Positioned for Growth Annual Shareholders Meeting July 21, 2016 Paris Panayiotopoulos President and Chief Executive Officer David Sachs Non small cell lung cancer ARIAD clinical trial patient
This presentation contains forward looking statements, which are generally statements that are not historical facts. Forward looking statements can be identified by the words expects, anticipates, believes, intends, estimates, plans, will, outlook and similar expressions. Forward looking statements are based on managements current plans, estimates, assumptions and projections, and speak only as of the date they are made. We undertake no obligation to update any forward looking statement in light of new information or future events, except as otherwise required by law. Forward looking statements involve inherent risks and uncertainties, most of which are difficult to predict and are generally beyond our control. Actual results or outcomes may differ materially from those implied by the forward looking statements as a result of the impact of a number of factors, many of which are discussed in more detail in our Annual Report on Form 10 K and our other reports filed with the Securities and Exchange Commission. 2
Where we are today Rapid progress in transforming company strategy, culture and financial position Projected cash balance at 12/31/16: $280 290 million Product Revenue growth Q1 2015 to Q1 2016: +41% Product and royalty revenue guidance for 2016 given on May 10, 2016 $170 $180 million OPEX guidance at $295 305 mil reduced from previously planned ~$400 mil Clear vision, building from core strengths in precision small molecule therapies and rare cancers Positioned for potential increase in addressable patient population from 1,000 2,000 to approx. 16,000 18,000 patients: Rapid near term revenue growth through potentially becoming a two product commercial company by early 2017 Mid term revenue growth from potential market expansion of Iclusig and brigatinib Longer term growth potential from AP32788 and new opportunities from discovery platform, including immuno oncology program 3
Our Vision is to become the leader in the discovery, development, and commercialization of precision therapies for patients with rare cancers. 4
Core strength: Precision therapies Precisely designed to address mutational resistance and drive differential efficacy Precisely defined groups of patients who have limited options and can receive greatest benefit Iclusig Survival Probability 100 80 60 40 20 0 0 12 20 36 48 60 72 84 Common EGFR mutations EGFR exon 20 insertions 96 Brigatinib AP32788 Survival in months 5
Core strength: Rare cancers Currently account for around a quarter of all cancer diagnoses and deaths* Expected to increase in importance as more molecular subsets of common cancers are identified * Incident Number of Patients (US) 200,000 Orphan Threshold (prevalence) ARIAD Focus: 45,000 Rare Cancer Threshold ** Address rare cancers/patient populations with high value precision therapies Patient centric development and commercial model *Lancet, February 2016 **NCI Epidemiology and Genetics Research ARIAD Current/Potential Markets 8,000 ALK+NSCLC 6,000 Exon 20 EGFR/HER2 NSCLC 3,300 CML/Ph+ALL 6
Strategic review: Areas of focus Geographic Reach Commercial Maximization R&D Portfolio Cost Efficiencies Business Development 7
Strategic review: Approach and methodology Rigorous, quantitative approach Evaluation of options based on Risk adjusted NPVs Impact on cash/financial flexibility Projected value of business over time factoring in key milestones Incorporated perspective from a range of stakeholders Company Valuation (rnpv) Cost Re focus Efficiencies on US Commercial Prior to Maximization Strategic Review Illustrative Approach After Strategic Review APAP32788 Brigatinib Clinical Approval/ Data Launch ALTA 1L Data OPTIC/2L Data Potential Future Value 8
Strategic review: Actions taken to date Incyte Transaction Kick off Strategic Review Cost Efficiencies: Reductions to expense base Iclusig EU License & Co development Divestiture of EU Operation z z z z Incyte Transaction Closing z Brigatinib NDA Initiated LATAM/ MENA distributor deal z 9
