- -------------------------------------------------------------------------------

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 JUNE 30, 1998

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

COMMISSION FILE NUMBER 0-21379

CUBIST PHARMACEUTICALS, INC.
(Exact Name of Registrant as Specified in Its Charter)

Delaware 22-3192085
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)

24 Emily Street
Cambridge, Massachusetts 02139
(Address of Principal Executive Offices)

(617) 576-1999
(Registrant's Telephone Number, Including Area Code)

None
(Former Name, Former Address and Former
Fiscal Year, if Changed Since Last Report)

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
--- ---

As of August 12, 1998, there were 10,580,948 shares outstanding of
the Company's common stock, $0.001 per value per share.

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CUBIST PHARMACEUTICALS, INC.

INDEX

Item Page
Number Number
- -------- ------

PART I. FINANCIAL INFORMATION

Item 1. Condensed Unaudited Financial Statements

Condensed Balance Sheets as of June 30, 1998
and December 31, 1997............................................................... 3

Condensed Statements of Operations for the three months ended
June 30, 1998 and 1997 and for the six months
ended June 30, 1998 and 1997........................................................ 4

Condensed Statements of Cash Flows for the six months
ended June 30, 1998 and 1997........................................................ 5

Notes to the Unaudited Condensed Financial Statements............................... 6

Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................................ 7

Item 3. Quantitative and Qualitative Disclosures About Market Risk.............................. 10

PART II. OTHER INFORMATION

Item 2. Changes in Securities and Use of Proceeds.............................................. 11

Item 4. Submission of Material to a Vote of Security Holders.................................... 11

Item 5. Other Information....................................................................... 12

Item 6. Exhibits and Reports on Form 8-K........................................................ 12

Signature............................................................................... 13

-2-

PART I -- FINANCIAL INFORMATION

Item 1. Condensed Financial Statements

CUBIST PHARMACEUTICALS, INC.
CONDENSED BALANCE SHEETS
UNAUDITED

June 30, December 31,
1998 1997
---------------- -----------------

ASSETS

Current Assets:
Cash and cash equivalents......................................... $3,895,627 $2,837,600
Short-term investments............................................ 4,702,136 6,709,623

Accounts receivable .............................................. -- 53,333
Prepaid expenses and other current assets......................... 187,397 142,635
--------------- ---------------
Total current assets.............................................. 8,785,160 9,743,191
Property and equipment ................................................ 6,761,098 5,893,101
Less: Accumulated depreciation and amortization.................. (3,353,714) (2,712,341)
--------------- ---------------
Property and equipment, net ...................................... 3,407,384 3,180,760
Long-term investments.................................................. 3,932,111 8,569,107
Other assets .......................................................... 141,993 180,294
--------------- ---------------
--------------- ---------------
Total assets............................................. $16,266,648 $21,673,352
--------------- ---------------
--------------- ---------------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable.................................................. $211,700 $275,260
Accrued expenses.................................................. 713,004 492,304
Current portion of long-term debt................................. 137,755 189,730
Current portion of capital lease obligations ..................... 523,675 548,351
--------------- ---------------
Total current liabilities .............................. 1,586,134 1,505,645
Long-term debt, net of current portion................................. 48,224 100,072
Long-term capital lease obligation, net of current portion............. 1,390,107 1,004,969
--------------- ---------------
Total liabilities........................................ 3,024,465 2,610,686
--------------- ---------------

Commitments

Stockholders' Equity:
Common Stock - $.001 par value;
authorized: 25,000,000 shares; issued: 10,580,948,
1998 and 10,580,555 shares, 1997 ................................. 10,581 10,581
Additional paid-in capital............................................. 42,088,013 42,047,966
Accumulated deficit .................................................. (28,856,411) (22,995,881)
--------------- ---------------
Total stockholders' equity............................... 13,242,183 19,062,666
--------------- ---------------

Total liabilities and stockholders' equity............... $16,266,648 $21,673,352
--------------- ---------------
--------------- ---------------

The accompanying notes are an integral part of the unaudited condensed
financial statements.

