ArQule Reports Third Quarter 2018 Financial Results

From Startup ARQULE

Link to Full Article: http://investors.arqule.com/news-releases/news-release-details/arqule-reports-third-quarter-2018-financial-results

Conference call scheduled today at 9:00 a.m. ET
BURLINGTON, Mass.–(BUSINESS WIRE)–Oct. 31, 2018–
ArQule,
Inc. (Nasdaq: ARQL) today announced its financial results for the third
quarter of 2018.

For the quarter ended September 30, 2018, the Company reported a net
loss of $5,619,000 or $0.05 per share, compared with a net loss of
$6,666,000 or $0.09 per share, for the third quarter of 2017. For the
nine-month period ended September 30, 2018, the Company reported a net
loss of $6,995,000 or $0.07 per share, compared with a net loss of
$21,443,000 or $0.30 per share, for the nine-month period ended
September 30, 2017.

At September 30, 2018, the Company had a total of approximately
$105,088,000 in cash, equivalents and marketable securities.

Key Highlights

In July 2018, the Company raised approximately $70 million of gross
proceeds in a public offering of common stock

In August 2018, extensive preclinical data on ARQ 531, our reversible
BTK inhibitor, was published in the scientific journal, Cancer
Discovery, highlighting the profile of this potential first and
best-in-class molecule

In September 2018, miransertib (ARQ 092) was granted Fast Track
Designation for the treatment of PROS (PIK3CA-Related Overgrowth
Spectrum), opening the way for enhanced interactions with regulators

In October 2018, three clinical presentations for miransertib were
given at the American Society of Human Genetics, confirming its
potential for treating patients with Proteus syndrome and PROS

“We continue to execute on our strategy to develop rapidly ARQ 531 in
hematological malignancies, miransertib in PROS and Proteus syndrome, as
well as miransertib and ARQ 751 in hormone sensitive solid tumors,” said
Paolo Pucci, Chief Execute Officer of ArQule. “Each of our drug
candidates holds tremendous promise and each candidate is being
increasingly validated by the data that we are placing in the public
domain.”

Brian Schwartz, M.D., Head of Research and Development and Chief Medical
Officer of ArQule said, “We are pleased with the Cancer Discovery
publication for ARQ 531 and how the pre-clinical data highlighted in
that paper is beginning to be validated in the on-going Phase 1 trial.”
“I am also proud of the work that we continue to perform with
miransertib in PROS and Proteus syndrome and am encouraged by the
accumulating clinical data that supports the potential utility of
miransertib to fulfill the serious unmet medical need in these diseases,
particularly in children.”

Revenues and Expenses

Revenues for the quarter ended September 30, 2018, were $4,979,000
compared with revenues of zero for the quarter ended September 30, 2017.
Research and development revenue in the quarter ended September 30, 2018
consisted of $2,852,000 from our February 2018 Sinovant licensing
agreement, $1,996,000 from our April 2018 Basilea licensing agreement
and $131,000 from a non-exclusive license agreement for certain of our
library compounds.

Revenues for the nine months ended September 30, 2018, were $22,823,000
compared with revenues of zero for the nine months ended September 30,
2017. Research and development revenue in the nine months ended
September 30, 2018 consisted of $5,852,000 from our February 2018
Sinovant licensing agreement $15,702,000 million from our April 2018
Basilea licensing agreement and $1,269,000 from a non-exclusive license
agreement for certain of our library compounds.

Research and development expense in the third quarter of 2018 was
$7,261,000 compared with $4,570,000 for the third quarter of 2017. The
$2.7 million increase in research and development expense in the third
quarter of 2018 was primarily due to higher outsourced preclinical,
clinical and product development costs.

Research and development expense in the nine months ended September 30,
2018 was $19,860,000 compared with $14,747,000 in the nine months ended
September 30, 2017. The $5.1 million increase in research and
development expense in the nine months ended September 30, 2018 was
primarily due to higher outsourced preclinical, clinical and product
development costs.

General and administrative expense was $3,429,000 in the third quarter
of 2018 compared with $1,762,000 in the third quarter 2017. The $1.7
million increase in general and administrative expense in the third
quarter of 2018 was primarily due to higher consulting and professional
fees of $1.4 million and labor and related costs of $0.2 million.

