<PAGE>


                       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 September 30, 1999

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 0-28494


                        MILLENNIUM PHARMACEUTICALS, INC.
             (Exact name of registrant as specified in its charter)


            DELAWARE                                    04-3177038
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)


                 75 SIDNEY STREET, CAMBRIDGE, MA 02139 (Address
               of principal executive offices, including zip code)


                                  617-679-7000
              (Registrant's telephone number, including area code)


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 / /

Number of shares of Common Stock, $.001 par value per share, outstanding as of
November 1, 1999 was 37,091,290


<PAGE>


                        MILLENNIUM PHARMACEUTICALS, INC.
                               REPORT ON FORM 10-Q
                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999

                                TABLE OF CONTENTS


<TABLE>
<CAPTION>

                                                                                                   Page
                                                                                                   ----
<S>                                                                                                <C>

PART I -  FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS (unaudited)

              Condensed Consolidated Balance Sheets
               September 30, 1999 and December 31, 1998                                              3

              Condensed Consolidated Statements of Operations
                for the three and nine months ended September 30, 1999 and 1998                      4

              Condensed Consolidated Statements of Cash Flows
                for the nine months ended September 30, 1999 and 1998                                5

              Notes to Condensed Consolidated Financial Statements                                   6

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                                         9
             CONDITION AND RESULTS OF OPERATIONS

ITEM 3.    QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK                                18

PART II - OTHER INFORMATION                                                                         19

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K                                                         19

SIGNATURES                                                                                          20
EXHIBIT INDEX                                                                                       21

</TABLE>


                                       2

<PAGE>


                        Millennium Pharmaceuticals, Inc.
                      CONDENSED CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>

                                                                                  September 30,        December 31,
(in thousands, except per share amounts)                                              1999                 1998
                                                                                  -------------        ------------
                                                                                   (unaudited)
<S>                                                                               <C>                  <C>

ASSETS
Current assets:
   Cash and cash equivalents                                                        $  81,960           $ 138,284
   Marketable securities                                                              143,220              52,680
   Due from strategic partners                                                          9,547               6,660
   Prepaid expenses and other current assets                                            6,746               5,033
                                                                                    ---------           ---------
Total current assets                                                                  241,473             202,657

Property and equipment, net                                                            51,152              38,170
Restricted cash and other assets                                                       12,564              11,416
Intangible asset, net                                                                   3,684               5,711
                                                                                    ---------           ---------
Total assets                                                                        $ 308,873           $ 257,954
                                                                                    =========           =========


LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                                 $  13,450           $   6,918
   Accrued expenses                                                                     8,466               6,186
   Deferred revenue                                                                     7,371               2,501
   Current portion of capital lease obligations                                         8,836               8,657
                                                                                    ---------           ---------
Total current liabilities                                                              38,123              24,262

Capital lease obligations, net of current portion                                      25,984              24,827
Minority interest                                                                      15,564               2,503

Commitments and contingencies

Stockholders' equity:
   Preferred Stock, $0.001 par value; 5,000 shares authorized, none issued
   Common stock, $0.001 par value; 100,000 shares authorized:
      36,644 shares in 1999 and 34,923 shares in 1998 issued and
      outstanding                                                                          36                  35
   Additional paid-in capital                                                         321,525             296,370
   Deferred compensation                                                               (1,370)               (957)
   Notes receivable from officers                                                         (29)                (87)
   Other comprehensive income (loss)                                                     (539)                 29
   Accumulated deficit                                                                (90,421)            (89,028)
                                                                                    ---------           ---------
Total stockholders' equity                                                            229,202             206,362
                                                                                    ---------           ---------

Total liabilities and stockholders' equity                                          $ 308,873           $ 257,954
                                                                                    =========           =========

</TABLE>


See notes to condensed consolidated financial statements.


                                       3

<PAGE>


                        Millennium Pharmaceuticals, Inc.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)


<TABLE>
<CAPTION>

                                                          Three Months Ended             Nine Months Ended
                                                             September 30,                  September 30,
(in thousands, except per share amounts)                 1999            1998            1999            1998
                                                      ---------       ---------       ---------       ---------
<S>                                                   <C>             <C>             <C>             <C>
Revenue under strategic alliances                     $  40,316       $  26,440       $ 128,581       $  75,719

Costs and expenses:
   Research and development                              38,359          30,014         113,276          80,479
   General and administrative                             8,279           6,090          23,907          17,928
   Amortization of intangible asset                         676             676           2,027           2,027
                                                      ---------       ---------       ---------       ---------
                                                         47,314          36,780         139,210         100,434
                                                      ---------       ---------       ---------       ---------
Loss from operations                                     (6,998)        (10,340)        (10,629)        (24,715)

