ArQule Announces Third Quarter Fiscal 2013 Results
Conference call scheduled today at 9:00 a.m. eastern time
WOBURN, Mass. -- November 7, 2013
ArQule, Inc. (NASDAQ: ARQL) today reported its results of operations for the
fiscal quarter and nine months ended September 30, 2013.
The Company reported a net loss of $6,083,000 or $0.10 per share for the
quarter ended September 30, 2013, compared to a net loss of $431,000 or $0.01
per share for the quarter ended September 30, 2012. For the nine month period
ended September 30, 2013, the Company reported a net loss of $18,644,000 or
$0.30 per share, compared to a net loss of $5,576,000 or $0.09 per share for
the same period in 2012.
At September 30, 2013, the Company had a total of $103,054,000 in cash,
equivalents and marketable securities.
Recent Operational Developments
Tivantinib (ARQ 197)
*Submission of a protocol amendment related to a reduced dose of 120
milligrams (mg) twice daily (BID) in the pivotal Phase 3 METIV-HCC trial
of tivantinib as single agent therapy in patients with hepatocellular
*Presentation of final data from the Phase 3 MARQUEE trial in non-squamous
non-small cell lung cancer (NSCLC) at the European Cancer Congress
demonstrating clinical benefits in a sub-group of patients whose tumors
expressed high levels of MET protein, as assessed per protocol.
“Following observation by the Data Monitoring Committee of a higher incidence
of neutropenia in the METIV-HCC trial, ArQule and its partner, Daiichi Sankyo,
submitted a protocol amendment in order to reduce the dose to 120 mg BID,”
said Paolo Pucci, chief executive officer of ArQule. “Patients in the
METIV-HCC trial are being treated at the reduced dose of 120 mg BID, and the
DMC will review data from these patients on an ongoing basis to monitor the
safety profile of this dose. We expect to provide additional details on the
trial as they become available.
“In the tivantinib NSCLC program, the final data analyses from the MARQUEE
trial demonstrated the potential therapeutic value of tivantinib in the
treatment of patients with MET high tumors as measured by improvements in
overall survival and progression-free survival,” said Mr. Pucci. “With respect
to the ATTENTION trial of tivantinib and erlotinib in NSCLC, we expect our
partner in Asia, Kyowa Hakko Kirin, to have data available early next year.
“Enrollment in our Phase 1 trials with ARQ 092, our AKT inhibitor, and ARQ
087, our FGFR inhibitor, is proceeding,” said Mr. Pucci. “We continue to
expect data readouts from these two trials in approximately mid-2014.”
Revenues and Expenses
The Company reported total revenues of $3,542,000 for the quarter ended
September 30, 2013, compared to revenues of $10,944,000 for the quarter ended
September 30, 2012. Revenues for the nine months ended September 30, 2013 were
$13,639,000 compared to revenues of $31,271,000 for the nine months ended
September 30, 2012.
The $7,402,000 revenue decrease in the three month period ended September 30,
2013 is primarily due to revenue decreases of $4,500,000 from the Daiichi
Sankyo AKIP™ discovery agreement that ended in November 2012, $2,300,000 from
the tivantinib program, and $600,000 from the Daiichi Sankyo ARQ 092 agreement
that ended in June 2013.
The $17,632,000 revenue decrease in the nine month period ended September 30,
2013 is primarily due to revenue decreases of $14,300,000 from the Daiichi
Sankyo AKIP™ discovery agreement that ended in November 2012, $4,100,000 from
the tivantinib program, and $1,000,000 from the Daiichi Sankyo ARQ 092
agreement that ended in June 2013. These decreases were partially offset by a
one-time payment of $1,750,000 related to a research project.
For the quarter ended September 30, 2013, the Company reported total costs and
expenses of $9,735,000, compared to total costs and expenses of $11,533,000
for the quarter ended September 30, 2012. Total costs and expenses for the
nine months ended September 30, 2013 were $32,596,000, compared to $37,220,000
for the same period in 2012.
