UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(MARK ONE)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001
                                       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
incorporation or organization)                         Identification No.)


75 SIDNEY STREET                                       02139
CAMBRIDGE, MASSACHUSETTS                               (Zip Code)
(Address of principal executive offices)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (617) 679-7000

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


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


The number of shares outstanding of each of the registrant's classes of common
stock as of:

       DATE                           CLASS                 OUTSTANDING SHARES
----------------          ------------------------------    ------------------
October 16, 2001          Common stock, $0.001 par value        221,359,771

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

<PAGE>

                        MILLENNIUM PHARMACEUTICALS, INC.

                                    FORM 10-Q

                    FOR THE QUARTER ENDED SEPTEMBER 30, 2001


                                TABLE OF CONTENTS


                                                                          PAGE



PART I     FINANCIAL INFORMATION

Item 1.    Condensed Consolidated Financial Statements

           Condensed Consolidated Balance Sheets as of
           September 30, 2001 and December 31, 2000                         3

           Condensed Consolidated Statements of Operations for the
           three and nine months ended September 30, 2001 and 2000          4

           Condensed Consolidated Statements of Cash Flows for the
           nine months ended September 30, 2001 and 2000                    5

           Notes to Condensed Consolidated Financial Statements             6

Item 2.    Management's Discussion and Analysis of Financial
           Condition and Results of Operations                             11

Item 3.    Quantitative and Qualitative Disclosures about Market Risk      22

PART II    OTHER INFORMATION

Item 2.    Changes in Securities and Use of Proceeds                       24

Item 6.    Exhibits and Reports on Form 8-K                                24

           Signatures                                                      25

           Exhibit Index                                                   26




                                        2
<PAGE>



                          PART I FINANCIAL INFORMATION

ITEM 1.    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



                        MILLENNIUM PHARMACEUTICALS, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                        SEPTEMBER 30,      DECEMBER 31,
                                                            2001               2000
                                                        -------------      -------------
                                                        (UNAUDITED)
<S>                                                     <C>                <C>
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
ASSETS
Current assets:
  Cash and cash equivalents                             $    61,464        $   166,086
  Marketable securities                                   1,466,238          1,286,281
  Due from strategic alliance partners                       25,648             21,901
  Prepaid expenses and other current assets                  15,537             11,312
                                                        -----------        -----------
Total current assets                                      1,568,887          1,485,580
Property and equipment, net                                 136,533             85,803
Restricted cash and other assets                             34,714             34,599
Goodwill, net                                               132,865            177,083
Intangible assets, net                                       22,733             28,857
                                                        -----------        -----------
Total assets                                            $ 1,895,732        $ 1,811,922
                                                        ===========        ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                      $    15,361        $    20,256
  Accrued expenses                                           72,139             39,868
  Deferred revenue                                           54,554             61,842
  Current portion of capital lease obligations               16,125             14,208
                                                        -----------        -----------
Total current liabilities                                   158,179            136,174
Deferred revenue                                             41,392             88,169
Capital lease obligations, net of current portion            32,086             29,369
Long term debt                                               83,325             95,927

Commitments and contingencies

Stockholders' equity:
Preferred Stock, $0.001 par value; 5,000 shares
authorized, none issued                                           -                  -
Common Stock, $0.001 par value; 500,000 shares
authorized: 221,145 shares at September 30, 2001 and
213,979 shares at December 31, 2000 issued and
outstanding                                                     221                214
Additional paid-in capital                                2,413,882          2,203,902
Deferred compensation                                          (898)            (1,296)
Notes receivable from officers                                 (354)              (385)
Accumulated other comprehensive income                       43,540             10,455
Accumulated  deficit                                       (875,641)          (750,607)
                                                        -----------        -----------
Total stockholders' equity                                1,580,750          1,462,283
                                                        -----------        -----------
Total liabilities and stockholders' equity              $ 1,895,732        $ 1,811,922
                                                        ===========        ===========
</TABLE>

        See notes to condensed consolidated financial statements.

                                       3
<PAGE>


                        MILLENNIUM PHARMACEUTICALS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>


                                                          THREE MONTHS ENDED SEPTEMBER 30,      NINE MONTHS ENDED SEPTEMBER 30,
                                                          --------------------------------      -------------------------------
                                                             2001              2000**              2001              2000**
                                                          ----------        ----------          ----------        ----------
<S>                                                       <C>               <C>                 <C>               <C>
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Revenues:
  Revenue under strategic alliances                       $   82,175        $   43,874          $  191,605        $  137,583
Costs and expenses:
  Research and development                                    98,840            68,783             285,945           190,894
  General and administrative                                  18,315            12,439              53,948            34,319
  Amortization of goodwill and intangible assets              15,714            14,480              48,010            38,611
                                                          ----------        ----------          ----------        ----------
   Total costs and expenses                                  132,869            95,702             387,903           263,824
                                                          ----------        ----------          ----------        ----------
Loss from operations                                         (50,694)          (51,828)           (196,298)         (126,241)

Other income (expense):
  Equity in operations of joint venture                        2,625            (2,099)              1,700            (3,499)
  Interest income                                             25,201            12,132              79,151            31,393
  Interest expense                                            (2,366)           (4,561)             (7,020)          (16,696)
  Debt conversion expense                                          -           (49,332)             (2,567)          (49,332)
  Minority interest                                                -                 -                   -               (63)
                                                          ----------        ----------          ----------        ----------
Loss before cumulative effect of change in
accounting principle                                         (25,234)          (95,688)           (125,034)         (164,438)

Cumulative effect of change in accounting principle                -                 -                    -         (107,692)
                                                          ----------        ----------          ----------        ----------
Net loss                                                     (25,234)          (95,688)           (125,034)         (272,130)
Deemed preferred stock dividend                                    -                 -                   -           (45,668)
                                                          ----------        ----------          ----------        ----------
Net loss attributable to common stockholders              $  (25,234)       $  (95,688)         $ (125,034)       $ (317,798)
                                                          ==========        ==========          ==========        ==========

AMOUNTS PER COMMON SHARE:

Loss before cumulative effect of change in
accounting principle                                      $    (0.11)       $    (0.49)         $    (0.57)       $    (0.88)

Cumulative effect of change in accounting principle                -                 -                   -             (0.58)
Deemed preferred stock dividend                                    -                 -                   -             (0.24)
                                                          ----------        ----------          ----------        ----------
Net loss per share, basic and diluted                     $    (0.11)       $    (0.49)         $    (0.57)       $    (1.70)
                                                          ==========        ==========          ==========        ==========

Weighted average shares, basic and diluted                   220,069          193,570              217,766           186,434
                                                          ==========       ==========           ==========        ==========
</TABLE>

**  Includes the effects of SAB 101.  See Note 2.

           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,
                                                                           -----------------------------
                                                                              2001               2000
                                                                           ----------         ----------
<S>                                                                        <C>                <C>
(IN THOUSANDS)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss                                                                   $ (125,034)        $ (272,130)
Adjustments to reconcile net loss to cash
used in operating activities:
Cumulative effect of change in accounting principle                                 -            107,692
Depreciation and amortization                                                  72,938             56,643
Gain on available-for-sale securities                                          (5,759)                 -
Stock compensation expense                                                      3,214              2,195
Equity in operations of joint venture                                          (1,700)             3,499
Minority interest                                                                   -                 63
Changes in operating assets and liabilities:
 Due from strategic alliance partners                                          (7,948)             1,279
 Prepaid expenses and other current assets                                     (1,194)             3,299
 Restricted cash and other assets                                                 251               (510)
 Accounts payable and accrued expenses                                          9,848             (7,274)
 Deferred revenue                                                             (54,065)            11,821
                                                                           ----------         ----------
Net cash used in operating activities                                        (109,449)           (93,423)
                                                                           ----------         ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in  marketable securities                                        (616,545)          (505,859)
Proceeds from sales and maturities of marketable securities                   474,992            202,591
Investment in joint venture                                                      (656)            (1,533)
Purchase of property and equipment and other long term assets                 (36,158)           (24,653)
Net cash used in Cambridge Discovery Chemistry Ltd. acquisition                (1,614)           (54,447)
Proceeds from the sale of Cambridge Discovery Chemistry, Inc.                     946                  -
                                                                           ----------         ----------
Net cash used in investing activities                                        (179,035)          (383,901)
                                                                           ----------         ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of convertible subordinated notes, net of issuance costs                   -            388,695
Proceeds from sales of common stock and exercises of warrants                 178,573            152,925
Net proceeds from employee stock purchases                                     16,118             55,303
Repayment of notes receivable from officers                                         -                633
Principal payments on capital leases                                          (10,793)            (8,949)
                                                                           ----------         ----------
Net cash provided by financing activities                                     183,898            588,607
                                                                           ----------         ----------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                             (104,586)           111,283
Equity adjustment from foreign currency translation                               (36)                44
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                166,086             56,775
                                                                           -----------        ----------
CASH AND CASH EQUIVALENTS, END OF  PERIOD                                  $   61,464         $  168,102
                                                                           ==========         ==========

