ArQule Discovers Second Activated Checkpoint Therapy(SM) Compound; Company Moves Forward With Preclinical Development of ARQ 171, Second Product Under Roche Partnership.

WOBURN, Mass. -- ArQule, Inc. (Nasdaq: ARQL) today announced the initiation of GLP toxicology studies with ARQ 171, the second compound generated through the Company's ARQ-550RP Activated Checkpoint Therapy(SM) (ACT) program, under its agreement with Roche.

"With the initiation of these studies, we are taking an important step toward the clinic with a second compound from our E2F1 checkpoint pathway program, based on our alliance with Roche," said Dr. Stephen A. Hill, president and chief executive officer of ArQule. "If data from these studies with ARQ 171 are supportive, the next step in the development process for ARQ 171 will be the filing of an IND (Investigational New Drug application)."

ArQule's ARQ-550RP program is focused on the discovery and clinical development of small molecule drug candidates that target the E2F1 checkpoint pathway. By activating E2F1-mediated checkpoint pathways, these compounds are intended to selectively kill cancer cells by activating the cell's natural defense mechanism against DNA damage.

About Checkpoint Activation

In a normal cell, checkpoint mechanisms serve to monitor genetic (DNA) damage. If damage is detected, the cell attempts to repair the damage. If such repair is not possible, checkpoint functions cause the damaged cell to undergo cell death, or apoptosis. Cancer cells have multiple abnormalities, including DNA damage, but they are able to survive and proliferate because key checkpoints and apoptotic pathways are disabled as the cancer develops. As a result, cancer cells undergo cell division in an uncontrolled way and pass their genetic damage on to their daughter cells.

Conventional chemotherapy seeks to kill cancer cells by creating further damage to DNA sufficient to prevent cell replication. A well-known side effect of this approach is that normal cells are indiscriminately damaged, creating toxicity to patients and limiting the cancer cell killing activity of conventional chemotherapy. In contrast, ArQule's small molecule product candidates, including ARQ 171, activate under-functional checkpoints and re-enable the cell to detect and respond appropriately to DNA damage. As a result, cancer cells undergo apoptosis, while normal cells, which have little DNA damage compared to cancer cells, are spared.

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 the development of 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 restoration and activation of cellular checkpoints that are defective in cancer. ArQule's lead ACT program, based on E2F elevation, is partnered with Roche. 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 or other, proprietary platforms may not improve efficacy or reduce toxicity, and compounds resulting from these platforms 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 product 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 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.