ArQule Announces Publication of Preclinical Data Demonstrating That Direct Checkpoint Activation Kills Cancer Cells; Findings Highlight Intrinsic Anti-Cancer Activity of ArQule's Proprietary Checkpoint Activation Platform.

WOBURN, Mass. -- ArQule, Inc. (Nasdaq: ARQL) today announced that the direct activation of the human checkpoint kinase 2 (Chk2) caused the death of cancer cells and inhibited their growth and proliferation, as demonstrated in a study published in Cancer Research ("Dual Induction of Apoptosis and Senescence in Cancer Cells by Chk2 Activation: Checkpoint Activation as a Strategy Against Cancer," July 15, 2005).

Researchers in this study demonstrated that Chk2 activation in the absence of chemotherapeutic activity led to the death of cancer cells, thus defining the independent role of Chk2 activation in this process. Previously, researchers had hypothesized that the inhibition of checkpoints enhanced the effects of DNA-damaging chemotherapy on cancer cells. In contrast, this study showed that the activation of checkpoint mechanisms independently and directly led to the apoptosis, or programmed cell death, as well as to the senescence, or ageing, of cancer cells. This finding further demonstrates the potential of checkpoint activators as a novel class of anti-cancer agents with improved efficacy and safety.

"We are excited about these results, as they clearly support the exploration of direct checkpoint activation as a novel strategy in the discovery and development of targeted cancer therapeutics," said Dr. Stephen A. Hill, president and chief executive officer of ArQule. "These data provide additional scientific validation of checkpoint activation, which is the central focus of the Company's proprietary approach to oncology drug discovery and the basis for the ongoing clinical testing of ARQ 501, our partnered program with Roche."

The Cancer Research study is consistent with recent scientific publications in Nature (2005 April 14; 434 (7035): 907-13 and 2005 April 14; 434 (7035): 864-70). These publications present evidence from experiments in human tumors showing that cancers are the results of under-functioning checkpoints. ArQule's Activated Checkpoint Therapy(SM) (ACT) platform is designed to address these fundamental defects in human cancers.

Checkpoint activation pathways are dysfunctional but present in a broad spectrum of cancer cell types. ArQule's fundamental approach to treating cancer is to restore the natural biological function of these checkpoints and thereby to kill cancer cells selectively while maintaining the integrity and function of healthy cells, thus avoiding the undifferentiated damage caused, for example, by chemotherapy or radiation.

About ArQule

ArQule, Inc. is a biotechnology company engaged in research and development of next-generation small-molecule cancer therapeutics based on its innovative Activated Checkpoint Therapy(SM) (ACT) platform. ACT compounds are intended to improve the way cancer patients are treated because they selectively kill cancer cells and spare normal cells by restoring and activating cellular checkpoints that are defective in cancer. ArQule's lead program based on E2F elevation is partnered with Roche. In addition to advancing its own programs, ArQule continues to advance the drug discovery efforts of pharmaceutical collaborators by providing high-quality library design and compound production, including collaborations with Pfizer. For more information, please visit www.ArQule.com.

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which provides a safe harbor for forward-looking statements made by or on behalf of ArQule. ArQule and its representatives may from time to time make written or oral forward-looking statements, including statements contained in this press release. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "will" and similar expressions identify forward-looking statements. All statements which address operating performance, events or developments that ArQule expects or anticipates will occur in the future, such as projections about its future results of operations or its financial condition, research, development and commercialization of its products and anticipated trends in its business are forward-looking statements within the meaning of the Reform Act. Actual results may differ materially from those projected in the forward-looking statements or historical performance due to numerous risks and uncertainties that exist in ArQule's operations, development efforts and the business environment, including without limitation: the ACT platform may not improve efficacy or reduce toxicity and compounds resulting from the platform may not operate as intended; the current and future clinical studies may encounter enrollment difficulties and unexpected toxicity; the commencement of the anticipated clinical trials may be delayed or the trials may never commence; the preclinical efforts associated with the ACT pipeline may fail or prove disappointing; the animal xenograft preclinical studies may be unpredictive of human response; collaborators may terminate their agreements with ArQule because ArQule may fail to satisfy the collaborators' needs or for other reasons; and, the risks and uncertainties described in ArQule's Form 10-Q filed with the Securities and Exchange Commission on April 29, 2005, its 10-K filed with the Commission on March 16, 2005, its Form 10-Q filed with the Commission on November 9, 2004,and its Form 10-Q filed with the Commission on August 4, 2004. The forward-looking statements contained herein represent the judgment of ArQule as of the date of this report. ArQule disclaims any intent or obligation to update any forward-looking statement except to the extent required by law.