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest                                                     $    7,692         $   11,617

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Equipment acquired under capital leases                                    $   15,427         $   10,782
Construction costs for laboratory and office space                             24,631                  -
Conversion of subordinated debt to common stock                                12,602            275,093
M&I capital contribution                                                        4,189                  -
Services due from the sale of Cambridge Discovery Chemistry, Inc.               3,000                  -
Write off of capital assets                                                       558              1,453
Reclassification of debt issuance costs to additional paid-in capital             122              6,744
MPI buyout of Becton Dickinson interest in MPMx                                     -             61,160
Issuance of common stock to Abgenix, Inc.                                           -             10,000
Additional goodwill related to the LeukoSite acquisition                            -              3,908
Deferred compensation relating to issuance of stock options                         -              1,160

</TABLE>

             See notes to condensed consolidated financial statements.
                                       5
<PAGE>

                        MILLENNIUM PHARMACEUTICALS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


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 and revisions of estimates, considered necessary
for a fair presentation of the accompanying condensed consolidated financial
statements have been included. Interim results for the three and nine month
periods ended September 30, 2001 are not necessarily indicative of the results
that may be expected for the year ended December 31, 2001. 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,
2000, which was filed with the Securities and Exchange Commission (SEC) on March
15, 2001.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      (a)   CASH EQUIVALENTS AND MARKETABLE SECURITIES

      Cash equivalents consist principally of money market funds and corporate
bonds with original maturities of three months or less at the date of purchase.
Marketable securities consist of high-grade corporate bonds, asset-backed and
U.S. government agency securities.

      Management determines the appropriate classification of marketable
securities at the time of purchase and reevaluates such designation at each
balance sheet date. Marketable securities at September 30, 2001 and December 31,
2000 are classified as "available-for-sale." Available-for-sale securities are
carried at fair value, with the unrealized gains and losses, net of tax,
reported in a separate component of stockholders' equity. Realized gains and
losses and declines in value judged to be other-than-temporary on
available-for-sale securities are included in interest income. The cost of debt
securities in this category is adjusted for amortization of premiums and
accretion of discounts to maturity. Such amortization and accretion is included
in interest income. The cost of securities sold is based on the specific
identification method. Interest and dividends on securities classified as
available-for-sale are included in interest income.

      (b)   GOODWILL AND INTANGIBLE ASSETS

      Intangible assets consist of specifically identified intangible assets.
Goodwill is the excess of any purchase price over the estimated fair market
value of net tangible assets acquired not allocated to specific intangible
assets. Amortization is computed using the straight-line method over the
estimated useful lives of the respective assets, generally four years.
Accumulated amortization was $111.7 million and $64.0 million at September 30,
2001 and December 31, 2000, respectively. On a periodic basis, the Company
estimates the future undiscounted cash flows of the businesses to which the
goodwill and intangible assets relate in order to ensure that the carrying value
of such assets has not been impaired.

                                       6
<PAGE>


                        MILLENNIUM PHARMACEUTICALS, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

      (c)   REVENUE RECOGNITION

      Effective October 1, 2000, Millennium changed its method of accounting for
revenue recognition in accordance with Staff Accounting Bulletin (SAB) No. 101
("SAB 101"), REVENUE RECOGNITION IN FINANCIAL STATEMENTS. Previously, the
Company had recognized revenue relating to non-refundable, up-front, license and
milestone payments and certain research funding payments from its strategic
partners in accordance with the contract. Under the new accounting method
adopted retroactively to January 1, 2000, the Company recognizes revenue from
non-refundable, up-front, license and milestone payments, not specifically tied
to a separate earnings process, ratably over the term of the research contract.
When payments are specifically tied to a separate earnings process, revenue is
recognized when the specific performance obligation associated with the payment
is completed. Performance obligations typically consist of significant
milestones in the development life cycle of the related technology such as
initiation of clinical trials, filing for approval with regulatory agencies and
approvals by regulatory agencies. In addition, when appropriate, the Company
recognizes revenue from certain research payments based upon the level of
research services performed during the period of the research contract. The
cumulative effect of the change on prior years resulted in a charge to income of
$107.7 million, which is included in the loss for the nine months ended
September 30, 2000. Included in revenue for the three and nine months ended
September 30, 2000 is $5.0 million and $15.1 million, respectively, of revenue
that was recognized in prior years relating to the adoption of SAB 101. The
amount of revenue recognized in the three and nine months ended September 30,
2001 that was included in the cumulative effect of change in accounting
principle and was recognized in prior years is $10.6 million and $32.8 million,
respectively. Prior year financial results have been restated for the
retroactive adoption of SAB 101 to January 1, 2000.

      In 1998, Millennium and Bayer AG ("Bayer") entered into a five-year
research collaboration. In connection with the company's adoption of SAB 101,
Millennium began recognizing the research funding portion of the Bayer alliance
on a percentage-of-completion basis. The percentage-of-completion is determined
based upon the actual level of work performed during the period as compared to
management's estimate of the total work to be performed under the alliance. The
estimates are continually reviewed and adjusted as necessary, as experience
develops or new information becomes known. To reflect research productivity
improvements, management revised its estimate of the remaining work to be
performed under the alliance, which resulted in a cumulative catch up adjustment
of $18.4 million of additional revenue in September 2001. Excluding the impact
of this change in estimate, net loss attributable to common stockholders and the
related earnings per share amounts for the three and nine months ended September
30, 2001 was $43.7 million and $0.20 per share and $143.5 million and $0.66 per
share, respectively.

      (d)   SEGMENT INFORMATION

      The Company operates in one business segment, which primarily focuses on
the discovery and development of proprietary therapeutic and diagnostic human
healthcare products and services. Substantially all of the Company's revenues
have been derived from its strategic alliances. Revenues from Bayer accounted
for approximately 50% and 31% of consolidated revenues for the quarters ended
September 30, 2001 and 2000, respectively and 39% and 27% of consolidated
revenues for the nine months ended September 30, 2001 and 2000, respectively.
Revenues from Monsanto Company ("Monsanto") accounted for approximately 13% and
26% of consolidated revenues for the quarters ended September 30, 2001 and 2000,
respectively and 17% and 24% of consolidated revenues for the nine months ended
September 30, 2001 and 2000, respectively. Revenues from Aventis
Pharmaceuticals, Inc. ("Aventis") accounted for approximately 12% and 13% of
consolidated revenues for the quarters ended September 30, 2001 and 2000,
respectively and 16% and 5% of consolidated revenues for the nine months ended
September 30, 2001 and 2000, respectively.

      (e)   NET INCOME (LOSS) PER COMMON SHARE

      Basic net income (loss) per common share is computed using the weighted
average number of common shares outstanding during the period. Diluted net
income (loss) per common share is computed using the weighted average number of
common and dilutive common equivalent shares from stock options, warrants and
convertible debt using the treasury stock method. For all periods presented,
diluted net loss per share is the same as basic net

                                       7
<PAGE>

                        MILLENNIUM PHARMACEUTICALS, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

loss per share as the inclusion of weighted average shares of common stock
issuable upon the exercise of stock options, warrants and convertible debt would
be antidilutive.

      (f)   STOCK DIVIDENDS

      Stockholders' equity has been restated to give retroactive application to
each of the two-for-one stock splits on April 18, 2000 and October 4, 2000 by
reclassifying from additional paid-in capital to common stock the par value of
the additional shares arising from the stock splits. In addition, all references
in the condensed consolidated financial statements to the number of shares and
per share amounts have been restated.

      (g)   COMPREHENSIVE INCOME (LOSS)

      Comprehensive loss was $4.5 million and $92.3 million for the quarters
ended September 30, 2001 and 2000, respectively, and $91.9 million and $269.1
million for the nine months ended September 30, 2001 and 2000, respectively.
Comprehensive income (loss) is comprised of net income (loss), unrealized gains
and losses on marketable securities and cumulative foreign currency translation
adjustments. Accumulated other comprehensive income at September 30, 2001
included $43.8 million of unrealized gains on marketable securities and $0.3
million of cumulative foreign currency translation adjustments.

      (h)   RECENT ACCOUNTING PRONOUNCEMENTS

      In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities." The effective date of this
statement was deferred to fiscal years beginning after June 15, 2000 by SFAS No.
137 "Accounting for Derivative Instruments and Hedging Activities--Deferral of
Effective Date of SFAS No. 133." SFAS No. 133 was amended by SFAS No. 138
"Accounting for Certain Derivative Instruments and Certain Hedging Activities."
The Company has adopted this new accounting standard effective January 1, 2001
and it did not have a significant effect on the financial statements.

