ArQule Announces Initiation of Clinical Programs with ARQ 197 in Germ Cell Tumors and Colorectal Cancer

ArQule, Inc. (Nasdaq: ARQL) today announced the initiation of a Phase 2, single agent trial with ARQ 197 in germ cell tumors (GCT), including testicular and non-central nervous system (non-CNS) tumors, and a Phase 1/2 clinical trial designed to evaluate the safety of ARQ 197 administered in combination with irinotecan and cetuximab in patients with metastatic colorectal cancer (CRC) who possess the wild-type form of the KRAS gene.

ARQ 197 is an orally available, small molecule inhibitor of the c-Met receptor tyrosine kinase. The trials will be conducted by Daiichi Sankyo Pharma Development, a division of Daiichi Sankyo, Inc., the co-developer of ARQ 197 outside of certain territories in Asia.

Germ Cell Trial

The primary aim of this trial is to determine the objective response rate in patients with relapsed or refractory GCT treated with ARQ 197. Secondary objectives include determination of progression free survival, overall survival, and safety and tolerability of ARQ 197 in this population.

"The c-Met receptor tyrosine kinase is expressed in human testicular tissue, and analysis of archived testicular tumor specimens at ArQule has confirmed its presence in two thirds of tumor samples,” said Dr. Brian Schwartz, chief medical officer of ArQule. "Further, early clinical evidence suggests that inhibition of c-Met with ARQ 197 has anti-cancer activity in this tumor type. These data cumulatively provide a sound rationale for testing ARQ 197 in a Phase 2 clinical setting.”

About Germ Cell Tumors

Among men between ages 15 and 35, GCT represent the most common malignancy diagnosed in the United States each year. Despite overall high cure rates, up to 30% of patients with advanced GCT will not be cured with initial chemotherapy with or without surgery. Due to their young age at diagnosis, death from testicular cancer represents the single greatest source of life years’ lost of any non-childhood malignancy. No standard therapy exists to provide disease control in patients following failure of high-dose chemotherapy.

Colorectal Trial

The ARQ 197 combination trial in colorectal cancer will consist of two stages. Pending the successful completion of the Phase 1 safety run-in portion of the trial, the randomized, double-blind, placebo-controlled Phase 2 portion of the trial will be initiated, comparing ARQ 197 in combination with irinotecan and cetuximab to placebo with the same two drugs. The primary objective of Phase 2 will be progression-free survival.

"We believe the addition of ARQ 197 to an existing combination therapy regimen for CRC may improve patient outcomes,” said Dr. Brian Schwartz, chief medical officer of ArQule. "In pre-clinical studies, ARQ 197 has been demonstrated to have anti-cancer activity against multiple human cancer xenograft models, including CRC.”

About Colorectal Cancer

According to the American Cancer Society, CRC is the third most common cancer diagnosed in both men and women in the U.S. It was projected to cause nearly 50,000 deaths during 2009. Standard treatments for CRC include surgery, chemotherapy, radiation therapy and targeted therapy.

Phase 1 or 2 trials with ARQ 197 are ongoing in non-small cell lung cancer, c-Met sarcoma, pancreatic adenocarcinoma, hepatocellular carcinoma, germ cell tumors and colorectal cancer. Patients, their families, physicians and other healthcare professionals seeking information about trials with ARQ 197 may call 1-800-373-7827, consult the Clinical Trials section on ArQule’s web site, http://www.arqule.com, or log on to ClinicalTrials.gov, a web site of the U.S. National Institutes of Health: http://www.clinicaltrials.gov.

About ARQ 197

ARQ 197 is a selective inhibitor of c-Met, a receptor tyrosine kinase. When abnormally activated, c-Met plays multiple roles in aspects of human cancer, including cancer cell growth, survival, angiogenesis, invasion and metastasis. Pre-clinical data have demonstrated that ARQ 197 inhibits c-Met activation in a range of human tumor cell lines and shows anti-tumor activity against several human tumor xenografts. In clinical trials to date, treatment with ARQ 197 has been well tolerated and has resulted in tumor responses and prolonged stable disease across broad ranges of tumors and doses.

On December 19, 2008, ArQule and Daiichi Sankyo, Inc. signed a license, co-development and co-commercialization agreement to co-develop 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, where Kyowa Hakko Kirin Co., Ltd. has exclusive rights for development and commercialization.

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 clinical development, is ARQ 197, an inhibitor of the c-Met receptor tyrosine kinase. The Company has also initiated Phase 1 clinical testing with ARQ 621, designed to inhibit the Eg5 kinesin motor protein. The Company’s pre-clinical pipeline includes a compound designed to inhibit the BRAF kinase. 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 progress of the Company’s clinical trials, including Phase 1 and 2 trials with ARQ 197. 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 early stage clinical trial results is not necessarily indicative of clinical efficacy and does not ensure that later stage or larger scale clinical trials will be successful. For example, ARQ 197 may not demonstrate promising therapeutic effect; in addition, this compound may not demonstrate an appropriate safety profile in further pre-clinical testing and in current, 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. 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 partner, Daiichi Sankyo, Inc. to discontinue development. Even if later stage clinical trials are successful, the risk exists that unexpected concerns may arise from analysis of data or from additional data or that obstacles may arise or issues be identified in connection with review of clinical data with regulatory authorities or that regulatory authorities may disagree with the Company’s view of the data or require additional data, information or studies. In addition, the planned timing of initiation and completion of clinical trials for ARQ 197 is subject to the ability of the Company or Daiichi Sankyo, Inc. to enroll patients, enter into agreements with clinical trial sites and investigators, and other technical hurdles and issues related to the conduct of the trials 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. Furthermore, ArQule may not have the financial or human resources to pursue drug discovery successfully in the future. 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.