Biotech Values

[mcbio]

ARQL - FYE/4Q 2013 Results

[Given that Kyowa Hakko Kirin was involved in the P3 ATTENTION NSCLC trial, should we read anything into the fact that they recently started a P3 HCC trial? I.e., will the ATTENTION sub-group data in MET high patients, when/if disclosed, show another benefit for tivantinib on OS? Also, can't recall if we discussed before the fact that KHK's pivotal P3 HCC trial actually includes PFS, and not OS, as the primary endpoint. Does this mean a lower hurdle?]

http://investors.arqule.com/releasedetail.cfm?ReleaseID=830356

March 5, 2014
ArQule Reports Fiscal 2013 Year End and Fourth Quarter Results
Conference call scheduled today at 9:00 a.m. eastern time

WOBURN, Mass.--(BUSINESS WIRE)-- ArQule, Inc. (NASDAQ: ARQL) today announced its financial results for the year and for the fourth quarter ended December 31, 2013.

The Company reported a net loss of $24,600,000 or $0.39 per share, for the year ended December 31, 2013, compared with a net loss of $10,872,000 or $0.18 per share, for the year ended December 31, 2012. For the quarter ended December 31, 2013, the Company reported a net loss of $5,956,000 or $0.10 per share, compared with net loss of $5,296,000 or $0.09 per share, for the quarter ended December 31, 2012.

At December 31, 2013, the Company had a total of approximately $95,100,000 in cash and marketable securities.

Operational Milestones

Tivantinib (ARQ 197)

Implementation of a worldwide clinical development program consisting of two Phase 3 trials testing tivantinib as single agent therapy against best supportive care in MET biomarker-defined, second-line populations of patients with hepatocellular carcinoma (HCC);
Presentation of final data from the discontinued Phase 3 MARQUEE trial in non-squamous, non-small cell lung cancer (NSCLC) demonstrating clinical benefit in the pre-defined patient subgroup whose tumors expressed high levels of MET protein;
Announcement by our partner Kyowa Hakko Kirin of top-line results from the amended Phase 3 ATTENTION trial in non-squamous NSCLC showing trends toward improved clinical benefit in the intent to treat (ITT) population.

Pipeline / Discovery

Re-acquisition of worldwide rights to compounds, including ARQ 092, covered under the Company's discovery collaboration with Daiichi Sankyo;
Progress in Phase 1a testing with ARQ 092, a selective inhibitor of the Akt/PI3K pathway, and ARQ 087, a multi-kinase inhibitor with pan-FGFR activity.

Plans for 2014

"During 2014, we plan to pursue the clinical development of our product candidates and to advance our discovery activities principally in the following ways," said Paolo Pucci, chief executive officer of ArQule.

Tivantinib

"We begin 2014 with two Phase 3 trials underway worldwide with tivantinib as single agent therapy for second line patients with MET-high HCC," said Mr. Pucci. "These include the METIV-HCC trial, conducted by Daiichi Sankyo and ArQule, with the primary endpoint of overall survival (OS), and the Phase 3 JET-HCC (Japanese Evaluation of Tivantinib in Hepatocellular Carcinoma), conducted by Kyowa Hakko Kirin, with the primary endpoint of progression-free survival (PFS).

"Our objectives for the ongoing tivantinib trials include:

timely progress toward the enrollment of the METIV-HCC trial;
support for the efforts of Kyowa Hakko Kirin toward the enrollment of the JET-HCC trial;
support for the National Institutes of Health (NIH) investigator-led clinical trials.

"Pipeline Products: ARQ 092 and ARQ 087

complete and announce data from the ongoing Phase 1a trial with ARQ 087;
complete and announce data from the ongoing Phase 1a trial with ARQ 092 and;
initiate Phase 1b for either ARQ 092 or ARQ 087.

"Discovery

complete hit-to-lead activity on one target and initiate a second hit-to-lead project;
initiate lead optimization on one program.

"At the end of 2013, ArQule had $95.1 million in cash and marketable securities," said Mr. Pucci. "We expect that these available financial resources will be sufficient to finance our working capital requirements into 2016."

Revenues and Expenses

Revenues for the year ended December 31, 2013 were $15,914,000 compared with revenues of $36,414,000 for the year ended December 31, 2012. For the quarter ended December 31, 2013, revenues were $2,275,000, compared with revenues of $5,143,000 for the quarter ended December 31, 2012. The $20.5 million revenue decrease in 2013 was primarily due to revenue decreases of $15.5 million from our Daiichi Sankyo AKIPTM agreement that ended in November 2012, $1.5 million from our Daiichi Sankyo ARQ 092 agreement that ended in June 2013 and $5.2 million from our Daiichi Sankyo tivantinib program. These decreases were partially offset by $1.7 million of other revenue related to a one-time research project.

Fiscal 2013 research and development expenses were $27,555,000, compared with $33,966,000 for fiscal 2012. Fourth quarter 2013 research and development expenses were $5,337,000, compared with $7,246,000 for the fourth quarter 2012. The $6.4 million decrease in research and development expense in 2013 was primarily due to lower labor related costs of $1.7 million from attrition and $1.0 million from the July 2013 restructuring, $1.1 million lower outsourced clinical and product development costs principally related to our Phase 1 and 2 programs for tivantinib, reduced lab expenses of $0.8 million, lower professional fees of $0.5 million, and other cost reductions of $1.3 million. The $1.9 million decrease in research and development expense in the fourth quarter of 2013 was primarily due to lower labor related costs of $0.4 million from attrition and $0.8 million from the July 2013 restructuring, and lower lab expenses of $0.3 million.

General and administrative expenses for fiscal 2013 were $12,836,000, compared to $13,852,000 for fiscal 2012. Fourth quarter 2013 general and administrative costs were $3,125,000, compared with $3,352,000 for the fourth quarter 2012. General and administrative expense in 2013 decreased primarily due to lower professional fees of $0.6 million and $0.2 million lower labor and related costs from the July 2013 restructuring.

2014 Financial Guidance

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 to range between $(0.48) and $(0.52) for the year. ArQule expects to end 2014 with between $57 and $60 million in cash and marketable securities.

Conference Call and Webcast

ArQule will hold a conference call today at 9:00 a.m. Eastern Time.

Date:
Wednesday, March 5, 2014
Time: 9:00 a.m., Eastern Time
Conference Call Numbers

Domestic: [phone]
International: [phone]
Webcast:
www.arqule.com

A replay of the conference call will be available beginning two hours after the completion of the call until March 7, 2014 and can be accessed by dialing toll-free [phone] or [phone] and outside the U.S. [phone]. The confirmation code for replayed calls is 31423627.