      In July 2001, the FASB issued SFAS No. 141, "Business Combinations" and
SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 eliminates
the pooling-of-interests method of accounting for business combinations except
for qualifying business combinations that were initiated prior to July 1, 2001.
Under SFAS No. 142, goodwill and indefinite lived intangible assets are no
longer amortized but are reviewed annually for impairment. Separable intangible
assets that are not deemed to have an indefinite life will continue to be
amortized over their useful lives. With respect to goodwill and intangible
assets acquired prior to July 1, 2001, the Company is required to adopt SFAS No.
142 for the fiscal year beginning after December 15, 2001. The Company is
currently assessing the financial impact SFAS No. 141 and 142 will have on its
consolidated financial statements.

      In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." SFAS No. 144 supersedes SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of" and provides a single accounting model for long-lived
assets to be disposed of. The Company is required to adopt SFAS No. 144 for the
fiscal year beginning after December 15, 2001 and does not believe it will have
a significant impact on its consolidated financial statements.

3.    STRATEGIC ALLIANCES

      In both January 2001 and July 2001, Aventis made $50 million purchases of
Millennium common stock pursuant to the June 2000 Investment Agreement between
the Company and Aventis.

      On March 12, 2001, the Company entered into a strategic alliance with
Abbott Laboratories ("Abbott"). This alliance is for a five-year term, and is a
research and development collaboration in the area of metabolic diseases. The
Company and Abbott have agreed to share the cost of developing, manufacturing
and marketing products on a worldwide basis. This arrangement with Abbott also
includes a technology exchange and development agreement and an equity
investment by Abbott, under which the Company is eligible to receive up to $250
million. As part of this $250 million equity investment, Abbott made investments
of $50.0 and $28.6 million in April 2001 and

                                       8
<PAGE>
                        MILLENNIUM PHARMACEUTICALS, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

September 2001, respectively, and has agreed to make additional investments
totaling $171.4 million in six remaining equal quarterly installments from later
in 2001 through 2003.

      On April 11, 2001, the Company entered into an agreement with BZL
Biologics, L.L.C. ("BZL"), a privately-held company, to develop and
commercialize antibody-based therapeutics targeting Prostate Specific Membrane
Antigen (PSMA). The development plan includes programs for both immunotoxin and
radiolabeled products. The primary indication expected for products targeting
PSMA is prostate cancer, although PSMA may also be a relevant therapeutic target
in other solid tumors. The terms of the agreement call for Millennium and BZL to
jointly develop the immunotoxin and radiolabeled products for the prostate
cancer indication until a predetermined clinical decision point. Thereafter,
Millennium will have full responsibility for development, manufacturing and
commercialization of all antibody-based therapies for all indications, as well
as all diagnostic products. Millennium will be responsible for all development
costs of the products. In addition, BZL will be entitled to receive milestone
payments and royalties based on net sales of any marketed products.


4.    MILLENNIUM & ILEX PARTNERS, L.P.

      The Company and ILEX Products, Inc. ("ILEX") each own 50% of Millennium
and ILEX Partners, L.P. ("M&I") a joint venture formed for the purpose of
developing and commercializing the CAMPATH(R) product, a monoclonal antibody for
use in the treatment of chronic lymphocytic leukemia. In August 1999, M&I and
Schering AG ("Schering") entered into a distribution and development agreement
which grants Schering exclusive marketing and distribution rights to the
CAMPATH(R) product in the U.S., Europe and the rest of the world except Japan
and East Asia, where M&I has retained rights. In the United States, Berlex
Laboratories, Inc., Schering's U.S. affiliate, and M&I will share in the profits
from the sale of the CAMPATH(R) product. On sales made in the rest of the
territory, Schering has agreed to pay royalties equivalent to the rate of profit
sharing expected in the U.S. Under the terms of the agreement, Schering has
agreed to make payments of up to $30 million, all of which has been paid as of
September 30, 2001, for rights to the CAMPATH(R) product upon the achievement of
certain regulatory milestones. The joint venture currently intends to use these
funds to pay for ongoing development activities.

      The Company accounts for its investment in M&I under the equity
method of accounting and records its share of the income or loss in other income
(expense). For the three and nine months ended September 30, 2001 the Company's
share of the joint venture's recorded income was $2.6 million and $1.7 million,
respectively and the Company's obligation to fund the joint venture at September
30, 2001 was $2.1 million. During the three and nine months ended September 30,
2001, the Company recognized $0.6 million and $2.9 million, respectively, of
revenue from research and development activities performed on behalf of and to
be reimbursed by M&I. Included in Due from strategic alliance partners was $.8
million and $3.8 million at September 30, 2001 and December 31, 2000,
respectively for amounts due from M&I for such work.

5.    CONVERTIBLE DEBT

      In January 2000, the Company completed a sale, pursuant to Rule 144A of
the Securities Act of 1933, of $400.0 million of 5.5% convertible subordinated
notes due January 15, 2007. The 5.5% convertible subordinated notes due January
15, 2007 are convertible into Millennium common stock at any time prior to
maturity at a price equal to $42.07 per share, subject to adjustment, unless
previously repurchased or redeemed by the Company under certain circumstances.
Under the terms of the notes, the Company is required to make semi-annual
interest payments on the outstanding principal balance of the notes on January
15 and July 15 of each year. All required interest payments to date have been
made.

      During the nine months ended September 30, 2001, the Company paid an
aggregate of $2.6 million in cash to certain holders of Millennium's 5.5%
convertible subordinated notes due January 15, 2007 in order to induce the
conversion of their notes into Millennium common stock. These cash payments were
expensed during the nine months ended September 30, 2001. Interest accrued
through the date of conversion was charged to interest expense and was paid upon
conversion. These conversions resulted in the retirement of $12.6 million of
outstanding principal of Millennium 5.5% convertible subordinated notes due
January 15, 2007, the issuance of approximately 0.3 million shares of Millennium
common stock, and the reclassification of deferred debt

                                       9
<PAGE>
                        MILLENNIUM PHARMACEUTICALS, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


issuance costs of $0.1 million to additional paid-in capital. At September 30,
2001, the Company had $83.3 million of outstanding 5.5% convertible subordinated
notes due January 15, 2007.

6.    COMMITMENTS

      On August 4, 2000, the Company entered into lease agreements, relating to
two buildings to be constructed for laboratory and office space in Cambridge,
Massachusetts. The rent obligation for each building is expected to commence on
the earlier of (a) September 1, 2002 or October 1, 2003, respectively or (b) the
date on which the Company commences occupancy of the respective building. Both
leases are for a term of seventeen years. The Company is responsible for a
portion of the construction costs for both buildings. The Company's cost to
complete each of the buildings is expected to be approximately $37.9 and $42.0
million, respectively. Rent is calculated on an escalating scale ranging from
approximately $7.6 million, per building per year, to approximately $9.7
million, per building per year.

      In February 2001, the Company entered into a lease agreement relating to a
building to be constructed for laboratory and office space in Cambridge,
England. The lease is for a term of 20 years and is expected to commence in
2003. The Company is responsible for a portion of the construction costs, which
it estimates to be approximately $21.0 million. Rent is approximately $2.4
million per year and is subject to market adjustments at the end of the 5th,
10th and 15th years.

                                       10

<PAGE>



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


OVERVIEW

      Millennium Pharmaceuticals, Inc. was founded in 1993. We incorporate
large-scale genetics, genomics, high throughput screening, and informatics in an
integrated science and technology platform, which we apply primarily in
discovering and developing proprietary therapeutic and diagnostic human
healthcare products and services.

      We primarily derive our revenue from payments from strategic alliances
with major pharmaceutical companies. We have not received any revenue from the
sale of products. Significant strategic alliances include the following: an
agreement with Bayer, AG ("Bayer") in cardiovascular disease, and certain areas
of oncology, pain, hematology, atherosclerosis, thrombosis, urology and viral
infections; a research alliance and technology transfer agreement with Monsanto
Company ("Monsanto") in plant agriculture; a technology transfer agreement and
joint development and commercialization agreement with Aventis Pharmaceuticals,
Inc. ("Aventis") in inflammatory disease; Millennium and ILEX Partners, L.P.
("M&I"), a joint venture partnership with ILEX Products, Inc. ("ILEX") for
development of the CAMPATH(R) (alemtuzumab) product, a monoclonal antibody for
use in the treatment of chronic lymphocytic leukemia, for which the partnership
received marketing approval from the Food and Drug Administration ("FDA") in May
2001; and an agreement, through our joint venture partnership with ILEX, with
Schering AG for distribution of the CAMPATH(R) (alemtuzumab) product. In
addition, we have a number of other strategic alliances. Our strategic alliance
agreements have provided us with various combinations of equity investments,
license fees and research funding, and may provide certain additional payments
contingent upon our achievement of research and regulatory milestones and
royalty and/or profit sharing payments based on sales of any products resulting
from the collaborations.

      In July 2001, the European Commission granted marketing authorization to
the MabCampath(TM) (alemtuzumab) product for patients with chronic lymphocytic
leukemia (CLL) who have been treated with alkylating agents and have failed
fludarabine therapy. MabCampath(TM) is the name that will be used for the
CAMPATH(R) product in Europe. Under this authorization, M&I Partners was granted
a single license for marketing MabCampath(TM) in the 15 member states of the
European Union and received national licenses in two additional countries,
Iceland and Norway. M&I has initiated a post-approval clinical trial of
MabCampath(TM) versus chlorambucil, the standard frontline treatment, to further
examine MabCampath(TM) for the treatment of B-cell chronic lymphocytic leukemia
(B-CLL) patients.

