ArQule reports net loss of $7,141,000 in first quarter 2014

ArQuleMay 7 2014

ArQule, Inc. (NASDAQ: ARQL) today announced its financial results for the first quarter of 2014. For the quarter ended March 31, 2014, the Company reported a net loss of $7,141,000 or $0.11 per share, compared to a net loss of $5,775,000, or $0.09 per share, for the first quarter of 2013.

At March 31, 2014, the Company had a total of $85,758,000 in cash, equivalents and marketable securities.

Operational Update

• Enrollment is proceeding in the Phase 3 METIV-HCC trial of tivantinib (ARQ 197) in hepatocellular carcinoma (HCC) conducted by ArQule and its partner, Daiichi Sankyo Co., in the U.S. and Europe;
• Kyowa Hakko Kirin, the Company's partner in Asian territories, initiated the Phase 3 JET-HCC trial of tivantinib in HCC in Japan in February, 2014;
• Patient enrollment is continuing in a number of NIH-sponsored trials with tivantinib, including Phase 2 randomized trials in prostate cancer, head and neck cancer, and kidney cancer;
• The dose escalation portions of Phase 1 trials with the Company's proprietary compounds, ARQ 092 and ARQ 087, are nearing completion.

"The two Phase 3 trials with tivantinib in HCC are proceeding," said Paolo Pucci, chief executive officer of ArQule. "These trials, which include METIV-HCC in the West and JET-HCC in Japan, are unique in that they are the only biomarker-directed trials ongoing in second-line HCC. We expect to provide updates on the projected time frame to completion of patient enrollment as more patients complete screening to ensure that they have MET-diagnostic high disease upon entry into the trial.

"The most advanced clinical trials with tivantinib that are being conducted under the NIH-CRADA program are randomized Phase 2 trials taking place in prostate cancer, head and neck cancer and kidney cancer," said Mr. Pucci. "We plan to announce data from these independent trials as they are made available by sponsoring investigators.

"Our earlier clinical-stage programs are focused on ARQ 092, an Akt inhibitor, and ARQ 087, an FGFR inhibitor," said Mr. Pucci. "Phase 1 trials with both of these products are nearing the achievement of maximum tolerated dose, and we plan to announce data from these trials later this year."

Revenues and Expenses

The Company reported research and development revenue of $2,676,000 for the quarter ended March 31, 2014, compared with $5,661,000 for the quarter ended March 31, 2013. Revenue in the three months ended March 31, 2014 is comprised of revenue from the Daiichi Sankyo tivantinib development agreement and the Kyowa Hakko Kirin exclusive license agreement for tivantinib.

The $3.0 million revenue decrease in the quarter ended March 31, 2014 is primarily due to revenue decreases of $0.6 million from our Daiichi Sankyo tivantinib program, $0.6 million from our Daiichi Sankyo ARQ 092 agreement that ended in June 2013, and $1.8 million of other revenue related to a one-time research project in the quarter ended March 31, 2013.

Total costs and expenses for the quarter ended March 31, 2014 were $9,981,000 compared to $11,581,000 for the first quarter of 2013. Research and development costs for the quarter ended March 31, 2014 were $6,731,000 compared to $8,181,000 for the first quarter of 2013. These decreases were primarily due to lower labor related costs of $1.2 million and reduced lab expenses of $0.4 million. These cost decreases were partially offset by $0.3 million higher outsourced clinical and product development costs related to our pipeline programs, including ARQ 092 and ARQ 087. General and administrative costs for the quarter ended March 31, 2014 were $3,250,000, compared to $3,400,000 for the first quarter of 2013. This decrease was principally due to lower non-cash stock compensation expenses.

Conference Call and Webcast

Conference call details

A replay of the conference call will be available beginning two hours after the completion of the call until the end of May 9, 2014 and can be accessed by dialing toll-free 855-859-2056 or 800-585-8367, and outside the U.S. 404-537-3406. The confirmation code for replayed calls is 30148648.