ARIAD s new strategy Commercial Maximization Development/Pipeline Science & Discovery Lean, Cost efficient Structure US direct commercialization Leverage Iclusig to continue growth Planned successful 2017 launch of brigatinib (subject to FDA approval) Ex US revenues with minimal costs partnerships with strategic optionality Earlier lines of treatment for brigatinib and Iclusig AP32788 EGFR/HER2 lung cancer Share development costs through ex US partnerships Engine for new potential products expand development pipeline World class capability in designing precision cancer therapies Expanding platform into small molecule immuno oncology Rare cancer model designed for efficient commercialization/r&d Operations limited to US Lean G&A/headquarter functions 10
ARIAD s new strategy Commercial Maximization US direct commercialization Leverage Iclusig to continue growth Planned successful 2017 launch of brigatinib (subject to FDA approval) Ex US revenues with minimal costs partnerships with strategic optionality Development/Pipeline Science & Discovery Lean, Cost efficient Structure 11
COMMERCIAL MAXIMIZATION New geographic strategy: US focus with global reach through partners Rationale US represents majority of industry oncology profits based on ~50% of global sales Can retain significant share of ex US value through partnerships Strive to maintain strategic optionality 12
COMMERCIAL MAXIMIZATION Incyte transaction: Execution of new strategy Key Terms Incyte acquired ARIAD EU operations and licensed Iclusig for the region (EU countries plus others, including Russia, Turkey) Financials: $140 mil upfront & 32 50% royalties to ARIAD $14 mil in development cost sharing for OPTIC/OPTIC2L $135 mil potential milestones in oncology indications ARIAD acquirer may terminate license following change of control Incyte receives financial payments & ongoing royalty from acquirer Major Benefits Significantly improves cash position/financial profile Operating costs reduced by ~ $65 mil annually Continuity of Iclusig commercialization ongoing ARIAD royalties Strategic flexibility 13
COMMERCIAL MAXIMIZATION Iclusig Katie Olson Chronic myeloid leukemia Iclusig patient 14
COMMERCIAL MAXIMIZATION Iclusig: Growth is expected to continue Iclusig Global Sales & Royalties $200M $150M $100M $50M CAGR +77% Key Drivers of Future Growth Field team expansion 4 year PACE data; expected label update Increasing clinical experience Patient retention programs 0 2014 Actual 2015 Actual 2016 Guidance 15
COMMERCIAL MAXIMIZATION Brigatinib BRIGATINIB Andy Bonnet Non small cell lung cancer ARIAD clinical trial patient 16
COMMERCIAL MAXIMIZATION Brigatinib: Overview BRIGATINIB NDA submission initiated in crizotinib resistant ALK+ NSCLC in June 2016 NDA completion planned for Q3 2016 Breakthrough designation from FDA Pivotal data suggests differentiated efficacy PFS 12.9 months * (vs. competitors 6 9 months) Preparing for anticipated US launch in early 2017 Development for front line indication under way *Secondary endpoint, comparison not head to head 17
COMMERCIAL MAXIMIZATION 2016 Global ALK inhibitor market: Annualized market approaching $800 mil In Millions $ $900.0 $800.0 $700.0 $600.0 $500.0 $400.0 $300.0 Global ALK Inhibitor Market $632 $349 Ex US $768 $420 Ex US Analysts projecting market growth toward ~$2 billion by 2020 34% Q1/16 vs. Q1/15 growth $200.0 $100.0 $283 $348 US US $0.0 2015 Q1 2016 Annualized Source: Pfizer 2016 Q1 Performance For Xalkori, Novartis 2016 Q1 Performance for Zykadia, Roche 2016 Q1 Performance for Alecensa 18
ARIAD s new strategy Commercial Maximization Development/Pipeline Earlier lines of treatment for brigatinib and Iclusig AP32788 EGFR/HER2 lung cancer Share development costs through ex US partnerships Science & Discovery Lean, Cost efficient Structure 19
DEVELOPMENT/PIPELINE Core development programs Iclusig Brigatinib AP32788 OPTIC & OPTIC 2L ALTA and ALTA 1L Phase I/II 20
