<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

           For the quarterly period ended September 30, 1997

           OR

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

           For the transition period from             to 
                                          -----------    -------------

                         COMMISSION FILE NUMBER 0-28494

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


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

                      238 MAIN STREET, CAMBRIDGE, MA 02142
          (Address of principal executive offices, including zip code)

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


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes  X  No 
                                       ---    ---

Number of shares of Common Stock, $.001 par value per share, outstanding as of
November 10, 1997 was 29,007,266.


<PAGE>   2

                        MILLENNIUM PHARMACEUTICALS, INC.
                               REPORT ON FORM 10-Q
                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997

                                TABLE OF CONTENTS


                                                                        PAGE
                                                                        ----
PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (unaudited)
        Condensed Consolidated Balance Sheets                             3
          September 30, 1997 and December 31, 1996

        Condensed Consolidated Statements of Operations
          for the three and nine months ended 
          September 30, 1997 and 1996                                     4

        Condensed Consolidated Statements of Cash Flows
          for the nine months ended September 30, 1997 and 1996           5

        Notes to Condensed Consolidated Financial Statements              6

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

PART II - OTHER INFORMATION                                               15

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                  15

SIGNATURES                                                                16

EXHIBIT INDEX                                                             17


                                       -2-
<PAGE>   3
PART 1 - FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS
      
                        Millennium Pharmaceuticals, Inc.
                      Condensed Consolidated Balance Sheets

<TABLE>
<CAPTION>

                                                          SEPTEMBER 30,      DECEMBER 31,
                                                              1997              1996
                                                          -------------------------------
                                                            (Unaudited)        (Note)
<S>                                                       <C>               <C>          

ASSETS
Current assets:
Cash and cash equivalents                                 $  35,303,000     $  10,088,000
Marketable securities                                        37,370,000        53,760,000
Due from strategic partners                                   2,577,000         5,710,000
Prepaid expenses and other current assets                     4,167,000         2,512,000
                                                          -------------------------------
Total current assets                                         79,417,000        72,071,000

Property and equipment, net                                  27,228,000        15,191,000
Deposits and other assets                                       799,000           483,000
Intangible assets, net                                        9,089,000                --
                                                          -------------------------------

                                                          $ 116,533,000     $  87,744,000
                                                          =============================== 

LIABILITIES AND STOCKHOLDERS' EQUITY 
Current liabilities:
Accounts payable                                          $   2,986,000     $   2,262,000
Accrued expenses                                              3,742,000         1,284,000
Deferred revenue                                              4,878,000         3,543,000
Current portion of long-term debt                               267,000         1,467,000
Current portion of capital lease obligations                  5,236,000         3,241,000
                                                          -------------------------------
Total current liabilities                                    17,109,000        11,797,000

Capital lease obligations, net                               15,521,000         9,308,000

Minority Interest                                            19,054,000                --

Stockholders' equity:
Common Stock, $0.001 par value: 100,000,000 shares 
authorized; 28,972,266 shares in 1997 and 23,914,151 
shares in 1996 issued and outstanding                            29,000            24,000
Additional paid-in capital                                  192,274,000        87,790,000
Deferred compensation                                        (2,333,000)       (2,768,000)
Notes receivable from officers                                 (187,000)         (245,000)

Unrealized gain (loss) on securities                              8,000           (18,000)
Accumulated deficit                                        (124,942,000)      (18,144,000)
                                                          -------------------------------
Total stockholders' equity                                   64,849,000        66,639,000
                                                          -------------------------------

Total liabilities and stockholders' equity                $ 116,533,000     $  87,744,000
                                                          ===============================
</TABLE>



Note: The balance sheet at December 31, 1996 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.

See notes to condensed consolidated financial statements.