      Our goal is to become an integrated biopharmaceutical company. As a
result, we expect to continue to pursue additional alliances and to consider
joint development, merger, or acquisition opportunities that may provide us with
access to products on the market or in later stages of commercial development
than those represented within our current programs. We expect that we 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 and as a result of our efforts to advance acquired products
or our own development programs to commercialization. Our results of operations
for any period may not be indicative of future results as our revenues under
strategic alliance and licensing arrangements and from product sales, to the
extent that we receive product sales in future periods, may fluctuate from
period to period or year to year.

RESULTS OF OPERATIONS

QUARTERS ENDED SEPTEMBER 30, 2001 AND SEPTEMBER 30, 2000

      For the three months ended September 30, 2001 (the "2001 Quarterly
Period") we reported a net loss attributable to common stockholders of $25.2
million or $0.11 per basic and diluted share as compared to a net loss
attributable to common stockholders of $95.7 million or $0.49 per basic and
diluted share for the three months ended September 30, 2000 (the "2000 Quarterly
Period").

      Revenue under strategic alliances increased to $82.2 million for the 2001
Quarterly Period from $43.9 million for the 2000 Quarterly Period. The increase
in revenue is primarily due to increased revenue from

                                       11
<PAGE>

Bayer's research funding, milestone payments from Bayer and Aventis and
additional license fees from Becton, Dickinson and Company. We expect revenue
under existing and new strategic alliances to continue; however, revenues may
fluctuate from period to period and there can be no assurance that strategic
alliance agreements will continue for their full initial terms or beyond.

      Effective October 1, 2000, we changed our method of accounting for revenue
recognition in accordance with Staff Accounting Bulletin (SAB) No. 101 ("SAB
101"), REVENUE RECOGNITION IN FINANCIAL STATEMENTS. Previously, we had
recognized revenue relating to non-refundable, up-front, license and milestone
payments and certain research funding payments from our strategic partners in
accordance with the contract. Under the new accounting method adopted
retroactively to January 1, 2000, we now recognize revenue from non-refundable,
up-front, license and milestone payments, not specifically tied to a separate
earnings process, ratably over the term of the research contract. When payments
are specifically tied to a separate earnings process, revenue is recognized when
the specific performance obligation associated with the payment is completed.
Performance obligations typically consist of significant milestones in the
development life cycle of the related technology such as initiation of clinical
trials, filing for approval with regulatory agencies and approvals by regulatory
agencies. In addition, when appropriate, we recognize revenue from certain
research payments based upon the level of research services performed during the
research contract. Included in the 2001 and 2000 quarterly revenue is $10.6 and
$5.0 million of revenue that was recognized in prior years relating to the
adoption of SAB 101, respectively.

      In 1998, we entered into a five-year research collaboration with Bayer. In
connection with our adoption of SAB 101, we began recognizing the research
funding portion of the Bayer alliance on a percentage-of-completion basis. The
percentage-of-completion is determined based upon the actual level of work
performed during the period as compared to management's estimate of the total
work to be performed under the alliance. The estimates are continually reviewed
and adjusted as necessary, as experience develops or new information becomes
known. To reflect research productivity improvements, we revised our estimate of
the remaining work to be performed under the alliance, which resulted in a
cumulative catch up adjustment of $18.4 million of additional revenue in
September 2001. Excluding the impact of this change in estimate, net loss
attributable to common stockholders and the related earnings per share amounts
for the three and nine months ended September 30, 2001 was $43.7 million and
$0.20 per share and $143.5 million and $0.66 per share, respectively.

      Research and development expenses increased to $98.8 million for the 2001
Quarterly Period from $68.8 million for the 2000 Quarterly Period. The increase
was primarily attributable to our continued investment in clinical trials and
preclinical product candidates and increased personnel and facilities expenses.
We expect research and development expenses to continue to increase as personnel
are added and research and development activities are expanded to accommodate
our existing and additional strategic alliances as well as our investment in
development efforts to move our product candidates to commercialization.

      General and administrative expenses increased to $18.3 million for the
2001 Quarterly Period from $12.4 million for the 2000 Quarterly Period. The
increase was primarily attributable to increased expenses for additional
management and administrative personnel, as well as an increase in facilities
expenses and other professional fees associated with the expansion and increased
complexity of our operations.

      On December 22, 1999 we acquired LeukoSite, Inc. ("LeukoSite") and on July
27, 2000 we acquired Cambridge Discovery Chemistry Limited. Both transactions
were recorded as purchases for accounting purposes and accordingly, the
respective purchase prices were allocated to the separately identifiable assets
purchased and liabilities assumed based upon their respective fair values.
Goodwill is the excess of the purchase price over such allocation of fair
values. Intangible assets and goodwill are being amortized on a straight-line
basis over four years. Amortization expense for the 2001 and 2000 Quarterly
Periods is primarily related to the LeukoSite acquisition.

      In connection with the LeukoSite acquisition, we also incurred a
nonrecurring charge to operations in 1999 for acquired in-process research and
development. Our research and development projects acquired in connection with
our acquisition of LeukoSite are expected to continue in line with the estimates
set forth in our 2000 Annual Report on Form 10-K.

                                       12
<PAGE>

      Through our 1999 acquisition of LeukoSite we became a party to a joint
venture partnership with ILEX, M & I Partners, for development of the CAMPATH(R)
product. We account for our investment in the joint venture under the equity
method of accounting and record our share of the income or loss in other income
(expense). Equity in operations of the joint venture was $2.6 million for the
2001 Quarterly Period compared to a loss of $2.1 million for the 2000 Quarterly
Period. The CAMPATH(R) product was launched in the United States and in the
U.K., Germany and Ireland during the 2001 Quarterly Period.

      Interest income increased to $25.2 million for the 2001 Quarterly Period
from $12.1 million for the 2000 Quarterly Period. The increase resulted
primarily from a higher level of invested funds due to net proceeds from our
public stock offering in October 2000 of $767.4 million (including the
underwriters' exercise of their over-allotment option), common stock purchases
made by Aventis in July 2000, January 2001 and July 2001 of $150 million, $50
million and $50 million, respectively, and common stock purchases made by Abbott
in April 2001 and September 2001 of $50 million and $28.6 million, respectively.

      Interest expense decreased to $2.4 million for the 2001 Quarterly Period
from $4.6 million for the 2000 Quarterly Period due to reduced obligations from
the early conversion of a portion of our 5.5% convertible subordinated notes due
January 15, 2007.

      During the 2000 Quarterly Period, we paid an aggregate of $49.3 million in
cash to certain holders of our 5.5% convertible subordinated notes due January
15, 2007 in order to induce the conversion of their notes into our common stock.
These cash payments were expensed during the 2000 Quarterly Period.

NINE MONTHS ENDED SEPTEMBER 30, 2001 AND SEPTEMBER 30, 2000

      For the nine months ended September 30, 2001 (the "2001 Nine Month
Period") we reported a net loss attributable to common stockholders of $125.0
million or $0.57 per basic and diluted share as compared to a net loss
attributable to common stockholders of $317.8 million or $1.70 per basic and
diluted share for the nine months ended September 30, 2000 (the "2000 Nine Month
Period").

      Revenue under strategic alliances increased to $191.6 million for the 2001
Nine Month Period from $137.6 million for the 2000 Nine Month Period. The
increase in revenue is primarily due to increased revenue from Bayer's research
funding and milestone payments from Bayer and Aventis. Included in the 2001 and
2000 Nine Month Period revenue is $32.8 and $15.1 million of revenue that was
recognized in prior years relating to the adoption of SAB 101, respectively. We
expect revenue under existing and new strategic alliances to continue; however,
revenues may fluctuate from period to period and there can be no assurance that
strategic alliance agreements will continue for their full initial terms or
beyond.

      In 1998, we entered into a five-year research collaboration with Bayer. In
connection with our adoption of SAB 101, we began recognizing the research
funding portion of the Bayer alliance on a percentage-of-completion basis. The
percentage-of-completion is determined based upon the actual level of work
performed during the period as compared to management's estimate of the total
work to be performed under the alliance. The estimates are continually reviewed
and adjusted as necessary, as experience develops or new information becomes
known. To reflect research productivity improvements, we revised our estimate of
the remaining work to be performed under the alliance, which resulted in a
cumulative catch up adjustment of $18.4 million of additional revenue in
September 2001. Excluding the impact of this change in estimate, net loss
attributable to common stockholders and the related earnings per share amounts
for the three and nine months ended September 30, 2001 was $43.7 million and
$0.20 per share and $143.5 million and $0.66 per share, respectively.