-3-

CUBIST PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF OPERATIONS
UNAUDITED

Three months ended Six months ended
June 30, June 30,
------------------------------------- -------------------------------------

1998 1997 1998 1997
---- ---- ---- ----

Sponsored research revenues............ $373,550 $844,000 $887,100 $1,678,600

Operating expenses:
Research and development............ 2,705,375 2,292,887 5,268,893 4,304,160
General and administrative.......... 817,255 933,868 1,675,332 1,579,337
----------------- ----------------- ---------------- -----------------
Total operating expenses.......... 3,522,630 3,226,755 6,944,225 5,883,497

Interest income........................ 195,948 246,978 380,116 533,757
Interest expense....................... (90,508) (63,970) (183,521) (119,981)
----------------- ----------------- ---------------- -----------------

Net loss............................... ($3,043,640) ($2,199,747) ($5,860,530) ($3,791,121)
----------------- ----------------- ---------------- -----------------
----------------- ----------------- ---------------- -----------------
Basic and diluted net loss per common
share.................................. ($.29) ($.23) ($.55) ($.40)
----------------- ----------------- ---------------- -----------------
----------------- ----------------- ---------------- -----------------
Weighted average number of common
shares for basic and diluted net
loss per common share............... 10,580,920 9,561,005 10,580,986 9,553,919
----------------- ----------------- ---------------- -----------------
----------------- ----------------- ---------------- -----------------

The accompanying notes are an integral part of the unaudited condensed
financial statements.

-4-

CUBIST PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
UNAUDITED

Six months ended
June 30,
----------------------------------------------
1998 1997
---- ----

Cash flows for operating activities:
Net loss...................................................... $(5,860,530) $(3,791,121)
Adjustments to reconcile net loss to net cash provided by/(used in)
operating activities:
Depreciation and amortization............................... 676,669 486,469
Changes in assets and liabilities:
Accounts receivable.................................... 53,333 183,500
Prepaid expenses and other current assets.............. (44,762) (678,087)
Other assets.......................................... 38,301 (9,999)
Accounts payable and accrued expenses.................. 157,140 (130,267)
Deferred revenue....................................... -- (84,600)
--------------------- ---------------------
Total adjustments.................................... 880,681 (232,984)
--------------------- ---------------------
Net cash used in operating activities............................ (4,979,849) (4,024,105)

Cash flows from investing activities:

Purchase of fixed assets...................................... (834,355) (783,765)
Leasehold improvements........................................ (33,642) (94,478)
Purchase of short-term investments............................ -- (7,641,449)
Maturities of short-term investments.......................... 2,007,487 --
Purchase of long-term investments............................. -- (3,620,843)
Maturities of long-term investments........................... 4,636,996 --
--------------------- ---------------------
Net cash provided by/(used in) investing activities.............. 5,776,486 (12,140,535)

Cash flows from financing activities:
Issuance of stock............................................. (5,249) (3,082)
Proceeds from notes receivable................................ 10,000 --
Repayments of debt............................................ (103,823) (92,138)
Proceeds from capital lease financing......................... 690,080 701,105
Principal payments of capital lease obligations............... (329,618) (305,487)
--------------------- ---------------------
Net cash provided by financing activities........................ 261,390 300,398
--------------------- ---------------------

Net increase (decrease) in cash and cash equivalents............. 1,058,027 (15,864,242)

Cash and cash equivalents,
beginning of period........................................... 2,837,600 19,329,353
--------------------- ---------------------
--------------------- ---------------------
Cash and cash equivalents,
end of period................................................. $3,895,627 $3,465,111
--------------------- ---------------------
--------------------- ---------------------

Supplemental disclosures of cash flow information:
Cash paid during the year for interest........................ $183,521 $119,981

The accompanying notes are an integral part of the unaudited condensed
financial statements.

-5-

CUBIST PHARMACEUTICALS, INC.
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS

Note A. Nature of Business

Cubist Pharmaceuticals, Inc. ("Cubist" or the "Company") is a
biopharmaceutical company founded in May 1992 and is focused on the
discovery, development and commercialization of novel classes of
antiinfective drugs to treat infectious diseases caused by bacteria and
fungal pathogens. Cubist has established multiple technology licenses and
collaborations, as well as a network of advisors and collaborators. The
Company is located in Cambridge, Massachusetts.

