ArQule reports net loss of $9,752,000 for first-quarter 2010

ArQule, Inc.May 6 2010

ArQule, Inc. (NASDAQ: ARQL) today announced its financial results for the first quarter of 2010.

“The first quarter of the year was highlighted by analyses of data from our Phase 2 trial with ARQ 197 in NSCLC”

For the quarter ended March 31, 2010, the Company reported a net loss of $9,752,000 or $0.22 per share, compared to a net loss of $9,908,000, or $0.23 per share, for the first quarter of 2009.

At March 31, 2010, the Company had a total of $146,762,000 in cash, equivalents and marketable securities, which includes $39,800,000 drawn down during 2008 under notes payable that are collateralized by the Company's auction rate securities. Net of these notes, at March 31, 2010 the Company had a total of $106,962,000.

Operational Update

• ARQ 197, a selective inhibitor of the c-Met receptor tyrosine kinase
  • Results of Phase 2 trial in non-small cell lung cancer (NSCLC) announced on March 31, 2010 provide a signal of anti-cancer activity with no clinically relevant differences in adverse events between treatment and control arms
  • Results of Phase 2 c-Met sarcoma trial planned for announcement during 2H 2010
  • Enrollment continuing in single agent and combination therapy regimens in four additional indications, including hepatocellular carcinoma, pancreatic adenocarcinoma, germ cell tumors and colorectal cancer
• ARQ 621, a novel inhibitor of the Eg5 kinesin motor protein: enrollment continuing in a Phase 1 safety trial
• BRAF and FGFR programs: pre-clinical activities continue with the goal of filing an Investigational New Drug (IND) application from at least one of these programs in 2010

"The first quarter of the year was highlighted by analyses of data from our Phase 2 trial with ARQ 197 in NSCLC," said Paolo Pucci, chief executive officer of ArQule. "We believe the treatment benefit observed in this rigorously conducted randomized Phase 2 trial would represent a meaningful clinical improvement over standard therapy if replicated in a Phase 3 trial. We look forward to presenting the complete set of data analyses from this trial, as well as data from a number of other trials with ARQ 197, at the 2010 Annual Meeting of the American Society of Clinical Oncology."

Revenues and Expenses

The Company reported revenues of $6,325,000 for the quarter ended March 31, 2010, compared with $5,420,000 for the first quarter of 2009. The increase in the first quarter of 2010 was primarily due to revenue from the Company's ARQ 197 and AKIP^TM collaborations with Daiichi Sankyo Co., Ltd. The 2010 and 2009 periods also included revenue from the Company's license agreement with Kyowa Hakko Kirin Co., Ltd.

Total costs and expenses for the quarter ended March 31, 2010 were $15,773,000 compared to $14,994,000 for the first quarter of 2009. Research and development costs for the quarter ended March 31, 2010 were $12,444,000 compared to $11,334,000 for the first quarter of 2009. The increased 2010 research and development costs were primarily due to higher preclinical, product development and clinical outsourcing costs related to the Company's pipeline programs.

General and administrative costs for the quarter ended March 31, 2010 were $3,329,000 compared to $3,660,000 for the first quarter of 2009. The decreased costs in 2010 were due to lower personnel and related costs.

Confirmed Financial Guidance

As previously stated, for 2010 ArQule expects net use of cash to range between $43 and $47 million. Revenues are expected to range between $24 and $28 million. Net loss is expected to range between $34 and $38 million, and net loss per share to range between $(0.76) and $(0.84). ArQule expects to end 2010 with between $70 and $74 million in cash and marketable securities.