Interest income                                           3,317           1,274           9,209           4,060
Interest expense                                           (705)           (565)         (2,177)         (1,689)
Minority interest                                           (83)          3,418           2,204           9,504
                                                      ---------       ---------       ---------       ---------

Net loss                                              $  (4,469)      $  (6,213)      $  (1,393)      $ (12,840)
                                                      =========       =========       =========       =========

Basic and diluted net loss per share                  $   (0.12)      $   (0.21)      $   (0.04)      $   (0.44)
                                                      =========       =========       =========       =========

SHARES USED IN CALCULATING:
Basic and diluted net loss per share                     36,370          29,552          35,817          29,434
                                                      =========       =========       =========       =========

</TABLE>


See notes to condensed consolidated financial statements.


                                       4

<PAGE>


                        Millennium Pharmaceuticals, Inc.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)


<TABLE>
<CAPTION>

                                                                            Nine Months Ended
                                                                              September 30,
(in thousands)                                                          1999                1998
                                                                     ---------           ---------
<S>                                                                  <C>                 <C>

CASH PROVIDED BY (USED IN) OPERATIONS                                $  19,972           $ (20,528)
                                                                     ---------           ---------

INVESTING ACTIVITIES
Purchase of property and equipment                                     (17,783)             (4,067)
Sale of marketable securities                                           74,000              46,506
Purchase of marketable securities                                     (165,108)            (54,697)
                                                                     ---------           ---------
Net cash used in investing activities                                 (108,891)            (12,258)
                                                                     ---------           ---------
FINANCING ACTIVITIES
Proceeds from sale of subsidiary stock                                  15,000                  --
Net proceeds from stock option exercises                                24,099               3,319
Repurchase of Common Stock                                                  (2)                (25)
Payments of capital lease obligations                                   (6,502)             (5,288)
                                                                     ---------           ---------
Net cash provided by (used in) financing activities                     32,595              (1,994)
                                                                     ---------           ---------

Decrease in cash and cash equivalents                                  (56,324)            (34,780)
Cash and cash equivalents at beginning of period                       138,284              69,236
                                                                     ---------           ---------
Cash and cash equivalents at end of period                           $  81,960           $  34,456
                                                                     =========           =========

NONCASH INVESTING AND FINANCING ACTIVITIES:
Equipment acquired under capital leases                              $   7,838           $  10,146
                                                                     =========           =========
Deferred compensation relating to issuance of stock options          $   1,059                  --
                                                                     =========           =========

</TABLE>


See notes to condensed consolidated financial statements.


                                       5

<PAGE>


                        MILLENNIUM PHARMACEUTICALS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (unaudited)

1-       BASIS OF PRESENTATION

         The accompanying condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Interim results for the three and nine month periods ended
September 30, 1999 are not necessarily indicative of the results that may be
expected for the year ended December 31, 1999. For further information, refer to
the financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1998 which was filed
with the Securities and Exchange Commission on March 24, 1999.

         In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities", which is effective for fiscal years
beginning after June 15, 2000. The Company believes the adoption of this new
accounting standard will not have a significant effect on its financial
statements as the Company's investment policies prohibit the use of derivatives.

         Comprehensive loss is composed of net loss and other comprehensive
loss. Other comprehensive loss is composed of changes in equity that are
excluded from net loss resulting from unrealized holding gains and losses on
available-for-sale marketable securities. Comprehensive loss for the three
months ended September 30, 1999 and 1998 was $4.3 million and $ 6.1 million,
respectively. Comprehensive loss for the nine months ended September 30, 1999
and 1998 was $2.0 million and $12.8 million, respectively.

         Basic and diluted net loss per share for the three and nine months
ended September 30, 1999 and 1998 is computed using the weighted-average number
of common shares outstanding.


2-       STRATEGIC ALLIANCE

         On February 22, 1999, the Company announced the formation of a
strategic alliance in the diagnostics field between its wholly-owned subsidiary,
Millennium Predictive Medicine, Inc. ("MPMx") and Becton, Dickinson and Company
("Becton Dickinson"). The five-year, genomics-based research collaboration
focuses on several areas of oncology.


                                       6

<PAGE>

         Under the alliance, MPMx has agreed to undertake a research program to
identify genetic markers and related assays that may be used to develop
diagnostic products for several types of cancer. Becton Dickinson has agreed to
manufacture and market any products that result, and MPMx will receive a royalty
based upon gross profits from any related product sales.

