.75 percent of the principal amount in the final quarter, together with interest throughout the term of the loan. All other provisions of our existing loan remain in full force and effect.

Uses of Funds

The primary uses of our cash are to fund our operations and working capital requirements and, to a lesser degree, to repay our long-term debt, to invest in intellectual property and to invest in our property and equipment as needed for our business. For the three-month periods ended March 31, 2012 and 2011, our uses of cash were as follows:

	Three Months Ended March 31,
In thousands	2012		2011
Net cash used in operating activities	$	30,561	$	17,269
Repayment of long-term borrowings and capital leases		365		374
Investment in intangible assets		195		241
Investment in property and equipment		916		423
Payment of tax withholding obligations related to stock compensation		2,302		324
	$	34,339	$	18,631

The net cash used in operating activities is comprised of our net losses, adjusted for non-cash expenses, changes in deferred revenue, and working capital requirements. As noted above, our net loss for the three-month period ended March 31, 2012 increased by $17.9 million, as compared to the corresponding period in 2011, due primarily to the overall increases in operating expenses of $20.6 million. Our net cash used in operating activities increased by $13.3 million in the three-month period ended March 31, 2012 as compared to the corresponding period in 2011, reflecting overall increases in operating expenses and changes in working capital. As noted above, we expect that we will continue to incur a net loss in 2012 due to ongoing development of our product candidates and preparation for potential commercialization of our product candidates in the United States and Europe; that our investment in intangible assets, consisting of our intellectual property, will increase in 2012 in support of our product development and commercialization activities; and that our investment in property and equipment will increase in 2012 to support growth of our R&D and general and administrative functions.

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Off-Balance Sheet Arrangements

As part of our ongoing business, we do not participate in transactions that generate relationships with unconsolidated entities for financial partnerships, such as entities often referred to as structured finance or special purpose entities which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As of March 31, 2012, we maintained outstanding letters of credit of $749,000 in accordance with the terms of our long-term lease for our office and laboratory facility and for other purposes.

Contractual Obligations

We have substantial fixed contractual obligations under our long-term debt agreement, operating and capital lease agreements, employment agreements and benefit plans. These non-cancellable contractual obligations were comprised of the following as of March 31, 2012:

			Payments Due By Period
In thousands	Total		In 2012		2013 through 2015		2016 through 2017		After 2017
Long-term debt	$	12,250	$	1,050	$	11,200	$	—	$	—
Operating leases		38,690		2,872		15,796		11,023		8,999
Employment agreements		6,736		5,198		1,538		—		—
Other long-term obligations		6,990		860		6,130		—		—
Total fixed contractual obligations	$	64,666	$	9,980	$	34,664	$	11,023	$	8,999

Long-term debt consists of scheduled principal payments on such debt. Interest on our long-term debt is based on variable interest rates. Assuming a constant interest rate of 1.76 percent, our average interest rate on our debt at March 31, 2012, over the remaining term of the debt, our interest expense would total approximately $155,000 for the remainder of 2012, and $365,000 in the period 2013 through 2015.

Leases consist of payments to be made on our lease for our office and laboratory facility, the term of which extends to July 2019, and on agreements for certain assets acquired under capital leases which expire at various dates into 2013. Employment agreements represent base salary payments under agreements with officers that extend for terms ranging from one to two years. Other long-term obligations are comprised primarily of our obligations under our deferred executive compensation plan.

Liquidity

At March 31, 2012, we had cash, cash equivalents and marketable securities totaling $287.8 million and working capital of $261.6 million, compared to cash and cash equivalents totaling $306.3 million and working capital of $282.2 million at December 31, 2011. For the three-month period ended March 31, 2012, we reported a net loss of $55.9 million and cash used in operating activities of $30.6 million. Based on our current operating plan, we believe that our cash and cash equivalents at March 31, 2012, together with anticipated milestones and royalty payments from Merck, assuming regulatory approval of ridaforolimus, will be sufficient to fund our operations to the end of 2013. This estimate assumes that we receive milestones and royalty payments from Merck during this period related to regulatory approvals and commercialization of ridaforolimus for patients with soft-tissue and bone sarcomas, for which Merck has filed for regulatory approval in the United States, Europe and other jurisdictions. However, there can be no assurance that such regulatory approvals will be obtained. The FDA action date for the ridaforolimus NDA is scheduled to be on or before June 5, 2012.

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We do not have significant recurring revenue streams and have historically incurred operating losses and net losses related to our research and development activities. We expect to continue to incur significant operating expenses and that our operating expenses will increase substantially in 2012 and beyond. We plan to expand our development of our product candidates, ponatinib and AP26113, and to conduct additional clinical trials, including a Phase 3 clinical trial of ponatinib that we plan to initiate in 2012, and continue manufacturing-related and other activities in support of these efforts. Subject to our filing for and receipt of marketing approval, we plan to commercialize ponatinib and future product candidates on our own in the United States, Europe and other select markets worldwide, which will require increased spending to establish sales, marketing and distribution capabilities in these markets. We also plan to continue to invest in discovery research and add to our pipeline of product candidates through these activities. There are many factors that will affect our level of spending on these activities, including the number, size and complexity of, and rate of enrollment of patients in, our clinical trials for ponatinib and AP26113, the extent of other development activities for ponatinib and AP26113, including product and process development, the progress of our preclinical and discovery research programs, the status of regulatory reviews and timing of potential regulatory approvals, in the United States, Europe and other markets of ponatinib, ridaforolimus and other product candidates, the size of the workforce and required systems and infrastructure necessary to support commercialization of our product candidates in multiple markets and other factors.

We currently have no drug products approved for sale. Until such time, if ever, that we receive regulatory approval for our product candidates and generate significant revenues from sales of our product candidates, we plan to continue to fund our operations through the potential receipt of milestone payments under our existing licenses, by issuing common stock, debt or other securities in public or private offerings, or by incurring additional debt from commercial lenders. Under our license agreement with Merck, we will be eligible to receive up to $40 million in additional milestone payments related to the sarcoma indication (consisting of $25 million for marketing approval in the United States, $10 million for approval to sell ridaforolimus in the European Union, including first pricing and reimbursement approval granted by a regulatory authority in any major European country or by the EMA, and $5 million for marketing approval in Japan). In addition to milestone payments, if ridaforolimus receives regulatory approval, Merck has agreed to pay us tiered double-digit royalties on global net sales of ridaforolimus. We have also exercised our option to co-promote ridaforolimus with Merck in the United States, subject to the terms of a co-promotion agreement to be signed by the parties, pursuant to which Merck will reimburse us for our sales efforts. As previously noted, there can be no assurance that such regulatory approvals will be obtained or that we will receive any additional milestone or other payments under our license agreement with Merck.

In addition to the license agreement with Merck, we also have existing license agreements with two companies, Medinol Ltd. and ICON Medical Corporation, for the development and commercialization of ridaforolimus-eluting stents, and other licenses of our ARGENT technology. If Medinol, ICON or the other licensees are successful in the development or commercialization of potential products or otherwise generate revenue from these licenses, we will be eligible to receive milestone payments and/or royalties on sales of products.

We may also seek to raise funds by issuing common stock, debt or other securities in one or more public or private offerings, as market conditions permit, or through the incurrence of additional debt from commercial lenders. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our existing stockholders will be diluted, and the terms may include liquidation or other preferences that adversely affect the rights of our stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring debt, making capital expenditures or declaring dividends.

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There can be no assurance that additional funds will be available when we need them on terms that are acceptable to us, or at all. If adequate funds are not available to us on a timely basis, we may be required to: (1) delay, limit, reduce or terminate preclinical studies, clinical trials or other clinical development activities for one or more of our product candidates; (2) delay, limit, reduce or terminate our discovery research or preclinical development activities; or (3) delay, limit, reduce or terminate our establishment of sales and marketing capabilities or other activities that may be necessary to commercialize our product candidates.

Securities Litigation Reform Act

Safe harbor statement under the Private Securities Litigation Reform Act of 1995: This Quarterly Report on Form 10-Q, contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements in connection with any discussion of future operating or financial performance are identified by the use of words such as “may,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning. Such statements are based on management’s expectations and are subject to certain factors, risks and uncertainties that may cause actual results, outcome of events, timing and performance to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the costs associated with our research, development, manufacturing and other activities; the conduct and results of pre-clinical and clinical studies of our product candidates; difficulties, delays or failure in obtaining regulatory approvals to market products resulting from our or our partners’ development efforts; preclinical data and early-stage clinical data that may not be replicated in later-stage clinical studies; the timing of development and potential market opportunity for our product candidates; our ability to establish sales, marketing and distribution capabilities to support the planned commercialization of our product candidates; our reliance on our strategic partners and licensees and other key parties for the successful development, manufacture and commercialization of our product candidates; the adequacy of our capital resources and the availability of additional funding; patent protection and third-party intellectual property claims relating to our and any of our partners’ product candidates; future capital needs; risks related to key employees, markets, economic conditions, prices, reimbursement rates, competition and other factors detailed under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2011 and any updates to those risk factors contained in our subsequent periodic and current reports filed with the U.S. Securities and Exchange Commission. The information contained in this document is believed to be current as of the date of original issue. We do not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in our expectations, except as required by law.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We invest our available funds in accordance with our investment policy to preserve principal, maintain proper liquidity to meet operating needs and maximize yields. Our investment policy specifies credit quality standards for our investments and limits the amount of credit exposure to any single issue, issuer or type of investment.

We invest cash balances in excess of operating requirements first in short-term, highly liquid securities, with maturities of 90 days or less, and money market accounts. Depending on our level of available funds and our expected cash requirements, we may invest a portion of our funds in marketable securities, consisting generally of corporate debt and U.S. government and agency securities. Maturities of our marketable securities are generally limited to periods necessary to fund our liquidity needs and may not in any case exceed three years. These securities are classified as available-for-sale. Available-for-sale securities are recorded on the balance sheet at fair value with unrealized gains or losses reported as a separate component of stockholders’ equity (accumulated other comprehensive income or loss).

Our investments are sensitive to interest rate risk. We believe, however, that the effect, if any, of reasonable possible near-term changes in interest rates on our financial position, results of operations and cash flows generally would not be material due to the short-term nature of these investments. In particular, at March 31, 2012, because our available funds are invested solely in securities with remaining maturities of twenty-one months or less, we believe that our risk of loss due to changes in interest rates is not material.

At March 31, 2012, we had $12.3 million outstanding under a bank term note which bears interest at prime or, alternatively, LIBOR + 1.25 percent to 2.25 percent. This note is sensitive to interest rate risk. In the event of a hypothetical 10% increase in the interest rate on which the loan is based (18 basis points at March 31, 2012), we would incur approximately $20,000 of additional interest expense per year based on expected balances over the next twelve months.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures. Our principal executive officer and principal financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in paragraph (e) of Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934) as of the end of the period covered by this Quarterly Report on Form 10-Q, have concluded that, based on such evaluation, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure, particularly during the period in which this Quarterly Report on Form 10-Q was being prepared.

In designing and evaluating our disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

(b) Changes in Internal Controls. There were no changes in our internal control over financial reporting, identified in connection with the evaluation of such internal control that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

ITEM 6. EXHIBITS

10.1+	Amended and Restated Executive Employment Agreement, dated May 1, 2010 between ARIAD Pharmaceuticals, Inc. and Maria Cantor.
10.2	First Amendment to Amended and Restated Executive Employment Agreement, dated January 25, 2012, between ARIAD Pharmaceuticals, Inc. and Maria Cantor.
10.3	First Amendment to Amended and Restated Executive Employment Agreement, dated January 25, 2012, between ARIAD Pharmaceuticals, Inc. and Frank G. Haluska, M.D., Ph.D.
10.4+	Director Compensation Arrangements.
10.5+	Form of 2012 Performance Share Certificate under the ARIAD Pharmaceuticals, Inc. 2006 Long-Term Incentive Plan.
31.1	Certification of the Chief Executive Officer.
31.2	Certification of the Chief Financial Officer.
32.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101@	The following materials from ARIAD Pharmaceutical, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) Unaudited Condensed Consolidated Balance Sheets, (ii) Unaudited Condensed Consolidated Statements of Operations, (iii) Unaudited Condensed Consolidated statements of Comprehensive Loss, (iv) Unaudited Condensed Consolidated Statements of Cash Flows, and (v) Notes to Unaudited Condensed Consolidated Financial Statements.

