John M. writes, " I was wondering your thoughts on Arqule (ARQL). Although they only have phase 2 data, the lung cancer results are pretty encouraging, the company has money for several years of operation, some income and partnerships, etc. Considering the market size, and on the basis that 40% of drugs that have successful Phase II trials go on to approval, the odds-adjusted risk reward ratio looks phenomenal. What is your take?" This is the time of the year when I start compiling a mental list of data I'm really interested in seeing when the American Society for Clinical Oncology (ASCO) annual meeting rolls into Chicago in early June. The phase II study of Arqule's ARQ197 in second-line non-small cell lung cancer is definitely on the list. The top-line results from the study released on March 31 are intriguing: The combination of ARQ197 plus Tarceva yielded a progression-free survival of 16.1 months compared to PFS of 9.7 months for Tarceva alone. Is a six-week improvement in PFS clinically significant for these advanced lung cancer patients? Perhaps. The PFS benefit in the ARQ197 study wasn't statistically significant and phase II studies often (always?) look better than what comes later when phase III studies are conducted. Still, cancer drugs have been approved on worse-looking data and Arqule gets kudos for running a decently-sized, randomized and controlled phase II study, which is more than what we get from most biotech companies with cancer drugs in development. The treatment effect of ARQ197 looks even better in the prospectively defined subgroup of patients with non-squamous lung cancer. Hopefully, Arqule has submitted the ARQ197 data for the ASCO meeting so we can see the study's nitty-gritty details, including survival data. It will also be important to hear from Arqule the plans for ARQ197's phase III study program. Lung cancer is a tough market commercially because doctors have a lot of options (not necessarily all good, but numerous) for patients newly diagnosed or who are progressing into second and third lines of therapy. This makes trial design for new lung cancer drugs particularly important. Arqule and its shareholders have certainly benefited from the ARQ197 data already. The stock jumped 63% on March 31, after the phase II data were released. The stock has moved higher since then, trading around $6.25 as I type this Thursday afternoon. It's hard to get really excited about a stock after such a big move, especially since the road forward for ARQ197 is still quite long. But then, Arqule's market cap today of around $280 million is far from obscene. In terms of catalysts for the stock, I'd next look to the ASCO meeting in June where we should see more of the ARQ197 data in lung cancer as well as data from a separate and smaller phase II study of ARQ197 in patients with various soft-tissue cancers.