         On March 31, 1999, Becton Dickinson made an equity investment in MPMx
of $15.0 million, representing approximately an 11% voting interest in MPMx, and
paid a $3.0 million licensing fee to MPMx. Becton Dickinson has agreed to pay
MPMx up to $51.5 million in research funding and additional annual license fees,
provided the alliance continues for the full five-year term. Becton Dickinson
has agreed to pay milestones and royalties to MPMx in connection with the
commercialization and sale of any products developed through the alliance.


3-    SUBSEQUENT EVENTS

         On October 14, 1999, Millennium Pharmaceuticals ("Millennium")
announced the signing of a merger agreement to acquire LeukoSite, Inc.
("LeukoSite") in a stock for stock exchange. As a result of this transaction,
Millennium expects to issue approximately 6,577,110 shares of its common
stock ("Millennium Common Stock"), and approximately 986,911 shares of
Millennium Common Stock issuable upon exercise of LeukoSite options and
warrants. The merger will be accounted for using the purchase method of
accounting and will result in significant in-process research and development
and goodwill charges. The transaction is subject to LeukoSite shareholder
approval as well as antitrust clearance under the Hart-Scott-Rodino Antitrust
Improvements Act.

         On October 14, 1999, Millennium entered into an Agreement and Plan
of Merger pursuant to which Millennium BioTherapeutics, Inc. ("MBio") would
be merged with and into Millennium. Each share of Class B Common Stock of
MBio will, upon consummation of the merger, be converted into a number of
shares of Millennium Common Stock equal to the average of (i) $15.00 divided
by $62.536 and (ii) $15.00 divided by the average of the last recorded sale
prices per share of Millennium Common Stock on the Nasdaq National Market
over the 20 consecutive trading days ending on the second trading day prior
to the effective date of the merger.

         On October 14, 1999, Millennium also entered into a Share Exchange
Agreement with Eli Lilly and Company ("Lilly"). Pursuant to this agreement,
Lilly was issued 360,198 shares of Millennium Common Stock in exchange for
all of the shares of MBio Series B Convertible Preferred Stock owned by it.
Millennium agreed to register the shares issued to Lilly on a registration
statement on Form S-3. The number of shares issued to Lilly will be adjusted,
upward or downward, based on the closing price of Millennium Common Stock
over the five consecutive trading days ending on the first trading day prior
to the effectiveness of the Form S-3 resale Registration Statement.

                                       7

<PAGE>

         Also on October 14, 1999, MBio amended the terms of its strategic
alliance with Lilly. Under the amendment (the "October 1999 Amendment"), the
research program was refocused from the discovery of new therapeutic proteins
to the further development of the therapeutic proteins which had been
identified in the course of the research program. The research program will
now end in May 2000, and Lilly's funding obligations under the refocused
research program were waived. Millennium agreed to provide the research
funding for the further development of the identified therapeutic proteins
which was previously provided by Lilly. In addition, Lilly's non-exclusive
license to use the genes and proteins from the jointly-funded program in its
small molecule drug discovery program was amended to be a non-royalty bearing
license.

         As part of the October 1999 Amendment and in accordance with the
original terms of this alliance, Lilly received royalty-bearing worldwide
exclusive rights to develop and commercialize 25% of the therapeutic proteins
discovered under the research program. MBio received non-royalty bearing,
worldwide exclusive rights to develop and commercialize 75% of the therapeutic
proteins discovered under the research program. In the event that Lilly achieves
product development and regulatory milestones in its development of the
therapeutic proteins exclusively licensed to it from the alliance, Lilly will be
obligated to make milestone payments to MBio.

         Also on October 14, 1999, MBio and Millennium entered into
amendments to the Rights Exchange Agreement and Technology Transfer and
License Agreement to which they are parties, each dated May 28, 1997.

         The amendment to the Rights Exchange Agreement provides that Millennium
will no longer be obligated to transfer to MBio future product development
opportunities or other technology rights that come into existence or under the
control of Millennium subsequent to the date of the amendment and that
Millennium will no longer be required to use reasonable efforts when negotiating
third party collaboration agreements to limit licenses and rights granted to the
third party in MBio's core field. In addition, should the proposed merger
between Millennium and MBio not have closed by December 31, 2000, Millennium and
MBio agreed to execute on that date an amended and restated Rights Exchange
Agreement which would reinstate Millennium's obligations as outlined above.

         The amendment to the Technology Transfer and License Agreement provides
that Millennium will no longer be obligated to grant MBio a royalty-free,
exclusive license to technology relating to the development, manufacture and/or
commercialization of products in MBio's core field that come into existence
subsequent to the date of the amendment. In addition, should the proposed merger
between MBio and Millennium not have closed by December 31, 2000, Millennium and
MBio agreed to execute on that date an amended and restated Technology Transfer
and License Agreement which would reinstate this obligation of Millennium and
would include a new obligation for MBio to share in the costs associated with
licensing or acquisition of product technology that has application in MBio's
core field and that was licensed or acquired from third parties subsequent to
October 14, 1999.


