ARIAD Pharmaceuticals announced that its Board of Directors has approved a transaction to merge ARIAD Gene Therapeutics, an 80 percent-owned subsidiary of ARIAD, with and into ARIAD. The transaction was approved by the unanimous vote of ARIAD's independent and disinterested Board members, and is effective today.

As stockholders of AGTI, Harvey J. Berger, M.D., ARIAD's chairman and chief executive officer, and Jay R. LaMarche, a member of the ARIAD Board, are not independent and disinterested with regard to this transaction and, therefore, abstained from the vote.

Under the terms of the merger agreement, each outstanding share of AGTI common stock owned by AGTI's minority stockholders will be converted into the right to receive two shares of ARIAD common stock. The exchange ratio was determined by the independent and disinterested members of ARIAD's Board based on analyses received from an investment banking firm. A total of 2,252,128 shares of ARIAD common stock will be issued, representing approximately 3.1 percent of the outstanding common stock of ARIAD following the transaction. The shares will not be registered under the Securities Act of 1933 and will become eligible for sale under Rule 144 in six months.

"In order to create additional value for our stockholders, the independent and disinterested members of the ARIAD Board undertook, with the assistance of an investment banking firm, an extensive evaluation of strategic alternatives with respect to acquiring the 20 percent minority interest of AGTI that ARIAD did not own," stated Sandford D. Smith, vice chairman of the ARIAD Board. "Based on our evaluation, we believe that this is an appropriate time to combine the companies and that this agreement is in the best interests of all parties."

"Upon the consummation of this merger, ARIAD is poised to realize all of the potential future economic benefit from deforolimus and other assets previously owned by AGTI," stated Dr. Berger. ARIAD will distribute by September 22, 2008 a detailed information statement to the holders of record of AGTI shares regarding the merger and specific actions they will need to take to exchange their AGTI shares for ARIAD common stock. Any holders of AGTI common stock who properly demand appraisal of their shares will be entitled to seek a judicial determination of the fair value of such shares in accordance with the provisions of the Delaware General Corporation Law.