New York, NY, March 30, 1999 - SmallCaps Online LLC announced today that it has initiated coverage of Cubist Pharmaceuticals (Nasdaq: CBST) with a BUY recommendation. The full text of this report can be accessed at SmallCaps' web site, at www.SmallCapsOnline.com.

Excerpts from the report follow:

Cubist Pharmaceuticals is an emerging pharmaceutical company that we believe represents a promising investment opportunity based on its combination of late-stage drug development, and genomics and assay development technologies, all in the area of anti-infectives. CBST has just initiated the first of two Phase III trials, and an open-label Phase II trial, on its novel antibiotic daptomycin, which has been shown to be effective against all gram-positive organisms, including many of the antibiotic-resistant, so-called "Super Bugs" that are becoming increasing prevalent in our healthcare system today. CBST is also using proprietary technology it calls VITA, in partnership with major pharmaceutical companies, to identify new anti-infective targets and drug candidates. CBST recently announced a three-year collaboration with Novartis, in a deal worth up to $33 million based upon achievements of certain milestones.

CBST stock is trading at a significant discount to other drug development companies with promising products in Phase III clinical trials. Based upon the potential of daptomycin alone, without consideration of the considerable value in the VITA technology, CBST’s collaborative partnerships and already identified anti-infective drug candidates, we believe CBST common stock to be significantly undervalued. We recommend purchase of CBST stock for investors tolerant of the risks associated with small-cap equity investments and are establishing a 12-month price target of $9 to $12 per share.

Daptomycin & VITA — Significantly Undervalued Assets

Daptomycin: an intravenous (IV) antibiotic that uses a novel mechanism of action, is currently in one Phase III trial in the US for skin and soft tissue infections, and in an open-label Phase II trial for bacteremia; we believe daptomycin could be on the market by mid-2001 and could reach sales in the US of close to $200MM in the year 2003.

VITA: A proprietary process incorporating genomics, bioinformatics and high-throughput screening, that should accelerate the time from target identification to new drug discovery. CBST has just teamed with Novartis on selected targets, assays and compounds, and intends to partner the technology with other companies as well.

Strong Corporate Partnerships — Actively Seeking Additional Collaborations

Novartis: We believe this partnership to be strong validation of the VITA technology and the first of many partnerships pertaining to this technology.

Bristol-Myers Squibb and Merck: CBST has ongoing collaborations with BMS and Merck for the discovery and development of anti-infective compounds against certain CBST targets.

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