(+) Management contract or compensatory plan or arrangement.

(@) Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under these sections.

ARIAD and the ARIAD logo are our registered trademarks and ARGENT is our trademark. The domain name and website address www.ariad.com, and all rights thereto, are registered in the name of, and owned by, ARIAD. The information in our website is not intended to be part of this Quarterly Report on Form 10-Q. We include our website address herein only as an inactive textual reference and do not intend it to be an active link to our website.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ARIAD Pharmaceuticals, Inc.
	By:	/s/ Harvey J. Berger, M.D.
		Harvey J. Berger, M.D.
		Chairman and Chief Executive Officer
	By:	/s/ Edward M. Fitzgerald
		Edward M. Fitzgerald
		Executive Vice President,
		Chief Financial Officer
		(Principal financial officer
Date: May 9, 2012		and chief accounting officer)

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EXHIBIT INDEX

Exhibit No.	Title
10.1+	Amended and Restated Executive Employment Agreement, dated May 1, 2010 between ARIAD Pharmaceuticals, Inc. and Maria Cantor.
10.2	First Amendment to Amended and Restated Executive Employment Agreement, dated January 25, 2012, between ARIAD Pharmaceuticals, Inc. and Maria Cantor.
10.3	First Amendment to Amended and Restated Executive Employment Agreement, dated January 25, 2012, between ARIAD Pharmaceuticals, Inc. and Frank G. Haluska, M.D., Ph.D.
10.4+	Director Compensation Arrangements.
10.5+	Form of 2012 Performance Share Certificate under the ARIAD Pharmaceuticals, Inc. 2006 Long-Term Incentive Plan.
31.1	Certification of the Chief Executive Officer.
31.2	Certification of the Chief Financial Officer.
32.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101@	The following materials from ARIAD Pharmaceutical, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) Unaudited Condensed Consolidated Balance Sheets, (ii) Unaudited Condensed Consolidated Statements of Operations, (iii) Unaudited Condensed Consolidated Statements of Comprehensive Loss, (iv) Unaudited Condensed Consolidated Statements of Cash Flows, and (v) Notes to Unaudited Condensed Consolidated Financial Statements.

(+) Management contract or compensatory plan or arrangement.

(@) Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under these sections.

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EX-10.1

Exhibit 10.1

Amended and Restated Executive Employment Agreement

ARIAD Pharmaceuticals, Inc. (the “Company”) a Delaware corporation, and Maria Cantor (the “Employee”) enter into the following Amended and Restated Executive Employment Agreement as of the lst day of May, 2010 (hereafter, the “Agreement”).

WHEREAS, Employee has been employed by the Company under a prior written employment agreement, including any amendments thereto (hereafter, the “Prior Agreement”);

WHEREAS, the Company wishes to offer the Employee certain enhancements to the payments and benefits available under the Prior Agreement, in return for certain covenants by the Employee;

WHEREAS, the Employee wishes to accept those enhanced payments and benefits and is willing to give the covenants that the Company seeks in return;

WHEREAS, the parties mutually intend that this Agreement shall supersede the Prior Agreement and that this Agreement shall be the sole agreement between them concerning the Company’s employment of the Employee and the terms and conditions of such employment;

NOW, THEREFORE, the Company and the Employee agree as follows:

1. Employment, Duties and Acceptance.

1.1 The Company hereby employs the Employee, for the Term (as hereinafter defined), to render full-time services to the Company, and to perform such duties, as the Chief Executive Officer of the Company shall reasonably direct Employee to perform. The Employee’s title shall continue to be Vice President, Corporate Communications and Investor Relations unless and until the Chief Executive Officer shall change such title, in her or her sole discretion.

1.2 The Employee hereby accepts such employment and agrees to render the services described above.

1.3 The principal place of employment of the Employee hereunder shall be in the greater Boston, Massachusetts area, or other locations reasonably acceptable to the Employee. The Employee acknowledges that, for limited periods of time, Employee may be required to provide services to the Company outside of the Boston, Massachusetts area.

1.4 Notwithstanding anything to the contrary herein, although the Employee shall provide services as a full-time employee, it is understood that the Employee may (a) have an academic appointment and (b) participate in professional activities (collectively, “Permitted Activities”); provided, however, that such Permitted Activities do not interfere with the Employee’s duties to the Company.

1.5 The Employee represents and affirms that Employee does not have any other contractual obligations to any other person or entity that would prohibit or limit Employee’s employment with the Company, except for the duty not to use or disclose another entity’s confidential information without authorization. Employee further acknowledges that the Company instructs Employee not to bring to ARIAD, use or disclose in the course of Employee’s employment any confidential information belonging to another person or entity, without that person or entity’s express authorization.

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2. Term of Employment.

The term of the Employee’s employment under this Agreement (the “Term”) shall commence on May 1, 2010 (the “Effective Date”), or such other date mutually agreed upon by the parties, and shall end on June 30, 2012, unless sooner terminated pursuant to Section 4 or 5 of this Agreement; provided, however, that this Agreement shall automatically be renewed for successive one-year terms (the Term and, if the period of employment is so renewed, such additional period(s) of employment are collectively referred to herein as the “Term”) unless terminated by written notice given by either party to the other at least ninety (90) days prior to the end of the applicable Term.

3. Compensation.

3.1 As full compensation for all services to be rendered pursuant to this Agreement, the Company agrees to pay the Employee, during the Term, a base salary at the fixed rate of $255,000 per annum, payable retroactive to January 1, 2010, and increased each year, by amounts, if any, to be determined by the Compensation Committee of the Board of Directors of the Company (the “Board”), in its sole discretion, payable in equal biweekly installments, less such deductions or amounts to be withheld as shall be required by applicable law and regulations.

3.2 Each year, Employee shall be eligible to receive a discretionary bonus. The target for such discretionary bonus shall be thirty (30) percent of her base salary, but the Company may elect to pay a greater or lesser bonus, in its sole discretion, which shall be determined annually by the Board. Factors that may be considered by the Board in determining bonus eligibility and the size of a bonus awarded, if any, include the Employee’s level of performance, the Company’s

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achievement of its business goals, and special contributions that the Employee may have made during the year under consideration. The bonus, if any, may be paid in the form of stock options, restricted stock, restricted stock units, deferred compensation or cash, as determined by the Board. In the event of any conflict between any equity-based or other compensation plan documents and this Agreement, the terms of this Agreement shall control.

3.3 The Company shall pay or reimburse the Employee for all reasonable and documented expenses actually incurred or paid by Employee during the Term in the performance of Employee’s services under this Agreement, upon presentation of expense statements or vouchers or such other supporting information as it may require.

3.4 The Employee shall be eligible under any incentive plan, stock-based compensation plan, bonus, deferred or extra compensation plan, pension, group health, disability, long-term care, and life insurance or other so-called “fringe” benefits, which the Company provides for its executives at the comparable level. All stock awards, stock options, restricted stock or restricted stock units or bonuses in the form of deferred compensation granted to the Employee by the Company prior to the Effective Date or in the future shall be subject to vesting schedules, which shall be determined by the Compensation Committee of the Board. All stock awards, stock options, restricted stock or restricted stock units, granted to the Employee shall also be subject to the terms of the Company’s equity-based or other compensation plan documents under which such grants were made and any certificates issued to the Employee in association with such grants. Any unvested stock awards, stock options, restricted stock or restricted stock units or unvested

4

portions of past bonuses in the form of deferred compensation shall be forfeited to the Company in the event (a) this Agreement is terminated by the Company for Cause pursuant to Section 4 herein, or (b) either party elects not to renew this Agreement pursuant to Section 2 herein. This forfeiture provision shall apply to stock awards, stock options, restricted stock or restricted stock units and bonuses in the form of deferred compensation that have been awarded prior to the Effective Date of this Agreement, as well as those that may be awarded in the future.

4. Termination by the Company.

The Company may terminate this Agreement, if any one or more of the following shall occur:

(a) The Employee shall die during the Term; provided, however, the Employee’s legal representatives shall be entitled to receive the compensation provided for hereunder to the last day of the month in which Employee’s death occurs.

(b) The Employee shall become physically or mentally disabled, whether totally or partially, so that he is unable substantially to perform her services hereunder for (i) a period of one-hundred eighty (180) consecutive days, or (ii) for shorter periods aggregating one-hundred eighty (180) days during any twelve (12) month period.

(c) The Employee acts, or fails to act, in a manner that provides Cause for termination, as determined in the sole discretion of the Chief Executive Officer of the Company. For purposes of this Agreement, the term “Cause” means (i) the failure by the Employee to perform any of Employee’s material duties hereunder, (ii) the conviction of the Employee of any felony, (iii) the commission of any crime relating

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to Employee’s employment with the Company, (iv) violation of any federal, state or local law, or administrative regulation related to the business of the Company, (v) conduct that could result in publicity reflecting unfavorably on the Company, (vi) unprofessional conduct inconsistent with the Employee’s position in the Company, (vii) failure to comply with the written policies of the Company, or (viii) a material breach of the terms of this Agreement by the Employee (including, without limitation, actions taken by the Employee which create a conflict of interest for Employee between the Company or any of its Affiliates and a competitor). If the conduct constituting Cause hereunder is susceptible to cure, the Company shall provide the Employee written notice of termination pursuant to this Section 4, and Employee shall have thirty (30) days to cure or remedy such failure or breach, in which case this Agreement shall not be terminated. If the conduct is not susceptible to cure as determined by the Chief Executive Officer of the Company in her or her sole discretion, this Agreement shall terminate upon written notice by the Company.

(d) The Company elects to terminate the Employee’s employment and this Agreement in circumstances not constituting Cause (as defined above), in which case the Company is not required to provide advance notice, but the Employee may be eligible for salary continuation payments and other benefits under Section 6.1 or Section 6.2 below.

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5. Termination by the Employee.

5.1 The Employee may terminate this Agreement, within ninety (90) days of the initial occurrence of any one or more of the following:

(a) a material breach of the terms of this Agreement by the Company and such breach continues for thirty (30) days after the Employee gives the Company written notice of such breach and an opportunity to cure it;

(b) the Company shall make a general assignment for benefit of creditors; or any proceeding shall be instituted by the Company seeking to adjudicate it as bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its property or the Company shall take any corporate action to authorize any of the actions set forth above in this subsection 5(b);

(c) an involuntary petition shall be filed or an action or proceeding otherwise commenced against the Company seeking reorganization, arrangement or readjustment of the Company’s debts or for any other relief under the Federal Bankruptcy Code, as amended, or under any other bankruptcy or insolvency act or law, state or federal, now or hereafter existing and remain undismissed or unstayed for a period of thirty (30) days;

(d) a receiver, assignee, liquidator, trustee or similar officer for the Company or for all or any part of its property shall be appointed involuntarily; or,

(e) a Change in Control as defined in Section 15.

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6. Severance.

6.1 If (i) the Company terminates this Agreement without Cause or (ii) the Employee terminates this Agreement pursuant to Section 5.1(a), then: (1) except in the case of death or disability, the Company shall continue to pay Employee her then-current salary for the period of six (6) months following the effective date of such termination; (2) the unvested portions of all stock awards, stock options, restricted stock or restricted stock units and bonuses in the form of deferred compensation that would have vested during the Term shall vest upon the effective date of such termination; and (3) the Company shall continue to provide Employee coverage under the Company’s group health insurance plan at the Company’s expense for up to one year following the effective date of such termination, provided Employee makes an effective COBRA election regarding group health insurance. Except as otherwise required under Section 14.2, salary continuation payments referenced in Sections 6.1(i)(1) and 6.1(ii)(1) above shall begin on the first regular pay date following Employee’s separation from service. The Employee will not be eligible for any payments or benefits under this Section 6.1 if Employee is eligible to receive payments and benefits under the following Section 6.2.

