ArQule Announces Encouraging Interim Data from Phase 1 Trial with C-Met Inhibitor, ARQ 197.

WOBURN, Mass. -- ArQule, Inc. (Nasdaq: ARQL) today announced interim data from a Phase 1 trial with ARQ 197, a selective inhibitor of the c-Met receptor tyrosine kinase, that demonstrate clinical tolerability, favorable pharmacokinetics and promising signs of anti-tumor activity in cancer patients with a broad range of metastatic solid tumor types who had failed prior treatment regimens.

These data were presented as a poster at the 18th EORTC-NCI-AACR International Conference on Molecular Targets and Cancer Therapeutics in Prague (A Phase 1 Dose Escalation Study of ARQ 197, a Selective Inhibitor of the c-Met Receptor in Patients with Metastatic Solid Tumors - Poster Number 651). The trial was initiated in early 2006.

"We are extremely encouraged by this initial data with ARQ 197, a novel agent that inhibits the activity of c-Met, a key receptor tyrosine kinase involved in tumor growth and metastasis," said Dr. Stephen A. Hill, president and chief executive officer of ArQule. "C-Met is directly linked with poor prognosis and decreased patient survival in a broad spectrum of human cancers. We believe ARQ 197 is differentiated from other approaches to c-Met pathway inhibition in that it is non-ATP-competitive, highly selective for c-Met, orally available and a small molecule.

"The data reflect promising anti-tumor activity, especially given the relatively early stage of clinical testing of this compound and the heterogeneous nature of cancer patients in this study," said Dr. Hill. "Nearly half of evaluable patients in the trial have achieved a best response of stable disease (SD) or better, including two partial responses (PR) according to RECIST (Response Evaluation Criteria in Solid Tumors) guidelines. We believe we may be close to achieving maximum systemic exposure to ARQ 197, although no dose-limiting toxicity has been observed. Patient recruitment continues on schedule, and we will continue dose escalation until we are able to recommend a dose for Phase 2 clinical testing."

Summary of Phase 1 interim data

The objectives of this study are to determine safety, tolerability and a recommended Phase 2 dose, to define the pharmacokinetic profile and to assess the preliminary anti-tumor activity of ARQ 197. All patients enrolled in the trial had failed prior courses of different cancer treatments. Data discussed herein were collected as of October 20, 2006.

Thirty-seven patients with metastatic cancer have been enrolled. ARQ 197 was administered orally at doses ranging from 10 milligrams (mg) to 180 mg twice daily (20 mg to 360 mg daily), for 14 days, followed by seven days with no treatment. This 21-day cycle was repeated as long as the patient tolerated the drug. Thirty-one patients were evaluable for efficacy, based on reaching their first tumor evaluation, and adverse event data have been collected on 27 patients.

Of the 31 evaluable patients, 15 achieved a best response of stable disease or better, ranging from six-plus to 33 weeks. Two of these patients achieved a partial response, according to RECIST. Dose escalation has been well tolerated, with no dose limiting toxicity observed. Adverse events have been generally mild, with the most common being fatigue. Enrollment and dose escalations are continuing.

About ARQ 197 and c-Met

ARQ 197 is the lead product from the Company's Cancer Survival Protein modulation program, also known as ARQ-650RP. ArQule retains all rights to compounds derived from the ARQ-650RP program, including ARQ 197.

ARQ 197 is designed to block the activity of c-Met, a receptor tyrosine kinase that plays multiple key roles in human cancer, including cancer cell growth, survival, angiogenesis, invasion and metastasis. The inappropriate expression of c-Met in most cancers and its role in controlling multiple signal transduction pathways involved in tumor growth and metastasis render it a compelling therapeutic target for cancer. Pre-clinical findings have demonstrated that ARQ 197 inhibits c-Met in a wide range of human tumor cell lines and possesses anti-tumor activity against several types of xenografted human tumors in mice.

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 and research programs are designed to affect key biological processes that are central to cancer. ArQule's lead clinical-stage products have been generated from two scientific platforms. The first of these, Activated Checkpoint Therapy(SM) (ACT), is designed to kill cancer cells selectively while sparing normal cells through direct activation of DNA damage response/checkpoint pathways. The Company's lead ACT program, based on the E2F1 pathway, is partnered with Roche. ArQule's second cancer platform, Cancer Survival Protein modulation, has generated a clinical-stage product designed to inhibit a molecule known as c-Met, which plays multiple roles in cancer cell growth, survival, invasion, angiogenesis and metastasis. For more information, please visit www.arqule.com.

This press release contains forward-looking statements regarding the Company's Phase I clinical trial 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 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, it may not demonstrate an appropriate safety profile in 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 ARQ 197 that could lead the Company or potential partners, if any, 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 197 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.