                                      -3-
<PAGE>   4


                        Millennium Pharmaceuticals, Inc.
           Condensed Consolidated Statements of Operations (Unaudited)


<TABLE>
<CAPTION>
                                                THREE MONTHS ENDED               NINE MONTHS ENDED
                                                   SEPTEMBER 30,                    SEPTEMBER 30,
                                               1997            1996              1997          1996
                                          ---------------------------------------------------------------
<S>                                       <C>               <C>             <C>               <C>        

Revenue under strategic alliances         $ 13,650,000      $ 9,582,000     $  37,978,000     $22,240,000

Costs and expenses:
   Research and development                 20,442,000        9,259,000        50,374,000      23,972,000
   General and administrative                4,146,000        2,092,000        12,009,000       5,143,000
   Acquired in-process research
     and development                                --               --        83,800,000              --
   Amortization of intangible assets          675,000               --         1,721,000              --
                                          ---------------------------------------------------------------
                                            25,263,000       11,351,000       147,904,000      29,115,000
                                          ---------------------------------------------------------------
Loss from operations                       (11,613,000)      (1,769,000)     (109,926,000)     (6,875,000)

Interest income                              1,174,000        1,254,000         3,227,000       2,504,000
Interest expense                              (410,000)        (209,000)       (1,046,000)       (625,000)
                                          ---------------------------------------------------------------
Loss before minority interest             $ 10,849,000      $   724,000     $ 107,745,000     $ 4,996,000
Minority Interest                              947,000               --           947,000              --
                                          ---------------------------------------------------------------

Net loss                                  $  9,902,000      $   724,000     $ 106,798,000     $ 4,996,000
                                          ===============================================================

Net loss per share                        $      (0.34)     $     (0.03)    $       (3.80)    $     (0.23)
                                          ===============================================================

Shares used in computing net loss
   per share                                28,889,249       23,837,703        28,092,337      21,749,426
                                          ===============================================================
</TABLE>



See notes to condensed consolidated financial statements.




                                      -4-
<PAGE>   5


                        Millennium Pharmaceuticals, Inc.
           Condensed Consolidated Statements of Cash Flows (Unaudited)

<TABLE>
<CAPTION>
                                                                 NINE MONTHS ENDED SEPTEMBER 30,
                                                                     1997              1996
                                                                
<S>                                                             <C>                <C>          

CASH USED IN OPERATIONS                                         $(10,964,000)      $ (4,040,000)
                                                                ------------------------------- 
INVESTING ACTIVITIES
Purchase of property and equipment                                (5,626,000)        (6,783,000)
Sale of marketable securities                                     41,400,000         35,313,000
Purchase of marketable securities                                (23,487,000)       (77,050,000)
                                                                ------------------------------- 
Net cash provided by (used in) investing activities               12,287,000        (77,050,000)

FINANCING ACTIVITIES
Acquisition of ChemGenics, net of cash acquired                    7,087,000                 --
Sale of subsidiary stock                                          20,000,000                 --
Proceeds from sale of Preferred Stock                                     --          3,500,000
Proceeds from sale of Common Stock                                 1,663,000         58,031,000
Repurchase of Common Stock                                           (23,000)            (2,000)
Payments of long-term debt                                        (1,200,000)        (1,200,000)
Payments of capital lease obligations                             (3,635,000)        (1,474,000)
                                                                ------------------------------- 
Net cash provided by financing activities                         23,892,000         58,855,000


Increase in cash and cash equivalents                             25,215,000          6,295,000
Cash and cash equivalents at beginning of period                  10,088,000         10,586,000
                                                                ------------------------------- 

Cash and cash equivalents at end of period                      $ 35,303,000       $ 16,881,000
                                                                ===============================

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Equipment acquired under capital leases                         $ 10,252,000       $  1,951,000
                                                                ===============================

Deferred compensation                                           $         --       $  3,487,000
                                                                ===============================
</TABLE>


See notes to condensed consolidated financial statements.



                                      -5-
<PAGE>   6


                        MILLENNIUM PHARMACEUTICALS, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1997
                                   (unaudited)

         1 - BASIS OF PRESENTATION

        The accompanying condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Interim results for the nine-month
period ended September 30, 1997 are not necessarily indicative of the results
that may be expected for the  year ended December 31, 1997. For further
information, refer to the financial  statements and footnotes thereto included
in the Company's Annual Report on 10-K  for the fiscal year ended December 31,
1996 which was filed with the Securities Exchange Commission on March 31, 1997.