6.2 In the event of a consummation of a Change in Control of the Company, and if, upon such occurrence or within the period of one year following such occurrence, the Company terminates the Employee’s employment without Cause or the Employee resigns for “Good Reason” (as defined herein), then, subject to compliance with Section 10 below, (i) all stock awards, stock options, restricted stock or restricted stock units granted to the Employee and past bonuses in the form of deferred compensation granted to the Employee shall

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immediately vest and remain fully exercisable through their original term with all rights; (ii) the Company shall continue to pay the Employee her then-current base salary for twelve (12) months; and (iii) if the Employee makes an effective COBRA election regarding group health insurance, then the Company shall continue to provide the Employee with coverage under the Company’s group health plan at the Company’s expense for a period of eighteen months following Employee’s separation from the Company. Except as otherwise required under Section 14.2, salary continuation payments referenced in Section 6.2(ii) above shall begin on the first regular pay date following Employee’s separation from service. Finally, the payments and benefits described in this Section 6.2 shall not be available if Employee’s employment terminates due to death or disability during the one-year period following a Change of Control.

6.3 The Employee shall bear all expense of, and be solely responsible for, all federal, state, local or foreign taxes due with respect to any payment received under the Agreement, including, without limitation, any excise tax imposed by Section 4999 of the Code (the “Excise Tax”); provided, however, that any payment or benefit received or to be received by the Employee in connection with a Change in Control or the termination of employment (whether payable under the terms of the Agreement or any other plan, arrangement or agreement with the Company or an affiliate (collectively, the “Payments”) that would constitute a “parachute payment” within the meaning of Section 280G of the Code, shall be reduced to the extent necessary so that no portion thereof shall be subject to the Excise Tax but only if, by reason of such reduction, the net after-tax benefit received by the Employee shall exceed the net after-tax benefit that would be received by the Employee if no such reduction was made. For purposes of this Section 6.3:

(a) The “net after-tax benefit” shall mean (i) the Payments which the Employee receives or is then entitled to receive from the Company or its affiliates that would constitute “parachute payments” within the meaning of Section 280G of the Code, less (ii) the amount of all federal, state and local income and employment taxes payable by the Employee with respect to the foregoing calculated at the highest marginal income tax rate for each year in which the foregoing shall be paid to the Employee (based on the rate in effect for such year as set forth in the Code as in effect at the time of the first payment of the foregoing), less (iii) the amount of Excise Tax imposed with respect to the payments and benefits described in (i) above.

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(b) All determinations under this Section 6.3 will be made by an accounting firm or law firm that is selected for this purpose by the Company’s Chief Executive Officer prior to the Change in Control (the “280G Firm”). All fees and expenses of the 280G Firm shall be borne by the Company. The Company will direct the 280G Firm to submit any determination it makes under this Section 6.3 and detailed supporting calculations to both the Employee and the Company as soon as reasonably practicable.

(c) If the 280G Firm determines that one or more reductions are required under Section 6.3, the 280G Firm shall also determine which Payments shall be reduced (first from cash payments and then from non-cash benefits) to the extent necessary so that no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code, and the Company shall pay such reduced amount to the Employee. The 280G Firm shall make reductions required under this Section 6.3 in a manner that maximizes the net after-tax amount payable to the Employee.

(d) As a result of the uncertainty in the application of Section 280G at the time that the 280G Firm makes its determinations under this

10

Section 6.3, it is possible that amounts will have been paid or distributed to the Employee that should not have been paid or distributed (collectively, the “Overpayments”), or that additional amounts should be paid or distributed to the Employee (collectively, the “Underpayments”). If the 280G Firm determines, based on either the assertion of a deficiency by the Internal Revenue Service against the Company or the Employee, which assertion the 280G Firm believes has a high probability of success or controlling precedent or substantial authority, that an Overpayment has been made, the Employee must repay to the Company, without interest; provided, however, that no loan will be deemed to have been made and no amount will be payable by the Employee to the Company unless, and then only to the extent that, the deemed loan and payment would either reduce the amount on which the Employee is subject to tax under Section 4999 of the Code or generate a refund of tax imposed under Section 4999 of the Code. If the 280G determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred, the 280G Firm will notify the Employee and the Company of that determination, and the Company will promptly pay the amount of that Underpayment to the Employee.

(e) The parties will provide the 280G Firm access to and copies of any books, records, and documents in their possession as reasonably requested by the 280G Firm, and otherwise cooperate with the 280G Firm in connection with the preparation and issuance of the determinations and calculations contemplated by this Section 6.3.

7. Other Benefits.

In addition to other benefits contained herein, the Employee shall be entitled to the following while Employee is employed with the Company:

(a) Paid time-off of at least five (5) weeks per year taken in accordance with the paid time-off policy of the Company in effect at the time.

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(b) The Company shall provide the Employee with an automobile allowance of $750 per month and standard tax preparation and planning services.

8. Confidentiality.

8.1 The Employee acknowledges that, during the course of performing Employee’s services hereunder, the Company shall be disclosing information to the Employee related to the Company’s business, Inventions, projects and business plans, as well as other information (collectively, “Confidential Information”). The Employee acknowledges that the Company’s business is extremely competitive, dependent in part upon the maintenance of secrecy, and that any disclosure of the Confidential Information would result in serious harm to the Company.

8.2 The Employee agrees that the Confidential Information only shall be used by the Employee in connection with Employee’s activities hereunder as an employee of the Company, and shall not be used in any way that is detrimental to the Company.

8.3 The Employee agrees not to disclose, directly or indirectly, the Confidential Information to any third person or entity, other than representatives or agents of the Company. The Employee shall treat all such information as confidential and proprietary property of the Company.

8.4 The term “Confidential Information” does not include information that (a) is or becomes generally available to the public

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other than by disclosure in violation of this Agreement, (b) was within the Employee’s possession prior to being furnished to such Employee, (c) becomes available to the Employee on a nonconfidential basis or (d) was independently developed by the Employee without reference to the information provided by the Company.

8.5 The Employee may disclose any Confidential Information that is required to be disclosed by law, government regulation or court order. If disclosure is required, the Employee shall give the Company advance notice so that the Company may seek a protective order or take other action reasonable in light of the circumstances.

8.6 Upon termination of this Agreement, the Employee shall promptly return to the Company all materials containing Confidential Information, as well as data, records, reports and other property, furnished by the Company to the Employee or produced by the Employee in connection with services rendered hereunder. Notwithstanding such return or any of the provisions of this Agreement, the Employee shall continue to be bound by the terms of the confidentiality provisions contained in this Section 8 for a period of three (3) years after the termination of this Agreement.

8.7 In connection with Employee’s employment by the Company, the Employee hereby acknowledges that Employee may enter into more than one agreement with regard to (a) the confidentiality of certain books, records, documents and business, (b) rights to certain inventions, proprietary information, and writings, (c) publication of certain materials, and (d) other related matters (the “Confidential Matters”) of the Company (the “Confidentiality Agreements”). In order to

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clarify any potential conflicts between certain respective provisions of such Confidentiality Agreements, the Employee and the Company hereby agree that, as among such Confidentiality Agreements, the provision (or part thereof) in any such Confidentiality Agreement that affords the greatest protection to the Company with respect to the Confidential Matters shall control.

9. Inventions Discovered by the Employee While Performing Services Hereunder. During the Term, the Employee shall promptly disclose to the Company any invention, improvement, discovery, process, formula, or method or other intellectual property, whether or not patentable, whether or not copyrightable (collectively, “Inventions”) made, conceived or first reduced to practice by the Employee, either alone or jointly with others, while performing service hereunder. The Employee hereby assigns to the Company all of her right, title and interest in and to any such Inventions. During and after the Term, the Employee shall execute any documents necessary to perfect the assignment of such Inventions to the Company and to enable the Company to apply for, obtain, and enforce patents and copyrights in any and all countries on such Inventions. The Employee hereby irrevocably designates the Chief Intellectual Property Officer of the Company as her agent and attorney-in-fact to execute and file any such document and to do all lawful acts necessary to apply for and obtain patents and copyrights and to enforce the Company’s rights under this paragraph. This Section 9 shall survive the termination of this Agreement.

10. Non-Competition and Non-Solicitation.

During the Term and for a period of one year following the date of termination of Employee’s employment with the

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Company and/or the termination of this Agreement, for any reason and whether voluntary or involuntary: (a) the Employee shall not in the United States or in any country in which the Company shall then be doing business, directly or indirectly, enter the employ of, or render any services to, any person, firm or corporation engaged in any business that is competitive with the business of the Company or of any of its subsidiaries or affiliates of which the Employee may become an employee or officer during the Term; Employee shall not engage in such business on Employee’s own account; and Employee shall not become interested in any such business, directly or indirectly, as an individual, partner, shareholder, director, officer, principal, agent, employee, trustee, consultant, or any other relationship or capacity; provided, however, that nothing contained in this Section 10 shall be deemed to prohibit the Employee from acquiring, solely as an investment, shares of capital stock of any public corporation; (b) neither the Employee nor any Affiliate of the Employee shall solicit or utilize, or assist any person in any way to solicit or utilize, the services, directly or indirectly, of any of the Company’s directors, key advisors, officers or employees (collectively, “Associates of the Company”). This non-solicitation and non-utilization provision shall not apply to Associates of the Company who have previously terminated their relationship with the Company. The above covenants will apply to the Employee, regardless of the circumstances under which the employment ends or this Agreement is terminated.

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10.1 If the Employee commits a breach, or threatens to commit a breach, of any of the provisions of this Section 10, the Company shall have the following rights and remedies:

10.1.1 The right and remedy to have the provisions of this Agreement specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach shall cause irreparable injury to the Company and that money damages shall not provide an adequate remedy to the Company; and

10.1.2 The right and remedy immediately to cease providing the salary continuation payments and other benefits under Sections 6.1 and 6.2 of this Agreement and to require the Employee to repay to the Company any such payments and benefits that already have been provided as of the time the Company learns of Employee’s breach of this Section 10.

10.1.3 The right and remedy and to require the Employee to account for and pay over to the Company all compensation, profits, monies, accruals, increments or other benefits (collectively “Benefits”) derived or received by the Employee as the result of any transactions constituting a breach of any of the provisions of the preceding paragraph, and the Employee hereby agrees to account for and pay over such Benefits to the Company.

Each of the rights and remedies enumerated above shall be independent of the other, and shall be severally enforceable, and all of such rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to the Company under law or in equity.

10.2 If any of the covenants contained in Section 8, 9 or 10, or any part thereof, is hereafter construed to be invalid or unenforceable, the same shall not affect the remainder of the covenant or covenants, which shall be given full effect without regard to the invalid portions.

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10.3 If any of the covenants contained in Section 8, 9 or 10, or any part thereof, is held to be unenforceable because of the duration of such provision or the area covered thereby, the parties agree that the court making such determination shall have the power to reduce the duration and/or area of such provision and, in its reduced form, such provision shall then be enforceable.

10.4 The parties hereto intend to and hereby confer jurisdiction to enforce the covenants contained in Sections 8, 9 and 10 upon the courts of any state within the geographical scope of such covenants. In the event that the courts of any one or more of such states shall hold any such covenant wholly unenforceable by reason of the breadth of such scope or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the Company’s right to the relief provided above in the courts of any other states within the geographical scope of such covenants, as to breaches of such covenants in such other respective jurisdictions, the above covenants as they relate to each state being, for this purpose, severable into diverse and independent covenants.