      Research and development expenses increased to $285.9 million for the 2001
Nine Month Period from $190.9 million for the 2000 Nine Month Period. The
increase was primarily attributable to increased personnel and facilities
expenses, increased purchases of laboratory supplies and our continued
investment in clinical trials and preclinical product candidates. We expect
research and development expenses to continue to increase as personnel are added
and research and development activities are expanded to accommodate our existing
and

                                       13
<PAGE>

additional strategic alliances as well as our investment in development
efforts to move our product candidates to commercialization.

      General and administrative expenses increased to $53.9 million for the
2001 Nine Month Period from $34.3 million for the 2000 Nine Month Period. The
increase was primarily attributable to increased expenses for additional
management and administrative personnel, as well as an increase in facilities
expenses and professional fees associated with the expansion and increased
complexity of our operations.

      On December 22, 1999 we acquired LeukoSite and on July 27, 2000 we
acquired Cambridge Discovery Chemistry Limited, respectively. Both transactions
were recorded as purchases for accounting purposes and accordingly, the
respective purchase prices were allocated to the separately identifiable assets
purchased and liabilities assumed based upon their respective fair values.
Goodwill is the excess of the purchase price over such allocation of fair
values. Intangible assets and goodwill are being amortized on a straight-line
basis over four years. Amortization expense for the 2001 and 2000 Nine Month
Periods primarily relates to the LeukoSite acquisition.

      In connection with the LeukoSite acquisition, we also incurred a
nonrecurring charge to operations in 1999 for acquired in-process research and
development. Our research and development projects acquired in connection with
our acquisition of LeukoSite are expected to continue in line with the estimates
set forth in our 2000 Annual Report on Form 10-K.

      Through our 1999 acquisition of LeukoSite we became a party to a joint
venture partnership with ILEX, M & I Partners, for development of the CAMPATH(R)
product. We account for our investment in the joint venture under the equity
method of accounting and record our share of the income or loss in other income
(expense). Equity in operations of the joint venture was $1.7 million for the
2001 Nine Month Period compared to a loss of $3.5 million for the 2000 Nine
Month Period. The CAMPATH(R) product was launched in the United States and in
the U.K., Germany and Ireland during the 2001 Nine Month Period.

      Interest income increased to $79.2 million for the 2001 Nine Month Period
from $31.4 million for the 2000 Nine Month Period. The increase resulted
primarily from a higher level of invested funds due to net proceeds from our
public stock offering in October 2000 of $767.4 million (including the
underwriters' exercise of their over-allotment option) and common stock
purchases made by Aventis in July 2000, January 2001and July 2001 of $150
million, $50 million and $50 million, respectively, and common stock purchases
made by Abbott in April 2001and September 2001 of $50 million and $28.6 million,
respectively.

      Interest expense decreased to $7.0 million for the 2001 Nine Month Period
from $16.7 million for the 2000 Nine Month Period due to reduced obligations
from the early conversion of a portion of our 5.5% convertible subordinated
notes due January 15, 2007.

      During the 2001 and 2000 Nine Month Periods, we paid an aggregate of $2.6
and $49.3 million, respectively, in cash to certain holders of our 5.5%
convertible subordinated notes due January 15, 2007 in order to induce the
conversion of their notes into our common stock. These cash payments were
expensed during the respective Nine Month Periods.

      Minority interest in the 2000 Nine Month Period represents the minority
shareholder interest of Becton Dickinson in the net income for the 2000 Nine
Month Period of our then majority-owned subsidiary, MPMx. On June 2, 2000, we
acquired the outstanding preferred stock of our MPMx subsidiary that we did not
already own, making MPMx a wholly-owned subsidiary of the Company.

LIQUIDITY AND CAPITAL RESOURCES

      As of September 30, 2001, we had approximately $1.5 billion in cash, cash
equivalents and marketable securities, an increase of $75.3 million from
December 31, 2000. This excludes $29.6 million of interest-bearing marketable
securities classified as restricted cash and other assets on our balance sheet,
which serve as security deposits for certain of our facilities leases.


                                       14
<PAGE>

      The increase in cash, cash equivalents and marketable securities is
primarily due to $178.6 million of proceeds from the sales of common stock to
Aventis and Abbott and $16.1 million of proceeds from employee stock purchases,
offset by cash outflows of $109.4 million for operating activities, purchases of
$36.2 million of property and equipment and other long term assets, and $10.8
million to pay capital lease obligations.

      In January 2000, we completed a sale, pursuant to Rule 144A of the
Securities Act of 1933, of $400.0 million of 5.5% convertible subordinated notes
due January 15, 2007. The 5.5% convertible subordinated notes due January 15,
2007 are convertible into shares of our common stock at any time prior to
maturity at a price equal to $42.07 per share, subject to adjustment, unless
previously repurchased or redeemed by us under certain circumstances. Under the
terms of the notes, we are required to make semi-annual interest payments on the
outstanding principal balance of the notes on January 15 and July 15 of each
year.

      During the first nine months of 2001, we paid an aggregate of $2.6 million
in cash to certain holders of Millennium's 5.5% convertible subordinated notes
due January 15, 2007 in order to induce the conversion of their notes into
Millennium common stock. These cash payments were expensed during 2001. Interest
accrued through the date of conversion was charged to interest expense and was
paid upon conversion. These conversions resulted in the retirement of $12.6
million of outstanding principal of Millennium 5.5% convertible subordinated
notes due January 15, 2007, the issuance of approximately 0.3 million shares of
Millennium common stock, and the reclassification of deferred debt issuance
costs of $0.1 million to additional paid-in capital. At September 30, 2001, we
had $83.3 million of outstanding 5.5% convertible subordinated notes due January
15, 2007.

      On June 23, 2000, we entered into an alliance with Aventis covering the
joint development and commercialization of drugs for the treatment of
inflammatory diseases; joint development of new drug discovery technologies;
transfer of key elements of our technology platform to Aventis to enhance its
existing capabilities; and purchase of an equity interest in us by Aventis. In
North America, we have agreed to share the responsibility for and cost of
developing, marketing and manufacturing products arising from the alliance, as
well as profits. Outside of North America, Aventis is responsible for developing
and marketing products arising from the alliance, with a royalty obligation to
us. Under a Technology Transfer Agreement, we agreed to provide Aventis with
rights to our drug discovery technologies in exchange for payments of up to $200
million over a five-year period. Under an Investment Agreement, Aventis agreed
to invest $250 million in our common stock. As part of this $250 million equity
investment, Aventis made a $150 million stock purchase in July 2000 and made
$50 million stock purchases in both January 2001 and July 2001.

      On August 4, 2000, we entered into lease agreements, relating to two
buildings to be constructed for laboratory and office space in Cambridge,
Massachusetts. The rent obligation for each building is expected to commence on
the earlier of (a) September 1, 2002 or October 1, 2003, respectively or (b) the
date on which we commence occupancy of the respective building. Both leases are
for a term of seventeen years. We are responsible for a portion of the
construction costs for both buildings. Our cost to complete each of the
buildings is expected to be approximately $37.9 and $42.0 million, respectively.
Rent is calculated on an escalating scale ranging from approximately $7.6
million, per building per year, to approximately $9.7 million, per building per
year.

      On October 11, 2000, we completed a public offering of 11,000,000 shares
of our common stock resulting in net proceeds to us of $677.1 million. On
October 17, 2000 the underwriters exercised their over-allotment option with
respect to an additional 1,465,500 shares of common stock, resulting in net
proceeds to us of an additional $90.3 million. We plan to use the net proceeds
of this offering for working capital and other corporate purposes including
financing our growth, accelerating the expansion of our technology platform,
developing products, including conducting preclinical testing and clinical
trials, and acquisitions of businesses, products and technologies that
complement or expand our business.

      In February 2001, we entered into a lease agreement relating to a building
to be constructed for laboratory and office space in Cambridge, England. The
lease has a term of 20 years and is expected to commence in 2003. We are
responsible for a portion of the construction costs, which we estimate to be
approximately $21.0 million. Rent is expected to be approximately $2.4 million
per year and is subject to market adjustments at the end of the 5th, 10th and
15th years.

                                       15

<PAGE>

      In March 2001, we entered into a strategic alliance with Abbott
Laboratories. This alliance is for a five-year term, and is primarily for
collaborative research and development in the area of metabolic diseases. Abbott
and we have agreed to share the cost of developing, manufacturing and marketing
products on a worldwide basis. Our arrangement with Abbott also includes a
technology exchange and development agreement and an equity investment by
Abbott, under which we are eligible to receive up to $250 million. As part of
this $250 million equity investment, Abbott made investments of $50.0 and $28.6
million in April 2001 and September 2001, respectively and has agreed to make
additional investments totaling $171.4 million in six remaining equal quarterly
installments from later in 2001 through 2003.

      We believe that existing cash, our investment securities and the
anticipated cash payments from our current strategic alliances will be
sufficient to support our operations and fund our capital commitments for the
near term. Our actual future cash requirements, however, will depend on many
factors, including the 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, success of products introduced
into the market and the progress of our development efforts and the development
efforts of our strategic partners.