         In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, "Earnings per Share" (FAS 128) which simplifies the
calculation of earnings per share (EPS) and creates a standard of comparability
to the recently issued International Accounting Standard No. 33, "Earnings Per
Share". Since early application is not permitted, the Company will adopt this
standard in the fourth quarter of 1997. The earnings per share calculations 
required under FAS 128 are not expected to be materially different from the net
loss per share calculations presented herein.

         In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income" and SFAS No. 131, "Disclosures About Segments of an Enterprise and
Related Information." Both SFAS No. 130 and SFAS No. 131 are effective for
fiscal years beginning after December 15, 1997. The Company believes that the
adoption of these new accounting standards will not have a material impact on
the Company's financial statements.


         2 - NET LOSS PER SHARE

         Net loss per share is computed using the weighted-average number of
outstanding shares of Common Stock and Common Stock Equivalents, reflecting the
conversion of Series A, B, C and D Convertible Preferred Stock into Common Stock
(as of their original date of issuance), which occurred upon completion of the
Company's initial public offering on May 7, 1996 and the exercise of stock
options and warrants (using the treasury stock method). Common Stock equivalents
are excluded from the computation when their effect is anti-dilutive; however,
pursuant to the requirements of the Securities and Exchange Commission, Common
Stock equivalent shares relating to stock options and warrants (using the
treasury stock method and an initial public offering price of $12.00 per share)
and Convertible Preferred Stock issued during the twelve month period prior to
the initial public offering are included for all periods prior to and including
the date of the initial public offering whether or not anti-dilutive.


         3 - SUBSIDIARY

         In May 1997, the Company established Millennium BioTherapeutics, Inc.
("MBIO") as a subsidiary, and, pursuant to a Technology Transfer and License
Agreement, has transferred and/or licensed certain technology to MBIO in
exchange for 9,000,000 shares of Series A Convertible Preferred Stock of MBIO.
At that time, MBIO entered into a strategic alliance with Eli Lilly and Company
("Lilly") for the 



                                      -6-
<PAGE>   7

discovery and development of novel therapeutic proteins. The agreement covers a
three year program with Lilly providing $8 to $10 million in research funding
per year with a provision to extend up to an additional two years at the same
level of funding. Additional licensing fees, clinical development milestones and
royalties will be payable by Lilly in connection with specific therapeutic
protein product candidates identified in the collaboration and licensed by
Lilly. Under the terms of the agreement, MBIO and Lilly will equally fund the
collaborative program and each company will share the rights to use discoveries
made in the collaboration, as described in the agreement.

         Under the terms of a related stock purchase agreement, Lilly agreed to
purchase $20 million of Series B Convertible Preferred Stock of MBIO. The
accompanying condensed consolidated financial statements include the accounts of
MBIO since inception. The minority interest reflects the approximate 18% equity
interest of Lilly in MBIO as of the balance sheet date, and the minority 
stockholder's interest in the net loss of MBIO for the statement of operations
period.

         The Company is not required to provide any funds for the operations of
MBIO, but has entered into certain agreements with MBIO to provide specific
services and facilities at negotiated fees. All such intercompany transactions
have been eliminated in consolidation.


         4 - MERGER

         On February 10, 1997, the Company acquired ChemGenics Pharmaceuticals,
Inc. ("ChemGenics") for 4,783,688 shares of Common Stock at $21.50 per share for
an aggregate of approximately $103,000,000 in exchange for all outstanding
shares of common stock of ChemGenics. In addition, a principal shareholder of
ChemGenics received approximately $4,000,000 in settlement of a promissory note
and repurchase of warrants previously issued by ChemGenics, and outstanding
warrants were purchased from another shareholder of ChemGenics for approximately
$500,000. The operating results of ChemGenics have been included in the
Company's financial statements from the date of acquisition. The transaction has
been recorded as a purchase for accounting purposes. The fair value of the
issued shares has been allocated to the assets purchased and liabilities assumed
based upon their respective fair values. In connection with the acquisition, the
Company incurred a non-recurring charge of $83,800,000 for acquired in-process
research and development which was charged to operations because in management's
opinion technological feasibility for the acquired research and development had
not been established.

