ArQule reports net loss of $1,466,000 for first quarter 2011

ArQuleMay 5 2011

ArQule, Inc. (NASDAQ: ARQL) today announced its financial results for the first quarter of 2011.

For the quarter ended March 31, 2011, the Company reported a net loss of $1,466,000, or $0.03 per share, compared to a net loss of $9,752,000, or $0.22 per share, for the first quarter of 2010.

At March 31, 2011, the Company had a total of $137,752,000 in cash, equivalents and marketable securities.

Operational Update

• Dosing of the first patient in the pivotal Phase 3 combination trial of tivantinib (ARQ 197), an oral, selective inhibitor of the c-MET receptor tyrosine kinase, and erlotinib in non-small cell lung cancer (NSCLC) and the subsequent receipt of a milestone payment from development partner, Daiichi Sankyo, in the first quarter;
• Presentation of Phase 1 results of tivantinib in combination with irinotecan and cetuximab in colorectal cancer (CRC) at the 2011 Gastrointestinal Cancers Symposium of the American Society of Clinical Oncology (ASCO);
• Continuing recruitment of patients in the Phase 2 trial with tivantinib in liver cancer and in the Phase 2 trial with tivantinib in combination with irinotecan and cetuximab in colorectal cancer, as well as enrollment of patients with multiple tumor types in Phase 1 trials of tivantinib in combinations with sorafenib and gemcitabine.

"In January 2011, the first patient was enrolled in our Phase 3 trial with tivantinib in combination with erlotinib for patients with non-squamous NSCLC who have received one or two prior systemic therapies," said Paolo Pucci, chief executive officer of ArQule. "This trial, led by Daiichi Sankyo, will enroll approximately 1,000 patients at clinical sites in the U.S., Canada, Eastern and Western Europe, Australia and Latin America.

"Data presentations during the first quarter were highlighted by findings from the Phase 1 lead-in portion of our ongoing Phase 2, randomized trial in CRC with tivantinib in combination with irinotecan and cetuximab at the 2011 ASCO Gastrointestinal Cancers Symposium," said Mr. Pucci. "These data showed that this combination was well tolerated, with encouraging anti-tumor activity in patients with relapsed, metastatic CRC that included one complete response, two partial responses and five stable diseases among nine patients treated.

"In addition, pre-clinical data presented at the American Association for Cancer Research (AACR) support our ongoing development of products targeting the RAF kinases and the FGFR kinase," said Mr. Pucci.

Revenues and Expenses

The Company reported revenues of $13,405,000 for the quarter ended March 31, 2011, compared with $6,325,000 for the quarter ended March 31, 2010. The increase in the first quarter of 2011 was primarily due to revenue from the Company's tivantinib collaboration with Daiichi Sankyo Co., Ltd., which included a $25 million milestone payment received in February, 2011. The 2011 and 2010 periods also included revenue from the Company's license agreement with Kyowa Hakko Kirin Co., Ltd. and its AKIP™ research collaboration agreement with Daiichi Sankyo.

Total costs and expenses for the quarter ended March 31, 2011 were $14,936,000, compared to $15,773,000 for the first quarter of 2010. Research and development costs for the quarter ended March 31, 2011 were $11,393,000, compared to $12,444,000 for the first quarter of 2010.

General and administrative costs for the quarter ended March 31, 2011 were $3,543,000, compared to $3,329,000 for the first quarter of 2010.

Confirmed Financial Guidance

As previously stated, for 2011 ArQule expects net use of cash to range between $40 and $45 million. Revenues are expected to range between $27 and $32 million. Net loss is expected to range between $35 and $40 million, and net loss per share to range between $(0.66) and $(0.75). ArQule expects to end 2011 with between $85 and $90 million in cash and marketable securities.