RISK FACTORS THAT MAY AFFECT RESULTS

      THIS QUARTERLY REPORT ON FORM 10-Q AND CERTAIN OTHER COMMUNICATIONS MADE
BY THE COMPANY CONTAIN "FORWARD-LOOKING STATEMENTS," INCLUDING STATEMENTS ABOUT
OUR GROWTH AND FUTURE OPERATING RESULTS, DISCOVERY AND DEVELOPMENT OF PRODUCTS,
POTENTIAL ACQUISITIONS, STRATEGIC ALLIANCES AND INTELLECTUAL PROPERTY. FOR THIS
PURPOSE, ANY STATEMENT THAT IS NOT A STATEMENT OF HISTORICAL FACT SHOULD BE
CONSIDERED A FORWARD-LOOKING STATEMENT. WE OFTEN USE THE WORDS "BELIEVES,"
"ANTICIPATES," "PLANS," "EXPECTS," "INTENDS" AND SIMILAR EXPRESSIONS TO HELP
IDENTIFY FORWARD-LOOKING STATEMENTS.

      THERE ARE A NUMBER OF IMPORTANT FACTORS THAT COULD CAUSE MILLENNIUM'S
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED OR IMPLIED BY
FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH
DIFFERENCES INCLUDE THOSE DISCUSSED BELOW, AS WELL AS THOSE DISCUSSED ELSEWHERE
IN THIS FORM 10-Q. WE DISCLAIM ANY INTENTION OR OBLIGATION TO UPDATE OR REVISE
ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE
EVENTS OR OTHERWISE.

REGULATORY RISKS

WE MAY NOT BE ABLE TO OBTAIN MARKETING APPROVAL FOR PRODUCTS OR SERVICES
RESULTING FROM OUR DEVELOPMENT EFFORTS.

      All of the products that we are developing will require additional
research and development, extensive preclinical studies and clinical trials and
regulatory approval prior to any commercial sales. This process is lengthy,
often taking a number of years, and expensive. In some cases, the length of time
that it takes for us to achieve various regulatory approval milestones affects
the payments that we are eligible to receive under our strategic alliance
agreements.

      We may need to successfully address a number of technological challenges
in order to complete development of our products. Moreover, these products may
not be effective in treating any disease or may prove to have undesirable or
unintended side effects, toxicities or other characteristics that may preclude
our obtaining regulatory approval or prevent or limit commercial use.

IF WE FAIL TO COMPLY WITH REGULATORY REQUIREMENTS, OR IF WE EXPERIENCE
UNANTICIPATED PROBLEMS WITH OUR APPROVED PRODUCTS, OUR PRODUCTS COULD BE SUBJECT
TO RESTRICTIONS OR WITHDRAWAL FROM THE MARKET.

      Any product for which we obtain marketing approval, such as our CAMPATH(R)
monoclonal antibody, along with the manufacturing processes, post-approval
clinical data and promotional activities for such product, will be subject to
continual review and periodic inspections by the FDA and other regulatory
bodies. Later discovery of previously unknown problems with our products or
manufacturing processes, or failure to comply with regulatory

                                       16
<PAGE>

requirements, may result in restrictions on such products or manufacturing
processes, withdrawal of the products from the market or the imposition of civil
or criminal penalties.

WE HAVE ONLY LIMITED EXPERIENCE IN REGULATORY AFFAIRS, AND SOME OF OUR PRODUCTS
MAY BE BASED ON NEW TECHNOLOGIES; THESE FACTORS MAY AFFECT OUR ABILITY OR THE
TIME WE REQUIRE TO OBTAIN NECESSARY REGULATORY APPROVALS.

      We have only limited experience in filing and prosecuting the
applications necessary to gain regulatory approvals. Moreover, certain of the
products that are likely to result from our research and development programs
may be based on new technologies and new therapeutic approaches that have not
been extensively tested in humans. The regulatory requirements governing these
types of products may be more rigorous than for conventional products. As a
result, we may experience a longer regulatory process in connection with any
products that we develop based on these new technologies or new therapeutic
approaches.

RISKS RELATING TO OUR INDUSTRY, BUSINESS AND STRATEGY

BECAUSE DISCOVERING DRUGS BASED UPON GENOMICS IS NEW, IT IS POSSIBLE THAT THIS
DISCOVERY PROCESS WILL NOT RESULT IN COMMERCIAL PRODUCTS OR SERVICES.

      The process of discovering drugs based upon genomics is new and
evolving rapidly. We focus our genomics research primarily on diseases that may
be linked to several or many genes working in combination. Both we and the
general scientific and medical communities have only a limited understanding
relating to the role of genes and their products in these diseases. To date, we
have not commercialized any products discovered through our genomics research,
and we may not be successful in doing so in the future. In addition, relatively
few products based on gene discoveries have been developed and commercialized by
others. Rapid technological development by us or others may result in compounds,
products or processes becoming obsolete before we recover our development
expenses.

WE FACE SUBSTANTIAL COMPETITION, WHICH MAY RESULT IN OTHERS DISCOVERING,
DEVELOPING OR COMMERCIALIZING PRODUCTS AND SERVICES BEFORE OR MORE SUCCESSFULLY
THAN WE DO.

      The fields of genomics, biotechnology and pharmaceuticals are highly
competitive. Many of our competitors are substantially larger than we are and
have substantially greater capital resources, research and development staffs
and facilities than we have. Furthermore, many of our competitors are more
experienced than we are in drug discovery, development and commercialization,
obtaining regulatory approvals and product manufacturing and marketing. As a
result, our competitors may identify genes associated with diseases or discover,
develop and commercialize products or services based on such genes before we do.
In addition, our competitors may discover, develop and commercialize products or
services that render non-competitive or obsolete the products or services that
we or our collaborators are seeking to develop and commercialize.

WE MAY NOT BE ABLE TO OBTAIN BIOLOGICAL MATERIAL, INCLUDING HUMAN AND ANIMAL DNA
SAMPLES, REQUIRED FOR OUR GENETIC STUDIES, WHICH COULD DELAY OR IMPEDE OUR DRUG
DISCOVERY EFFORTS.

      Our gene identification strategy includes genetic studies of families and
populations prone to particular diseases. These studies require the collection
of large numbers of DNA samples from affected individuals, their families and
other suitable populations as well as animal models. The availability of DNA
samples and other biological material is important to our ability to discover
the genes responsible for human diseases through human genetic approaches and
other studies. Competition for these resources is intense. Access to suitable
populations, materials and samples could be limited by forces beyond our
control, including governmental actions. Some of our competitors may have
obtained access to significantly more family and population resources and
biological materials than we have obtained. As a result, we may not be able to
obtain access to DNA samples necessary to support our human gene discovery
programs.

BECAUSE MANY OF THE PRODUCTS AND SERVICES THAT WE DEVELOP WILL BE BASED ON NEW
TECHNOLOGIES AND THERAPEUTIC APPROACHES, THE MARKET MAY NOT BE RECEPTIVE TO
THESE PRODUCTS AND SERVICES UPON THEIR INTRODUCTION.

                                       17
<PAGE>

      The commercial success of any of our products and services for which we
may obtain marketing approval from the FDA, the EMEA and other regulatory
authorities will depend upon their acceptance by the medical community and
third-party payors as clinically useful, cost-effective and safe. Many of the
products and services that we are developing are based upon new technologies or
therapeutic approaches. As a result, it may be more difficult for us to achieve
market acceptance of our products and services, particularly the first products
and services that we introduce to the market based on new technologies and
therapeutic approaches. Our efforts to educate the medical community on these
potentially unique approaches may require greater resources than would be
typically required for products and services based on conventional technologies
or therapeutic approaches. The safety, efficacy, convenience and
cost-effectiveness of our products as compared to competitive products will also
affect market acceptance.

RISKS RELATING TO OUR FINANCIAL RESULTS AND STRUCTURE AND NEED FOR FINANCING

WE HAVE INCURRED SUBSTANTIAL LOSSES AND EXPECT TO CONTINUE TO INCUR LOSSES. WE
WILL NOT BE SUCCESSFUL UNLESS WE REVERSE THIS TREND.

      We have incurred losses in all but two of the years since our inception.
We expect to continue to incur substantial operating losses in future periods.
To date, substantially all of our revenues have resulted from payments from
collaborators, and not from the sale of products.

      We expect to increase our spending significantly as we continue to expand
our infrastructure, research and development programs and commercialization
activities. As a result, we will need to generate significant revenues to pay
these costs and achieve profitability. We cannot be certain whether or when we
will become profitable because of the significant uncertainties with respect to
our ability to generate revenues from the sale of products and services and from
existing and potential future strategic alliances.

WE MAY NEED ADDITIONAL FINANCING, WHICH MAY BE DIFFICULT TO OBTAIN. OUR FAILURE
TO OBTAIN NECESSARY FINANCING OR DOING SO ON UNATTRACTIVE TERMS COULD ADVERSELY
AFFECT OUR DISCOVERY AND DEVELOPMENT PROGRAMS AND OTHER OPERATIONS.