                                       8

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.

         THIS REPORT ON FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS. FOR THIS
PURPOSE, ANY STATEMENTS CONTAINED HEREIN THAT ARE NOT STATEMENTS OF HISTORICAL
FACT MAY BE DEEMED TO BE FORWARD-LOOKING STATEMENTS. WITHOUT LIMITING THE
FOREGOING, THE WORDS "BELIEVES," "ANTICIPATES," "PLANS," "EXPECTS," "INTENDS,"
AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS.
THERE ARE A NUMBER OF IMPORTANT FACTORS THAT COULD CAUSE THE COMPANY'S ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH FORWARD-LOOKING
STATEMENTS. A NUMBER OF THESE FACTORS ARE SET FORTH UNDER THE CAPTION "FACTORS
THAT MAY AFFECT RESULTS" IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE
YEAR ENDED DECEMBER 31, 1998, WHICH "FACTORS THAT MAY AFFECT RESULTS" DISCUSSION
IS EXPRESSLY INCORPORATED BY REFERENCE HEREIN.

OVERVIEW

         Millennium Pharmaceuticals, Inc. ("Millennium" or the "Company"), was
founded in 1993 and has developed a comprehensive integrated science and
technology platform which incorporates large-scale genetics, genomics, high
throughput screening, and informatics. We apply this technology platform
primarily in discovering and developing proprietary therapeutic and diagnostic
human healthcare products and services. As used herein, the terms "the Company"
and "Millennium" include the Company's subsidiaries, Millennium BioTherapeutics,
Inc. ("MBio") and Millennium Predictive Medicine, Inc.
("MPMx"), where appropriate in the context.

         To date, all of our revenue has resulted from payments from strategic
partners and United States Government research grants. We have not received any
revenue from the sale of products.

         These strategic alliances have provided Millennium with various
combinations of equity investments, up-front and follow-on fees and research
funding. These alliances may also provide certain additional payments upon the
attainment of research and regulatory milestones as well as royalty and/or
profit sharing payments based on sales of any products resulting from the
collaborations. There can be no assurance that any of our strategic alliance
agreements will continue for their full term or be renewed on terms favorable to
the Company, if at all, or that any discoveries will result in marketed
products.

         During the balance of 1999 and 2000, we expect to continue to pursue
additional alliances and consider joint development and acquisition
opportunities that may provide Millennium with access to products on the market
or in later stages of commercial development than those represented within our
current programs. We expect that Millennium will incur increasing expenses and
may incur increasing operating losses for at least the next several years,
primarily due to expansion of facilities and research and development programs
as a result of


                                       9

<PAGE>

acquisitions and as a result of efforts to advance acquired products or our own
development programs to commercialization. Our revenues under existing and new
strategic alliances may fluctuate from period to period or year to year; these
fluctuations, as well as fluctuations in spending, may result in periods of
profitability and periods of losses. Therefore, Millennium's results of
operations for any period may not be indicative of future results of operations.

RESULTS OF OPERATIONS

         QUARTERS ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30, 1998

         For the quarter ended September 30, 1999 (the "1999 Quarterly Period"),
the Company reported a net loss of $4.5 million or $0.12 per basic and diluted
share as compared to a net loss of $6.2 million or $0.21 per basic and diluted
share for the quarter ended September 30, 1998 ("the 1998 Quarterly Period").

         Revenue under strategic alliances increased to $40.3 million for the
1999 Quarterly Period from $26.4 million for the 1998 Quarterly Period. The
increase in revenue is primarily due to revenue from alliances with Bayer AG and
Becton, Dickinson and Company ("Becton Dickinson") that were not in place in the
1998 Quarterly Period, partially offset by a decrease in funding from the
Hoffman-La Roche Inc. alliance that concluded in March 1999. Revenues may
fluctuate from period to period and there can be no assurance that strategic
alliance agreements will continue for their initial term or beyond.

         Research and development expenses increased to $38.4 million for the
1999 Quarterly Period from $30.0 million for the 1998 Quarterly Period. The
increase was primarily attributable to increased personnel and facilities
expenses, increased purchases of laboratory supplies, and increased equipment
depreciation. We expect research and development expenses to continue to
increase as personnel are added and as research and development activities are
expanded to accommodate our existing and any additional strategic alliances and
development efforts.

