ASCO Publication Highlights Promising Data from ArQule's Phase I Combination Trial with ARQ 501 and Docetaxel.

WOBURN, Mass. -- ArQule, Inc. (Nasdaq: ARQL) today announced the publication of data in the 2006 Proceedings of the American Society of Clinical Oncology (ASCO) from a Phase 1 combination therapy trial with ARQ 501 and docetaxel that demonstrated clinical tolerability, favorable pharmacokinetics and promising signs of anti-tumor activity in cancer patients with a range of advanced solid tumors who had failed prior treatments with chemotherapy.

Dr. Casey Cunningham of the Mary Crowley Medical Research Center in Dallas, Texas was principal investigator on the trial, and Dr. Chiang J. Li, senior vice president and chief scientific officer of ArQule, was lead author of the publication, entitled "A Phase Ib Trial of ARQ 501, an Activated Checkpoint Therapy(SM) (ACT) Agent, in Combination with Docetaxel in Patients with Advanced Solid Tumors" (ASCO Abstract ID: 13053).

"The published data from this trial are clinically important, as they point the way toward continued testing of the promising combination of ARQ 501 and a taxane in a Phase 2 clinical setting in ovarian cancer expected to begin late this year," said Dr. Stephen A. Hill, president and chief executive officer of ArQule. "This decision is based in part upon the data announced today, additional supportive findings from the same trial gathered following data submission for the ASCO publication and pre-clinical findings.

"In addition to the planned Phase 2 trial with this combination, ArQule's broad Phase 2 program with ARQ 501 will consist of three other trials, two as monotherapy in leiomyosarcoma and head and neck cancer, and one as combination therapy with gemcitabine in pancreatic cancer," said Dr. Hill.

"The ASCO publication follows our recent presentation of Phase 1 monotherapy data with ARQ 501 at the annual meeting of the American Association for Cancer Research, which provided encouraging data that has led to the initiation of Phase 2 development of ARQ 501," said Dr. Hill. "Our first Phase 2 trial in leiomyosarcoma has been initiated, and the second Phase 2 trial, in pancreatic cancer, is close to initiation, with approximately 25 investigator sites selected thus far in the U.S. and Europe. Finally, our monotherapy study with ARQ 501 in head and neck cancer is also approaching initiation, with nine sites selected to date."

Study summary

The objectives of the study conducted with ARQ 501 in combination with docetaxel were to determine the maximum tolerated dose (MTD), pharmacokinetics and preliminary antitumor activity of this combination therapy. All patients enrolled in the study had failed prior courses of chemotherapy. Data analyzed in the ASCO publication were collected as of October 14, 2005, and the study is ongoing.

Two combination therapy dosing schedules were investigated. In the first, ARQ 501 was administered for five consecutive days, with a single docetaxel infusion given on day three. In the second, a single dose of ARQ 501 was given in combination with a single docetaxel infusion on day one. Both schedules were repeated every three weeks. Dose escalation of ARQ 501 was conducted to explore and evaluate the effects of both doses and infusion regimens.

Data were published on 16 evaluable patients who received one of the dosing schedules. Of these, 12 (75 percent) achieved a response of stable disease or better, including two responses based on decreases in a key biomarker known as CA-125 and two unconfirmed partial responses according to RECIST (Response Evaluation Criteria in Solid Tumors) criteria. These responses could not be confirmed due to the absence of repeat CT scans following patient drop-out unrelated to serious adverse events.

The data also demonstrated the clinical tolerability and favorable pharmacokinetics of ARQ 501 in combination with docetaxel, including no alteration of docetaxel pharmacokinetic parameters. The most common adverse events were neutropenia (4.9 percent) and anemia (4.4 percent), similar to those associated with docetaxel monotherapy.

About ARQ 501

ARQ 501, the Company's lead product generated from its Activated Checkpoint Therapy(SM) (ACT) platform, is being developed under an alliance with Roche. ACT compounds are designed to selectively and broadly target cancer cells through activation of checkpoint pathways. ARQ 501 activates E2F1-mediated checkpoint pathways, resulting in apoptosis (cell suicide) in cancer cells selectively.

Based on data from Phase 1 trials, the Phase 2 development plan for ARQ 501 has been established and will include monotherapy trials in leiomyosarcoma and head and neck cancer, as well as combination therapy trials with gemcitabine in pancreatic cancer and with paclitaxel in ovarian cancer.

About ArQule

ArQule, Inc. is a biotechnology company engaged in the research and development of next-generation, small-molecule cancer therapeutics. The Company's targeted, broad-spectrum products are designed to affect key biological processes that are central to cancer. ArQule's innovative Activated Checkpoint Therapy(SM) (ACT) platform is generating products designed to improve the way cancer patients are treated by selectively killing cancer cells and sparing normal cells through direct activation of DNA damage response/checkpoint pathways. ArQule's lead ACT program, based on the E2F pathway, is partnered with Roche. For more information, please visit www.arqule.com.

This press release contains forward-looking statements regarding the implications of the results of the company's Phase 1 combination therapy trial with ARQ 501 and the planned initiation of Phase 2 trials with ARQ 501. 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 does not ensure that later stage or larger scale clinical trials will be successful. For example, ARQ 501 may not demonstrate promising therapeutic effect or an appropriate safety profile in later stage or larger scale clinical trials as a result of known or as yet unidentified 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 ARQ 501 that could lead the company or its partner 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 or information or additional studies. In addition, the planned timing of initiation of clinical trials for ARQ 501 is subject to the ability of the company to enroll patients, enter into agreements with clinical trial sites and investigators, and other technical hurdles and issues 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. 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.