General and administrative expense was $8,014,000 in the nine months
ended September 30, 2018 compared with $5,702,000 in the nine months
ended September 30, 2017. The $2.3 million increase in general and
administrative expense in the nine months ended September 30, 2018 was
principally due to higher consulting and professional fees of $1.8
million and labor and related costs of $0.5 million.

2018 Updated Financial Guidance

As a result of our advancing development programs and collaborations and
the likely timing of cash receipts and disbursements, we have updated
our 2018 guidance. Net use of cash is expected to be approximately $34
million for the year, which is slightly higher than our previous
guidance due primarily to an acceleration of the clinical development
costs associated with proprietary and partnered clinical programs. Net
loss is expected to range between $14 and $17 million for the year, and
net loss per share to range between $(0.14) and $(0.17). We are also
adjusting our revenue guidance upward to between $24 and $25 million
primarily in connection with services provided to our derazantinib
partners.

ArQule expects to end 2018 with approximately $100 million in cash and
marketable securities, which we believe will be sufficient to finance
our operations into 2021.

Conference Call and Webcast

The live webcast can be accessed in the “Investors and Media” section of
our website, www.arqule.com,
under “Events & Presentations.” You may also listen to the call by
dialing (877) 868-1831 within the U.S. or (914) 495-8595 outside the
U.S. A replay will be available two hours after the completion of the
call and can be accessed in the “Investors & Media” section of our
website, www.arqule.com,
under “Events and Presentations.”

About ArQule
ArQule is a biopharmaceutical company engaged in the research and
development of targeted therapeutics to treat cancers and rare diseases.
ArQule’s mission is to discover, develop and commercialize novel small
molecule drugs in areas of high unmet need that will dramatically extend
and improve the lives of our patients. Our clinical-stage pipeline
consists of five drug candidates, all of which are in targeted,
biomarker-defined patient populations, making ArQule a leader among
companies our size in precision medicine. ArQule’s pipeline includes:
ARQ 531, an orally bioavailable, potent and reversible inhibitor of both
wild type and C481S-mutant BTK, in Phase 1 for patients with B-cell
malignancies refractory to other therapeutic options; Miransertib (ARQ
092), a selective inhibitor of the AKT serine/threonine kinase, in a
Phase 1/2 company-sponsored study for Overgrowth Diseases, in a Phase 1
study for ultra-rare Proteus syndrome conducted by the National
Institutes of Health (NIH), and in Phase 1b in combination with the
hormonal therapy, anastrozole, in patients with advanced endometrial
cancer; ARQ 751, a next generation AKT inhibitor, in Phase 1 for
patients with AKT1 and PI3K mutations; Derazantinib, a multi-kinase
inhibitor designed to preferentially inhibit the fibroblast growth
factor receptor (FGFR) family, in a registrational trial for iCCA; and
ARQ 761, a β-lapachone analog being evaluated as a promoter of
NQO1-mediated programmed cancer cell necrosis, in Phase 1/2 in multiple
oncology indications in partnership with the University of Texas
Southwestern Medical Center. ArQule’s current discovery efforts are
focused on the identification and development of novel kinase
inhibitors, leveraging the Company’s proprietary library of compounds.

