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ArQule Reports Second Quarter 2012 Financial Results

This press release contains forward-looking statements regarding the Company’s clinical trials with tivantinib (ARQ 197) and other candidate compounds in earlier stages of development, as well as forward-looking statements related to the Company’s financial guidance for 2012 (including estimates of net use of cash, revenues, net loss, net loss per share and cash and marketable securities at the end of 2012) and its agreements with Daiichi Sankyo Co., Ltd. and Kyowa Hakko Kirin. These statements are based on the Company’s current beliefs and expectations, and are subject to risks and uncertainties that could cause actual results to differ materially. Positive information about pre-clinical and early stage clinical trial results does not ensure that later stage or larger scale clinical trials will be successful. For example, tivantinib, ARQ 621 (an Eg5 inhibitor) and ARQ 736 (a RAF kinases inhibitor) may not demonstrate promising therapeutic effects; in addition, they may not demonstrate appropriate safety profiles in current or later stage or larger scale clinical trials as a result of known or as yet unanticipated side effects. The results achieved in later stage trials may not be sufficient to meet applicable regulatory standards or to justify further development. Problems or delays may arise during clinical trials or in the course of developing, testing or manufacturing these compounds that could lead the Company or its partners to discontinue development. Even if later stage clinical trials are successful, unexpected concerns may arise from analysis of data or from additional data. Obstacles may arise or issues may be identified in connection with review of clinical data with regulatory authorities, and regulatory authorities may disagree with the Company’s view of the data or require additional data or information or additional studies. In addition, the planned timing of initiation and completion of clinical trials for tivantinib is subject to the ability of the Company or Daiichi Sankyo, its partner, and Kyowa Hakko Kirin, a licensee of tivantinib, to enroll patients, enter into agreements with clinical trial sites and investigators, and overcome other technical hurdles and issues related to the conduct of the trials for which each of them is responsible that may not be resolved. Drug development involves a high degree of risk. Only a small number of research and development programs result in the commercialization of a product. Positive pre-clinical data may not be supported in later stages of development. Furthermore, ArQule may not have the financial or human resources to successfully pursue drug discovery in the future. Moreover, Daiichi Sankyo has certain rights to unilaterally terminate the tivantinib license, co-development and co-commercialization agreement. If it were to do so, the Company might not be able to complete development and commercialization of tivantinib on its own. For more detailed information on the risks and uncertainties associated with the Company’s drug development and other activities, see the Company’s periodic reports filed with the Securities and Exchange Commission. The Company does not undertake any obligation to publicly update any forward-looking statements.

 

ArQule, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

 
Three Months Ended June 30, Six Months Ended June 30,
2012 2011 2012 2011
(In Thousands, Except Per Share Data)
 
Research and development revenue $ 11,829 $ 5,447 $ 20,327 $ 18,852
 
Costs and expenses:
Research and development 9,271 12,836 18,574 24,229
General and administrative   3,514   3,552   7,113   7,095
Total costs and expenses   12,785   16,388   25,687   31,324
 
Loss from operations (956 ) (10,941 ) (5,360 ) (12,472 )
 
Interest income 79 112 144 167
Interest expense (6 ) (6 ) (12 ) (12 )
Other income (expense) (2 ) 31 83 47
                 
Net loss   (885 )   (10,804 )   (5,145 )   (12,270 )
 
Unrealized gain (loss) on marketable securities   (126 )   101   (107 )   64
Comprehensive loss $ (1,011 ) $ (10,703 ) $ (5,252 ) $ (12,206 )
 
Basic and diluted net loss per share:
Net loss per share $ (0.01 ) $ (0.20 ) $ (0.09 ) $ (0.24 )
 
Weighted average basic and diluted common shares outstanding   60,891   53,255   57,351   51,961
 

(1) Research and development revenue is shown net of collaboration contra-revenue of zero and $3.4 million and $3.7 million and $8.7 million for the three and six months ended June 30, 2012 and 2011, respectively.

   
Balance sheet data (in thousands): June 30,

2012

December 31, 2011
 
Cash, equivalents and marketable securities- short term $ 75,089 $ 68,168
Marketable securities- long term 71,979 40,475
$ 147,068 $ 108,643
 
Total assets $ 152,259 $ 117,051
 
Notes payable $ 1,700 $ 1,700
 
Stockholders’ equity $ 84,232 $ 29,729




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