      We will require substantial funds to conduct research and development,
including preclinical testing and clinical trials of our potential products. We
will also require substantial funds to meet our obligations to our collaborators
and maximize the prospective benefits to us from these alliances, manufacture
and market any products and services that are approved for commercial sale and
meet our debt service obligations. Additional financing may not be available
when we need it or may not be available on terms that are favorable to us.

      If we are unable to obtain adequate funding on a timely basis, we may be
required to significantly curtail one or more of our discovery or development
programs. We could be required to seek funds through arrangements with
collaborators or others that may require us to relinquish rights to certain of
our technologies, product candidates or products which we would otherwise pursue
on our own.

RISKS RELATING TO COLLABORATORS

WE DEPEND SIGNIFICANTLY ON OUR COLLABORATORS TO DEVELOP AND COMMERCIALIZE
PRODUCTS AND SERVICES BASED ON OUR WORK. OUR BUSINESS MAY SUFFER IF ANY OF OUR
COLLABORATORS BREACHES ITS AGREEMENT OR FAILS TO SUPPORT OR TERMINATES ITS
ALLIANCE WITH US.

      We conduct most of our discovery and development activities through
strategic alliances. The success of these programs depends heavily on the
efforts and activities of our collaborators. Each of our collaborators has
significant discretion in determining the efforts and resources that they will
apply to the alliance. Our existing and any future alliances may not be
scientifically or commercially successful.

      The risks that we face in connection with these alliances include:

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<PAGE>

      - All of our strategic alliance agreements are subject to termination
under various circumstances, including, in many cases, on short notice without
cause.

      - In our strategic alliance agreements, we generally agree not to conduct
specified types of research and development in the field that is the subject of
the alliance. These agreements may have the effect of limiting the areas of
research and development we may pursue, either alone or in collaboration with
third parties.

      - Our collaborators may develop and commercialize, either alone or with
others, products and services that are similar to or competitive with the
products and services that are the subject of the alliance with us.

      - Our collaborators may change the focus of their development and
commercialization efforts. Pharmaceutical and biotechnology companies
historically have re-evaluated their priorities following mergers and
consolidations, which have been common in recent years in these industries.

      - We will rely on our collaborators to manufacture most products covered
by our alliances. For example, Becton Dickinson has the sole right to develop,
manufacture and commercialize our Melastatin(R) gene detection product.
Therefore, we cannot control the timing of the introduction of this product.

WE MAY NOT BE SUCCESSFUL IN ESTABLISHING ADDITIONAL STRATEGIC ALLIANCES, WHICH
COULD ADVERSELY AFFECT OUR ABILITY TO DEVELOP AND COMMERCIALIZE PRODUCTS AND
SERVICES.

      An important element of our business strategy is entering into
strategic alliances for the development and commercialization of products and
services based on our discoveries. We face significant competition in seeking
appropriate collaborators. Moreover, these alliance arrangements are complex to
negotiate and time-consuming to document. We may not be successful in our
efforts to establish additional strategic alliances or other alternative
arrangements. The terms of any additional strategic alliances or other
arrangements that we establish may not be favorable to us. Moreover, such
strategic alliances or other arrangements may not be successful.

RISKS RELATING TO INTELLECTUAL PROPERTY

IF WE ARE UNABLE TO OBTAIN PATENT PROTECTION FOR OUR DISCOVERIES, THE VALUE OF
OUR TECHNOLOGY AND PRODUCTS WILL BE ADVERSELY AFFECTED. IF WE INFRINGE PATENT OR
OTHER INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, WE MAY NOT BE ABLE TO
DEVELOP AND COMMERCIALIZE OUR PRODUCTS AND SERVICES OR THE COST OF DOING SO MAY
INCREASE.

      Our patent positions, and those of other pharmaceutical and biotechnology
companies, are generally uncertain and involve complex legal, scientific and
factual questions.

      Our ability to develop and commercialize products and services depends in
significant part on our ability to:

      -   obtain patents;

      -   obtain licenses to the proprietary rights of others on commercially
          reasonable terms;

      -   operate without infringing upon the proprietary rights of others;

      -   prevent others from infringing on our proprietary rights; and

      -   protect trade secrets.

THERE IS SIGNIFICANT UNCERTAINTY ABOUT THE VALIDITY AND PERMISSIBLE SCOPE OF
GENOMICS PATENTS IN OUR INDUSTRY, WHICH MAY MAKE IT DIFFICULT FOR US TO OBTAIN
PATENT PROTECTION FOR OUR DISCOVERIES.

      The validity and permissible scope of patent claims in the pharmaceutical
and biotechnology fields, including the genomics field, involve important
unresolved legal principles and are the subject of public policy debate in the
United States and abroad. For example, there is significant uncertainty both in
the United States and abroad

                                       19
<PAGE>

regarding the patentability of gene sequences in the absence of functional data
and the scope of patent protection available for full-length genes and partial
gene sequences. Moreover, certain groups have made certain gene sequences
available in publicly accessible databases. These and other disclosures may
adversely affect our ability to obtain patent protection for gene sequences
claimed by us in patent applications that we file subsequent to such
disclosures. There is also some uncertainty as to whether human clinical data
will be required for issuance of patents for human therapeutics. If such data
are required, our ability to obtain patent protection could be delayed or
otherwise adversely affected.

THIRD PARTIES MAY OWN OR CONTROL PATENTS OR PATENT APPLICATIONS AND REQUIRE US
TO SEEK LICENSES, WHICH COULD INCREASE OUR DEVELOPMENT AND COMMERCIALIZATION
COSTS, OR PREVENT US FROM DEVELOPING OR MARKETING OUR PRODUCTS OR SERVICES.

      We may not have rights under some patents or patent applications
related to our proposed products, processes or services. Third parties may own
or control these patents and patent applications in the United States and
abroad. Therefore, in some cases, such as those described below, to develop,
manufacture, sell or import certain of our proposed products, processes or
services, we or our collaborators may choose to seek, or be required to seek,
licenses under third party patents issued in the United States and abroad or
those that might issue from United States and foreign patent applications. In
such event, we would be required to pay license fees or royalties or both to the
licensor. If licenses are not available to us on acceptable terms, we or our
collaborators may not be able to develop, manufacture, sell or import these
products, processes or services.

      With respect to our product candidate LDP-01, we are aware of third party
patents and patent applications which relate to certain anti-CD18 antibodies and
their use in various methods of treatment including methods of reperfusion
therapy and methods of treating focal ischemic stroke. In addition, our LDP-01
and LDP-02 product candidates and our CAMPATH(R) product are humanized
monoclonal antibodies. We are aware of third party patents and patent
applications that relate to certain humanized or modified antibodies, products
useful for making humanized or modified antibodies and processes for making and
using humanized or modified antibodies. We are also aware of third party patents
and patent applications relating to certain manufacturing processes, products
thereof and materials useful in such processes.

      Our product candidates LDP-341 and LDP-519 are small molecule drug
candidates. With respect to LDP-341, we are aware of third party patents or
patent applications that relate to either intermediates or synthetic processes
used in the synthesis of this compound. Additionally, for the use of LDP-341 and
LDP-519 in the treatment of infarctions we are aware of the existence of a
potentially interfering patent application filed by one of our former
consultants.

WE MAY BECOME INVOLVED IN EXPENSIVE PATENT LITIGATION OR OTHER PROCEEDINGS,
WHICH COULD RESULT IN OUR INCURRING SUBSTANTIAL COSTS AND EXPENSES OR
SUBSTANTIAL LIABILITY FOR DAMAGES OR REQUIRE US TO STOP OUR DEVELOPMENT AND
COMMERCIALIZATION EFFORTS.

      There has been substantial litigation and other proceedings regarding
the patent and other intellectual property rights in the pharmaceutical and
biotechnology industries. We may become a party to patent litigation or other
proceedings regarding intellectual property rights. For example, we believe that
we hold patent applications that cover genes that are also claimed in patent
applications filed by others. Interference proceedings before the United States
Patent and Trademark Office may be necessary to establish which party was the
first to invent these genes.

      The cost to us of any patent litigation or other proceeding, even if
resolved in our favor, could be substantial. Some of our competitors may be able
to sustain the cost of such litigation or proceedings more effectively than we
can because of their substantially greater financial resources. If a patent
litigation or other proceeding is resolved against us, we or our collaborators
may be enjoined from developing, manufacturing, selling or importing our
products, processes or services without a license from the other party and we
may be held liable for significant damages. We may not be able to obtain any
required license on commercially acceptable terms or at all.

                                       20
<PAGE>

      Uncertainties resulting from the initiation and continuation of patent
litigation or other proceedings could have a material adverse effect on our
ability to compete in the marketplace. Patent litigation and other proceedings
may also absorb significant management time.