Note B. Accounting Policies

Basis of Presentation

The accompanying unaudited condensed financial statements reflect
all adjustments, consisting of normal recurring adjustments, which are
necessary, in the opinion of management, for a fair presentation of the
results of the interim periods presented. Interim results are not necessarily
indicative of results for a full year. These unaudited condensed financial
statements do not include all information and footnote disclosures required
by generally accepted accounting principles and therefore should be read in
conjunction with the Company's audited financial statements and related
footnotes for the year ended December 31, 1997 which are included in the
Company's Annual Report on Form 10-K. Such Annual Report on Form 10-K was
filed by the Company with the Securities and Exchange Commission (the
"Commission") on March 20, 1998.

Net Loss Per Common Share

The net loss per common share is computed based upon the weighted
average number of common shares and common equivalent shares (using the
treasury stock method) outstanding after certain adjustments described below.
Common equivalent shares are not included in the per share calculations where
the effect of their inclusion would be anti-dilutive.

Effective December 31, 1997, the Company adopted Statement of
Financial Accounting Standards 128 (SFAS 128) "Earnings per Share", which
requires the disclosure of Basic Earnings per Common Share and Diluted
Earnings per Common Share, both as defined in the standard, for all periods
presented. Adoption of this standard did not have any impact on the earnings
per share computation for any period presented.

Comprehensive Income

Effective January 1, 1998, the Company adopted the Statement of
Financial Accounting Standards No. 130 (SFAS 130) "Reporting Comprehensive
Income". This statement requires changes in comprehensive income to be shown
in a financial statement that is displayed with the same prominence as other
financial statements. Adoption of this statement did not have an impact on
the financial statements.

Recently Issued Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133 (SFAS 133) "Accounting
for Derivative Instruments and Hedging Activities" which is effective for
fiscal years beginning after June 15, 1999. The statement establishes
accounting and reporting standards requiring that every derivative instrument
be recorded in the balance sheet as either an asset or liability measured at
its fair value. SFAS No. 133 also requires that changes in the derivative's
fair value be recognized currently in earnings unless specific hedge
accounting criteria are met. Adoption of this standard is not expected to
have a material impact on the financial position or results of operations of
the Company.

-6-

Item 2. Management's Discussion And Analysis Of Financial Condition And Results
Of Operations

Except for the historical information contained herein, this
Quarterly Report on Form 10-Q may contain "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934, including, but not limited to, (i)
statements about the adequacy of the Company's cash, cash equivalents, other
capital resources, interest income, other income and future revenues due
under the Company's collaborative agreements to fund its operating expenses
and capital requirements as currently planned through mid-1999 (ii)
statements about the amount of capital expenditures that the Company expects
to incur in 1998, (iii) statements about the Company's plans to begin
clinical trials of daptomycin in the fourth quarter of 1998 or first quarter
of 1999, and (iv) certain statements identified or qualified by words such as
"likely", "will", "suggests", "may", "would", "could", "should", "expects",
"anticipates", "estimates", "plans", "projects", "believes", or similar
expressions (and variants of such words or expressions). Investors are
cautioned that forward-looking statements are inherently uncertain. Actual
performance and results of operations may differ materially from those
projected or suggested in the forward-looking statements due to certain risks
and uncertainties, including, but not limited to, the risks and uncertainties
described or discussed in the section "Risk Factors" in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1997. The
forward-looking statements contained herein represent the Company's judgment
as of the date of this quarterly report on Form 10-Q, and the Company
cautions readers not to place undue reliance on such statements.

Overview

Since its incorporation on May 1, 1992 and commencement of
operations in February 1993, Cubist has been focused on the discovery,
development and commercialization of novel antiinfective drugs to treat
infectious diseases caused by bacteria and fungal pathogens. The Company has
a limited history of operations and has experienced significant operating
losses since inception. The Company expects to incur significant additional
operating losses over the next several years and expects cumulative losses to
increase substantially due to expanded research and development efforts,
pre-clinical and clinical trials and development of manufacturing, marketing
and sales capabilities.