         The following unaudited pro forma consolidated results of operations
have been prepared as if the acquisition of ChemGenics had occurred at the
beginning of 1997 and 1996:

<TABLE>
<CAPTION>
                                                            Nine months ended
                                               September 30, 1997        September 30, 1996
<S>                                               <C>                        <C>         

Pro Forma:
Revenues under strategic alliances                $  38,471,000              $ 24,411,000
Net loss                                          $(107,963,000)             $(99,409,000)
Net loss per share                                $       (3.75)             $      (3.75)
Shares used in calculating net loss per share        28,795,821                26,533,114

</TABLE>

The pro forma net loss and net loss per share amounts for each period above
include the acquired in-process research and development charge. The pro forma
consolidated results do not purport to be indicative of results that would have
occurred had the acquisition been in effect for the periods presented, nor do
they purport to be indicative of the results that will be obtained in the
future.


                                      -7-
<PAGE>   8

5.  CONSORTIUM AGREEMENT

         In April 1997, the Company joined a corporate consortium to fund a
five-year research program in functional genomics at the Whitehead Institute/MIT
Center for Genome Research. The new program will advance the development of
gene-based technologies for research and health care.


6.  SUBSEQUENT EVENT

         In October 1997, the Company entered into a broad five-year
collaboration agreement in genomics research in the agricultural field with
Monsanto. As part of the agreement, Monsanto will form a wholly-owned subsidiary
and pay Millenium, over the agreement term, $118,000,000 in up front, licensing
and technology transfer fees and up to $100,000,000 contingent upon achieving
mutually agreed upon research objectives. Monsanto will also fund research
activities of its new subsidiary.


                                      -8-
<PAGE>   9

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

     This Report on Form 10-Q contains forward-looking statements. For this
purpose, any statements contained herein that are not statements of historical
fact may be deemed to be forward-looking statements. Without limiting the
foregoing, the words "believes," "anticipates," "plans," "expects," "intends,"
and similar expressions are intended to identify forward-looking statements.
There are a number of important factors that could cause the Company's actual
results to differ materially from those indicated by such forward-looking
statements. These factors are set forth under the caption "Risk Factors" in the
Company's Registration Statement on Form S-3 (333-28239), which "Risk Factors"
discussion is expressly incorporated by reference herein.

OVERVIEW

     Millennium Pharmaceuticals, Inc. ("Millennium" or the "Company"), was
incorporated in January 1993 and has devoted substantially all of its resources
to the development and application of genetics, genomics and bioinformatics
technology used to identify the genes responsible for major diseases, as well as
comprehensive technologies to elucidate the role of these genes in disease
initiation and progression. As used herein, the terms "the Company" and
"Millennium" include the Company's subsidiaries where appropriate in the
context.

     On February 10, 1997 (the "ChemGenics Acquisition Date"), the Company
acquired ChemGenics Pharmaceuticals Inc. ("ChemGenics") for approximately
4,800,000 shares of Company Common Stock. In connection with this acquisition, a
principal stockholder of ChemGenics received $4.0 million in settlement of a
promissory note and as the repurchase price of warrants previously issued by
ChemGenics. Upon such acquisition, ChemGenics became a wholly-owned subsidiary
of the Company. In May 1997, ChemGenics was merged into Millennium and ceased to
be a separate company. At the time of the acquisition, ChemGenics had
approximately 70 employees and approximately 11,500 square feet of laboratory
and office space in Cambridge, Massachusetts. Millennium accounted for this
acquisition as a purchase.