RISKS RELATING TO PRODUCT MANUFACTURING, MARKETING AND SALES

BECAUSE WE HAVE LIMITED SALES, MARKETING OR DISTRIBUTION EXPERIENCE AND
CAPABILITIES, WE WILL DEPEND ON THIRD PARTIES TO SUCCESSFULLY PERFORM THESE
FUNCTIONS ON OUR BEHALF OR WILL BE REQUIRED TO INCUR SIGNIFICANT COSTS AND
DEVOTE SIGNIFICANT EFFORTS TO DEVELOP THESE CAPABILITIES.

      We have limited sales, marketing or distribution experience and
capabilities. We plan to rely significantly on sales, marketing and distribution
arrangements with our collaborators and other third parties for the CAMPATH(R)
product and the other products and services that we are developing. For example,
our partnership that holds the CAMPATH(R) monoclonal antibody relies solely upon
Schering AG and its U.S. affiliate, Berlex Laboratories, for the marketing,
distribution and sale of the CAMPATH(R) product throughout the world other than
the Far East. If in the future we elect to perform sales, marketing and
distribution functions ourselves, we would face a number of additional risks,
including the need to recruit experienced marketing and sales personnel.

BECAUSE WE HAVE LIMITED MANUFACTURING CAPABILITIES, WE WILL BE DEPENDENT ON
THIRD-PARTY MANUFACTURERS TO MANUFACTURE PRODUCTS FOR US OR WILL BE REQUIRED TO
INCUR SIGNIFICANT COSTS AND DEVOTE SIGNIFICANT EFFORTS TO ESTABLISH OUR OWN
MANUFACTURING FACILITIES AND CAPABILITIES.

      We have limited manufacturing experience and no commercial scale
manufacturing capabilities. In order to continue to develop products and
services, apply for regulatory approvals and commercialize products and
services, we will need to develop, contract for or otherwise arrange for the
necessary manufacturing capabilities.

      We currently rely upon third parties to produce material for preclinical
testing purposes and expect to continue to do so in the future. We also expect
to rely upon other third parties, including our collaborators, to produce
materials required for clinical trials and for the commercial production of
certain of our products. Our partnership with ILEX Products relies on Boehringer
Ingelheim as the sole source manufacturer of the CAMPATH(R) monoclonal antibody.

      There are a limited number of manufacturers that operate under the FDA's
good manufacturing practices regulations capable of manufacturing for us. As a
result, we have experienced some difficulty finding manufacturers for our
products with adequate capacity for our anticipated future needs. If we are
unable to arrange for third party manufacturing of our products, or to do so on
commercially reasonable terms, we may not be able to complete development of our
products or market them.

      Reliance on third party manufacturers entails risks to which we would not
be subject if we manufactured products ourselves, including reliance on the
third party for regulatory compliance and quality assurance, the possibility of
breach of the manufacturing agreement by the third party because of factors
beyond our control and the possibility of termination or nonrenewal of the
agreement by the third party, based on its own business priorities, at a time
that is costly or inconvenient for us.

      We may in the future elect to manufacture certain of our products in our
own manufacturing facilities. We will require substantial additional funds and
need to recruit qualified personnel in order to build or lease and operate any
manufacturing facilities.

IF WE FAIL TO OBTAIN AN ADEQUATE LEVEL OF REIMBURSEMENT FOR THE CAMPATH(R)
PRODUCT OR OUR FUTURE PRODUCTS OR SERVICES BY THIRD PARTY PAYORS, THERE MAY BE
NO COMMERCIALLY VIABLE MARKETS FOR OUR PRODUCTS OR SERVICES.

      The availability and levels of reimbursement by governmental and other
third party payors affect the market for any pharmaceutical product or
healthcare service. These third party payors continually attempt to contain or
reduce the costs of healthcare by challenging the prices charged for medical
products and services. In certain

                                       21
<PAGE>

foreign countries, particularly the countries of the European Union, the pricing
of prescription pharmaceuticals is subject to governmental control. We may not
be able to sell our products and services profitably if reimbursement is
unavailable or limited in scope or amount.

      In both the United States and certain foreign jurisdictions, there have
been a number of legislative and regulatory proposals to change the healthcare
system. Further proposals are likely. The potential for adoption of these
proposals affects or will affect our ability to raise capital, obtain additional
collaborators and market our products.

      We expect to experience pricing pressures in connection with the sale of
the CAMPATH(R) product and our future products and services due to the trend
toward managed health care, the increasing influence of health maintenance
organizations and additional legislative proposals.

ETHICAL, LEGAL AND SOCIAL ISSUES RELATED TO GENETIC TESTING MAY CAUSE OUR
DIAGNOSTIC PRODUCTS TO BE REJECTED BY CUSTOMERS OR PROHIBITED OR CURTAILED BY
GOVERNMENTAL AUTHORITIES.

      Diagnostic tests that evaluate genetic predisposition to disease raise
issues regarding the use and confidentiality of the information provided by such
tests. Insurance carriers and employers might discriminate on the basis of such
information, resulting in a significant barrier to the acceptance of such tests
by customers. This type of discrimination could cause governmental authorities
to prohibit or limit the use of such tests.

      WE FACE A RISK OF PRODUCT LIABILITY CLAIMS AND MAY NOT BE ABLE TO OBTAIN
INSURANCE.

      Our business exposes us to the risk of product liability claims that is
inherent in the manufacturing, testing and marketing of human therapeutic
products. Although we have product liability and clinical trial liability
insurance that we believe is appropriate, this insurance is subject to
deductibles and coverage limitations. We may not be able to obtain or maintain
adequate protection against potential liabilities. If we are unable to obtain
insurance at acceptable cost or otherwise protect against potential product
liability claims, we will be exposed to significant liabilities, which may
materially and adversely affect our business and financial position. These
liabilities could prevent or interfere with our product commercialization
efforts.

      GUIDELINES AND RECOMMENDATIONS CAN AFFECT THE USE OF OUR PRODUCTS.

      Government agencies promulgate regulations and guidelines directly
applicable to us and to our products. In addition, professional societies,
practice management groups, private health and science foundations and
organizations involved in various diseases from time to time may also publish
guidelines or recommendations to the health care and patient communities.
Recommendations of government agencies or these other groups or organizations
may relate to such matters as usage, dosage, route of administration and use of
concomitant therapies. Recommendations or guidelines that are followed by
patients and health care providers could result in decreased use of our
products.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      We maintain an investment portfolio in accordance with our Investment
Policy. The primary objectives of our Investment Policy are to preserve
principal, maintain proper liquidity to meet operating needs and maximize
yields. Although our investments are subject to credit risk, our Investment
Policy specifies credit quality standards for our investments and limits the
amount of credit exposure from any single issue, issuer or type of investment.
Our investments are also subject to interest rate risk and will decrease in
value if market interest rates increase. A hypothetical 100 basis point increase
in interest rates would result in an approximate $20.9 million decrease in the
fair value of our investments as of September 30, 2001. However, due to the
conservative nature of our investments and relatively short duration, interest
rate risk is mitigated. We do not own derivative financial instruments in our
investment portfolio.

                                       22
<PAGE>

      The interest rates on our 5.5% convertible subordinated notes due January
15, 2007 and capital lease obligations are fixed and therefore not subject to
interest rate risk.

      Accordingly, we do 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.

                                       23

<PAGE>

                            PART II OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

      On July 2, 2001, we issued and sold to Aventis Pharmaceuticals, Inc.
1,203,079 shares of our common stock for aggregate proceeds of approximately $50
million. These shares were issued in connection with a collaboration agreement
between the parties and no person served as an underwriter with respect to this
transaction. We relied on Section 4(2) of the Securities Act of 1933, as amended
(the "Securities Act") for exemption from the registration requirements of the
Securities Act.

      On September 4, 2001, we issued and sold to Abbott Laboratories 946,700
shares of our common stock for aggregate proceeds of approximately $28.6
million. These shares were issued in connection with a collaboration agreement
between the parties and no person served as an underwriter with respect to this
transaction. We relied on Section 4(2) of the Securities Act of 1933, as amended
(the "Securities Act") for exemption from the registration requirements of the
Securities Act.

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 Forms 8-K.

              None.

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<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)

    Dated:  October 25, 2001                    /s/ KEVIN P. STARR
                                                --------------------
                                                Kevin P. Starr
                                                Executive Vice President,
                                                Business Operations and
                                                Chief Financial Officer
                                                (principal financial and chief
                                                accounting officer)

                                       25

<PAGE>


EXHIBIT INDEX

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

 EXHIBIT NO.                   DESCRIPTION

+    10.1   Third Amendment effective as of July 31, 2001 of Collaboration and
            License Agreement dated February 21, 1999 between the Company and
            Becton, Dickinson and Company.

+    10.2   Amendment No. 5 dated as of September 7, 2001 to Agreement dated
            September 22, 1998 between the Company and Bayer AG, as amended.

+    10.3   First Amendment dated as of June 29, 2001 to Collaboration and
            License Agreement dated June 22, 2000 by and between the Company
            and Aventis Pharmaceuticals Inc.


+        Confidential treatment requested as to certain portions.



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