Forward-Looking Statements
This press release contains forward-looking statements, including
without limitation under the heading, “Key Highlights,” in the quotes of
management in connection with the Company’s clinical trials and planned
clinical trials, as well as under the heading, “2018 Updated Financial
Guidance,” with respect to projected financial results and our ability
to fund operations with current cash and marketable securities. 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 from those set forth in this press release.
Positive information about pre-clinical and early stage clinical trial
results does not ensure that later stage or larger scale clinical trials
will be successful. For example, ARQ 531, miransertib, ARQ 751 and
derazantinib may not demonstrate promising therapeutic effect; in
addition, they may not demonstrate appropriate safety profiles 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 or to justify further development. Problems or delays may
arise prior to the initiation of planned clinical trials, during
clinical trials or in the course of developing, testing or manufacturing
these compounds that could lead the Company or its partners and
collaborators to fail to initiate or to discontinue development. Even if
later stage clinical trials are successful, unexpected concerns may
arise from subsequent analysis of data or from additional data.
Obstacles may arise or issues may be identified in connection with
review of clinical data with regulatory authorities. Regulatory
authorities may disagree with the Company’s or its collaborators’ view
of data or require additional data or information or additional studies.
In addition, the planned timing of completion of clinical trials is
subject to the ability of the Company and, in certain cases, its
collaborators to enroll patients, enter into agreements with clinical
trial sites and investigators, and overcome technical hurdles and other
issues related to the conduct of the trials for which each of them is
responsible. There is a risk that these issues may not be successfully
resolved. In addition, we and our partners are utilizing a break apart
FISH diagnostic test to identify patients in the registrational trial
with derazantinib in iCCA, and are utilizing or expect to utilize
diagnostic tests in other biomarker-guided clinical trials with
derazantinib, miransertib, ARQ 531 and ARQ 751. We or our collaborators
may encounter difficulties in developing and obtaining approval for
companion diagnostics, including issues relating to access to certain
technologies, selectivity/specificity, analytical validation,
reproducibility, or clinical validation. Any delay or failure by our
collaborators or ourselves to develop or obtain regulatory approval of
companion diagnostics could delay or prevent approval of our product
candidates. Moreover, each of Basilea and Sinovant, our collaborators
for derazantinib, has only a limited or no track record of drug
development in oncology.In addition, both Basilea and Sinovant
have certain rights to unilaterally terminate their respective
agreements with ArQule.If either party were to do so, the
Company might not be able to complete development and commercialization
of derazantinib. Even if derazantinib were to show promise, our
collaborators may decide not to continue to develop it. If derazantinib
is not successfully developed as a result of any of the foregoing or
other issues, risks or uncertainties, ArQule may not receive any future
milestones or royalties under its agreements with Basilea and Sinovant.Drug development involves a high degree of risk. Only a small number
of research and development programs result in the commercialization of
a product. Furthermore, ArQule may not have the financial or human
resources to successfully pursue drug discovery in the future. For more
detailed information on the risks and uncertainties associated with the
Company’s drug development, financial condition 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.

 

 

 

 

 

 

 

 

 

 

ArQule, Inc.Condensed Statement of Operations and
Comprehensive Loss(In Thousands, Except Per Share
Amounts)(Unaudited)

 

 

 

 

 

 

Three Months EndedSeptember 30,

Nine months EndedSeptember 30,

2018

2017

2018

2017

 

 

Research and development revenue

$

4,979

$

$

22,823

$

 

Costs and expenses:

Research and development

7,261

4,570

19,860

14,747

General and administrative

 

3,429

 

1,762

 

8,014

 

5,702

Total costs and expenses

 

10,690

 

6,332

 

27,874

 

20,449

 

Income (loss) from operations

(5,711

)

(6,332

)

(5,051

)

(20,449

)

 

Interest income

514

66

843

125

Interest expense

(422

)

(400

)

(1,235

)

(1,119

)

Other expense (1)

 

 

 

(1,552

)

 

Net loss

 

(5,619

)

 

(6,666

)

 

(6,995

)

 

(21,443

)

 

Unrealized gain (loss) on marketable securities

 

(10

)

 

6

 

(16

)

 

(3

)

Comprehensive loss

$

(5,629

)

$

(6,660

)

$

(7,011

)

$

(21,446

)

 

Basic and diluted net loss per share:

Net loss per share

$

(0.05

)

$

(0.09

)

$

(0.07

)

$

(0.30

)

 

Weighted average basic and diluted common shares outstanding

 

107,445

 

71,541

 

95,678

 

71,282

 

 

 

 

(1)

Non-cash expense associated with the change in fair value of our
preferred stock warrant liability. At September 30, 2018 there was
no remaining balance in the warrant liability.

 

 

 

 

 

 

 

Balance sheet data (in thousands) (Unaudited):

 

 

 

September 30,2018

December 31,2017

 

Cash, equivalents and marketable securities- short term

$

100,181

$

48,036

Marketable securities-long term

4,907

$

105,088

$

48,036

 

Total assets

$

112,549

$

48,902

Stockholders’ equity

$

87,097

$

14,181

View source version on businesswire.com: https://www.businesswire.com/news/home/20181031005107/en/
Source: ArQule, Inc.
Corporate Contact:ArQule, Inc.Marc Schegerin, M.D.Senior
Vice President, Head of Strategy, Finance and Communicationir@arqule.comwww.ArQule.comorMedia
Contact:LifeSci Public RelationsAllison Blum, Ph.D.,
646-627-8383Allison@lifescipublicrelations.com

Please visit their site for more information: ARQULE.com
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2018-11-01 05:08:41