ArQule and Daiichi Sankyo Reach Agreement with FDA on Special Protocol Assessment for Phase 3 Trial of Tivantinib in

  ArQule and Daiichi Sankyo Reach Agreement with FDA on Special Protocol
  Assessment for Phase 3 Trial of Tivantinib in Hepatocellular Carcinoma

Business Wire

WOBURN, Mass. -- October 16, 2012

ArQule, Inc. (Nasdaq: ARQL) today announced a Special Protocol Assessment
(SPA) agreement with the U.S. Food and Drug Administration (FDA) for the
design of a pivotal Phase 3 trial of tivantinib in patients with
hepatocellular carcinoma (HCC).

The Phase 3 trial will be a randomized, double-blinded study of tivantinib as
single agent therapy in previously treated patients with MET diagnostic-high
inoperable HCC. The primary endpoint is overall survival in the
intent-to-treat population, and the secondary endpoint is progression free
survival in the same population. Approximately 300 patients are planned to be
enrolled at approximately 120 centers worldwide.

The SPA process is a procedure by which the FDA provides official evaluation
and written guidance on the design and size of proposed protocols that are
intended to form the basis for a New Drug Application. Final marketing
approval depends on the results of the trial.

“We are mindful of the high unmet need among patients suffering from this
disease, and we are proceeding with our partner, Daiichi Sankyo, toward the
timely initiation of this trial,” said Paolo Pucci, chief executive officer of

About Hepatocellular Carcinoma (HCC)
Globally, liver cancer is the sixth most common cancer (749,000 new cases),
accounting for 7 percent of all cancers, and is the third cause of cancer
related death (692,000 cases).^1 HCC represents more than 90 percent of
primary liver cancers.^2 Chronic hepatitis B and C are recognized as the major
factors worldwide increasing the risk of HCC, with risk being even greater in
the presence of co-infection with these viruses.^3 Cirrhosis is also a risk
factor for development of HCC.

About Tivantinib and the MET pathway
Tivantinib is an orally administered, selective inhibitor of MET, a receptor
tyrosine kinase. In healthy adult cells, MET is present in normal levels to
support natural cellular function, but in cancer cells MET is inappropriately
and continuously activated for unknown reasons. When abnormally activated, MET
plays multiple roles in aspects of human cancer, including cancer cell growth,
survival, angiogenesis, invasion and metastasis. Tivantinib has not yet been
approved for any indication in any country.

About ArQule and Daiichi Sankyo Co., Ltd.
In December 2008, ArQule and Daiichi Sankyo signed a license, co-development
and co-commercialization agreement for tivantinib (ARQ 197) in the U.S.,
Europe, South America and the rest of the world, excluding Japan, China
(including Hong Kong), South Korea and Taiwan.

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 c-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.

This press release contains statements regarding clinical trials with
tivantinib (ARQ 197) by ArQule and its business partner, Daiichi Sankyo,
including a planned Phase 3 trial in second-line hepatocellular carcinoma
(HCC) to be conducted under a Special Protocol Assessment (SPA). 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 and
early stage 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, 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.

^1 EASL–EORTC Clinical Practice Guidelines: Management of hepatocellular
carcinoma. Journal of Hepatology. 2012;56: 908-943

^2 EASL–EORTC Clinical Practice Guidelines: Management of hepatocellular
carcinoma. Journal of Hepatology. 2012;56: 908-943

^3 Chiaramonte M, Stroffolini T, Vian A, et al.: Rate of incidence of
hepatocellular carcinoma in patients with compensated viral cirrhosis. Cancer
85 (10): 2132-37, 1999.


ArQule, Inc.
William B. Boni, 781-994-0614
VP, Investor Relations/Corp. Communications
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