ArQule Reports Second Quarter 2014 Financial Results
Conference call scheduled today at 9:00 a.m. eastern time
WOBURN, Mass. -- August 5, 2014
ArQule, Inc. (NASDAQ: ARQL) today announced its financial results for the
second quarter of 2014.
For the quarter ended June 30, 2014, the Company reported a net loss of
$6,339,000 or $0.10 per share, compared with a net loss of $6,786,000 or $0.11
per share for the second quarter of 2013. For the six-month period ended June
30, 2014, the Company reported a net loss of $13,480,000 or $0.22 per share,
compared with a net loss of $12,561,000 or $0.20 per share, for the six-month
period ended June 30, 2013.
At June 30, 2014, the Company had a total of approximately $77,572,000 in
cash, equivalents and marketable securities.
*Approximately 110 clinical sites are now enrolling patients in the Phase 3
METIV-HCC trial of tivantinib in second line hepatocellular carcinoma
(HCC), with the goal of recruiting approximately 300 patients.
*Seven presentations on tivantinib were highlighted at the 2014 ASCO Annual
Meeting, including three from trials being sponsored by the National
Institutes of Health.
*As a result of a restructuring of the Company’s workforce effective August
4, 2014, current cash, cash equivalents and marketable securities will be
sufficient to fund the Company’s working capital and capital requirements
into 2017, with no impact on current financial guidance for 2014.
*The dose escalation portions of Phase 1 clinical trials with ARQ 092, an
orally bioavailable, non-ATP competitive inhibitor of Akt, and ARQ 087, a
multi-kinase inhibitor with pan-fibroblast growth factor (FGFR) activity,
are concluding, and biomarker-driven Phase 1b expansion cohorts in these
trials are about to be initiated. Data with these compounds are planned
for presentation in November 2014 at the EORTC-NCI-AACR Symposium on
Molecular Targets and Cancer Therapeutics.
“We continue to build momentum in patient enrollment in the METIV-HCC trial,”
said Paolo Pucci, chief executive officer of ArQule. “We expect to achieve
critical mass in the screening of patients later this year and to announce
then the updated timeline for completing enrollment.
“With today’s announced restructuring, we have more closely aligned our human
and capital resources with our focus on clinical-stage development programs,”
said Mr. Pucci. “This action will allow us both to increase spending on
proprietary programs like ARQ 092, our Akt inhibitor, and also to extend our
cash runway into 2017.”
Revenues and Expenses
The Company reported total revenues of $2,901,000 for the quarter ended June
30, 2014, compared with revenues of $4,436,000 for the quarter ended June 30,
2013. Revenues for the six months ended June 30, 2014 were $5,577,000,
compared with revenues of $10,097,000 for the six months ended June 30, 2013.
The $1.5 million revenue decrease in the three months ended June 30, 2014 is
primarily due to revenue decreases of $0.9 million from our Daiichi Sankyo
tivantinib program and $0.6 million from our Daiichi Sankyo ARQ 092 agreement
that ended in June 2013.
The $4.5 million revenue decrease in the six months ended June 30, 2014 is
primarily due to revenue decreases of $1.4 million from our Daiichi Sankyo
tivantinib program, $1.8 million of other revenue related to a one-time
research project in the six months ended June 30, 2013 and $1.3 million from
our Daiichi Sankyo ARQ 092 agreement that ended in June 2013.
Total costs and expenses for the quarter ended June 30, 2014 were $9,307,000
compared with $11,280,000 for the second quarter of 2013. Total costs and
expenses for the six months ended June 30, 2014 were $19,288,000 compared with
$22,861,000 for the same period in 2013.
Research and development costs for the three and six-month periods ended June
30, 2014 were $6,236,000 and $12,967,000 respectively, compared with
$8,082,000 and $16,263,000 for the 2013 three and six-month periods. The lower
research and development costs and expenses in the 2014 periods were due to
lower labor related costs, reduced lab expenses and other cost decreases.
General and administrative costs for the three and six-month periods ended
June 30, 2014 were $3,071,000 and $6,321,000 respectively, compared with
$3,198,000 and $6,598,000 for the 2013 three and six-month periods.
Confirmed 2014 Financial Guidance
As previously stated, for 2014 ArQule expects net use of cash to range between
$35 and $38 million. Revenues are expected to range between $8 and $10
million. Net loss is expected to range between $30 and $33 million, and net
loss per share is expected to range between $(0.48) and $(0.52). ArQule
expects to end 2014 with between $57 and $60 million in cash and marketable
Conference Call and Webcast
Date: Tuesday, August 5, 2014
Time: 9:00 a.m. Eastern Time
Web cast: http://investors.arqule.com/events.cfm
A replay of the conference call will be available beginning two hours after
the completion of the call through August 7, 2014 and can be accessed by
dialing toll-free 855-859-2056 or 800-585-8367 and outside the U.S.
404-537-3406. The replay access code is 75401404.
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, leveraging the Company’s proprietary library of compounds.
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 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 092 and ARQ 087 may not demonstrate promising
therapeutic effect; 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. In
addition, we and our partners are utilizing a companion diagnostic to identify
MET-high patients in the METIV-HCC and JET-HCC trials, and we may encounter
difficulties in developing and obtaining approval for companion diagnostics,
including issues relating to selectivity/specificity, analytical validation,
reproducibility, or clinical validation. Any delay or failure by our
collaborators to develop or obtain regulatory approval of the companion
diagnostics could delay or prevent approval of our product candidates. 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
Condensed Statement of Operations and Comprehensive Loss
(In Thousands, Except Per Share Amounts)
THREE MONTHS ENDED SIX MONTHS ENDED
June 30, June 30,
2014 2013 2014 2013
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Research and development $ 2,901 $ 4,436 $ 5,577 $ 10,097
Costs and expenses:
Research and development 6,236 8,082 12,967 16,263
General and 3,071 3,198 6,321 6,598
Total costs and expenses 9,307 11,280 19,288 22,861
Loss from operations (6,406 ) (6,844 ) (13,711 ) (12,764 )
Interest income 76 132 171 283
Interest expense (10 ) (6 ) (17 ) (10 )
Other income (expense) 1 (68 ) 77 (70 )
Net loss (6,339 ) (6,786 ) (13,480 ) (12,561 )
Unrealized loss on (4 ) (67 ) (21 ) (58 )
Comprehensive loss $ (6,343 ) $ (6,853 ) $ (13,501 ) $ (12,619 )
Basic and diluted net
loss per share:
Net loss per share $ (0.10 ) $ (0.11 ) $ (0.22 ) $ (0.20 )
Weighted average basic
and diluted common 62,627 62,473 62,605 62,429
Balance sheet data (in thousands): June 30, December 31,
Cash, equivalents and marketable securities- short $ 63,203 $ 74,695
Marketable securities- long term 14,369 20,391
$ 77,572 $ 95,086
Total assets $ 80,257 $ 98,179
Notes payable $ 1,700 $ 1,700
Stockholders’ equity $ 49,062 $ 60,626
William B. Boni, 781-994-0300
VP, Investor Relations/
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