         Following the closing of the Millennium and LeukoSite merger,
Millennium expects to incur significant increases in research and development
expenses resulting from the addition of several preclinical product
candidates and five product candidates in clinical trials. In addition, the
Company will incur significant non-cash charges as a result of the
amortization of goodwill and the write-off of in-process research and
development costs in connection with the LeukoSite merger. These charges will
affect our reported results of operations.

         General and administrative expenses increased to $8.3 million for the
1999 Quarterly Period from $6.1 million for the 1998 Quarterly Period. The
increase was attributable primarily to increased personnel expenses as the
Company hired additional management, business development, and administrative
personnel, and to increased facilities costs and professional fees in connection
with the further expansion of the company's operations. We expect that general
and administrative expenses will continue to increase as we add capabilities to
support the further advancement of our development efforts.


                                       10

<PAGE>

         Interest income increased to $3.3 million for the 1999 Quarterly Period
from $1.3 million for the 1998 Quarterly Period. The increase resulted from an
increase in the Company's average balance of cash, cash equivalents and
marketable securities. Interest expense increased to $0.7 million for the 1999
Quarterly Period from $0.6 million for the 1998 Quarterly Period due to
increased capital lease obligations.

         Minority interest represents the minority shareholder interest of
Eli Lilly and Company ("Lilly") in the net loss for the 1998 Quarterly Period
of the Company's majority-owned subsidiary, MBio, as well as the minority
shareholder interest of Becton Dickinson in the net income or loss for the
1999 Quarterly Period of the Company's majority-owned subsidiary, MPMx. As of
October 14, 1999, Lilly no longer owns a minority shareholder interest in
MBio.

         NINE MONTHS ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30, 1998

         For the nine months ended September 30, 1999 (the "1999 Nine Month
Period"), the Company reported a net loss of $1.4 million or $0.04 per basic and
diluted share as compared to a net loss of $12.8 million or $0.44 per basic and
diluted share for the nine months ended September 30, 1998 (the "1998 Nine Month
Period").

         Revenue under strategic alliances increased to $128.6 million for the
1999 Nine Month Period from $75.7 million for the 1998 Nine Month Period. The
increase is primarily due to revenue from alliances with Bayer AG and Becton
Dickinson that were not in place in the 1998 Nine Month Period, partially offset
by a decrease in funding from the Hoffman-La Roche Inc. alliance that concluded
in March 1999. Revenues may fluctuate from period to period and there can be no
assurance that strategic alliance agreements will continue for their initial
term or beyond.

         Research and development expenses increased to $113.3 million for the
1999 Nine Month Period from $80.5 million for the 1998 Nine Month Period. The
increase was attributable primarily to increased personnel expenses as the
Company hired additional research and development personnel, increased purchases
of laboratory supplies, and increased equipment depreciation and facilities
expenses in connection with the expansion of the Company's research efforts. We
expect research and development expenses to continue to increase as personnel
are added and as research and development activites are expanded to accommodate
our existing strategic alliances and development efforts.

         Following the closing of the Millennium and LeukoSite merger,
Millennium expects to incur significant increases in research and development
expenses resulting from the addition of several preclinical product
candidates and five product candidates in clinical trials. In addition, the
Company will incur significant non-cash charges as a result of the
amortization of goodwill and the write-off of in-process research and
development costs in connection with the LeukoSite merger. These charges will
affect our reported results of operations.

                                       11

<PAGE>

         General and administrative expenses increased to $23.9 million for the
1999 Nine Month Period from $17.9 million for the 1998 Nine Month Period. The
increase was attributable primarily to increased personnel expenses as the
Company hired additional management, business development, and administrative
personnel, and to increased facilities costs and professional fees in connection
with the further expansion of the Company's operations. We expect that general
and administrative expenses will continue to increase as we add capabilities to
support the further advancement of our development efforts.

         Interest income increased to $9.2 million for the 1999 Nine Month
Period from $4.1 million for the 1998 Nine Month Period. The increase resulted
from an increase in the Company's average balance of cash, cash equivalents and
marketable securities. Interest expense increased to $2.2 million for the 1999
Nine Month Period from $1.7 million for the 1998 Nine Month Period due to
increased capital lease obligations.

         Minority interest represents the minority shareholder interest of
Lilly in the net loss for the 1999 and 1998 Nine Month Periods of the
Company's majority-owned subsidiary, MBio, as well as the minority
shareholder interest of Becton Dickinson in the net income or loss for the
1999 Nine Month Period of the Company's majority-owned subsidiary, MPMx. As
of October 14, 1999, Lilly no longer owns a minority shareholder interest in
MBio.