10.5 The covenants in Sections 8, 9, and 10 are conditions of Employee’s continued employment with the Company, and they are not tied to Employee’s performance of any particular position, role or job; therefore, the covenants in Sections 8, 9, and 10 shall survive any change in Employee’s position, title, compensation, benefits, role, or responsibilities and shall remain in full force and effect following any such change. By continuing in the Company’s employ, Employee continually re-affirms the intention to be bound by these ongoing covenants.

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11. Indemnification.

The Company shall indemnify the Employee, to the maximum extent permitted by applicable law, against all costs, charges and expenses incurred or sustained by Employee in connection with any action, suit or proceeding to which Employee may be made a party by reason of being an officer, director or employee of the Company or of any subsidiary or affiliate of the Company. The Company shall provide, subject to its availability upon reasonable terms (which determination shall be made by the Board) at its expense, directors and officers insurance for the Employee in reasonable amounts. Determination with respect to (a) the availability of insurance upon reasonable terms and (b) the amount of such insurance coverage shall be made by the Board in its sole discretion.

12. Notices.

All notices, requests, consents and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if sent by prepaid telegram (confirmed delivery by the telegram service), private overnight mail service (delivery confirmed by such service), registered or certified mail (return receipt requested), or delivered personally, as follows (or to such other address as either party shall designate by notice in writing to the other in accordance herewith):

If to the Company:
ARIAD Pharmaceuticals, Inc.
26 Landsdowne Street Cambridge, Massachusetts 02139 Attention: Chief Executive Officer
Telephone:	(617) 494-0400
Fax:	(617) 494-1828
If to the Employee:
55 Burnside Road
Needham, MA 02494

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13. General.

13.1 This Agreement shall be governed by and construed and enforced in accordance with the laws of the Commonwealth of Massachusetts applicable to agreements made and to be performed entirely in Massachusetts.

13.2 The parties agree that any action, claim, or other proceeding involving any dispute between them shall be resolved by a judge alone in a bench trial, and both parties expressly waive their right to a trial by a jury of any such action, claim, or proceeding.

13.3 The Section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

13.4 This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter hereof, and supersedes all prior agreements, arrangements and understandings, written or oral, relating to the subject matter hereof. Neither Party has made any representation, promise or inducement that is

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not embodied in this Agreement, and neither party shall be bound by or liable for any alleged representation, promise or inducement not so set forth.

13.5 This Agreement and the Employee’s rights and obligations hereunder may not be assigned by the Employee or the Company; provided, however, the Company may assign this Agreement to an Affiliate or a successor-in interest.

13.6 This Agreement may be amended, modified, superseded, canceled, renewed or extended, and the terms or covenants hereof may be waived only by a written instrument executed by the parties hereto or in the case of a waiver, by the party waiving compliance. In order to be effective, any such modification or amendment must be signed by the Company’s Chief Executive Officer; Employee acknowledges that no other officer, employee, Director or representative is authorized to modify or amend the terms of this Agreement. The failure of a party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same. No waiver by a party of the breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach, or a waiver of the breach of any other term or covenant contained in this Agreement.

14. Section 409A.

14.1 Notwithstanding any other provision to the contrary, the parties agree that amounts payable under the Agreement shall be interpreted to comply with or be exempt from Section 409A of the Code (“Section 409A”) consistent with the intentions set forth in this Section 14.

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14.2 Salary continuation payments that may become payable under either Section 6.1 or Section 6.2 are intended to be exempt from Section 409A to the maximum extent permitted under (a) the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations (to the extent of such payments made from the date of termination of employment or termination of the Agreement, as the case may be, through March 14th of the calendar year following such separation) and (b) the “separation pay due to involuntary separation from service” rule set forth in Section l.409A—1(b)(9)(iii) of the Treasury Regulations (to the extent that such payments made after said March 14th). For purposes of the Agreement, each payable and benefit payable hereunder is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

14.3 Continued employer paid COBRA benefits described in Section 6.1 and 6.2 are intended to be exempt from Section 409A under either the welfare benefits exception set forth in Section 1.409A-1(a)(5) of the Treasury Regulations (if COBRA premium payments are not taxable to the Employee) or the limited payments exception set forth in Section 1.409A-1(b)(9)(v)(D) of the Treasury Regulations (if COBRA premium payments are taxable to the Employee).

14.4 All expenses or other reimbursements as provided under the Agreement shall be payable in accordance with the Company’s policies in effect from time to time, but in any event shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by the Employee. No

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reimbursement or expenses eligible for reimbursement in any taxable year shall in any way affect the expenses eligible for reimbursement in any other taxable year and the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchanged for another benefit.

14.5 If the Employee is considered by the Company to be a “specified employee” (within the meaning of Section 409A) upon separation from service and any payment or the provision of any benefit under the Agreement or otherwise that is payable upon separation from service is determined to be nonqualified deferred compensation subject to Section 409A after giving full effect to the intentions set forth in this Section 14, then any such payment or benefit shall not commence until the earlier of (i) the first payroll period commencing during the seventh month immediately following the date of such separation from service, and (ii) the date of Employee’s death (the “Delay Period”). Upon the expiration of the Delay Period, all payments and benefits delayed hereunder (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to Employee in a lump sum, and any remaining payments and benefits due under the Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

14.6 All payments and benefits that are payable upon a termination of the Agreement (including Section 6.1) or a termination of the Employee’s employment hereunder shall be paid or provided only upon the Employee’s “separation from service” from the Company within the meaning of Section 409A (determined after applying the presumptions set forth in Section 1.409A-1(h)(1) of the Treasury Regulations.

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15. Definitions. As used herein the following terms have the following meaning:

(a) “Affiliate” means and includes any corporation or other business entity controlling, controlled by or under common control with the corporation in question.

(b) “Person” means any natural person, corporation, partnership, firm, joint venture, association, joint stock company, trust, unincorporated organization, governmental body or other entity.

(d) “Subsidiary” means any corporation or other business entity directly or indirectly controlled by the corporation in question.

(e) “Change in Control” means the occurrence of any of the following events:

(i) Any corporation, person or other entity makes a tender or exchange offer for shares of the Company’s Common Stock pursuant to which such corporation, person or other entity acquires more than fifty (50) percent of the issued and outstanding shares of the Company’s Common Stock;

(ii) The stockholders of the Company approve a definitive agreement to merge or consolidate the Company with or into another corporation or to sell or otherwise dispose of all or substantially all of the Company’s assets; or

(iii) Any person within the meaning of Section 3 (a) (9) or Section 13 (d) of the Securities Exchange Act of 1934 acquires more than fifty (50) percent of the combined voting power of Company’s issued and outstanding voting securities entitled to vote in the election of the Board.

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(f) “Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended, and the final regulations and any guidance promulgated thereunder.

(g) “Good Reason” means the occurrence of one or more of the following conditions arising without the Employee’s voluntary consent:

(i) any requirement that the Employee relocate to a worksite that would increase the Employee’s one-way commuting distance by more than twenty-five (25) miles, provided that the Employee gives notice to the Company within ninety (90) days of the relocation and the increase in commuting distance is not cured within thirty (30) days of such notice;

(ii) the Company’s material breach of any provision of this Agreement with the Employee, provided that the Employee gives notice to the Company within ninety (90) days of the initial occurrence of the breach and it is not cured within thirty (30) days of such notice; or

(iii) the material diminution of Employee’s roles, responsibilities, scope of authority, or level in the overall management structure or hierarchy of the Company and/or the entity resulting from a Change in Control, provided that the Employee gives notice to the Company within ninety (90) days of the initial occurrence of the material diminution, and it is not cured within thirty (30) days of such notice.

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For avoidance of doubt, a “material breach of any provision of this Agreement” under clause (ii) above includes, without limitation, the Company’s failure to pay or provide salary, bonus or any other form of compensation referenced in Section 3 that is not corrected by the Company within thirty (30) days after receiving notice from the Employee, provided such notice is provided by the Employee within ninety (90) days of the initial occurrence of the breach. This definition of “Good Reason” shall be interpreted consistent with the definition of an “involuntary separation from service” under Section 1.409A-1 (n) of the Treasury Regulations.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

ARIAD PHARMACEUTICALS, INC.
By	/s/ Harvey J. Berger
	Harvey J. Berger, M.D.
	Chairman and Chief Executive Officer
EMPLOYEE
/s/ Maria Cantor
Maria Cantor

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EX-10.2

Exhibit 10.2

FIRST AMENDMENT TO AMENDED AND RESTATED

EXECUTIVE EMPLOYMENT AGREEMENT

This FIRST AMENDMENT TO THE AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT dated May 1, 2010 (the “First Amendment”) is made as of January 25, 2012 between ARIAD Pharmaceuticals, Inc., a Delaware corporation (the “Company”) and Maria E. Cantor (the “Employee”).

WHEREAS, the Company and the Employee previously entered into an Amended and Restated Executive Employment Agreement dated May 1, 2010 (the “Agreement”), and the parties hereto desire further to amend certain provisions of the Agreement.

NOW, THEREFORE, in consideration of the promises set forth herein and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree further to amend the Agreement as follows:

I. Severance – Section 6.2:

The entirety of Section 6.2 shall be replaced with the following:

“6.2 In the event of a consummation of a Change in Control of the Company, and if, upon such occurrence or within the period of one year following such occurrence, the Company terminates the Employee’s employment without Cause or the Employee resigns for “Good Reason” (as defined herein), then, subject to compliance with Section 10 below, (i) all stock awards, stock options, restricted stock or restricted stock units granted to the Employee and past bonuses in the form of deferred compensation granted to the Employee shall immediately vest and remain fully exercisable through their original term with all rights; (ii) the Company shall continue to pay the Employee his then-current base salary for twenty-four (24) months; and (iii) if the Employee makes an effective COBRA election regarding group health insurance, then the Company shall continue to provide the Employee with coverage under the Company’s group health plan at the Company’s expense for a period of

eighteen months following Employee’s separation from the Company. Except as otherwise required under Section 14.2, salary continuation payments referenced in Section 6.2(ii) above shall begin on the first regular pay date following Employee’s separation from service. Finally, the payments and benefits described in this Section 6.2 shall not be available if Employee’s employment terminates due to death or disability during the one-year period following a Change of Control.

II. Except as modified by this First Amendment, the Agreement remains in full force and effect.

ARIAD PHARMACEUTICALS, INC.,
By:	/s/ Harvey J. Berger, M.D.
	Harvey J. Berger, M.D.
	Chairman and Chief Executive Officer
EMPLOYEE,
	/s/ Maria E. Cantor
	Maria E. Cantor

DATED: January 25, 2012

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EX-10.3

Exhibit 10.3

FIRST AMENDMENT TO AMENDED AND RESTATED

EXECUTIVE EMPLOYMENT AGREEMENT

This FIRST AMENDMENT TO THE AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT dated May 1, 2010 (the “First Amendment”) is made as of January 25, 2012 between ARIAD Pharmaceuticals, Inc., a Delaware corporation (the “Company”) and Frank G. Haluska, M.D., Ph.D. (the “Employee”).

WHEREAS, the Company and the Employee previously entered into an Amended and Restated Executive Employment Agreement dated May 1, 2010 (the “Agreement”), and the parties hereto desire further to amend certain provisions of the Agreement.

NOW, THEREFORE, in consideration of the promises set forth herein and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree further to amend the Agreement as follows:

I. Severance – Section 6.2:

The entirety of Section 6.2 shall be replaced with the following:

“6.2 In the event of a consummation of a Change in Control of the Company, and if, upon such occurrence or within the period of one year following such occurrence, the Company terminates the Employee’s employment without Cause or the Employee resigns for “Good Reason” (as defined herein), then, subject to compliance with Section 10 below, (i) all stock awards, stock options, restricted stock or restricted stock units granted to the Employee and past bonuses in the form of deferred compensation granted to the Employee shall immediately vest and remain fully exercisable through their original term with all rights; (ii) the Company shall continue to pay the Employee his then-current base salary for twenty-four (24) months; and (iii) if the Employee makes an effective COBRA election regarding group health insurance, then the Company shall continue to provide the Employee with coverage under the Company’s group health plan at the Company’s expense for a period of

eighteen months following Employee’s separation from the Company. Except as otherwise required under Section 14.2, salary continuation payments referenced in Section 6.2(ii) above shall begin on the first regular pay date following Employee’s separation from service. Finally, the payments and benefits described in this Section 6.2 shall not be available if Employee’s employment terminates due to death or disability during the one-year period following a Change of Control.

