July, 2012
Safe Harbor This presentation and other statements by ArQule may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to clinical trials with the Company s product candidates, including tivantinib ib (ARQ 197), ARQ 621, ARQ 736, ARQ 092, the discovery and development of additional product candidates in the Company s FGFR program, the AKIP drug discovery platform, competitive products, financial operations and results, corporate partnerships and other future business objectives, opportunities and strategies. Forward-looking statements are typically identified by words such as believe, expect, anticipate, intend, outlook, position and similar expressions, or future or conditional verbs such as will, should, would, and could. Forward-looking statements are subject to numerous assumptions, risks and uncertainties. Forward-looking statements speak only as of today, and ArQule assumes no obligation to update them. Actual results may differ materially from forward-looking statements or historical performance due to the factors discussed in this presentation and factors previously disclosed in ArQule s SEC reports. See discussion of Risk Factors in the Company s Annual Report on Form 10-K as filed with the SEC. Prospective investors are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this presentation. ArQule s product candidates are in various stages of development and are not available for sale or use outside of approved clinical trials. ArQule and the ArQule logo are registered trademarks of ArQule, Inc. 1
ArQule Company Overview: Positioned to Generate Value Focus on Tivantinib (ARQ 197): first-in-class c-met inhibitor Phase 3 randomized trials ongoing: MARQUEE registration trial in 2 nd /3 rd line NSCLC completed patient recruitment in the West (interim analysis by 2012 year-end and final data expected in mid-2013) ATTENTION trial in Asia recruiting, top line data by 2013 year-end Phase 3 randomized trial in preparation: Second line HCC Tivantinib versus best supportive care in Met-high patients Phase 2 randomized trials: Phase 2 CRC trial ongoing, completed recruitment, top line results late 2012 or early 2013 Phase 2 NSCLC K-RAS trial ongoing, to report in 2013 Multiple Phase 3 & 2 randomized trials provide clinical & regulatory milestones in 2012 and 2013 2
ArQule Financial Profile Cash balance Cash and marketable securities at Mar 31, 2012 $ 100 Mil Net use of cash guidance 2012 $ 39-44 Mil Cash and marketable securities 2012 end guidance $ 121-126126 Mil* Stock data Shares outstanding at Apr 30, 2012 62.2 Mil Fully diluted shares outstanding at Apr 30, 2012 69.8 Mil Key recent sources of funding Share offerings (Jan 2011 and Apr 2012) $ 103 Mil Partnership milestones 2007/2012 (excluding research support) $ 158 Mil *Note: Includes net proceeds of ~$56 Mil from April 2012 common stock offering not reflected in cash and marketable securities at March 31, 2012 3
Tivantinib Partnerships: Enabling Broad Clinical Development Key terms Daiichi Sankyo (DS) co-development worldwide, except Asia $60 Mil upfront, $560 Mil potential milestones, tiered double-digit royalties DS has all ex-asia commercial rights, ArQule has US co-commercialization Kyowa Hakko Kirin (KHK) in Asia* $30 Mil upfront, $93+ Mil potential milestones, mid teens/low 20s royalties KHK has exclusive development and commercial rights in its region Financial implications DS and ARQL fund 50/50 development costs ex-asia; ARQL to fund its 50% of Ph 3 costs exclusively with milestones and royalties, if necessary KHK to fund 100% development/commercialization costs in Asia * Asia for contractual purpose is defined as: Japan, China, S. Korea, Taiwan and Hong Kong. 4