DEVELOPMENT/PIPELINE Iclusig: Development programs OPTIC & OPTIC 2L Goals Improve Iclusig safety profile through lower doses Expand market potential through earlier lines of treatment 2L indication more than doubles available market Demonstrate superior efficacy to drive market share 1st Line 6,000 2nd Line 1,900 3rd Line 920 Other Considerations Incyte partnership provides $14 million funding, plus significant potential milestones related to OPTIC 2L T315i+ 200 Total 3rd line + 1,400 Current eligible pool 1000 2000 patients 21
DEVELOPMENT/PIPELINE Brigatinib: Development programs ALTA 1L Goals Expand market potential through front line indication Potential for long duration of treatment enhances revenue potential H2H superiority data would further strengthen efficacy positioning Confirmatory study for FDA approval Annual Incidence/ Number of Switches * 1st Line 4,300 2nd Line 2,500 3rd Line+ 1,300 SOURCE: *SEER Cancer Statistics Review 1975 2010; UpToDate; 2012 SEER Data (Cancer Statistics Review, 1975 2008); Cancer.gov; ARIAD internal assumptions, Applies mutation and testing rate. Stage IV only and assumes 85% testing by 2017, Kantar Health Epi Report 2015; eligible patients is reflective of all patients who would be candidates for ALK treatment 22
DEVELOPMENT/PIPELINE AP32788 Program Orally active TKI precision therapy Unique profile demonstrated against EGFR and HER2 Exon 20 mutations No current approved targeted treatments Estimated 6,000 US patients Phase I/II clinical study underway Initial data expected next year Crystal structure of EGFR in complex with AP32788 23
ARIAD s new strategy Commercial Maximization Development/Pipeline Science & Discovery Engine for new potential products expand development pipeline World class capability in designing precision cancer therapies Expanding platform into small molecule immuno oncology Lean, Cost efficient Structure 24
SCIENCE & DISCOVERY Discovery platform Precision therapies targeting rare cancers Kinase inhibitors Validated targets low target based risk Potential rapid clinical proof of concept Potential streamlined development: ~4 5 years first in human to approval Leveraging precision, small molecule platform into immuno oncology Genetically validated kinase target; in cell assays, inhibition stimulates T cell activation; similar to PD 1 antibody levels Resistance mapping Innovative chemistry 25
ARIAD s new strategy Commercial Maximization Development/Pipeline Science & Discovery Lean, Cost efficient Structure Rare cancer model designed for efficient commercialization/r&d Operations limited to US Lean G&A/headquarter functions 26
LEAN, COST EFFICIENT STRUCTURE Lean, cost efficient structure Incyte transaction: $65 mil annual operating cost savings Reduced 90 HQ positions critically evaluated every role in the company Reinvested in new customer facing positions Doubled the US customer facing roles 2016 vs. 2015 Focused R&D spend on critical and necessary activities Shared development costs with partners (Incyte and Otsuka) Reduced G&A expenses in line with a leaner, more efficient organization Direct positive impact on shareholder value from reduced costs 27
SUMMARY Looking ahead: Expanding addressable patient populations Eligible US Patient Population (Incidence) Current/Initial Potential Future ~1,000 2,000 ~3,000 4,000 Brigatinib ~4,000 ~7,000 8,000 AP32788 NA ~6,000 28
SUMMARY Cultural DNA elements ACCOUNTABILITY Own It We always meet our plans and commitments PASSION FOR PATIENTS Feel It We aim to have every appropriate patient treated with our therapies and supported by our programs SENSE OF URGENCY Make It Happen We make every day count with our actions, from our labs to the field 29
Strong and diverse executive management team Paris Panayiotopoulos President and Chief Executive Officer Tim Clackson, Ph.D. President, R&D, CSO Jennifer Herron EVP, Chief Commercial Officer Hugh Cole SVP, Chief Business Officer Manmeet S. Soni EVP, Chief Financial Officer Jayne Gansler SVP, Human Resources Daniel Bollag SVP, Regulatory Affairs & Quality Elona Kogan, Esq. SVP, General Counsel 30