A key element of the Company's strategy is to enhance certain of its
drug discovery and development programs and to fund its capital requirements,
in part, by entering into collaborative agreements with major pharmaceutical
companies. The Company is a party to collaborative agreements based
specifically on its aminoacyl-tRNA synthetase program with Bristol-Myers
Squibb Company ("Bristol-Myers Squibb") and Merck & Co., Inc. ("Merck").
Under these collaborative agreements, the Company is entitled to receive
research support payments and, if certain drug development milestones are
achieved, milestone payments. In addition, the Company will be entitled to
receive royalties on worldwide sales of any drug developed and commercialized
from these collaborations.

In addition, the Company entered into a license agreement with Eli
Lilly and Company ("Eli Lilly") pursuant to which the Company acquired
exclusive worldwide rights to develop, manufacture and market daptomycin.
Daptomycin is a novel, natural product being developed for the treatment of
Staphylococcus aureus and enterococcus infections. The Company anticipates
that it will begin clinical trials of daptomycin in the fourth quarter of
1998 or the first quarter of 1999. In exchange for such license, the Company
has paid an upfront license fee in cash, and if certain drug development
milestones are achieved, has agreed to pay milestone payments by issuing
shares of Common Stock to Eli Lilly. In addition, the Company will be
required to pay royalties to Eli Lilly on worldwide sales of daptomycin.

-7-

Results of Operations

Three Months Ended June 30, 1998 and 1997

Revenues. Total revenues in the three months ended June 30, 1998
were $374,000 compared to $844,000 in the three months ended June 30, 1997, a
decrease of $470,000 or 55.7%. The revenue earned in the three months ended
June 30, 1998 consisted of $250,000 in research support funding from the
Bristol-Myers Squibb, and $124,000 in SBIR grants. In the three months ended
June 30, 1997, revenues consisted of research funding from the Bristol-Myers
Squibb, Merck and Pfizer collaborations. The decrease was due to smaller
revenues associated with such stage of the Merck and Pfizer collaborations.

Research and Development Expenses. Total research and development
expenses in the three months ended June 30, 1998 were $2,705,000 compared to
$2,293,000 in the three months ended June 30, 1997, an increase of $412,000
or 18%. The increase was largely due to increased costs related to daptomycin
development, and the additional personnel and purchases that are required by
such development.

General and Administrative Expenses. General and administrative
expenses in the three months ended June 30, 1998 were $817,000 compared to
$934,000 in the three months ended June 30, 1997, a decrease of $117,000 or
12.5%. The decrease was largely due to both decreased legal expenses and
public relation expenses as compared to the expenses which were incurred in
the three months ended June 30, 1997.

Interest Income and Expense. Interest income in the three months
ended June 30, 1998 was $196,000 compared to $247,000 in three months ended
June 30, 1997, a decrease of $51,000 or 20.6%. The decrease in interest
income was due primarily to lower average cash, cash equivalent and
investment balances during the three months ended June 30, 1998 as compared
to the three months ended June 30, 1997. Interest expense in the three months
ended June 30, 1998 was $91,000 as compared to $64,000 during the three
months ended June 30, 1997 due to increased capital lease activity.

Net Loss. The net loss during the three months ended June 30, 1998
was $3,044,000 compared to $2,200,000 during the three months ended June 30,
1997, an increase of $844,000 or 38.4%. The increase was primarily due to the
additional expenses incurred to support the advancement of the Company's
internal research and development programs, as well as reduced revenue from
such stage of research support funding.

Six Months Ended June 30, 1998 and 1997

Revenues. Total revenues in the six months ended June 30, 1998 were
$887,000 compared to $1,679,000 in the six months ended June 30, 1997, a
decrease of $792,000 or 47.2%. The revenue recognized in the six months ended
June 30, 1998 consisted of $607,000 in research support payments from the
Bristol-Myers Squibb and Merck collaborations; and $280,000 in SBIR grants.
In the six months ended June 30, 1997, revenues consisted of research support
payments from Bristol-Myers Squibb, Merck and Pfizer; and milestone payments
from Bristol-Myers Squibb. The decrease was due to smaller revenues
associated with such stage of the Bristol-Myers Squibb collaboration.

