Cubist Pharmaceuticals, Inc. announced that it has completed its previously announced transaction with Eli Lilly and Company, through which Cubist purchased a one percentage point reduction in the royalties payable to Lilly on net sales of Cubist's investigational antibiotic Cidecin (daptomycin for injection), should it gain regulatory approval. Cubist acquired worldwide development and commercialization rights to daptomycin from Lilly in 1997. The New Drug Application for Cidecin is currently being reviewed by the U.S. Food & Drug Administration (FDA) under priority review status.

Under the terms of the transaction, Cubist has issued to Lilly $8.0 million in Cubist Common Stock, or 723,619 shares, with registration rights. The $11.056 price per share was determined based on the average closing price of Cubist Common Stock over the twenty consecutive trading days ending July 18, 2003.