Cubist Pharmaceuticals Reports First $100 Million Revenue Quarter; Q2 2008 Total Revenues $101.8 Million; Total Net Product Revenues $101.4 Million

Net income for the second quarter ended June 30, 2008 on a GAAP basis, reflecting one-time expenses, was $1.6 million, or $0.03 per basic and diluted share, as compared to $14.5 million, or $0.26 and $0.24 per basic and diluted share, respectively, for the second quarter of 2007. Second quarter 2008 GAAP net income includes $17.5 million of upfront and milestone expenses, or $0.30 and $0.25 per basic and diluted share net of tax, respectively, related to the in-licensing from Dyax Corporation of ecallantide for surgical indications. Second quarter 2008 GAAP net income also includes $3.0 million, or $0.05 and $0.04 per basic and diluted share net of tax, respectively, in stock-based compensation expenses.

Non-GAAP net income for the second quarter ended June 30, 2008, excluding the Dyax-related expenses and stock-based compensation expenses described above, was $21.5 million, or $0.38 and $0.35 per basic and diluted share, respectively.

As of June 30, 2008, Cubist had $358.3 million in cash, cash equivalents and investments. The total number of common shares outstanding at June 30, 2008 was 56,446,823.

Use of Non-GAAP Financial Measures

Cubist uses non-GAAP net income (loss) and non-GAAP net income (loss) per share data to improve its analysis of operational results and trends. Cubist's management also uses these non-GAAP figures to make financial and operational decisions as these numbers exclude non-operational activities and because management believes these measures are useful to investors because they provide greater transparency regarding Cubist's operating performance. These measures should not be considered an alternative to measurements required by GAAP, such as net income (loss) and net income (loss) per share, and should not be considered measures of our liquidity. In addition, these non-GAAP measures are unlikely to be comparable with non-GAAP information provided by other companies. A reconciliation between non-GAAP financial measures and GAAP financial measures are included in the tables accompanying this press release after the unaudited condensed consolidated financial statements.

CONFERENCE CALL & WEBCAST INFORMATION Cubist will host a conference call and live audio webcast to discuss its second quarter 2008 financial results, business activities and financial outlook. WHEN: Thursday, July 17, 2008 at 5:00 p.m. EDT LIVE DOMESTIC & CANADA CALL-IN: 877-407-0782 LIVE INTERNATIONAL CALL-IN: 201-689-8567 24-HOUR REPLAY DOMESTIC & CANADA: 877-660-6853 24-HOUR REPLAY INTERNATIONAL: 201-612-7415 REPLAY PASSCODES (BOTH REQUIRED FOR PLAYBACK): ACCOUNT #: 286 CONFERENCE ID #: 262759 CALL WILL ALSO BE BROADCAST LIVE, LISTEN ONLY, VIA THE WEB AT: www.cubist.com Replay will be available for 30 days at www.cubist.com

About Cubist

Cubist Pharmaceuticals, Inc. is a biopharmaceutical company focused on the research, development, and commercialization of pharmaceutical products that address unmet medical needs in the acute care environment. Cubist developed and commercialized CUBICIN(R) (daptomycin for injection), a Gram-positive first-in-class lipopeptide antibiotic. In the U.S., Cubist also promotes MERREM(R) I.V. (meropenem for injection), Astra Zeneca's established broad spectrum (carbapenem class) I.V. antibiotic. The Cubist product pipeline includes ecallantide, a recombinant human protein in Phase 2 clinical trials for the prevention of blood loss during cardiothoracic surgery, and pre-clinical programs that address unmet medical needs in Gram-positive infections, Gram-negative infections, CDAD (Clostridium difficile-associated diarrhea), and HCV (Hepatitis C infections). Cubist is headquartered in Lexington, MA. Additional information can be found at Cubist's web site at www.cubist.com. Cubist and CUBICIN are registered trademarks of Cubist Pharmaceuticals, Inc.

