Data from ArQule's Phase 1 Trial with c-Met Inhibitor, ARQ 197, Demonstrate Safety and Expanded Anti-Cancer Activity.

Objective responses and prolonged stable disease observed across broad range of doses and tumors

WOBURN, Mass. -- ArQule, Inc. (NASDAQ: ARQL) today announced data from a Phase 1 trial with ARQ 197, a selective inhibitor of the c-Met receptor tyrosine kinase, demonstrating that treatment with ARQ 197 was very well tolerated over extended dosing periods, with more than 60 percent of patients experiencing partial responses, minor responses or stable disease. Findings resulted in a recommended Phase 2 dose of 240 milligrams (mg) daily.

These data are being discussed in an oral presentation ("Phase 1 study of ARQ 197, a selective inhibitor of the c-Met RTK in patients with metastatic solid tumors reaches recommended Phase 2 dose," Abstract Number 3525) at the 2007 Annual Meeting of the American Society of Clinical Oncology.

"These exciting data underscore the excellent safety profile to date and noteworthy clinical benefit of treatment with ARQ 197, as well as the inherent promise of inhibiting c-Met, a biological target that has been implicated in cancer cell growth, invasion and metastasis," said Dr. Stephen A. Hill, president and chief executive officer of ArQule.

"We are gratified that patient compliance with treatment regimens was extremely high and that treatment showed anti-cancer activity among patients with the advanced cancers seen in this Phase 1 clinical trial environment," said Dr. Hill. "In addition, some observations are consistent with a possible anti-metastatic effect of ARQ 197 that we plan to explore in future trials.

"We look forward to building upon these findings by initiating a Phase 2 clinical program the parameters of which we plan to announce in the near future, following further analyses of Phase 1, biomarker and pre-clinical data," said Dr. Hill. "This program will embrace both standard proof-of-concept studies in multiple indications and fast-to-market combined Phase 2/3 trial designs."

Trial Design

The trial was of a standard Phase 1 sequential dose-escalation design, with ten dose levels evaluated, from 10 mg twice daily through 180 mg twice daily. Fifty-seven patients were enrolled with a broad range of solid tumors and confirmed, active metastatic disease. ARQ 197 was dose-escalated orally in two regimens, the first one administered in cycles consisting of two weeks on treatment followed by one week off drug, and the second one in cycles consisting of three weeks on treatment with no time off drug.

The primary objective of the trial was to determine a recommended Phase 2 dose for ARQ 197. Secondary objectives included determining the pharmacokinetic and pharmacodynamic profiles and assessing the anti-tumor activity of this compound.

Summary of Findings

Safety

Treatment with ARQ 197 was well tolerated. Patient compliance with dosing was high (>98 percent), and there were no treatment interruptions due to adverse events. Most adverse events were mild and transient, and no grade three or four drug-related adverse events were reported. No dose-limiting toxicity was observed on either dosing regimen. Substantial plasma exposure, at levels several times the predicted efficacious concentration, was maintained with oral dosing.

Anti-tumor activity

Thirty-nine patients were recruited into the intermittent, or two weeks out of three, dosing cohort. Tumors were evaluated using standard RECIST criteria (Response Evaluation Criteria In Solid Tumors). Of the 35 evaluable patients in this cohort, there were three patients with partial responses (PR) and 18 with stable disease (SD), with 11 of these 18 showing some evidence of tumor shrinkage and 10 with stable disease lasting six months or more. The PRs were observed in patients with prostate, neuroendocrine and testicular tumors. Long-term, durable disease control lasting more than four months was observed in a range of additional tumor types, including pancreatic, renal cell, non-small cell lung and papillary thyroid.

Eighteen patients were recruited into the continuous, or three weeks out of three, dosing cohort. Of the 10 patients in this cohort who had been on study long enough to reach the first tumor evaluation, seven were stable at the first assessment, which took place six weeks following initiation of treatment. The remaining patients have not reached the first tumor evaluation but remain on study.

Data analysis of new lesions among the intermittent dosing cohort showed that only four of these patients developed new lesions while on ARQ 197, and three of these were treated at low doses. All new lesions developed within the first six weeks of therapy. No new lesions developed after six weeks of therapy. A detailed review of clinical data and disease progression among both cohorts is ongoing to better understand the potential of this compound to affect both metastatic spread and primary disease.

About ARQ 197 and c-Met

ARQ 197 is the lead product from the Company's Cancer Survival Protein modulation program. The Company has licensed rights to develop and commercialize ARQ 197 in Japan and parts of Asia to Kyowa Hakko Kogyo Co., Ltd. (Kyowa). Other than the rights licensed under the agreement with Kyowa, ArQule retains all worldwide rights to ARQ 197.

ARQ 197 mediates its effects by inhibiting 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. C-Met is abnormally activated in most cancers and is believed to control multiple signal transduction pathways involved in tumor growth and metastasis. 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 focused on key biological processes that are central to cancer. ArQule's lead clinical-stage products have been generated from two scientific platforms: Cancer Survival Protein modulation and Activated Checkpoint Therapy([R]) (ACT). The Cancer Survival Protein modulation platform has generated a clinical-stage product that mediates its effects by inhibiting the activity of a molecule known as c-Met, which plays multiple roles in cancer cell growth, survival, invasion, angiogenesis and metastasis. The ACT platform 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 E2F-1 pathway, is partnered with Roche. For more information, please visit www.arqule.com.

This press release contains forward-looking statements regarding the Company's Phase 1 and Phase 2 trials 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 current or 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 this compound 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 and completion of clinical trials for ARQ 197 are 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.