     In May 1997, the Company established Millennium BioTherapeutics, Inc.
("MBIO") as a subsidiary, and, pursuant to a Technology Transfer and License
Agreement, transferred and/or licensed certain technology to MBIO in exchange
for 9,000,000 shares of Series A Convertible Preferred Stock of MBIO. At that
time, MBIO entered into a strategic alliance with Eli Lilly and Company
("Lilly") for the discovery and development of novel therapeutic proteins. Under
the terms of a related stock purchase agreement, Lilly made an equity investment
of $20,000,000 in MBIO pursuant to which Lilly owns approximately 18% of the
outstanding capital stock of MBIO. The accompanying consolidated financial
statements include the financial position and results of operations of MBIO
since May 1997.

                                       -9-

<PAGE>   10



     To date, all of the Company's revenue has resulted from payments from
strategic partners and United States government research grants. The Company has
not received any revenue from the sale of products.

     The Company has entered into several strategic alliances: in March 1994
with Hoffmann La-Roche, Inc. ("Roche"), with respect to obesity and type II
diabetes; in October 1995 and March 1996 with Lilly with respect to
atherosclerosis and select areas of oncology, respectively; in December 1995
with Astra AB ("Astra") with respect to inflammatory respiratory diseases; and
in July 1996 with American Home Products ("AHP") with respect to certain
disorders of the central nervous system. In addition, ChemGenics had entered
into several strategic alliances: in January 1995 with Pfizer Inc. ("Pfizer")
with respect to human fungal infections; in December 1996 with AHP with respect
to human bacterial infections; and in May, November and December 1996 with
PerSeptive Biosystems, Inc. ("PerSeptive") where a substantial equity interest
in ChemGenics was exchanged for certain present and future rights to patents,
technology and prototype equipment. Millennium has succeeded to ChemGenics in
connection with ChemGenics' strategic alliances with Pfizer, AHP and PerSeptive
as a result of Millennium's acquisition of ChemGenics.

     These strategic alliance agreements have provided the Company with various
combinations of equity investments, up-front and follow-on fees and research
funding and may provide certain additional payments upon the attainment of
research and regulatory milestones and royalty and/or profit sharing payments
based on sales of any products resulting from the collaborations. Revenue
recognized under these collaborations through September 30, 1997 aggregated
approximately $100,585,000.

     In October 1997, the Company entered into a broad five-year collaboration
agreement in genomics research in the agricultural field with Monsanto. As part
of the agreement, Monsanto will form a wholly-owned subsidiary and pay
Millennium, over the agreement term, $118,000,000 in up front, licensing and
technology transfer fees and up to $100,000,000 contingent upon achieving
mutually agreed upon research objectives. Monsanto will also fund research
activities of its new subsidiary.

     Although the Company intends to enter into additional strategic alliances,
it also expects to incur increasing expenses and additional losses for at least
the next several years, as it continues to build the infrastructure to support
its operations. Payments under strategic alliance and licensing arrangements
will be subject to significant fluctuation in both timing and amounts and,
therefore, the Company's results of operations for any period may not be
comparable to the results of operations for any other period.

RESULTS OF OPERATIONS

     QUARTERS ENDED SEPTEMBER 30, 1997 AND SEPTEMBER 30, 1996

                                      -10-

<PAGE>   11



     Revenue under strategic alliances increased to $13,650,000 for the three
months ended September 30, 1997 (the "1997 Quarterly Period") from $9,582,000
for the three months ended September 30, 1996 (the "1996 Quarterly Period"). The
increase for the 1997 Quarterly Period was primarily due to strategic alliance
revenue from both the ChemGenics/Pfizer (human fungal infections) and
ChemGenics/AHP (human bacterial infections) strategic alliances and revenue from
Lilly related to the collaboration between Lilly and MBIO.

     Research and development expenses increased to $20,442,000 for the three
months ended September 30, 1997 from $9,259,000 for the three months ended
September 30, 1996. The increase was attributable primarily to increased payroll
and personnel expenses as the Company hired additional research and development
personnel, increased purchases of laboratory supplies and increased equipment
depreciation and facilities expenses in connection with the expansion of the
Company's research efforts. In addition, the 1997 Quarterly Period included
research and development expenses related to the former ChemGenics operations
and MBIO. The Company's research and development expenses may continue to
increase as personnel and research and development facilities are expanded to
accommodate the Company's existing and future strategic alliances.