II. Definition of “Good Reason”:

The definition of “Good Reason” in Section 15(g) of the Agreement shall be replaced, in its entirety, with the following:

“(g) “Good Reason” means the occurrence of one or more of the following conditions arising without the Employee’s voluntary consent:

(i) any requirement that the Employee relocate to a worksite that would increase the Employee’s one-way commuting distance by more than twenty-five (25) miles, provided that the Employee gives notice to the Company within ninety (90) days of the relocation and the increase in commuting distance is not cured within thirty (30) days of such notice;

(ii) the Company’s material breach of any provision of this Agreement with the Employee, provided that the Employee gives notice to the Company within ninety (90) days of the initial occurrence of the breach and it is not cured within thirty (30) days of such notice; or

(iii) the material diminution of Employee’s roles, responsibilities, scope of authority, or level in the overall management structure or hierarchy of the Company and/or the entity resulting from a Change in Control, provided that the Employee gives notice to the Company within ninety (90) days of the initial occurrence of the material diminution, and it is not cured within thirty (30) days of such notice.

For avoidance of doubt, a “material breach of any provision of this Agreement” under clause (ii) above includes, without limitation, the Company’s failure to pay or provide salary, bonus or any other form of compensation referenced in Section 3 that is not corrected by the Company within thirty (30) days after receiving notice from the Employee, provided such notice is provided by the Employee

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within ninety (90) days of the initial occurrence of the breach. This definition of “Good Reason” shall be interpreted consistent with the definition of an “involuntary separation from service” under Section 1.409A-1 (n) of the Treasury Regulations.”

III. Except as modified by this First Amendment, the Agreement remains in full force and effect.

ARIAD PHARMACEUTICALS, INC.,
By:	/s/ Harvey J. Berger
	Harvey J. Berger, M.D.
	Chairman and Chief Executive Officer
EMPLOYEE,
/s/ Frank G. Haluska
Frank G. Haluska, M.D., Ph.D.

DATED: January 25, 2012

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EX-10.4

Exhibit 10.4

ARIAD Pharmaceuticals, Inc.

Director Compensation Arrangements

Effective January 2, 2012 and until further modified by the Board of Directors of ARIAD Pharmaceuticals, Inc. (the “Corporation”), the Corporation’s non-employee directors will receive the compensation set forth below. Non-employee directors do not receive any other compensation for service on the Board of Directors or its committees, other than reimbursement of reasonable expenses. Directors who are also employees of the Corporation do not receive any additional compensation for their service on the Board of Directors. All equity awards are granted under the Corporation’s 2006 Long Term Incentive Plan, as amended.

Upon initial appointment to the Board of Directors, the director will receive a one-time grant of 40,000 stock options, which will vest over three years in equal amounts on first, second and third anniversaries of the date of grant. The options will have a term of ten years. The exercise price for such options will be the closing price of the Corporation’s common stock as quoted on the NASDAQ Global Select Market on the date of grant.

Each year, the directors will receive annual cash compensation of $50,000, paid in equal quarterly amounts on or about the last day of each calendar quarter. In lieu of cash, a director may elect to receive the equivalent value in restricted shares of the Corporation’s common stock on January 31, subject to a lapsing repurchase right as described below. The number of shares will be determined based on the volume weighted average price (VWAP) of the Corporation’s common stock for the month of December of the prior year. Such election will be made by January 15 of each calendar year.

Each year, the directors will receive an annual equity grant of 14,000 restricted shares of the Corporation’s common stock to be issued on January 31, subject to a lapsing repurchase right as described below. The number of restricted shares to be awarded will be evaluated annually to take into account the underlying value of the shares.

The lapsing repurchase right will give the Corporation the right to repurchase the shares for a nominal amount if the individual ceases to be a member of the Board of Directors or ceases to provide agreed upon services to the Corporation following their service as a director. The right will lapse as to 25% of the shares on March 31, June 30, September 30 and December 31 of the year of the award.

The Board of Directors has adopted stock ownership guidelines, to be phased in over five years, for the non-employee directors and the Corporation’s Chief Executive Officer. The guideline for the non-employee directors is ownership of the Corporation’s common stock with a value of at least three times the annual cash compensation and the guideline for the Chief Executive Officer is ownership of the Corporation’s common stock with a value of at least six times his base salary.

EX-10.5

Exhibit 10.5

FORM OF

2012 PERFORMANCE SHARE CERTIFICATE

This Performance Share Certificate certifies that, pursuant to the ARIAD Pharmaceuticals, Inc. 2006 Long Term Incentive Plan (the “2006 Plan”), as amended, the Board of Directors of ARIAD Pharmaceuticals, Inc. (the “Company”) has granted the Participant the right to receive shares of Common Stock, $.001 par value per share, of the Company (the “Grant”), issuable as soon as administratively feasible following achievement of the performance milestone set forth below and in such amount of shares and subject to the additional vesting provisions set forth below:

Name of Participant:
Target Award Amount:
Grant Date:
Grant Price:	$	.001 Per Share	*

Performance Milestone:

On or before December 31, 2016, the European Medicines Agency or a successor regulatory agency approves a marketing authorization application for ponatinib.

Vesting:

Upon certification of the achievement of the Performance Milestone by the Compensation Committee, the Participant shall be entitled to receive the following number of shares of Common Stock on the following dates provided that the Participant is employed by the Company on the applicable date:

• If the Performance Milestone is achieved on or before December 31, 2013, then 160% of the Target Award Amount shall be deemed achieved and shares for such amount shall be issuable upon vesting as follows: 50% of the shares deemed achieved shall vest on the date that the Compensation Committee of the Board of Directors certifies as to the achievement of the Performance Milestone and 25% of such amount shall vest on each of the next two anniversaries of such date, provided the individual remains employed by the Company on such applicable date;

• If the Performance Milestone is achieved after December 31, 2013 and on or before December 31, 2014, then 100% of the Target Award Amount shall be deemed achieved and shares for such amount shall be issuable upon vesting as follows: 50% of the shares deemed achieved shall vest on the date that the Compensation Committee of the Board of Directors certifies as to the achievement of the Performance Milestone and 50% of such amount shall vest on the first anniversary of such date, provided the individual remains employed by the Company on such applicable date; or

• If the Performance Milestone is achieved after December 31, 2014 and on or before December 31, 2016, then 50% of the Target Award Amount shall be deemed achieved and 100% of the shares deemed achieved shall vest in full on the date that the Compensation Committee of the Board of Directors certifies the achievement of the Performance Milestone, provided the individual remains employed by the Company on such applicable date.

The Grant shall terminate in full on the date that a Participant is no longer employed by the Company. On the date that the Performance Milestone is deemed achieved, the Grant shall remain outstanding only as to the number of shares deemed achieved. In addition if the Performance Milestone has not been achieved by December 31, 2016, this Grant shall terminate in full at the close of business on such date and no longer be in force or effect.

The Grant is subject to all the terms, conditions and limitations set forth in the 2006 Plan, which is incorporated herein by reference, and to the following additional terms specified by the Board of Directors of the Company. Capitalized terms used herein and not otherwise defined shall have the meaning set forth in the 2006 Plan.

Legends. To the extent the Participant is an affiliate at the date of issuance of the Granted Shares, all certificates representing the Granted Shares to be issued to the Participant pursuant to this Performance Share Certificate shall contain a legend required by virtue of the fact that the Participant is an affiliate (as defined in Rule 144(a)(1) of the Securities Act of 1933, as amended) of the Company.

Tax Considerations. This award is intended to qualify as a “short-term deferral” exempt from Section 409A of the Internal Revenue Code of 1986, as amended. The Participant acknowledges and agrees that he/she is responsible for all federal, state and local taxes applicable to the Granted Shares and will by the date requested by the Company deposit with the Company an amount of cash equal to the amount determined by the Company to be required with respect to the statutory minimum withholding tax due.

If the Participant does not provide the Company with the required cash payment in a timely manner as set forth above, then the Company shall receive payment of the statutory minimum tax withholding as follows:

(a) if the Company believes that a sale of shares can be made in compliance with applicable securities laws including, but not limited to through entering into a Rule 10b5-1 trading plan at a time when the Participant is not in possession of material nonpublic information, then the Company shall receive payment in cash through a brokerage sale by the Participant of a sufficient number of the vested Granted Shares to cover the statutory minimum tax withholding obligation of the Company, after deduction of the broker’s commission, and which sale provides for remittance directly by the broker to the Company of the cash necessary in order for the Company to satisfy its statutory minimum tax withholding obligation; or

(b) if the Participant cannot sell any Granted Shares in accordance with (a) above, then the Company shall reduce the number of vested Granted Shares actually issued to the Participant in an amount equal to the statutory minimum withholding tax due and payable by the Company using the Fair Market Value as set forth in Section 10.7(b) of the Plan. Fractional shares will not be retained to satisfy any portion of the withholding tax. Accordingly, the Participant agrees that in the event that the amount of withholding owed would result in a fraction of a share being owed, that amount will be satisfied by withholding the fractional amount from the Participant’s bi-weekly pay.

In witness whereof, the Company has caused this Performance Share Certificate to be executed by its duly authorized officer.

ARIAD PHARMACEUTICALS, INC.
By:
	Edward M. Fitzgerald
	Executive Vice President
	Chief Financial Officer

* Deemed to have been paid by services rendered to the Company

EX-31.1

Exhibit 31.1

CERTIFICATIONS

Chief Executive Officer

I, Harvey J. Berger, M.D., certify that:

1. I have reviewed this quarterly report of ARIAD Pharmaceuticals, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	By:	/s/ Harvey J. Berger, M.D.
		Harvey J. Berger, M.D.
Date: May 9, 2012		Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

Chief Financial Officer

I, Edward M. Fitzgerald, certify that:

1. I have reviewed this quarterly report of ARIAD Pharmaceuticals, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	By:	/s/ Edward M. Fitzgerald
		Edward M. Fitzgerald
		Executive Vice President,
		Chief Financial Officer
Date: May 9, 2012		(Principal financial officer and chief accounting officer)

EX-32.1

Exhibit 32.1

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of ARIAD Pharmaceuticals, Inc., a Delaware corporation (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for the period ended March 31, 2012 (the “Form 10-Q”) of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 9, 2012	/s/ Harvey J. Berger, M.D
	Harvey J. Berger, M.D.
	Chairman and Chief Executive Officer
Date: May 9, 2012	/s/ Edward M. Fitzgerald
	Edward M. Fitzgerald
	Executive Vice President,
	Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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Changes in Fair Value of Warrant Liability (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Derivatives, Fair Value [Line Items]
Revaluation of warrant liability	$ (15,924)	$ (18,572)
Warrant
Derivatives, Fair Value [Line Items]
Balance at beginning of period	58,639	28,815
Exercise of warrants	(74,563)	(14,863)
Revaluation of warrant liability	15,924	18,572
Balance at end of period		$ 32,524

XML

Future Scheduled Principal Payments Due under Financing Obligations (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Bank Term Loan
Future scheduled principal payments under bank term loan due 2012	$ 1,050
Future scheduled principal payments under bank term loan due 2013	2,100
Future scheduled principal payments under bank term loan due 2014	4,200
Future scheduled principal payments under bank term loan due 2015	4,900
Bank term loan	12,250	12,600
Less current portion	(1,575)
Bank term loan, long-term portion	10,675
Capital Lease Obligations
Future scheduled principal payments under capital lease due 2012	39
Future scheduled principal payments under capital lease due 2013	15
Future scheduled principal payments under capital lease due 2014
Future scheduled principal payments under capital lease due 2015
Capital lease obligations	54
Less current portion	(51)
Capital leases obligations, long-term portion	$ 3