Tivantinib Development Program: Pipeline in a Drug Research Pre-clinical Phase 1 Phase 2 Phase 3 Approved NSCLC Tivantinib + erlotinib (worldwide ex-asia) MARQUEE NSCLC Tivantinib + erlotinib (Asia) ATTENTION Registration HCC (hepatocellular) Tivantinib Single Agent Colorectal Tivantinib + irinotecan/cetuximab Randomized NSCLC Tivantinib + erlotinib KRAS mutations (U.S.) Tivantinib + Sorafenib* & Tivantinib ib + Gemcitabine** CRADA trials (NIH) Open Label Signal Generation *Sorafenib-sensitive tumors: Hepatocellular, Renal Cell Carcinoma, NSCLC, Melanoma, Breast **Gemcitabine-sensitive tumors: Pancreatic, Uterine, Ovarian, Breast, NSCLC 5
Tivantinib in NSCLC: Phase 3 MARQUEE Registration Trial in 2/3 rd Line, Under SPA (Worldwide ex-asia, Daiichi Sankyo) NSCLC Inoperable locally adv/ metastatic disease Non-squamous histology only 1-2 regimens prior chemo (no prior EGFR TKI) Prior adjuvant/ maintenance therapy allowed R A N D O M I Z E Erlotinib 150 mg PO QD + Tivantinib 360 mg PO BID 28-day cycle Erlotinib 150 mg PO QD + Placebo BID 28-day cycle Parameters: ~1,000 patients ~ 200 sites in ~20 countries Stratify by EGFR and KRAS mutation status Interim analysis to be performed at 50% of events 1 Endpoint OS (ITT population) 2 Secondary Endpoints incl: - PFS (ITT population) - OS and PFS in EGFR WT patients - Safety and toxicity - QOL/FACT-L - Biologic sub-groups 6
Tivantinib in NSCLC: Enrolling Phase 3 ATTENTION Registration Trial in 2/3 rd Line (Asia, Kyowa Hakko Kirin) NSCLC Inoperable locally adv/ metastatic disease Non-squamous histology only Wild-type EGFR Prior adjuvant/ maintenance therapy allowed Parameters: aa etes ~ 460 patients ~ 50 sites in Japan, Korea and Taiwan R A N D O M I Z E EM*: Erlotinib ib 150 mg PO QD + Tivantinib 360 mg PO BID 28-day cycle OR PM**: Erlotinib 150 mg PO QD +Tivantinib 240 mg PO BID 28-day cycle EM: Erlotinib 150 mg PO QD + Placebo BID 28-day cycle OR PM: Erlotinib 150 mg QD +Placebo BID 1 Endpoint OS (ITT population) 2 Secondary Endpoints incl: - PFS (ITT population) - Objective response rate - Adverse events *Extensive metabolizer patients **Poor metabolizer patients 7
In Ph 2 NSCLC Trial, Tivantinib+Erlotinib Nearly Doubles Median PFS in Non-Squamous Cell Histology Patients* PFS (Investigator Assessed) HR=0.71 (95% CI: 0.46, 1.10) P=0.12 Adjusted HR=0.61 (95% CI: 0.47, 0.98) P<0.05** Overall Survival HR=0.72 (95% CI: 0.6, 1.3) P=0.18 Adjusted HR=0.58 (95% CI: 0.34, 0.99) P<0.05** Propor rtion of patients progression-free e 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 01 0.1 0.0 0 Erlotinib + Tivantinib 18.9 wks (n=58) Erlotinib + Placebo 9.7 wks (n=59) 10 20 30 40 Time from randomization (weeks) tients surviving Proportion of pat 10 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 Erlotinib + Tivantinib 43.1 wks (n=58) Erlotinib + Placebo 29.4 wks (n=59) 0.0 50 0 10 20 30 40 50 60 70 Time from randomization (weeks) * Data presented in ASCO plenary session June 2010 ** Cox regression model 8
Tivantinib in HCC: Dual Approach with Ph 2 Monotherapy & Expanded Ph 1 Combination with Sorafenib Dual development approach Single agent Combination with sorafenib Rationale single agent c-met dysregulated in HCC Silencing of c-met expression inhibits growth of HCC cell lines Rationale combination therapy In vitro/vivo synergy demonstrated with tivantinib + sorafenib Oral dosing enables convenient co-administration Study design Ph 2 monotherapy Second line setting Randomized, double-blind ~ 100 patients 1º endpoint TTP Study design Ph 1 combination Open label single arm ~ 40 patients Safety of tivantinib + sorafenib ASCO 2010/11 reports 2010 single agent tolerated, with preliminary signs of efficacy 2011 combination well tolerated, with preliminary signs of efficacy 9
