ArQule Announces Third Quarter Fiscal 2005 Results; Conference call scheduled today at 9 a.m. eastern time.WOBURN, Mass. -- ArQule, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : ARQL) today reported its results of operations for the fiscal quarter ended September 30, 2005. The Company reported total revenues of $13,194,000 for the quarter ended September 30, 2005, compared to revenues of $14,594,000 for the third quarter of 2004. Revenues for the nine months ended September 30, 2005 were $40,591,000, compared to revenues of $40,367,000 for the same period in 2004. The Company reported a net loss of $916,000, or $0.03 per share, for the quarter ended September 30, 2005, compared to a net profit of $1,472,000, or $0.05 per share, for the quarter ended September 30, 2004, which included a one-time restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). credit of $1,496,000 associated with a lease commitment. For the nine-month period ended September 30, 2005, the Company reported a net loss of $4,787,000, or $0.14 per share, compared to a net loss of $3,912,000, or $0.14 per share, for the nine-month period ended September 30, 2004. For the quarter ended September 30, 2005, the Company reported total costs and expenses of $15,255,000, compared with $13,442,000 for the third quarter of 2004. Total costs and expenses for the nine months ended September 30, 2005 were $47,275,000, compared to $45,014,000 for the same period in 2004. ArQule ended the third quarter of fiscal 2005 with approximately $134,000,000 in cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has . "As we near the end of 2005, ArQule is approaching a number of milestones which will increasingly define us as a product-focused company with an exciting and rapidly expanding portfolio," said Dr. Stephen A. Hill, president and chief executive officer of ArQule. "Our strong commitment to oncology oncology /on·col·o·gy/ (ong-kol´ah-je) the sum of knowledge regarding tumors; the study of tumors. on·col·o·gy n. , which has fueled the expansion of this promising portfolio, also guided our recent decision to exit our chemistry services business in an orderly fashion, as we announced last month. We will work closely with our remaining chemistry customers to ensure their needs are supported. We are retaining our core chemistry expertise, however, which I believe differentiates us from other biotechnology companies Top 100 Biotechnology Companies The following is a list of the top 100 biotechnology companies ranked by revenue. The first nine companies qualify for the list of the top 50 pharmaceutical companies. and allows us to integrate drug-like qualities into new product candidates from the earliest stages of their development," said Dr. Hill. "We expect to begin the first of several Phase 2 trials by the end of the year or early next year with ARQ (Automatic Repeat reQuest) A method of handling communications errors in which the receiving station requests retransmission if an error occurs. ARQ - Automatic Repeat Request 501, our lead product, which is partnered with Roche," said Dr. Hill. "Phase I clinical trials Noun 1. phase I clinical trial - a clinical trial on a few persons to determine the safety of a new drug or invasive medical device; for drugs, dosage or toxicity limits should be obtained phase I with ARQ 501 as monotherapy monotherapy /mono·ther·a·py/ (-ther´ah-pe) treatment of a condition by means of a single drug. mon·o·ther·a·py n. Treatment of a disorder with a single drug. and in combination therapy continue to demonstrate anti-cancer activity with an acceptable side effect profile," said Dr. Hill. "We have completed GLP See gateway location protocol. toxicity toxicity /tox·ic·i·ty/ (tok-sis´i-te) the quality of being poisonous, especially the degree of virulence of a toxic microbe or of a poison. testing with ARQ 197, a proprietary compound discovered through our 650 RP program, and we plan to file an Investigational New Drug (IND) application by year-end," said Dr. Hill. "We are also making exciting progress in pre-clinical programs that target additional critical pathways in the development of cancer, including those involving BRAF BRAF Baton Rouge Area Foundation BRAF Bookstore Requisition Attachment Form (USF) kinase kinase /ki·nase/ (ki´nas) 1. a subclass of the transferases, comprising the enzymes that catalyze the transfer of a high-energy group from a donor (usually ATP) to an acceptor. 