LIQUIDITY AND CAPITAL RESOURCES

         As of September 30, 1999, the Company had approximately $225 million in
cash, cash equivalents and marketable securities. This excludes $11.2 million of
interest-bearing marketable securities classified as restricted cash and other
assets on the balance sheet which serve as security deposits for certain of the
Company's facilities leases.

         Cash, cash equivalents and marketable securities increased by $34.2
million from December 31, 1998 to September 30, 1999. The increase is primarily
due to cash provided by operations of $19.9 million, the sale of MPMx stock of
$15.0 million to Becton Dickinson and proceeds from exercises of stock options
of $24.1 million. Significant cash outflows included the purchase of $17.8
million of property and equipment and $6.5 million to pay capital lease
obligations.

         On February 22, 1999, the Company announced the formation of a
strategic alliance in the diagnostics field between its wholly-owned subsidiary,
MPMx, and Becton Dickinson. The five-year genomics-based research collaboration
focuses on several areas of oncology. On March 31, 1999, Becton Dickinson made
an equity investment in MPMx of $15.0 million, representing approximately an 11%
voting interest in MPMx, and paid a $3.0 million licensing fee to MPMx. Becton
Dickinson has agreed to pay MPMx up to $51.5 million in research funding and
additional annual license fees, provided the alliance continues for the full
five-year term. Becton Dickinson has agreed to pay milestones and royalties to
MPMx in connection with the commercialization and sale of any products developed
through the alliance.


                                       12

<PAGE>

         Millennium has financed its operations since inception primarily
through strategic alliances, equity security offerings, issuance of debt, and
capital leases.

         We believe that existing cash and investment securities, and
anticipated cash flow from our current strategic alliances will be sufficient to
support our existing operations for the near term. Millennium's actual future
cash requirements, however, will depend on many factors, including progress of
our disease research programs, the number and breadth of these programs,
achievement of milestones under strategic alliance arrangements, acquisitions,
our ability to establish and maintain additional strategic alliance and
licensing arrangements, and the progress of the development efforts of our
strategic partners. We expect that Millennium will require significant
additional financing in the future, which we may seek to raise through public or
private equity offerings, debt financings, additional strategic alliances or
other financing vehicles. However, we can make no assurance that additional
financing, strategic alliances or licensing arrangements will be available when
needed or that, if available, such financing will be obtained on terms favorable
to the Company or its stockholders. The Company's forecast of the period of time
through which its financial resources will be adequate to support its operations
is forward-looking information, and, as such, actual results may vary.

SUBSEQUENT EVENTS

          On October 14, 1999, Millennium announced the signing of a merger
agreement to acquire LeukoSite in a stock for stock exchange. As a result of
this transaction, Millennium expects to issue approximately 6,577,110 shares
of common stock, and approximately 986,911 shares of Millennium Common Stock
issuable upon exercise of LeukoSite options and warrants. The merger will be
accounted for using the purchase method of accounting and will result in
significant in-process research and development and goodwill charges. The
transaction is subject to LeukoSite shareholder approval as well as antitrust
clearance under the Hart-Scott-Rodino Antitrust Improvements Act.

         On October 14, 1999, Millennium entered into an Agreement and Plan
of Merger pursuant to which MBio would be merged with and into Millennium.
Each share of Class B Common Stock of MBio will, upon consummation of the
merger, be converted into a number of shares of Millennium Common Stock equal
to the average of (i) $15.00 divided by $62.536 and (ii) $15.00 divided by
the average of the last recorded sale prices per share of Millennium Common
Stock on the Nasdaq National Market over the 20 consecutive trading days
ending on the second trading day prior to the effective date of the merger.

         On October 14, 1999, Millennium also entered into a Share Exchange
Agreement with Eli Lilly and Company ("Lilly"). Pursuant to this agreement,
Lilly was issued 360,198 shares of Millennium Common Stock in exchange for
all of the shares of MBio Series B Convertible Preferred Stock owned by it.

                                       13

<PAGE>

Millennium agreed to register the shares issued to Lilly on a registration
statement on Form S-3. The number of shares issued to Lilly will be adjusted,
upward or downward, based on the closing price of Millennium Common Stock
over the five consecutive trading days ending on the first trading day prior
to the effectiveness of the Form S-3 resale Registration Statement.

         Also on October 14, 1999, MBio amended the terms of its strategic
alliance with Lilly. Under the amendment (the "October 1999 Amendment"), the
research program was refocused from the discovery of new therapeutic proteins
to the further development of the therapeutic proteins which had been
identified in the course of the research program. The research program will
now end in May 2000, and Lilly's funding obligations under the refocused
research program were waived. Millennium agreed to provide the research
funding for the further development of the identified therapeutic proteins
which was previously provided by Lilly. In addition, Lilly's non-exclusive
license to use the genes and proteins from the jointly-funded program in
their small molecule drug discovery programs was amended to be a non-royalty
bearing license.