     General and administrative expenses increased to $4,146,000 for the three
months ended September 30, 1997 from $2,092,000 for the three months ended
September 30, 1996. The increase was attributable primarily to increased payroll
and personnel expenses as the Company hired additional management, business
development and administrative personnel, and to professional fees in connection
with the further expansion of the Company's operations. The 1997 Quarterly
Period also included general and administrative expenses related to the former
ChemGenics operations. It is anticipated that general and administrative
expenses will continue to increase as the Company continues to build the
infrastructure to support its operations.

     The Company's total operating expenses increased to $25,263,000 for the
three months ended September 30, 1997 from $11,351,000 for the three months
ended September 30, 1996. In addition to the research and development and
general and administrative expenses discussed above, the 1997 Quarterly Period
included a $675,000 charge for amortization of the intangible assets from the
ChemGenics acquisition.

     Interest income of $1,174,000 for the three months ended September 30, 1997
approximated interest income of $1,254,000 for the three months ended September
30, 1996. Interest expense increased to $410,000 for the 1997 Quarterly Period
from $209,000 for the 1996 Quarterly Period due to increased capital lease
obligations.

                                       -11-

<PAGE>   12



     Minority interest represents the minority shareholder's (Lilly) interest in
the net loss for the 1997 Quarterly Period of the Company's majority owned
subsidiary, MBIO.

NINE MONTHS ENDED SEPTEMBER  30, 1997 AND SEPTEMBER 30, 1996

     Revenue under strategic alliances increased to $37,978,000 for the nine
months ended September 30, 1997 (the "1997 Nine Month Period") from $22,240,000
for the nine months ended September 30, 1996 (the "1996 Nine Month Period"). The
increase for the 1997 Nine Month Period was primarily due to strategic alliance
revenue from AHP in connection with the central nervous systems alliance signed
in July 1996, from Lilly in connection with the oncology alliance effective
March 1996, strategic alliance revenue from the ChemGenics Acquisition Date
through September 30, 1997, from both the ChemGenics/Pfizer (human fungal
infections) and ChemGenics/AHP (human bacterial infections) strategic alliances
and revenue from Lilly pursuant to the collaboration between Lilly and MBIO.

     Research and development expenses increased to $50,374,000 for the nine
months ended September 30, 1997 from $23,972,000 for the nine months ended
September 30, 1996. The increase was primarily attributable to increased payroll
and personnel expenses as the Company hired additional research and development
personnel, increased purchase of laboratory supplies and increased equipment
depreciation and facilities expenses in connection with the expansion of the
Company's research efforts. In addition, the 1997 Nine Month Period includes
research and development expenses related to the former ChemGenics operations
from the ChemGenics Acquisition Date and to MBIO.

     General and administrative expenses increased to $12,009,000 for the nine
months ended September 30, 1997 from $5,143,000 for the nine months ended
September 30, 1996. The increase was primarily attributable to increased payroll
and personnel expenses as the Company hired additional management, business
development and administrative personnel, and to professional fees in connection
with the further expansion of the Company's operations, the acquisition of
ChemGenics and formation of MBIO. The 1997 Nine Month Period also includes
general and administrative expenses related to the former ChemGenics from the
ChemGenics Acquisition Date through the end of the period.

     The Company's total operating expenses increased to $147,904,000 for the
nine months ended September 30, 1997 from $29,115,000 for the nine months ended
September 30, 1996. In addition to the research and development and general and
administrative expenses discussed above, the 1997 Nine Month Period includes a
$83,800,000 one-time charge for acquired in-process research and development
associated with the acquisition of ChemGenics as well as a $1,721,000 charge for
amortization of the intangible assets from the acquisition.

                                       -12-

<PAGE>   13



     Interest income increased to $3,227,000 for the nine months ended September
30, 1997 from $2,504,000 for the nine months ended September 30, 1996. The
average balance of cash, cash equivalents and marketable securities was lower
during the 1996 Nine Month Period. Interest expense increased to $1,046,000 for
the 1997 Nine Month Period from $625,000 for the 1996 Six Month Period due to
increased capital lease obligations.