2. and mitotic mitotic pertaining to mitosis. mitotic activity degree to which a cell population is proliferating; used as an index of tumor aggression. checkpoints." "Finally, our financial position allows us the flexibility to retain ownership over a number of our key programs and to add value to these programs through additional clinical development activities planned for initiation in the near future," said Dr. Hill. Investor Conference Call ArQule will host an investor conference call today at 9:00 a.m. eastern time. Dr. Stephen A. Hill, president and chief executive officer, and Louise A. Mawhinney, vice president and chief financial officer, will lead the call. Date: Thursday, October 27, 2005 Time: 9:00 a.m. eastern time Conference Call Numbers Toll free: 866.314.4483 Toll: 617.213.8049 Participant Passcode: ArQule Webcast: http://www.ArQule.com A replay of the conference call will be available for five days and can be accessed by dialing 888.286.8010 from the U.S. and Canada, and 617.801.6888 from outside the U.S. For archived calls, the access code is 16419710. About ArQule ArQule, Inc. is a biotechnology company engaged in research and development of next-generation small-molecule cancer therapeutics therapeutics Treatment and care to combat disease or alleviate pain or injury. Its tools include drugs, surgery, radiation therapy, mechanical devices, diet, and psychiatry. based on its innovative Activated Checkpoint (programming) checkpoint - Saving the current state of a program and its data, including intermediate results, to disk or other non-volatile storage, so that if interrupted the program could be restarted at the point at which the last checkpoint occurred. Therapy(SM) (ACT(SM)) platform. ACT(SM) compounds are intended to improve the way cancer patients are treated because they selectively kill cancer cells cells once believed to be peculiar to cancers, but now know to be epithelial cells differing in no respect from those found elsewhere in the body, and distinguished only by peculiarity of location and grouping. See also: Cancer and spare normal cells by restoring and activating cellular checkpoints that are defective in cancer. ArQule's lead program based on E2F E2F E-Mail to Fax elevation is partnered with Roche. For more information, please visit www.arqule.com. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. as defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, which provides a safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. 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(SM) 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 preclinical /pre·clin·i·cal/ (-klin´i-k'l) before a disease becomes clinically recognizable. pre·clin·i·cal adj. 1. efforts associated with the ACT(SM) pipeline may fail or prove disappointing; the animal xenograft xenograft /xeno·graft/ (zen´o-graft) a graft of tissue transplanted between animals of different species; it may be concordant, preclinical studies preclinical studies, n.pl a term used to describe research done before a clinical study. May be laboratory or epidemiologic research. 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 filings with the Securities and Exchange Commission. 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.
ArQule, Inc.
Condensed Statement of Operations
(In Thousands, Except Per Share Amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
(Unaudited) (Unaudited)
2005 2004 2005 2004
----------- -------- -------- --------
Revenue:
Compound development
revenue $11,542 $12,942 $35,635 $37,063
Research and development
revenue 1,652 1,652 4,956 3,304
----------- -------- -------- --------
Total revenue 13,194 14,594 40,591 40,367
----------- -------- -------- --------
Costs and expenses:
Cost of revenue -
compound development 7,209 7,820 22,236 23,824
Research and development 6,172 5,001 18,243 14,680
Marketing, general and
administrative 1,874 2,117 6,796 6,934
Restructuring credit - (1,496) - (424)
----------- -------- -------- --------
Total costs and
expenses 15,255 13,442 47,275 45,014
----------- -------- -------- --------
Income/(loss) from
operations (2,061) 1,152 (6,684) (4,647)
Net investment income 1,145 320 2,147 735
Loss on investment - - (250) -
----------- -------- -------- --------
Net income/(loss) $(916) $1,472 $(4,787) $(3,912)
=========== ======== ======== ========
Net income/(loss) per
share:
Basic $(0.03) $0.05 $(0.14) $(0.14)
=========== ======== ======== ========
Diluted $(0.03) $0.05 $(0.14) $(0.14)
=========== ======== ======== ========
Weighted average common
shares outstanding:
Basic 35,233 28,830 34,398 28,789
=========== ======== ======== ========
Diluted 35,233 28,986 34,398 28,789
=========== ======== ======== ========
September 30, December 31,
2005 2004
Balance sheet data (Unaudited)
(in thousands):
------------------------- ----------- --------
Cash, cash equivalents
and marketable
securities $134,104 $71,365
Working capital 116,064 54,782
Total assets 146,849 120,218
Stockholders' equity 107,860 82,452
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