Tivantinib in HCC: Successful Single Agent, Randomized, Placebo-Controlled, Double-Blind Clinical Trial 2 nd Line HCC HCC Second line setting, single agent against best supportive care Randomized, doubleblind Parameters: ~ 100 patients ~ 23 sites in 5 countries R A N D O M I Z E Tivantinib 360 or 240 mg BID Best Supportive Care 1 Endpoint TTP 2 Secondary analysis incl: - Viral status - Time on front line therapy - Safety profile by dose sub-group - Biologic sub-groups by IHC defined c-met status 10
Tivantinib in HCC: Key Findings from Randomized, Controlled Phase 2 Single Agent Trial Study met primary endpoint in second-line HCC (ITT population), with statistically significant 56% improvement in time-to-progression (HR = 0.64, log rank p-value = 0.04) Major improvements in MET+ patients OS (7.2 mos. vs. 3.8 mos., HR=0.38, log rank p-value=0.01) 01) TTP (2.9 mos. vs. 1.5 mos., HR=0.43, log rank p-value=0.03) PFS (2.4 mos. vs. 1.5 mos., 0.45, log rank p-value =0.02) Efficacy similar in both tivantinib dosing subgroups (360 milligrams BID and 240 milligrams BID) AEs reported at similar rates in both arms except for higher incidence of fatigue and hematologic events, which declined with dose reduction Phase 3 trial among previously treated HCC patients with MET-high tumors being planned 11
MET as a Prognostic Factor (Patients on Placebo) Median OS Patients Events MET Dx Low 9.0 13 9 MET Dx High 3.8 15 15 HR: 2.94 (95% CI: 1.16-7.43) Log Rank: P=0.02 Data presented at ASCO June 2, 2012
Improved TTP in MET Diagnostic High Group Median TTP Patients Events Tivantinib 11.7 wks 22 14 Placebo 6.1 wks 15 13 HR: 0.43 (95% CI: 0.19-0.97) Log Rank: P=0.03 PFS: HR 0.45 (95% CI: 0.21-0.95) 0 Log Rank: P=0.02 02 DCR: 50% on tivantinib (28-72) vs 20% (4-48) Data presented at ASCO June 2, 2012
Improved OS in MET Diagnostic High Group Median OS Patients Events Tivantinib 7.2 mos 22 17 Placebo* 3.8 mos 15 15 HR: 0.38 (95% CI: 0.18-0.81) Log Rank: P=0.01 *8 MET Dx High patients crossed-over, 5 remained on open-label tivantinib for at least 6 weeks (1 non-evaluable at cut-off date) Data presented at ASCO June 2, 2012
OS of Selected Subgroups in ITT Patients / Events Favors Tivantinib Favors Placebo Tivantinib Placebo HR (95% CI) MET Dx High 22/17 15/15 0.38 (0.18-0.81) 0 81) Low 27/20 13/9 1.33 (0.58-3.04) Starting Dose 240mg BID 33/21 36/30 0.71 (0.41-1.25) 360mg BID 38/35 36/30 0.99 (0.61-1.62) Vascular Invasion Yes 22/21 13/9 1.89 (0.85-4.20) No 49/35 23/21 0.60 (0.35-1.04) Distant Metastasis Yes 43/34 28/23 1.04 (0.61-1.76) No 28/22 8/7 0.45 (0.18-1.12) ECOG PS 0 41/29 21/17 0.82 (0.44-1.50) 1 30/27 15/13 0.98 (0.50-1.93) HBV Pos* 16/15 5/4 0.99 (0.32-3.04) HCV Pos (HBV Neg) 31/23 14/13 0.65 (0.32-1.32) HBV / HCV Neg / Neg 24/18 17/13 0.87 (0.42-1.79) Baseline AFP (IU/mL) <200 37/30 15/12 1.01 (0.51-1.97) 200 31/23 21/18 0.77 (0.42-1.44) Prior sorafenib therapy 60 days 15/13 4/3 1.86 (0.52-6.62) >60 days 55/42 29/24 0.79 (0.48-1.30) *5 HBV Pos patients are also HCV Pos 0125 0.125 025 0.25 05 0.5 1 2 4 8 Data presented at ASCO June 2, 2012
Tivantinib in Colorectal: Enrolling Ph 2 Combination with Irinotecan + Cetuximab CRC Inoperable locally adv/metastatic dz. >1 prior chemo KRAS wt R A N D O M I Z E Irinotecan/Cetuximab + Tivantinib 360 mg BID Irinotecan/Cetuximab + Placebo BID Parameters: ~ 150 patients ~ 25 sites in 5 countries 1 Endpoint PFS 2 Secondary Endpoints incl: - OS - ORR - Safety profile - Biologic sub-groups 16
Summary Tivantinib: Much Data Available, More to Come Demonstrated active as single agent and in multiple combinations Demonstrated efficacy in NSCLC and HCC in randomized Ph 2 trials Two NSCLC Ph 3 trials (MARQUEE and ATTENTION) ongoing One additional Ph 3 (HCC) in planning Expected milestones 2012 and 2013 Interim analysis (~#370 events) of Ph 3 NSCLC MARQUEE Randomized data from Ph 2 CRC trial (late 2012/early 2013) Initiation of Ph 3 HCC trial in 2 nd line HCC Complete recruitment ATTENTION Final analysis MARQUEE 17