ArQule and Daiichi Sankyo Announce Discontinuation of Phase 3 MARQUEE Clinical Trial in Non-Small Cell Lung Cancer

  ArQule and Daiichi Sankyo Announce Discontinuation of Phase 3 MARQUEE
  Clinical Trial in Non-Small Cell Lung Cancer

             DMC Recommends Discontinuation of Study for Futility

             No Unexpected Safety Findings from Interim Analysis

Business Wire

WOBURN, Mass. & TOKYO -- October 02, 2012

ArQule, Inc. (Nasdaq: ARQL) and Daiichi Sankyo, Co., Ltd. (TSE 4568) today
announced that the independent Data Monitoring Committee (DMC) of the Phase 3
MARQUEE (Met inhibitor ARQ 197 plus Erlotinib vs Erlotinib plus placebo in
NSCLC) trial recommended the study be stopped early following a planned
interim analysis, when they concluded that the study would not meet its
primary endpoint of improved overall survival. Although the interim analysis
showed a statistically significant improvement in progression-free survival
(PFS) in the intent-to-treat (ITT) population, this benefit did not carry over
to overall survival. There were no safety concerns identified by the DMC to
Daiichi Sankyo or ArQule during this interim analysis.

MARQUEE is a randomized, double-blind, controlled pivotal trial to evaluate
the investigational selective MET inhibitor, tivantinib (ARQ 197), in
combination with erlotinib in previously treated patients with locally
advanced or metastatic, non-squamous NSCLC.

ArQule and Daiichi Sankyo are providing information regarding the study
discontinuation to health authorities and those clinical investigators
participating in studies of tivantinib. Data from this study will be presented
at an upcoming scientific meeting.

“We are disappointed that the MARQUEE trial did not provide statistically
significant results for overall survival in a disease and treatment setting
which remains a major unmet medical need,” said Paolo Pucci, chief executive
officer of ArQule.

“Fighting cancer is a complex process in that therapies work differently in
different tumor settings, so we will continue to investigate tivantinib in
other tumor types,” said Glenn Gormley, MD, PhD, global head, R&D and senior
executive officer, Daiichi Sankyo Co., Ltd.

Approximately 1,000 patients were recruited in MARQUEE from more than 200
clinical sites worldwide. The primary endpoint in the trial is overall
survival (OS) in the overall intent-to-treat population. Secondary endpoints
include OS in the subpopulation of patients with epidermal growth factor
receptor (EGFR) wild type, progression-free survival (PFS) in the ITT
population, and further assessment of the safety of tivantinib in combination
with erlotinib. Tivantinib has not been approved for any indication in any
country.

In December 2008, ArQule and Daiichi Sankyo signed a license, co-development
and co-commercialization agreement to co-develop tivantinib in the U.S.,
Europe, South America and the rest of the world, excluding Japan, China
(including Hong Kong), South Korea and Taiwan.

ArQule Conference Call and Webcast

Date:           October 2, 2012
Time:            9:00 a.m. Eastern Time
Conference Call Numbers
Domestic:        (877) 868-1831
International:   (914) 495-8595
Web cast:        http://investors.arqule.com/events.cfm

A replay of the conference call will be available for seven days following the
call and can be accessed by dialing toll-free (855) 859-2056 and outside the
U.S. (404) 537-3406. The replay access code is 37426625.

About ArQule

ArQule is a biotechnology company engaged in the research and development of
next-generation, small-molecule cancer therapeutics. The Company’s targeted,
broad-spectrum products and research programs are focused on key biological
processes that are central to human cancers. ArQule’s lead product candidate,
in Phase 2 and Phase 3 clinical development together with development and
commercialization partner, Daiichi Sankyo, Co. Ltd., is tivantinib, an oral,
selective inhibitor of the MET receptor tyrosine kinase. The Company’s
pipeline consists of ARQ 621, designed to inhibit the Eg5 kinesin motor
protein, and ARQ 736, designed to inhibit the RAF kinases. ArQule’s current
discovery efforts, which are based on the ArQule Kinase Inhibitor Platform
(AKIP™), are focused on the identification of novel kinase inhibitors that are
potent, selective and do not compete with ATP (adenosine triphosphate) for
binding to the kinase.

About Daiichi Sankyo

The Daiichi Sankyo Group is dedicated to the creation and supply of innovative
pharmaceutical products to address the diversified, unmet medical needs of
patients in both mature and emerging markets. While maintaining its portfolio
of marketed pharmaceuticals for hypertension, hyperlipidemia, and bacterial
infections, the Group is engaged in the development of treatments for
thrombotic disorders and focused on the discovery of novel oncology and
cardiovascular-metabolic therapies. Furthermore, the Daiichi Sankyo Group has
created a "Hybrid Business Model," which will respond to market and customer
diversity and optimize growth opportunities across the value chain. For more
information, please visit www.daiichisankyo.com.

This press release contains statements regarding the clinical trials with
tivantinib (ARQ 197) by ArQule and its business partner, Daiichi Sankyo. These
statements are based on the current beliefs and expectations of both
companies, and are subject to risks and uncertainties that could cause actual
results to differ materially. Positive information about pre-clinical, early
stage and interim clinical trial results does not ensure that later stage or
larger scale clinical trials will be successful. For example, tivantinib may
not demonstrate a promising therapeutic effect; in addition, it may not
demonstrate an appropriate safety profile 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 ArQule 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. Regulatory
authorities may disagree with ArQule’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 are subject to the
ability of ArQule, Daiichi Sankyo, and Kyowa Hakko Kirin, a licensee of
tivantinib in Asian territories, to enroll patients, enter into agreements
with clinical trial sites and investigators, and overcome technical hurdles
and other issues related to the conduct of the trials for which each of them
is responsible. There is a risk that these issues may not be successfully
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, with respect to
partnered programs, even if certain compounds show initial promise, Daiichi
Sankyo or Kyowa Hakko Kirin may decide not to license or continue to develop
them, as the case may be. In addition, Daiichi Sankyo and Kyowa Hakko Kirin
have certain rights to unilaterally terminate their agreements with ArQule. If
either company were to do so, ArQule might not be able to complete development
and commercialization of the applicable licensed products on its own. For more
detailed information on the risks and uncertainties associated with ArQule’s
drug development and other activities, see ArQule’s periodic reports filed
with the Securities and Exchange Commission. Neither ArQule nor Daiichi Sankyo
undertakes any obligation to publicly update any forward-looking statements.

Contact:

ArQule, Inc.
William B. Boni, 781-994-0300
VP, Investor Relations/Corp. Communications
www.ArQule.com
or
Daiichi Sankyo, Inc. (US)
Tara Camp, 973-944-2393/908-577-4531
or
Daiichi Sankyo, Co., Ltd.
Michaela Paudler-Debus, PhD, +81-3-6225-1338