         As part of the October 1999 Amendment and in accordance with the
original terms of this alliance, Lilly received royalty-bearing worldwide
exclusive rights to develop and commercialize 25% of the therapeutic proteins
discovered under the research program. MBio received non-royalty bearing,
worldwide exclusive rights to develop and commercialize 75% of the therapeutic
proteins discovered under the research program. In the event that Lilly achieves
product development and regulatory milestones in its development of the
therapeutic proteins exclusively licensed to it from the alliance, Lilly will be
obligated to make milestone payments to MBio.

         Also on October 14, 1999, MBio and Millennium entered into
amendments to the Rights Exchange Agreement and Technology Transfer and
License Agreement to which they are parties, each dated May 20, 1997.

         The amendment to the Rights Exchange Agreement provides that Millennium
will no longer be obligated to transfer to MBio future product development
opportunities or other technology rights that come into existence or under the
control of Millennium subsequent to the date of the amendment and that
Millennium will no longer be required to use reasonable efforts when negotiating
third party collaboration agreements to limit licenses and rights granted to the
third party in MBio's core field. In addition, should the proposed merger
between Millennium and MBio not have closed by December 31, 2000, Millennium and
MBio agreed to execute on that date an amended and restated Rights Exchange
Agreement which would reinstate Millennium's obligations as outlined above.

         The amendment to the Technology Transfer and License Agreement provides
that Millennium will no longer be obligated to grant MBio a royalty-free,
exclusive license to technology relating to the development, manufacture and/or
commercialization of products in MBio's core field that come into existence
subsequent to the date of the amendment. In addition, should the proposed merger
between MBio and Millennium not have closed by December 31,


                                       14

<PAGE>

2000, Millennium and MBio agreed to execute on that date an amended and restated
Technology Transfer and License Agreement which would reinstate this obligation
of Millennium and would include a new obligation for MBio to share in the costs
associated with licensing or acquisition of product technology that has
application in MBio's core field and that was licensed or acquired from third
parties subsequent to October 14, 1999.

NEW ACCOUNTING PRONOUNCEMENT

         In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities", which is effective for fiscal years
beginning after June 15, 2000. The Company believes the adoption of this new
accounting standard will not have a significant effect on its financial
statements as the Company's investment policies prohibit the use of derivatives.

IMPACT OF YEAR 2000

         The Year 2000 issue is the result of computer programs that were
written using two digits rather than four to define the applicable year. Any
computer program that has date-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. It is possible that an
incorrect recognition of dates could cause system failures or miscalculations of
data. The following describes our efforts to address this issue, the related
costs, the potential ramifications of a Year 2000 problem at Millennium and the
contingencies we are implementing to address problems that may arise despite our
Year 2000 efforts.

         STATE OF READINESS.  We have determined that we have Year 2000 exposure
in the following areas:

--   software and hardware contained in or integrated with our automated
     processes and our infrastructure, including our networks, data processing
     systems and financial and administrative systems,

--   embedded technology in our facilities and laboratory equipment, and

--   the Year 2000 readiness of third party vendors and suppliers of goods,
     services and systems as it relates to the foregoing areas.

         We are using both internal and external resources to identify potential
issues, costs and solutions to address Year 2000 concerns. For this effort, we
are using procedures outlined in the Government Accounting Office's Y2K Guide.

         We have completed an inventory and assessment of software and hardware
contained in or integrated with our automated processes and our infrastructure.
Our assessment included researching available vendor Year 2000 compliance
statements as well as contacting certain vendors to obtain Year 2000 compliance
certifications and/or remediation recommendations for these systems and
equipment. We have identified critical systems on which we have focused our


                                       15

<PAGE>

remediation and testing efforts. To date, we have identified aspects of the
computer hardware, network infrastructure and business systems that we purchase
from third party vendors which are not Year 2000 compliant. We have obtained and
implemented vendor recommendations for correcting deficiencies in critical
systems and have established a process to monitor and implement any additional
vendor recommendations for correcting these Year 2000 deficiencies in our
critical systems. We expect to have implemented any necessary Year 2000 upgrades
to critical systems provided to us by third party vendors or to have developed a
contingency plan for critical systems by the end of the fourth quarter.