Research and Development Expenses. Total research and development
expenses in the six months ended June 30, 1998 were $5,269,000 compared to
$4,304,000 in the six months ended June 30, 1997, an increase of $965,000 or
22.4%. The increase was largely due to increased costs related to daptomycin
development, and the additional personnel and purchases that are required by
such development.

General and Administrative Expenses. General and administrative
expenses in the six months ended June 30, 1998 were $1,675,000 compared to
$1,579,000 in the six months ended June 30, 1997, an increase of $96,000 or
6.1%. The increase was primarily due to increased costs related to additional
personnel hired in connection with the Company's growth, offset by decreased
legal expenses and public relation expenses.

-8-

Interest Income and Expense. Interest income in the six months ended
June 30, 1998 was $380,000 compared to $534,000 in the six months ended June
30, 1997, a decrease of $154,000 or 28.8%. The decrease in interest income
was due primarily to a lower average cash, cash equivalent and investment
balances during the six months ended June 30, 1998 as compared to the six
months ended June 30, 1997. Interest expense in the six months ended June 30,
1998 was $184,000 as compared to $120,000 during the six months ended June
30, 1997 due to increased capital lease activity.

Net Loss. The net loss during the six months ended June 30, 1998 was
$5,861,000 compared to $3,791,000, an increase of $2,070,000 or 54.6%. The
increase was primarily due to the additional expenses incurred to support the
advancement of the Company's internal research and development programs, as
well as reduced revenue from such stage of research support funding.

Liquidity and Capital Resources

Since inception, the Company has financed its operations through the
sale of equity securities, equipment financing, sponsored research revenues,
license revenues and interest earned on invested capital. The Company's total
cash, cash equivalent and investments balance at June 30, 1998 was
$12,530,000 compared to $18,116,000 at December 31, 1997.

As of June 30, 1998, the Company had invested an aggregate of
$6,761,000 (of which $541,000 was invested during the three months then
ended) in property and equipment, primarily in laboratory equipment under
capital leases. The obligations under capital leases at June 30, 1998 were
$1,914,000. Minimum annual principal payments due under capital leases total
$543,000 in 1998. Principal payments are scheduled to decline each year
thereafter until expiration in 2002. The Company made principal payments
under its capital lease obligations of $330,000 in the six months ended on
June 30, 1998. The Company expects its capital expenditures in 1998 to be
approximately $1,500,000 consisting of laboratory and other equipment
purchases.

The Company believes that its existing capital resources, interest
income and future revenues due under the Bristol-Myers Squibb and Merck
collaborative agreements will be sufficient to fund its operating expenses
and capital requirements, as currently planned, through mid-1999. The
Company's actual cash requirements may vary materially from those now planned
and will depend on numerous factors. There can be no assurance that the
Company's existing cash, cash equivalents, other capital resources, interest
income and future revenues due under the Bristol-Myers Squibb and Merck
collaborative agreements will be sufficient to fund its operating expenses
and capital requirements during such period. The Company will need to raise
substantial additional capital to fund its operations. The Company intends to
seek such additional funding through public or private financing or
collaborative or other arrangements with corporate partners.

The Company is currently engaged in an effort to raise up to
$20,000,000 through a private offering of its Common Stock and warrants
exercisable for shares of Common Stock. The proceeds of this private offering
will be used primarily to fund the clinical development of daptomycin. There
can be no assurance that the proposed offering will be consummated.

Earnings Per Share

-9-

Comprehensive Income

Investments

Year 2000 Compliance

The Company has assessed the impact of the year 2000 as it relates
to the Company's computer and operating systems and does not believe there is
a significant risk of material impact from the year 2000 on the Company's
internal systems, business, results of operations or financial condition.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

-10-

PART II -- OTHER INFORMATION

Item 2. Changes in Securities and Use of Proceeds

The Company's Registration Statement on Form S-1 (Reg. No. 333-6795)
in connection with the Company's initial public offering of Common Stock was
declared effective by the Securities and Exchange Commission ("the SEC") on
October 25, 1996. On October 25, 1996, the Company also filed another
Registration Statement on Form S-1 (Reg. No. 333-5880) with the SEC pursuant
to Rule 462 (b) promulgated under the Securities Act of 1933, as amended (the
"Securities Act"). Such Registration Statements (together the "IPO
Registration Statement") provided for the registration under the Securities
Act of 2,875,000 shares of the Company's Common Stock.