XML

Marketable Securities - Additional Information (Detail) (USD $)	Mar. 31, 2012
Available For Sale Securities [Line Items]
Aggregate fair value of marketable securities	$ 89,532,000
Amortized cost of marketable securities	89,547,000
Gross unrealized gains	10,000
Gross unrealized losses	$ 25,000

XML

Stock Option Activity (Detail) (USD $)	3 Months Ended
	Mar. 31, 2012
Number of Shares
Options outstanding, January 1, 2012	7,381,329
Granted	1,531,750
Forfeited	(12,063)
Exercised	(775,107)
Options outstanding, March 31, 2012	8,125,909
Weighted Average Exercise Price Per Share
Options outstanding, January 1, 2012	$ 5.22
Granted	$ 14.90
Forfeited	$ 2.89
Exercised	$ 4.23
Options outstanding, March 31, 2012	$ 7.14

XML

Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011 Warrant	Mar. 31, 2012 Fair Value, Measurements, Recurring	Dec. 31, 2011 Fair Value, Measurements, Recurring Warrant	Mar. 31, 2012 Level 2 Fair Value, Measurements, Recurring	Dec. 31, 2011 Level 2 Fair Value, Measurements, Recurring Warrant
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Marketable securities		$ 89,532		$ 89,532
Warrant liability	$ 58,639		$ 58,639		$ 58,639

XML

Property and Equipment, Net

3 Months Ended

Mar. 31, 2012

Property and Equipment, Net

3. Property and Equipment, Net

Property and equipment, net, was comprised of the following at March 31, 2012 and December 31, 2011:

In thousands	March 31, 2012			December 31, 2011
Leasehold improvements	$	22,259		$	22,252
Construction in progress		770			699
Equipment and furniture		17,696			17,032
		40,725			39,983
Less accumulated depreciation and amortization		(34,026	)		(33,372	)
	$	6,699		$	6,611

Depreciation and amortization expense for the three-month periods ended March 31, 2012 and 2011 amounted to $654,000 and $766,000, respectively.

The Company leases certain assets under capital leases having terms up to four years. Assets under capital leases included in property and equipment were as follows at March 31, 2012 and December 31, 2011:

In thousands	March 31, 2012			December 31, 2011
Equipment and furniture	$	392		$	392
Less accumulated depreciation and amortization		(278	)		(257	)
	$	114		$	135

XML

Stock and Stock Unit Activity (Detail) (Stock and stock units, USD $)	3 Months Ended
	Mar. 31, 2012
Stock and stock units
Number of Shares
Outstanding, January 1, 2012	2,785,026
Granted	901,677
Forfeited	(6,800)
Vested or restrictions lapsed	(1,420,406)
Outstanding, March 31, 2012	2,259,497
Weighted Average Grant Date Fair Value
Outstanding, January 1, 2012	$ 4.51
Granted	$ 15.00
Forfeited	$ 4.13
Vested or restrictions lapsed	$ 3.73
Outstanding, March 31, 2012	$ 9.19

XML

Intangible and Other Assets, Net (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 12,040	$ 12,700
Less accumulated amortization	(6,476)	(6,957)
Intangible assets, net	5,564	5,743
Other assets	63	42
Intangible and other assets	5,627	5,785
Capitalized patent and license costs
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	6,139	6,799
Purchased technology
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 5,901	$ 5,901

XML

Assets under Capital Leases Included in Property and Equipment (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Capital Leased Assets [Line Items]
Equipment and furniture	$ 17,696	$ 17,032
Less accumulated depreciation and amortization	(34,026)	(33,372)
Property and equipment, net	6,699	6,611
Assets under capital lease
Capital Leased Assets [Line Items]
Equipment and furniture	392	392
Less accumulated depreciation and amortization	(278)	(257)
Property and equipment, net	$ 114	$ 135

XML

Potentially Dilutive Securities Excluded in Computation of Net Loss Per Share (Detail) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	10,385	15,316
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	8,126	6,884
Restricted stock and restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	2,259	2,394
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share		6,038

XML

Intangible and Other Assets, Net - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2012 Year	Mar. 31, 2011 Year
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible assets, amortization expense	$ 169,000	$ 214,000
Finite lived intangible assets, Weighted average amortization period	14.3	14.8

XML

Long-term Debt and Capital Lease Obligations (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Debt Instrument [Line Items]
Bank term loan	$ 12,250	$ 12,600
Capital lease obligations	54	69
Debt and Capital Lease Obligations, Total	12,304	12,669
Less current portion	(1,626)	(1,454)
Long-term debt and capital lease obligations	$ 10,678	$ 11,215

XML

Marketable Securities

3 Months Ended

Mar. 31, 2012

Marketable Securities

2. Marketable Securities

The Company has classified its marketable securities as available-for-sale and, accordingly, carries such securities at fair value. At March 31, 2012, all of the Company’s marketable securities consisted of United States government or agency securities.

At March 31, 2012, the aggregate fair value and amortized cost of the Company’s marketable securities were $89,532,000 and 89,547,000, respectively. Gross unrealized gains and losses were $10,000 and $25,000, respectively, at March 31, 2012.

At December 31, 2011, the Company had no marketable securities.

XML

Long-term Debt and Capital Lease Obligations - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012
Bank term loan
Debt Instrument [Line Items]
Bank term loan, frequency of payments of principal and interest	The term loan provides for quarterly payments of principal and interest with final scheduled maturity on December 31, 2015.
Bank term loan, maturity date	Dec. 31, 2015
Debt instrument, effective interest rate	1.76%
Bank term loan | Minimum
Debt Instrument [Line Items]
Bank term loan, interest rate over and above LIBOR	1.25%
Bank term loan, required minimum in unrestricted cash, cash equivalents and investments	15.0
Bank term loan | Maximum
Debt Instrument [Line Items]
Bank term loan, interest rate over and above LIBOR	2.25%
Capital lease obligations | Minimum
Debt Instrument [Line Items]
Debt instrument, effective interest rate	5.60%
Capital lease obligations | Maximum
Debt Instrument [Line Items]
Debt instrument, effective interest rate	7.20%
Capital lease, terms	4 years

XML

Total Compensation Cost from Share-Based Payments (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation cost	$ 4,913	$ 2,404
Research and development expenses
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation cost	2,516	1,158
General and administrative expenses
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation cost	2,397	1,246
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation cost	2,889	889
Stock and stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation cost	1,975	1,461
Purchases of common stock at a discount
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation cost	$ 49	$ 54

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 198,222	$ 306,256
Marketable securities	89,532
Other current assets	3,085	1,311
Total current assets	290,839	307,567
Restricted cash	749	749
Property and equipment, net	6,699	6,611
Intangible and other assets, net	5,627	5,785
Total assets	303,914	320,712
Current liabilities:
Accounts payable	6,722	5,728
Current portion of long-term debt and capital lease obligations	1,626	1,454
Accrued compensation and benefits	3,858	1,209
Accrued product development expenses	10,961	11,948
Other accrued expenses	4,704	3,634
Current portion of deferred executive compensation	963	1,032
Current portion of deferred revenue	231	231
Other current liabilities	136	136
Total current liabilities	29,201	25,372
Long-term debt and capital lease obligations	10,678	11,215
Deferred executive compensation	3,527	2,723
Deferred revenue	711	768
Other long-term liabilities	2,532	1,854
Warrant liability		58,639
Stockholders' equity:
Preferred stock, $.01 par value; authorized 10,000,000 shares, none issued and outstanding
Common stock, $.001 par value; authorized, 240,000,000 shares in 2012 and 2011; issued and outstanding, 165,474,108 shares in 2012 and 157,608,702 shares in 2011	165	158
Additional paid-in capital	869,972	776,946
Accumulated other comprehensive loss	(15)
Accumulated deficit	(612,857)	(556,963)
Total stockholders' equity	257,265	220,141
Total liabilities and stockholders' equity	$ 303,914	$ 320,712

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Cash flows from operating activities:
Net loss	$ (55,894)	$ (37,949)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,015	946
Amortization of premium on marketable securities	7
Stock-based compensation	4,913	2,404
Deferred executive compensation expense	633	380
Revaluation of warrant liability	15,924	18,572
Increase (decrease) from:
Other current assets	(1,773)	(594)
Other assets	(22)	2
Accounts payable	616	(63)
Accrued compensation and benefits	2,649	(319)
Accrued product development expenses	(988)	(1,134)
Other accrued expenses	1,601	486
Other current liabilities	712
Deferred revenue	(57)
Deferred executive compensation paid	103
Net cash used in operating activities	(30,561)	(17,269)
Cash flows from investing activities:
Acquisitions of marketable securities	(89,554)
Investment in property and equipment	(916)	(423)
Investment in intangible assets	(195)	(241)
Net cash used in investing activities	(90,665)	(664)
Cash flows from financing activities:
Proceeds from long-term borrowings		4,375
Repayment of long-term borrowings	(350)	(350)
Principal payments under capital lease obligation	(15)	(24)
Proceeds from issuance of common stock pursuant to warrants	12,482	7,580
Payment of tax withholding obligations related to stock compensation	(2,302)	(324)
Proceeds from issuance of common stock pursuant to stock option and purchase plans	3,377	1,402
Net cash provided by financing activities	13,192	12,659
Net decrease in cash and cash equivalents	(108,034)	(5,274)
Cash and cash equivalents, beginning of period	306,256	103,630
Cash and cash equivalents, end of period	198,222	98,356
Supplemental disclosure:
Non-cash transaction - investment in property and equipment included in accounts payable or accruals	$ 758

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Stockholders' Equity and Warrants - Additional Information (Detail) (USD $)	1 Months Ended		3 Months Ended		12 Months Ended		1 Months Ended
	Dec. 20, 2011	Feb. 25, 2009	Mar. 31, 2012	Mar. 31, 2011	Dec. 31, 2011	Dec. 31, 2010	Dec. 20, 2011 Common Stock	Feb. 25, 2009 Common Stock	Jan. 11, 2010 Maximum
Stockholders Equity Note [Line Items]
Common stock, authorized			240,000,000		240,000,000
Shares of common stock sold							24,725,000	14,378,698
Common stock purchase price	$ 10.42	$ 1.69
Net proceed from sale of common stock	$ 243,100,000	$ 22,800,000
Warrants issued		10,784,024
Exercise price of warrants		2.15
Warrants exercised			5,805,843		3,757,767	1,220,414
Proceeds from warrants exercised			12,482,000	7,580,000	8,100,000	2,600,000
Adjustment of additional paid-up capital up on exercise of warrants			87,000,000
Shelf registration statement, total value									125,000,000
Shelf registration statement, remaining value			$ 65,800,000

XML

Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2012

Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table presents information about the Company’s assets and liabilities as of March 31, 2012 and December 31, 2011 that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value:

	March 31, 2012
In thousands	Total		Level 1		Level 2		Level 3
Marketable securities	$	89,532	$	—	$	89,532	$	—

	December 31, 2011
In thousands	Total		Level 1		Level 2		Level 3
Warrant liability	$	58,639	$	—	$	58,639	$	—

Changes in Fair Value of Warrant Liability

The changes in the fair value of the warrant liability for the three-month periods ended March 31, 2012 and 2011 were as follows:

In thousands	Three Months Ended March 31,
	2012			2011
Balance at beginning of period	$	58,639		$	28,815
Exercise of warrants		(74,563	)		(14,863	)
Revaluation of warrant liability		15,924			18,572
Balance at end of period	$	—		$	32,524