     Minority interest represents the minority shareholder's (Lilly) interest in
the net loss for the 1997 Nine Month Period of the Company's majority owned
subsidiary, MBIO.

LIQUIDITY AND CAPITAL RESOURCES

     The Company has financed its operations since inception primarily through
strategic alliances, private placement of equity securities, issuance of debt,
and capital leases. In addition, in May 1996, the Company completed an initial
public offering of common stock resulting in proceeds, net of underwriting
discounts, of $57,753,000. Through September 30, 1997, the Company recognized
approximately $100,585,000 of revenue under strategic alliances. The private
placement of equity securities has provided the Company with aggregate gross
proceeds of approximately $25,590,000. The Company has obtained $4,000,000 in
long-term debt, approximately $26,000,000 in capital lease financings, and
$1,100,000 to finance the build-out of an 9,000 square foot in-house animal
facility. In July 1997, Lilly made a $20,000,000 equity investment in MBIO. As
of September 30, 1997, the Company had approximately $72,673,000 in cash, cash
equivalents and marketable securities. 

     During the first nine months of 1997, the Company used $10,964,000 of cash
in its operations, purchased $5,626,000 of property and equipment and used cash
of $1,200,000 to pay long term debt and $3,635,000 to pay capital lease
obligations. In addition, during the first nine months of 1997, the Company
acquired equipment under capital leases of $10,252,000.

     The Company believes that existing cash and investment securities, and
anticipated cash flow from its current strategic alliances, will be sufficient
to support the Company's operations for at least the next 24 months. The
Company's actual future cash requirements, however, will depend on many factors,
including progress of its disease research programs, the number and breadth of
these programs, achievement of milestones under strategic alliance arrangements,
the ability of the Company to establish and maintain additional strategic
alliance and licensing arrangements, and the progress of the development efforts
of the Company's strategic partners. Other important factors that will affect
the Company's cash requirements include the level of the Company's activities
relating to commercialization rights it has retained in its strategic alliance
arrangement, competing technological and market developments, the costs
associated

                                       -13-

<PAGE>   14



with the collection of patient information and DNA samples, the costs involved
in obtaining and enforcing patent claims and other intellectual property rights,
and the costs and timing of regulatory approvals. The Company expects that it
will require significant additional financing in the future, which it may seek
to raise through public or private equity offerings, debt financings, or
additional strategic alliance and licensing arrangements. No assurance can be
given that additional financing or strategic alliance and licensing arrangements
will be available when needed or that, if available, such financing will be
obtained on terms favorable to the Company or its stockholders. The Company's
forecast of the period of time through which its financial resources will be
adequate to support its operations is forward-looking information, and, as such,
actual results may vary.



                                       -14-

<PAGE>   15



                           PART II - OTHER INFORMATION


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

     (a)  Exhibits

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

     (b)  Reports on Form 8-K

          Current Report on Form 8-K dated October 28, 1997, filed with the
          Securities and Exchange Commission on November 3, 1997.

                                      -15-

<PAGE>   16



                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                        MILLENNIUM PHARMACEUTICALS, INC.
                                                  (Registrant)



Date: November    , 1997                By:
               ---                         -------------------------------------
                                              Steven H. Holtzman
                                              Chief Business Officer
                                              (Principal Financial Officer)



Date: November    , 1997                By:
               ---                         -------------------------------------
                                              Peter J. Courossi
                                              Director of Finance
                                              (Principal Accounting Officer)



                                      -16-

<PAGE>   17


                                  EXHIBIT INDEX

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

Exhibit
  No.               Description
  ---               -----------

   27.1             Financial Data Schedule.

   99.1             Pages 5 through 15 of the Company's Registration Statement
                    on Form S-3 (333-28239), as filed with the Securities
                    Exchange Commission (which are deemed filed except to the
                    extent that portions are not expressly incorporated by
                    reference herein).



                                      -17-