The aggregate initial public offering proceeds for all 2,875,000
shares of Common Stock registered under the Securities Act pursuant to the
IPO Registration Statement was $17,250,000. The net proceeds to the Company
from such issuance and distribution, after deducting the aggregate amount of
expenses (including underwriting discounts and commissions) paid by the
Company in connection therewith, were $15,153,000.

Of such net proceeds, an aggregate of $8,806,000 has been spent
through June 30, 1998 for the following uses and in the following amounts per
use: $324,000 in construction of plant, building and facilities; $1,662,000
for repayment of indebtedness; $6,820,000 for working capital. All amounts
spent by the Company for such uses, other than payment of salaries to
directors and officers of the Company, consisted of direct payments to
persons or entities, none of which was a director or officer of the Company,
holder of 10 percent or more of any class of equity securities of the Company
or other affiliate of the Company. The remaining balance of such net
proceeds, consisting of $6,347,000, are held in cash, cash equivalents, and
investments.

Item 4. Submission of Matters to a Vote of Security Holders

(a) The Annual Meeting of Stockholders of the Company was held on May 21,
1998.

(b) The Annual Meeting was held to consider and vote upon (i) electing two
Class II directors of the Company to hold office for a three year term and
until their successors have been duly elected and qualified, (ii) ratifying
the adoption and approval by the Board of Directors of an amendment to the
Company's Amended and Restated 1993 Stock Option Plan to provide for an
increase in the number of shares of Common Stock authorized for issuance
under the Plan and (iii) ratifying the adoption and approval by the Board of
Directors of the Company's 1997 Employee Stock Purchase Plan.

Director name For Withheld Total Votes
- ------------- --- -------- -----------

Barry Bloom, Ph.D. 8,975,664 62,724 9,038,388
George Conrades 8,974,607 63,781 9,038,388

The votes cast for ratifying the amendment to the Company's Amended
and Restated 1993 Stock Option Plan are summarized as follows:

For Against Abstain Broker Non-Votes
- --- ------- ------- ----------------

7,737,832 171,773 15,185 1,113,598

The votes cast for ratifying the adoption of the Company's 1997
Employee Stock Purchase Plan are summarized as follows:

For Against Abstain Broker Non-Votes
- --- ------- ------- ----------------

7,796,181 113,010 15,599 1,113,598

-11-

Item 5. Other Information

The Company is currently engaged in an effort to raise up
to $20,000,000 through a private offering of its Common Stock and warrants
exercisable for shares of Common Stock. The proceeds of this private offering
will be used primarily to fund the clinical development of daptomycin. There
can be no assurance that the proposed offering will be consummated.

THE SECURITIES PROPOSED TO BE OFFERED AND SOLD BY THE COMPANY IN THE PRIVATE
OFFERING WILL NOT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR
SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN APPLICABLE EXEMPTION FROM
REGISTRATION.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

*10.1 -- Amendment No. 1 to Collaborative Research and License
Agreement with Merck, dated as of October 30, 1997

*10.2 -- Amendment No. 2 to Collaborative Research and License
Agreement with Merck, dated as of April 30, 1998

10.3 -- First Amendment to Amended and Restated 1993 Stock Option
Plan

10.4 -- 1997 Employee Stock Purchase Plan

27 -- Financial Data Schedule

-------------
*Confidential Treatment Requested

(b) Reports on Form 8-K

No reports on Form 8-K were filed by the Company during the
quarter ended June 30, 1998.

-12-

SIGNATURE

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.

CUBIST PHARMACEUTICALS, INC.

August 12, 1998 By:
--------------------------------------
Thomas A. Shea,
Senior Director of Finance
& Administration and Treasurer
(Authorized Officer and Principal
Finance and Accounting Officer)

-13-