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Changes in Stockholders' Equity (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		12 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Dec. 31, 2011	Dec. 31, 2010
Stockholders Equity Note [Line Items]
Balance, January 1, 2012	$ 220,141
Issuance of common stock pursuant to warrant exercises (in shares)	5,805,843		3,757,767	1,220,414
Issuance of common stock pursuant to warrant exercises	87,045
Issuance of common stock pursuant to ARIAD stock plans	3,377
Stock-based compensation	4,913
Payment of tax withholding obligations related to stock-based compensation	(2,302)
Net unrealized losses on marketable securities	(15)
Net loss	(55,894)	(37,949)
Balance, March 31, 2012	257,265		220,141
Common Stock
Stockholders Equity Note [Line Items]
Balance, January 1, 2012 (in shares)	157,608,702
Balance, January 1, 2012	158
Issuance of common stock pursuant to warrant exercises (in shares)	5,805,843
Issuance of common stock pursuant to warrant exercises	5
Issuance of common stock pursuant to ARIAD stock plans (in shares)	2,059,563
Issuance of common stock pursuant to ARIAD stock plans	2
Balance, March 31, 2012 (in shares)	165,474,108
Balance, March 31, 2012	165
Additional Paid-in Capital
Stockholders Equity Note [Line Items]
Balance, January 1, 2012	776,946
Issuance of common stock pursuant to warrant exercises	87,040
Issuance of common stock pursuant to ARIAD stock plans	3,375
Stock-based compensation	4,913
Payment of tax withholding obligations related to stock-based compensation	(2,302)
Balance, March 31, 2012	869,972
Accumulated Other Comprehensive Loss
Stockholders Equity Note [Line Items]
Net unrealized losses on marketable securities	(15)
Balance, March 31, 2012	(15)
Accumulated Deficit
Stockholders Equity Note [Line Items]
Balance, January 1, 2012	(556,963)
Net loss	(55,894)
Balance, March 31, 2012	$ (612,857)

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Net Loss Per Share (Tables)

3 Months Ended

Mar. 31, 2012

Potentially Dilutive Securities Excluded in Computation of Net Loss Per Share

For the three-month periods ended March 31, 2012 and 2011, the following potentially dilutive securities were not included in the computation of net loss per share because the effect would be anti-dilutive:

	Three Months Ended March  31,
In thousands	2012		2011
Outstanding stock options		8,126		6,884
Outstanding restricted stock and restricted stock units		2,259		2,394
Warrants to purchase common stock		—		6,038
		10,385		15,316

XML

Management Statement

3 Months Ended

Mar. 31, 2012

Management Statement

1. Management Statement

In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of items of a normal and recurring nature) necessary to present fairly the financial position as of March 31, 2012, and the results of operations and cash flows for the three-month periods ended March 31, 2012 and 2011. The results of operations for the three-month period ended March 31, 2012 are not necessarily indicative of the results to be expected for any other period or the full year. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, which includes consolidated financial statements and notes thereto for the years ended December 31, 2011, 2010 and 2009.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2012	Dec. 31, 2011
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, authorized	10,000,000	10,000,000
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized	240,000,000	240,000,000
Common stock, shares issued	165,474,108	157,608,702
Common stock, shares outstanding	165,474,108	157,608,702

XML

Recently Adopted or Issued Accounting Pronouncements

3 Months Ended

Mar. 31, 2012

Recently Adopted or Issued Accounting Pronouncements

11. Recently Adopted or Issued Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-05, Presentation of Comprehensive Income, which requires the presentation of other comprehensive income in either a continuous statement of comprehensive income or in two separate but consecutive statements. ASU No. 2011-05 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2011 and requires retrospective application. The Company adopted this ASU on January 1, 2012, and included a separate consolidated statement of comprehensive income (loss).

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2012	Apr. 30, 2012
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1
Trading Symbol	ARIA
Entity Registrant Name	ARIAD PHARMACEUTICALS INC
Entity Central Index Key	0000884731
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		165,728,859

XML

Property and Equipment, Net (Tables)

3 Months Ended

Mar. 31, 2012

Property and Equipment, Net

Property and equipment, net, was comprised of the following at March 31, 2012 and December 31, 2011:

In thousands	March 31, 2012			December 31, 2011
Leasehold improvements	$	22,259		$	22,252
Construction in progress		770			699
Equipment and furniture		17,696			17,032
		40,725			39,983
Less accumulated depreciation and amortization		(34,026	)		(33,372	)
	$	6,699		$	6,611

Assets under Capital Leases Included in Property and Equipment

Assets under capital leases included in property and equipment were as follows at March 31, 2012 and December 31, 2011:

In thousands	March 31, 2012			December 31, 2011
Equipment and furniture	$	392		$	392
Less accumulated depreciation and amortization		(278	)		(257	)
	$	114		$	135

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Revenue:
License revenue	$ 64
Service revenue	17	56
Total revenue	81	56
Operating expenses:
Research and development	28,774	14,574
General and administrative	11,288	4,854
Total operating expenses	40,062	19,428
Loss from operations	(39,981)	(19,372)
Other income (expense):
Interest income	68	55
Interest expense	(57)	(60)
Revaluation of warrant liability	(15,924)	(18,572)
Other income (expense), net	(15,913)	(18,577)
Net loss	$ (55,894)	$ (37,949)
Net loss per share - basic and diluted	$ (0.35)	$ (0.29)
Weighted-average number of shares of common stock outstanding - basic and diluted	160,970	128,998

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Executive Compensation Plan

3 Months Ended

Mar. 31, 2012

Executive Compensation Plan

6. Executive Compensation Plan

Under the Company’s deferred executive compensation plan, the Company accrues a liability for the value of the awards ratably over the vesting period. The grant-date value of awards made in March 2012 was $1.1 million. No awards were made in the first quarter of 2011. The net expense for this plan was $839,000 and $380,000 for the three-month periods ended March 31, 2012 and 2011, respectively.

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Long-term Debt and Capital Lease Obligations

3 Months Ended

Mar. 31, 2012

Long-term Debt and Capital Lease Obligations

5. Long-term Debt and Capital Lease Obligations

Long-term debt and capital lease obligations were comprised of the following at March 31, 2012 and December 31, 2011:

In thousands	March 31, 2012			December 31, 2011
Bank term loan	$	12,250		$	12,600
Capital lease obligations		54			69
		12,304			12,669
Less current portion		(1,626	)		(1,454	)
	$	10,678		$	11,215

The term loan provides for quarterly payments of principal and interest with final scheduled maturity on December 31, 2015. The loan bears interest at LIBOR plus 1.25 to 2.25 percent, depending on the percentage of the Company’s liquid assets on deposit with or invested through the bank, or at the prime rate. The effective interest rate on the loan was 1.76 percent at March 31, 2012. The loan is secured by a lien on all assets of the Company excluding intellectual property, which the Company has agreed not to pledge to any other party. The loan requires the Company to maintain a minimum of $15.0 million in unrestricted cash, cash equivalents and investments. The loan also contains certain covenants that restrict additional indebtedness, additional liens and sales of assets, and dividends, distributions or repurchases of common stock.

In addition, the Company leases certain equipment under capital leases with original terms of up to four years. These leases have effective interest rates ranging from 5.6 percent to 7.2 percent and are secured by the underlying leased assets.

The future scheduled principal payments due under these financing obligations were as follows at March 31, 2012:

In thousands	Bank Term Loan			Capital Lease Obligations
Year ended December 31:
2012	$	1,050		$	39
2013		2,100			15
2014		4,200			—
2015		4,900			—
		12,250			54
Less current portion		(1,575	)		(51	)
Long-term portion	$	10,675		$	3

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2012

Total Compensation Cost from Share-Based Payments

The Company’s statement of operations included total compensation cost from share-based payments for the three-month periods ended March 31, 2012 and 2011, as follows:

	Three Months Ended March  31,
In thousands	2012		2011
Compensation cost from:
Stock options	$	2,889	$	889
Stock and stock units		1,975		1,461
Purchases of common stock at a discount		49		54
	$	4,913	$	2,404
Compensation cost included in:
Research and development expenses	$	2,516	$	1,158
General and administrative expenses		2,397		1,246
	$	4,913	$	2,404

Stock Option Activity

Stock option activity under the Company’s stock plans for the year ended March 31, 2012 was as follows:

	Number of Shares			Weighted Average Exercise  Price Per Share
Options outstanding, January 1, 2012		7,381,329		$	5.22
Granted		1,531,750		$	14.90
Forfeited		(12,063	)	$	2.89
Exercised		(775,107	)	$	4.23
Options outstanding, March 31, 2012		8,125,909		$	7.14

Stock and stock units

Stock and Stock Unit Activity

Stock and stock unit activity under the Company’s stock plans for the year ended March 31, 2012 was as follows:

	Number of Shares			Weighted Average Grant  Date Fair Value
Outstanding, January 1, 2012		2,785,026		$	4.51
Granted		901,677		$	15.00
Forfeited		(6,800	)	$	4.13
Vested or restrictions lapsed		(1,420,406	)	$	3.73
Outstanding, March 31, 2012		2,259,497		$	9.19

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Intangible and Other Assets, Net (Tables)

3 Months Ended

Mar. 31, 2012

Intangible and Other Assets, Net

Intangible and other assets, net, were comprised of the following at March 31, 2012 and December 31, 2011:

In thousands	March 31, 2012			December 31, 2011
Capitalized patent and license costs	$	6,139		$	6,799
Purchased technology		5,901			5,901
		12,040			12,700
Less accumulated amortization		(6,476	)		(6,957	)
		5,564			5,743
Other assets		63			42
	$	5,627		$	5,785

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2012

Stock-Based Compensation

9. Stock-Based Compensation

The Company awards stock options and other equity-based instruments to its employees, directors and consultants and provides employees the right to purchase common stock (collectively “share-based payments”), pursuant to stockholder approved plans. The Company’s statement of operations included total compensation cost from share-based payments for the three-month periods ended March 31, 2012 and 2011, as follows:

	Three Months Ended March  31,
In thousands	2012		2011
Compensation cost from:
Stock options	$	2,889	$	889
Stock and stock units		1,975		1,461
Purchases of common stock at a discount		49		54
	$	4,913	$	2,404
Compensation cost included in:
Research and development expenses	$	2,516	$	1,158
General and administrative expenses		2,397		1,246
	$	4,913	$	2,404

Stock Options

Stock options are granted with an exercise price equal to the closing market price of the Company’s common stock on the date of grant. Stock options generally vest ratably over four years and have contractual terms of ten years. Stock options are valued using the Black-Scholes option valuation model and compensation cost is recognized based on such fair value over the period of vesting on a straight-line basis.

Stock option activity under the Company’s stock plans for the year ended March 31, 2012 was as follows:

	Number of Shares			Weighted Average Exercise  Price Per Share
Options outstanding, January 1, 2012		7,381,329		$	5.22
Granted		1,531,750		$	14.90
Forfeited		(12,063	)	$	2.89
Exercised		(775,107	)	$	4.23
Options outstanding, March 31, 2012		8,125,909		$	7.14

Stock and Stock Unit Grants

Stock and stock unit grants are provided to non-employee directors as compensation and generally carry no restrictions as to resale or are fully vested upon grant. Stock and stock unit grants to officers carry restrictions as to resale for periods of time or vesting provisions over time as specified in the grant. Stock and stock unit grants are valued at the closing market price of the Company’s common stock on the date of grant and compensation expense is recognized over the requisite service period, vesting period or period during which restrictions remain on the common stock or stock units granted.

