ArQule Reports First Quarter 2012 Financial Results

ArQule, Inc. (NASDAQ: ARQL) today announced its financial results for the first quarter of 2012.

For the quarter ended March 31, 2012, the Company reported a net loss of $4,260,000, or $0.08 per share, compared to a net loss of $1,466,000, or $0.03 per share, for the first quarter of 2011.

At March 31, 2012, the Company had a total of $100,358,000 in cash, equivalents and marketable securities.

Operational Update

• Reporting of randomized, controlled Phase 2 clinical trial with tivantinib (ARQ 197) as a single agent in hepatocellular carcinoma, showing a statistically significant improvement in time-to-progression in the intent-to-treat (ITT) population of previously treated patients;
• Data presentations for tivantinib at the Annual Meeting of the American Association for Cancer Research (AACR), including IHC analysis of tissue from a completed Phase 2 clinical trial in non-small cell lung cancer (NSCLC) showing that non-squamous NSCLC tumors were more often positive for c-MET expression than squamous NSCLC tumors.

“The top-line Phase 2 findings with tivantinib in HCC announced in January, 2012 represent the first randomized data with a c-Met inhibitor administered as a single agent in this disease,” said Paolo Pucci, chief executive officer of ArQule. “We look forward to presenting additional data from this trial at the Annual Meeting of the American Society of Clinical Oncology in June, including secondary endpoint, sub-group and biomarker analyses.

“In April, 2012, the Company completed a common stock offering, which combined with the full exercise of an over-allotment option resulted in net proceeds of approximately $56 million, an amount not reflected in our first quarter financials,” said Mr. Pucci.

Revenues and Expenses

The Company reported revenues of $8,498,000 for the quarter ended March 31, 2012, compared with $13,405,000 for the quarter ended March 31, 2011. The revenue decrease in the quarter ended March 31, 2012 is primarily due to the timing of revenue recognized from the $25 million milestone payment received in the quarter ended March 31, 2011 from Daiichi Sankyo triggered by the dosing of the first patient in the Phase 3 NSCLC clinical trial. In the quarter ended March 31, 2011, we recognized revenue of $11.4 million related to this milestone, compared with $1.2 million in the quarter ended March 31, 2012. This decrease was partially offset by revenue increases from our Daiichi Sankyo AKIP™ and ARQ 092 agreements, as well as lower contra revenue of $1.6 million.

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