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ArQule Reports First Quarter 2013 Financial Results



  ArQule Reports First Quarter 2013 Financial Results

          Conference call scheduled today at 9:00 a.m. eastern time

Business Wire

WOBURN, Mass. -- May 08, 2013

ArQule, Inc. (NASDAQ: ARQL) today announced its financial results for the
first quarter of 2013.

For the quarter ended March 31, 2013, the Company reported a net loss of
$5,775,000, or $0.09 per share, compared to a net loss of $4,260,000, or $0.08
per share, for the first quarter of 2012.

At March 31, 2013, the Company had a total of $119,641,000 in cash,
equivalents and marketable securities.

Operational Update

  * Enrollment in the Phase 3 METIV-HCC (MET-high patients with tivantinib in
    HCC) trial with tivantinib (ARQ 197) in hepatocellular carcinoma was
    initiated in January, 2013 and is proceeding as planned with the opening
    of clinical sites in the U.S. and Europe;
  * The Company has regained worldwide rights to compounds previously covered
    under its AKIP™ (ArQule Kinase Inhibitor Platform) collaboration with
    Daiichi Sankyo Co., Ltd., including ARQ 092, an AKT inhibitor in Phase 1
    clinical development for which data presented at the American Association
    for Cancer Research (AACR) Annual Meeting demonstrated inhibition of the
    AKT pathway and a manageable safety profile;
  * Data from the Company’s Phase 2 trial in colorectal cancer with tivantinib
    in combination with irinotecan and cetuximab will be presented at the
    Annual Meeting of the American Society of Clinical Oncology (ASCO) in
    June, 2013.

“With respect to our lead product, tivantinib, in January we enrolled the
first patient in the pivotal Phase 3 METIV trial of tivantinib as a single
agent in HCC,” said Paolo Pucci, chief executive officer of ArQule. “Building
upon the clinical benefits observed in MET-high patients in our Phase 2 trial,
investigators in the METIV trial are enrolling previously treated patients
with MET-high tumors. We have opened a number of sites in the U.S. and Europe
during the past several months, and we look forward to building momentum in
patient enrollment in the months to come.

“In colorectal cancer, we plan to present final data from our Phase 2 trial of
tivantinib in combination with irinotecan and cetuximab at the ASCO Annual
Meeting in June,” said Mr. Pucci. “The presentation will include mature
overall survival data from this trial.

“We are delighted to have regained worldwide rights to the AKT program,” said
Mr. Pucci. “The early Phase 1 clinical data for ARQ 092 presented recently at
AACR is encouraging and potentially provides a basis for differentiating this
compound in the class of AKT inhibitory agents. We are continuing to enroll
patients in this trial and have not yet declared a maximum tolerated dose,
following which we plan to explore the activity of ARQ 092 in patients with
AKT-driven tumors.”

Revenues and Expenses

The Company reported research and development revenue of $5,661,000 for the
quarter ended March 31, 2013, compared with $8,498,000 for the quarter ended
March 31, 2012. Revenue in the three months ended March 31, 2013 is comprised
primarily of revenue from the Daiichi Sankyo tivantinib development agreement,
the license agreement with Daiichi Sankyo for the development of ARQ 092, and
the Kyowa Hakko Kirin exclusive license agreement for tivantinib.

The $2.8 million revenue decrease in the quarter ended March 31, 2013 is
primarily due to revenue decreases of $4.9 million from our Daiichi Sankyo
AKIP™ agreement and $0.3 million from our Daiichi Sankyo ARQ 092 agreement,
partially offset by a $0.5 million increase in revenue from our Daiichi Sankyo
tivantinib program and $1.8 million from a one-time research project.

Total costs and expenses for the quarter ended March 31, 2013 were $11,581,000
compared to $12,902,000 for the first quarter of 2012. Research and
development costs for the quarter ended March 31, 2013 were $8,181,000
compared to $9,303,000 for the first quarter of 2012. These decreases were
primarily due to lower outsourced clinical and product development costs
related to tivantinib and pipeline programs. General and administrative costs
for the quarter ended March 31, 2013 were $3,400,000, compared to $3,599,000
for the first quarter of 2012.

                                     
Conference Call and Webcast
                                       
Conference call details
                                       
Date:                                 Thursday, May 8, 2013
Time:                                 9:00 a.m. eastern time
Conference Call Numbers
Domestic:                             877-868-1831
International:                        914-495-8595
Web cast:                             http://www.arqule.com
                                       

A replay of the conference call will be available beginning two hours after
the completion of the call until the end of May 10, 2013 and can be accessed
by dialing toll-free 855-859-2056 and outside the U.S. 404-537-3406. The
confirmation code for replayed calls is 33189641.

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, in Phase 2
and Phase 3 clinical development, is tivantinib (ARQ 197), an oral, selective
inhibitor of the c-MET receptor tyrosine kinase. The Company’s pipeline
includes: ARQ 092, designed to inhibit the AKT serine/threonine kinase; ARQ
087, designed to inhibit fibroblast growth factor receptor (FGFR); 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 forward-looking statements regarding the Company’s
clinical trials with tivantinib (ARQ 197) and other candidate compounds in
earlier stages of development and its ability to fund operations with current
cash and marketable securities. 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 087, ARQ 092, ARQ 621 and ARQ 736 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 subsequent 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 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 as well as Daiichi Sankyo, Inc. 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, the
Company 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 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 Statement of Operations and Comprehensive Loss
(In Thousands, Except Per Share Amounts)
(Unaudited)
 
                                               Quarter Ended
                                               March 31,
                                               2013         2012
                                                                      
Research and development revenue (1)           $ 5,661      $ 8,498
                                                                      
Costs and expenses:
Research and development                       8,181        9,303
General and administrative                     3,400        3,599
Total costs and expenses                       11,581       12,902
                                                                      
Loss from operations                           (5,920   )   (4,404   )
                                                                      
Interest income                                151          65
Interest expense                               (4       )   (6       )
Other income (expense)                         (2       )   85
Net loss                                       (5,775   )   (4,260   )
                                                                      
Unrealized gain on marketable securities       9            19
                                                                      
Comprehensive loss                             $ (5,766 )   $ (4,241 )
                                                                      
                                                                      
Basic and diluted loss per share               $ (0.09  )   $ (0.08  )
                                                                      
Weighted average shares used in calculating:
Basic and diluted loss per share               62,384       53,810

(1) Research and development revenue is shown net of collaboration
contra-revenue of $0.2 million and $3.4 million for the quarter ended March
31, 2013 and 2012, respectively.

                                                                 
Balance sheet data (in thousands):                    March 31,   December 31,
                                                      2013        2012
                                                                   
Cash, equivalents and marketable securities- short    $ 87,108    $   79,271
term
Marketable securities- long term                      32,533      51,328
                                                      $ 119,641   $   130,599
                                                                   
Total assets                                          $ 123,400   $   134,193
Notes payable                                         $ 1,700     $   1,700
Stockholders’ equity                                  $ 76,628    $   81,029

Contact:

ArQule, Inc.
William B. Boni, 781-994-0300
VP, Investor Relations/
Corp. Communications
www.ArQule.com
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