Stock and stock unit activity under the Company’s stock plans for the year ended March 31, 2012 was as follows:

	Number of Shares			Weighted Average Grant  Date Fair Value
Outstanding, January 1, 2012		2,785,026		$	4.51
Granted		901,677		$	15.00
Forfeited		(6,800	)	$	4.13
Vested or restrictions lapsed		(1,420,406	)	$	3.73
Outstanding, March 31, 2012		2,259,497		$	9.19

Included in stock and stock units outstanding in the above table are 392,500 performance share units, awarded in March 2011, that will vest upon regulatory approval of ponatinib by the U.S. Food and Drug Administration on or before December 31, 2016 and 352,000 performance share units, awarded in March 2012, that will vest upon regulatory approval of ponatinib by the European Medicines Agency on or before December 31, 2016. The number of shares that may vest, if any, related to the March 2012 awards is dependent on the timing of approval. The compensation costs for such performance-based stock awards will be based on the awards that ultimately vest and the grant date fair value of those awards. Compensation expense related to these performance share units will begin to be recognized when achievement of the performance condition is probable. The unrecognized stock compensation expense associated with the maximum number of shares that may be issued upon achievement of the performance conditions was $11.5 million at March 31, 2012.

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Stockholders' Equity and Warrants

3 Months Ended

Mar. 31, 2012

Stockholders' Equity and Warrants

7. Stockholders’ Equity and Warrants

Authorized Common Stock

At March 31, 2012, the Company had 240,000,000 shares of common stock authorized.

Financings

On February 25, 2009, the Company sold 14,378,698 shares of its common stock in a registered direct offering to institutional investors, at a purchase price of $1.69 per share, resulting in net proceeds after fees and expenses of $22.8 million. The investors also received warrants to purchase an additional 10,784,024 shares of the Company’s common stock exercisable at a price of $2.15 per share in cash or pursuant to the net exercise provisions of the warrants. The warrants became exercisable on August 25, 2009 and were scheduled to expire if not exercised on February 25, 2012. During the year ended December 31, 2010, 1,220,414 warrants were exercised for proceeds to the Company of $2.6 million. During the year ended December 31, 2011, a total of 3,757,767 warrants were exercised by the holders for proceeds to the Company of approximately $8.1 million. In the first quarter of 2012, the remaining 5,805,843 warrants were exercised by the holders for proceeds to the Company of approximately $12.5 million. Prior to exercise, the warrants were recorded at fair value, with the adjustment to carrying value recognized in earnings. Upon exercise, the sum of the fair value of the exercised warrants and the proceeds received were credited to additional paid-in-capital and totaled $87.0 million in the first quarter of 2012. Upon the exercise of these remaining warrants, the balance of the warrant liability was credited to stockholders’ equity and the liability was eliminated.

On December 20, 2011, the Company sold 24,725,000 shares of its common stock in an underwritten public offering at a purchase price of $10.42 per share. Net proceeds of this offering, after underwriting discounts and commissions and expenses, were approximately $243.1 million.

On January 11, 2010, the Company filed a shelf registration statement with the U.S. Securities and Exchange Commission (“SEC”) for the issuance of common stock, preferred stock, various series of debt securities and/or warrants or rights to purchase any of such securities, either individually or in units, with a total value of up to $125 million, from time to time at prices and on terms to be determined at the time of any such offering. This filing was declared effective on January 21, 2010. The Company has approximately $65.8 million of securities remaining available under this shelf registration statement.

On December 14, 2011, the Company filed a shelf registration statement with the SEC for the issuance of an unspecified amount of common stock, preferred stock, various series of debt securities and/or warrants to purchase any of such securities, either individually or in units, from time to time at prices and on terms to be determined at the time of any such offering. This filing was effective upon filing and will remain in effect for up to three years from filing.

Changes in Stockholders’ Equity

The changes in stockholders’ equity for the three-month period ended March 31, 2012 were as follows:

	Common Stock				Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total
$ in thousands	Shares		Amount
Balance, January 1, 2012		157,608,702	$	158	$	776,946		$	—		$	(556,963	)	$	220,141
Issuance of common stock pursuant to warrant exercises		5,805,843		5		87,040									87,045
Issuance of common stock pursuant to ARIAD stock plans		2,059,563		2		3,375									3,377
Stock-based compensation						4,913									4,913
Payment of tax withholding obligations related to stock-based compensation						(2,302	)								(2,302	)
Net unrealized losses on marketable securities									(15	)					(15	)
Net loss												(55,894	)		(55,894	)
Balance, March 31, 2012		165,474,108	$	165	$	869,972		$	(15	)	$	(612,857	)	$	257,265

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2012

Fair Value of Financial Instruments

8. Fair Value of Financial Instruments

The Company provides disclosure of financial assets and financial liabilities that are carried at fair value based on the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements may be classified based on the amount of subjectivity associated with the inputs to the fair valuation of these assets and liabilities using the following three levels:

Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2—Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.) and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

Level 3—Unobservable inputs that reflect the Company’s estimates of the assumptions that market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available, including its own data.

The following table presents information about the Company’s assets and liabilities as of March 31, 2012 and December 31, 2011 that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value:

	March 31, 2012
In thousands	Total		Level 1		Level 2		Level 3
Marketable securities	$	89,532	$	—	$	89,532	$	—

	December 31, 2011
In thousands	Total		Level 1		Level 2		Level 3
Warrant liability	$	58,639	$	—	$	58,639	$	—

The Company’s marketable securities are carried at fair value. Marketable securities are classified as Level 2 in the fair value hierarchy as they are traded in a dealer market where the price at which the dealer is willing to pay or to sell is more readily available than closing prices. Therefore, their fair value is based on observable inputs other than quoted prices included within Level 1.

The Company’s warrant liability was carried at fair value and, at December 31, 2011, was classified as Level 2 in the fair value hierarchy as the unobservable inputs did not have a significant impact on the valuation of the warrant liability. This classification as Level 2 reflects that the warrants’ exercise price was significantly lower than the market price of the underlying common stock on the reporting date. The fair value of the warrants on December 31, 2011 was determined to be $58.6 million using the Black-Scholes option valuation model applying the following assumptions: (i) the market price of the Company’s common stock of $12.25 on that date, (ii) a risk-free rate of 0.015%, (iii) an expected term of 0.2 years, (iv) no dividend yield, and (v) a volatility of 59.9%. As of March 31, 2012, all warrants have been exercised and the fair value of the warrants on the exercise date plus the proceeds from exercise were recorded in equity. The changes in the fair value of the warrant liability for the three-month periods ended March 31, 2012 and 2011 were as follows:

In thousands	Three Months Ended March 31,
	2012			2011
Balance at beginning of period	$	58,639		$	28,815
Exercise of warrants		(74,563	)		(14,863	)
Revaluation of warrant liability		15,924			18,572
Balance at end of period	$	—		$	32,524

The carrying amounts of cash equivalents, accounts payable and accrued liabilities approximate fair value because of their short-term nature. The carrying amount of the Company’s bank term loan approximates fair value due to its variable interest rate and other terms. The Company’s obligation under its executive compensation plan is based in part on the current fair market value of specified mutual funds, which is therefore stated at its estimated fair value. The carrying amounts of cash equivalents, accounts payable, accrued liabilities, bank term loan liability and executive compensation liability are classified as Level 2 in the fair value hierarchy.

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Net Loss Per Share

3 Months Ended

Mar. 31, 2012

Net Loss Per Share

10. Net Loss Per Share

Net loss per share amounts have been computed based on the weighted-average number of common shares outstanding during each period. Because of the net loss reported in each period, diluted and basic net loss per share amounts are the same. For the three-month periods ended March 31, 2012 and 2011, the following potentially dilutive securities were not included in the computation of net loss per share because the effect would be anti-dilutive:

	Three Months Ended March  31,
In thousands	2012		2011
Outstanding stock options		8,126		6,884
Outstanding restricted stock and restricted stock units		2,259		2,394
Warrants to purchase common stock		—		6,038
		10,385		15,316

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Executive Compensation Plan - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Executive Compensation Plan Expense [Line Items]
Deferred executive compensation plan, grant date value of awards	$ 1,100,000
Deferred executive compensation plan, net expense	$ 839,000	$ 380,000

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Stockholders' Equity and Warrants (Tables)

3 Months Ended

Mar. 31, 2012

Changes in Stockholders' Equity

The changes in stockholders’ equity for the three-month period ended March 31, 2012 were as follows:

	Common Stock				Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total
$ in thousands	Shares		Amount
Balance, January 1, 2012		157,608,702	$	158	$	776,946		$	—		$	(556,963	)	$	220,141
Issuance of common stock pursuant to warrant exercises		5,805,843		5		87,040									87,045
Issuance of common stock pursuant to ARIAD stock plans		2,059,563		2		3,375									3,377
Stock-based compensation						4,913									4,913
Payment of tax withholding obligations related to stock-based compensation						(2,302	)								(2,302	)
Net unrealized losses on marketable securities									(15	)					(15	)
Net loss												(55,894	)		(55,894	)
Balance, March 31, 2012		165,474,108	$	165	$	869,972		$	(15	)	$	(612,857	)	$	257,265

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Property and Equipment, Net (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Property, Plant and Equipment [Line Items]
Leasehold improvements	$ 22,259	$ 22,252
Construction in progress	770	699
Equipment and furniture	17,696	17,032
Property, Plant and Equipment, Gross, Total	40,725	39,983
Less accumulated depreciation and amortization	(34,026)	(33,372)
Property and equipment, net	$ 6,699	$ 6,611

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Stock Based Compensation - Additional Information (Detail) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options vesting period	4 years
Stock options remaining contractual term	10
Performance share units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of performance share units	352,000	392,500
Unrecognized stock compensation expense	11.5
Performance share units | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance share units vesting date	Dec. 31, 2016	Dec. 31, 2016

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Net loss	$ (55,894)	$ (37,949)
Other comprehensive loss:
Net unrealized losses on marketable securities	(15)
Other comprehensive loss	(15)
Comprehensive loss	$ (55,909)	$ (37,949)

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Intangible and Other Assets, Net

3 Months Ended

Mar. 31, 2012

Intangible and Other Assets, Net

4. Intangible and Other Assets, Net

Intangible and other assets, net, were comprised of the following at March 31, 2012 and December 31, 2011:

In thousands	March 31, 2012			December 31, 2011
Capitalized patent and license costs	$	6,139		$	6,799
Purchased technology		5,901			5,901
		12,040			12,700
Less accumulated amortization		(6,476	)		(6,957	)
		5,564			5,743
Other assets		63			42
	$	5,627		$	5,785

Amortization expense for intangible assets amounted to $169,000 and $214,000 for the three-month periods ended March 31, 2012 and 2011, respectively. The weighted average amortization period for intangible assets was 14.3 years in 2012 and 14.8 years in 2011.

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Property and Equipment, Net - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Property, Plant and Equipment [Line Items]
Depreciation and amortization expense	$ 654,000	$ 766,000
Assets under capital lease
Property, Plant and Equipment [Line Items]
Capital lease, terms	4 years

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Fair Value of Financial Instruments - Additional Information (Detail) (Warrant, USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011
Warrant
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of warrant liability	$ 58,639
Market price of common stock	$ 12.25
Risk-free rate	0.015%
Warrants expected term	73 days
Dividend yield	0.00%
Volatility rate	59.90%

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Long-term Debt and Capital Lease Obligations (Tables)

3 Months Ended

Mar. 31, 2012

Long-term Debt and Capital Lease Obligations

Long-term debt and capital lease obligations were comprised of the following at March 31, 2012 and December 31, 2011:

In thousands	March 31, 2012			December 31, 2011
Bank term loan	$	12,250		$	12,600
Capital lease obligations		54			69
		12,304			12,669
Less current portion		(1,626	)		(1,454	)
	$	10,678		$	11,215

Future Scheduled Principal Payments Due under Financing Obligations

The future scheduled principal payments due under these financing obligations were as follows at March 31, 2012:

In thousands	Bank Term Loan			Capital Lease Obligations
Year ended December 31:
2012	$	1,050		$	39
2013		2,100			15
2014		4,200			—
2015		4,900			—
		12,250			54
Less current portion		(1,575	)		(51	)
Long-term portion	$	10,675		$	3