CUBIST PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS UNAUDITED (in thousands) June 30, December 31, 2008 2007 ----------- ------------ ASSETS Cash, cash equivalents and investments $ 358,329 $ 398,184 Accounts receivable, net 38,883 29,075 Inventory 16,999 18,733 Property and equipment, net 59,867 50,150 Other assets 37,256 38,373 ----------- ------------ Total assets $ 511,334 $ 534,515 =========== ============ LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable and accrued expenses $ 71,257 $ 65,299 Deferred revenue 18,348 17,816 Debt, capital lease obligations and other long-term liabilities 303,764 352,698 ----------- ------------ Total liabilities 393,369 435,813 ----------- ------------ Total stockholders' equity 117,965 98,702 ----------- ------------ Total liabilities and stockholders' equity $ 511,334 $ 534,515 =========== ============

CUBIST PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED (in thousands, except share and per share data) Three months ended Six months ended June 30, June 30, ------------------------ ----------------------- 2008 2007 2008 2007 ------------ ----------- ----------- ----------- Revenues: U.S. product revenues, net $ 99,366 $ 68,294 $ 185,424 $ 125,819 International product revenues 2,003 1,231 3,807 3,141 Other revenues 397 239 820 283 ------------ ----------- ----------- ----------- Total revenues, net $ 101,766 $ 69,764 $ 190,051 $ 129,243 Costs and expenses: Cost of product revenues 22,050 15,834 42,050 32,572 Research and development 45,193 17,145 67,557 33,015 Sales and marketing 22,187 15,993 42,170 30,987 General and administrative 10,521 7,787 21,954 15,507 ------------ ----------- ----------- ----------- Total costs and expenses 99,951 56,759 173,731 112,081 Operating income 1,815 13,005 16,320 17,162 ------------ ----------- ----------- ----------- Other income (expense), net (23) 2,007 3,304 3,617 ------------ ----------- ----------- ----------- Income before income taxes 1,792 15,012 19,624 20,779 Provision for income taxes 160 522 766 688 ------------ ----------- ----------- ----------- Net income $ 1,632 $ 14,490 $ 18,858 $ 20,091 ============ =========== =========== =========== Basic net income per common share $ 0.03 $ 0.26 $ 0.33 $ 0.36 Diluted net income per common share $ 0.03 $ 0.24(a) $ 0.31(b) $ 0.35 Shares used in calculating: Basic net income per share 56,391,804 55,406,882 56,306,256 55,263,940 Diluted net income per share 57,743,860 68,754,256 67,767,704 57,180,092 (a) Includes add back of interest expense and debt issuance costs related to 2.25% notes to income, net of tax effect (b) Includes add back of interest expense, debt issuance costs and gain on repurchase of 2.25% notes to income, net of tax effect

CUBIST PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP UNAUDITED (in thousands, except share and per share data) Three months ended Six months ended June 30, June 30, ------------------------- ------------------------- 2008 2007 2008 2007 ------------ ------------ ------------ ------------ GAAP net income $ 1,632 $ 14,490 $ 18,858 $ 20,091 Ecallantide licensing fees 17,500 - 17,500 Stock-based compensation expense under SFAS 123(R) 3,004 2,692 5,768 5,331 Write off of assets disposed of to build new lab space - - 2,323 - Income tax effect of Non-GAAP adjustments (574) (91) (717) (181) ------------ ------------ ------------ ------------ Non-GAAP proforma net income $ 21,562 $ 17,091 $ 43,732 $ 25,241 ============ ============ ============ ============ Non-GAAP basic net income per common share $ 0.38 $ 0.31 $ 0.78 $ 0.46 Non-GAAP diluted net income per common share $ 0.35(a) $ 0.28(a) $ 0.68(b) $ 0.43(a) Shares used in calculating: Non-GAAP basic net income per common share 56,391,804 55,406,882 56,306,256 55,263,940 Non-GAAP diluted net income per common share 67,493,290 68,754,256 67,767,704 68,554,427 (a) Includes add back of interest expense and debt issuance costs related to 2.25% notes to income, net of tax effect (b) Includes add back of interest expense, debt issuance costs and gain on repurchase of 2.25% notes to income, net of tax effect

SOURCE: Cubist Pharmaceuticals, Inc.

Cubist Pharmaceuticals, Inc. Eileen C. McIntyre, 781-860-8533 Senior Director, Corporate Communications eileen.mcintyre@cubist.com or Fleishman-Hillard, Inc. Jonathan R. Potter, 212-453-2406 potterj@fleishman.com