Research and development costs for the three and nine month periods ended
September 30, 2013 were $5,955,000 and $22,218,000 respectively, compared with
$8,146,000 and $26,720,000 for the 2012 three and nine month periods. The
lower research and development expenses in both the three and nine month
periods ended September 30, 2013 were related primarily to lower labor related
costs and lower outsourced clinical and product development costs.
In connection with the reorganization implemented in July 2013, the Company
recorded $667,000 of restructuring costs, including $403,000 of which was paid
in the three month period ended September 30, 2013, as well as $139,000 of
non-cash stock compensation costs. The restructuring actions related to these
charges are expected to result in annual cost savings of approximately
$3,500,000-$4,000,000 commencing in 2014.
General and administrative costs for the three and nine month periods ended
September 30, 2013 were $3,113,000 and $9,711,000, respectively, compared with
$3,387,000 and $10,500,000 for the 2012 three and nine month periods.
Updated 2013 Financial Guidance
For 2013, ArQule expects net use of cash to range between $37 and $40 million.
Revenues are expected to range between $13 and $16 million. Net loss is
expected to range between $26 and $29 million, and net loss per share is
expected to range between $(0.42) and $(0.46). ArQule expects to end 2013 with
between $91 and $94 million in cash and marketable securities.
Investor Conference Call
ArQule will host an investor conference call today at 9:00 a.m.
Date: Thursday, November 7, 2013
Time: 9:00 a.m. Eastern Time
Conference Call Dial-In Numbers
Domestic: (877) 868-1831
International: (914) 495-8595
A replay of the conference call will be available beginning two hours after
its completion through November 9, 2013 and can be accessed by dialing
toll-free 1-855-859-2056 or 1-800-585-8367 and 1-404-537-3406 from outside the
U.S. For archived calls, the access code is 86068331.
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, and
ARQ 087, designed to inhibit fibroblast growth factor receptor (FGFR).
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, as well as forward-looking statements related
to the Company’s financial guidance for 2013 (including estimates of net use
of cash, revenues, net loss, net loss per share and cash and marketable
securities at the end of 2013) and its agreements with Daiichi Sankyo Co.,
Ltd. and Kyowa Hakko Kirin Co., Ltd. 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 092 (an AKT inhibitor) and ARQ 087 (an FGFR
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.
Condensed Consolidated Statements of Operations and Comprehensive Loss
Three Months Ended Nine Months Ended
September 30, September 30,
2013 2012 2013 2012
(In Thousands, Except Per Share Data)
Research and development $ 3,542 $ 10,944 $ 13,639 $ 31,271
Costs and expenses:
Research and development 5,955 8,146 22,218 26,720
General and 3,113 3,387 9,711 10,500
Restructuring costs 667 — 667 —
Total costs and expenses 9,735 11,533 32,596 37,220
Loss from operations (6,193 ) (589 ) (18,957 ) (5,949 )
Interest income 114 150 397 294
Interest expense (8 ) (7 ) (18 ) (19 )
Other income (expense) 4 15 (66 ) 98
Net loss (6,083 ) (431 ) (18,644 ) (5,576 )
Unrealized gain (loss) on 41 273 (17 ) 166
Comprehensive loss $ (6,042 ) $ (158 ) $ (18,661 ) $ (5,410 )
Basic and diluted net
loss per share:
Net loss per share $ (0.10 ) $ (0.01 ) $ (0.30 ) $ (0.09 )
Weighted average basic
and diluted common shares 62,512 62,224 62,457 58,987
(1) Research and development revenue is shown net of collaboration
contra-revenue of zero and $0.2 million and $0.3 million and $3.7 million for
the three and nine months ended September 30, 2013 and 2012, respectively.
Balance sheet data (in thousands): September 30, December 31,
Cash, equivalents and marketable securities- $ 82,262 $ 79,271
Marketable securities- long term 20,792 51,328
$ 103,054 $ 130,599
Total assets $ 105,848 $ 134,193
Notes payable $ 1,700 $ 1,700
Stockholders’ equity $ 65,782 $ 81,029
William B. Boni, 781-994-0300
VP, Investor Relations/
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