         In addition, we have identified aspects of our own internally developed
software applications that are not Year 2000 compliant. We are conducting
remediation and testing for critical software applications. We will continue to
perform remediation and testing efforts throughout the fourth quarter including
testing of specific critical applications to simulate their operation in the
Year 2000. We expect to complete any necessary remediation of critical
internally developed systems or, where remediation is not feasible, to have
developed a contingency plan for such critical systems, by the end of the fourth
quarter.

         We are also conducting an inventory and assessment of hardware and
software embedded in our facilities and laboratory equipment. We completed an
inventory and risk assessment of critical laboratory and facilities equipment
and systems during the first half of 1999 and have scheduled a review and
follow-up inventory in the fourth quarter. Our assessment included researching
available vendor Year 2000 statements as well as contacting certain vendors to
obtain Year 2000 compliance certifications and/or remediation recommendations
for these systems and equipment. We have conducted a remediation of such systems
and equipment based upon these recommendations and have established a process
for identifying and implementing any additional vendor recommendations. We
expect to complete all corrective actions on critical laboratory and facilities
or, where correction is not feasible, will have developed a contingency plan for
such critical facilities or laboratory equipment, by the end of the fourth
quarter.

         We have also made inquiries of the Year 2000 readiness of a limited
number of our important vendors, suppliers and other third party companies with
whom we do business.

         COSTS. Our costs to date associated with assessment, remediation and
testing activities concerning the Year 2000 problem have not been material. We
do not expect that we will incur material additional costs in connection with
identifying, evaluating and addressing Year 2000 compliance issues.

         WORST CASE SCENARIO. Our reasonably likely worst case Year 2000
scenario would be that the failure of any computer hardware and software systems
or a failure of any facilities or laboratory equipment could result in a
disruption in the integrity of the data produced in our research and development
programs and/or cause material delays in our ability to provide such


                                       16

<PAGE>

data to our strategic alliance partners, either of which could have a material
adverse effect on our business and operating results.

         CONTINGENCY PLAN. We are developing contingency plans for critical
aspects of our systems and operations to address Year 2000 problems that may
arise despite our Year 2000 compliance efforts.
Currently, these plans focus on the development of procedures for:

--   employee safety,

--   protecting valuable lab materials including tissues and clones,

--   data preservation,

--   animal facility system failures,

--   handling equipment malfunction,

--   arranging for alternative power sources in the event of power outages in
     critical facilities,

--   methodical testing of critical systems during the weekend of January 1,
     2000, and

--   making key personnel "on call" during the weekend of January 1, 2000 to
     identify promptly and begin remediating any Year 2000 related system
     failures.

We continue to engage in ongoing assessment, remediation and testing activities
and our internal results, as well as the responses we receive from third parties
will be taken into account in determining the nature and extent of any further
contingency plans if necessary. However, we may not be able to modify our
systems and equipment or find alternative vendors in a timely and successful
manner to comply with Year 2000 requirements, which could have a material
adverse effect on our business and operating results.


                                       17

<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company maintains an investment portfolio in accordance with its
Investment Policy. The primary objectives of the Company's Investment Policy are
to preserve principal, maintain liquidity to meet operating needs and maximize
yields. The Company's Investment Policy specifies credit quality standards for
the Company's investments and limits the amount of credit exposure to any single
issue, issuer or type of investment.

         The Company does not believe that there is any material market risk
exposure with respect to derivative or other financial instruments which would
require disclosure under this item.


                                       18

<PAGE>

PART II - OTHER INFORMATION

Item 6.   EXHIBITS AND REPORTS ON FORM 8-K.

     (a)  Exhibits

          The exhibits listed in the Exhibit Index are included in this report.

     (b)  Reports on Form 8-K

          1.   Form 8-K filed with the Securities and Exchange Commission on
               October 21, 1999, as amended by Form 8-K/A filed on October 29,
               1999.


                                       19

<PAGE>


                              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.


                                       MILLENNIUM PHARMACEUTICALS, INC.
                                                 (Registrant)


Date:  November 5, 1999                By:   /s/ Kevin P. Starr
                                             -----------------------
                                             Kevin P. Starr
                                             Chief Financial Officer
                                             (Principal Financial and
                                              Accounting Officer)


                                       20

<PAGE>


                                  EXHIBIT INDEX

      The following exhibits are filed as part of this Quarterly Report on
Form 10-Q:


<TABLE>
<CAPTION>

Exhibit
  No.               Description
-------             -----------
<S>                 <C>

  27.1              Financial Data Schedule for the quarter ended September 30,
                    1999

  99.1              Pages 45 through 59 of the Company's Annual Report of Form
                    10-K for the year ended December 31, 1998, as filed with
                    the Securities Exchange Commission (which are deemed filed
                    except to the extent that portions are not expressly
                    incorporated by reference herein).

</TABLE>


                                       21