ArQule Announces Summary Data from Phase I Trials with ARQ 501 and Chemotherapeutic Agents.

WOBURN, Mass. -- ArQule, Inc. (Nasdaq: ARQL) today announced data from two Phase 1b combination therapy trials, one with ARQ 501 and docetaxel and one with ARQ 501 and gemcitabine, that support previously announced findings demonstrating 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.

"We are pleased to communicate, as planned, the current status of our Phase 1b combination studies with ARQ 501," said Dr. Stephen A. Hill, president and chief executive officer of ArQule. "In due course, we also plan to submit findings from these combination therapy trials for presentation in a peer-reviewed forum. Cumulatively, these data and those announced earlier from our monotherapy trial strongly support our initiation of a broad Phase 2 program with ARQ 501."

Summary of combination trial with ARQ 501 and docetaxel

The objectives of this study were to determine the maximum tolerated dose, safety and tolerability, pharmacokinetics and preliminary anti-tumor activity of the combination of ARQ 501 and docetaxel. All patients enrolled in the study had failed prior courses of chemotherapy. Data discussed below were collected as of May 19, 2006, compared with a data cut-off date of October 14, 2005 for the ASCO publication that contained the first data analysis from this trial.

Two combination therapy dosing schedules were investigated in this protocol. In the first, ARQ 501 was administered for five consecutive days, with a single docetaxel infusion administered on day three. In the second, a single dose of ARQ 501 was administered in combination with a single docetaxel infusion on day one. Once tolerated, additional weekly infusions of ARQ 501 were administered. 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.

A total of 10 patients were enrolled and received the first dosing schedule. Of these, 9 patients were evaluable for efficacy, defined as having completed 6 weeks of the study and at least one post-baseline tumor assessment. Of these, 5 patients (56 percent) achieved a best response of stable disease or partial response ranging from 12 to 39 weeks, and of these 5, 2 patients with ovarian cancer achieved a durable normalization in the tumor marker CA-125. Both of these patients also experienced an overall reduction in tumor burden, and one of them achieved an unconfirmed partial response at the end of the study.

A total of 27 patients were enrolled and received the second dosing schedule. At the time of data cut-off, 18 patients were evaluable for efficacy according to the criteria described above. Of these, 14 patients (78 percent) achieved a response of stable disease or better (10 to 38 weeks), including 3 unconfirmed partial responses according to RECIST (Response Evaluation Criteria in Solid Tumors) criteria. Two of these responses could not be confirmed due to the absence of repeat CT scans following patient drop-out unrelated to serious adverse events associated with ARQ 501. The third response has been recently observed in a patient with ovarian cancer who remains on study after 16+ weeks. Twelve patients remain active on this study.

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 anemia (81 percent) and neutropenia (68 percent), similar to those associated with docetaxel monotherapy.

Of note, 8 patients with ovarian cancer were treated in the study, 4 with each dosing regimen. Two of the 4 who received the first regimen achieved near normalization of CA-125 levels and reduction in tumor burden. Four of the 4 patients who received the second regimen achieved a best response of stable disease or better (13+ - 27 weeks).

Based on these findings, combined with pre-clinical data, a regimen of weekly administration of 450 milligrams per meter squared (mg/m2) of ARQ 501 is expected to be used in the Company's Phase 2 trial with ARQ 501 and a taxane in patients with ovarian cancer.

Summary of combination trial with ARQ 501 and gemcitabine

The objectives of this Phase 1b study were to determine the maximum tolerated dose, safety and tolerability, pharmacokinetics and preliminary anti-tumor activity of this combination therapy in patients with advanced solid tumors. All patients enrolled in the study had failed prior courses of chemotherapy. Data discussed below were collected as of May 19, 2006 and represent the first disclosure of data from this trial.

ARQ 501 was administered once weekly for all cycles of treatment, 30 minutes after the end of the gemcitabine infusion. Gemcitabine was administered once weekly for the first four weeks of cycle 1 and then 3 out of 4 weeks for each successive cycle.

A total of 36 patients have been enrolled in this study, with 34 receiving the combination regimen. Of these, 26 patients were evaluable for efficacy, defined as having completed eight weeks of study and one post-baseline tumor assessment. Of these, 14 patients (54 percent) achieved a response of stable disease or better, ranging from 8 to 33 weeks, including one minor response in a patient with colorectal cancer who achieved a 28 percent reduction in tumor burden over 33 weeks on study.

A recommended Phase 2 regimen of 400 mg/m2 of ARQ 501 in combination with gemcitabine has been determined in this study. A total of 11 patients have been enrolled at this dose level, with 7 considered evaluable for efficacy. Of these, 5 patients have achieved a best response of stable disease ranging from 10+ to 16+ weeks and all 5 continue on study, while 2 patients had progressive disease. Of the remaining 4 patients enrolled at this dose level, 1 has withdrawn for an adverse event after receiving one dose of the combination, and 3 other patients have recently enrolled, all of whom remain on study.

Although 400 mg/m2 was established as the recommended Phase 2 dose, 6 patients received a dose of 450 mg/m2 of ARQ 501 in combination with gemcitabine. While dose-limiting toxicity was observed at the 450 mg/m2 dose level, 3 of these 6 patients achieved stable disease ranging from 20+ to 27+ weeks, with all 3 patients continuing on study.

The data also demonstrated the clinical tolerability of ARQ 501 in combination with gemcitabine. The most common adverse events were anemia, fatigue and constipation. Based on these findings, combined with pre-clinical data, a regimen of weekly administration of 400 mg/m2 of ARQ 501 is expected to be used in the Company's Phase 2 trial with ARQ 501 and gemcitabine in patients with pancreatic cancer.

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.

The Company's Phase 2 clinical program with ARQ 501 will consist of four separate trials, including two monotherapy trials, in leiomyosarcoma and head and neck cancer, and two combination therapy trials, one with gemcitabine in pancreatic cancer and one with a taxane 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 trials 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.