ArQule Reports Fourth Quarter and Full Year 2018 Financial Results
ArQule , Inc. (Nasdaq: ARQL) today announced its financial results for the fourth quarter and full year of 2018.
ArQule,
Inc. (Nasdaq: ARQL) today announced its financial results for the fourth
quarter and full year of 2018.
For the quarter ended December 31, 2018, the Company reported a net loss
of $8,487,000 or $0.08 per share, compared with net loss of $7,760,000
or $0.09 per share, for the quarter ended December 31, 2017. The Company
reported a net loss of $15,482,000 or $0.16 per share, for the year
ended December 31, 2018, compared with a net loss of $29,203,000 or
$0.39 per share, for the year ended December 31, 2017.
As of December 31, 2018, the Company had a total of approximately
$99,558,000 in cash, equivalents, and marketable securities.
Key Highlights from 2018
-
ARQ 531, our potent and reversible dual inhibitor of both wild-type
and C481S-mutant BTK. Successfully progressed recruitment
in our ongoing phase 1 dose escalation trial in 2018, enrolling over
20 patients at 7 dose cohorts ranging from 5mg to 65mg QD. Data from
this trial was presented at 3 major conferences (AACR, EHA, ASH) in
2018 and demonstrated a good safety profile, profound target
engagement and encouraging signs of dose-dependent clinical activity
in both lymphomas and C481S-mutant CLL -
Miransertib, our potent and selective first-generation AKT
inhibitor. Presented first-of-its kind clinical data in Proteus
syndrome and PROS at the American Society of Human Genetics (ASHG),
received FDA Fast Track Designation in PROS, and worked with
regulators to define registrational trial designs for both indications -
ARQ 751, our highly potent and selective next-generation AKT
inhibitor. Progressed the phase 1 basket trial in R/R or
metastatic cancer patients harboring an AKT, PI3K or PTEN mutation,
identified a recommended phase 2 dose of 75mg QD and presented data at
the EORTC/AACR/NCI congress in November -
Derazantinib, our FGFR inhibitor, partnered with Basilea and
Sinovant, in a registrational trial for intrahepatic
cholangiocarcinoma. Continued the timely recruitment and transfer
of clinical and other responsibilities to Sinovant and Basilea
following the outlicensing to both companies in February and April of
last year, respectively -
Capital Structure. Strengthened our capital structure through
business development activities, which included funding from our
collaborators and a successful offering of our common stock which
raised gross proceeds of about $70 million -
Stock Index Inclusions. Added to the family of Russell 2000
Index companies in June and the NASDAQ Biotechnology Index in December
Key Catalysts & Goals for 2019
ARQ 531: Dual BTK Inhibitor in B-Cell Malignancies
- Complete the dose escalation portion of phase 1 trial
- Determine a recommended phase 2 dose and initiate expansion cohort(s)
-
Present results of dose escalation phase 1 trial at major industry
conference(s)
Miransertib: AKT Inhibitor in Proteus syndrome and PROS
- Finalize regulatory interactions with the FDA
- Initiate registrational trial cohorts in both Proteus syndrome and PROS
ARQ 751 (and Miransertib): AKT Inhibitors in Oncology
- Complete recruitment in ongoing clinical trials
- Present data sets at major medical conferences this year
Derazantinib: FGFR Inhibitor in iCCA
-
Complete the orderly and timely transfer of all clinical,
manufacturing and regulatory responsibilities to our partners, Basilea
and Sinovant
“2018 was a watershed year for ArQule,” remarked Paolo Pucci, Chief
Executive Officer. “The clinical progress we made across the entire
portfolio positions us well for an even more transformational 2019.
Specifically in rare disease, we now have the ability to expand the
scope of the miransertib registrational trial beyond Proteus syndrome to
the PROS family of overgrowth spectrum disorders which represents a
particularly exciting opportunity because of their significantly larger
prevalence.”
Dr. Brian Schwartz, Chief Medical Officer, added “We made tremendous
progress in 2018, enrolling over 20 patients across 7 cohorts in our
dose escalation study with ARQ 531 which is now positioned as the first
and best in class drug candidate to address the emerging medical need in
BTK mutated malignancies. We are looking forward to advance ARQ 531,
miransertib and ARQ 751 respectively into the next phase of development.
I want to thank our collaborators such as the Ohio State University, the
National Institute of Health and Bambino Gesu’, and others for their
continued support in advancing these programs.”
Revenues and Expenses
Revenues for the quarter ended December 31, 2018, were $2,941,000
compared with revenues of zero for the quarter ended December 31, 2017.
Revenues for the year ended December 31, 2018 were $25,764,000 compared
with revenues of zero for the year ended December 31, 2017. Research and
development revenue increased in 2018 due to revenue of $5.9 million
from our February 2018 Sinovant licensing agreement, $18.5 million from
our April 2018 Basilea licensing agreement and $1.3 million from a
non-exclusive license agreement for certain of our library compounds.
Research and development expenses in the fourth quarter of 2018 were
$8,850,000 compared with $4,721,000 for the fourth quarter 2017. Fiscal
2018 research and development expenses were $28,710,000 compared with
$19,468,000 for fiscal 2017. The $4.1 million increase in research and
development expense in the fourth quarter of 2018 compared with the
fourth quarter of 2017 was primarily due to higher outsourced
preclinical, clinical and product development costs of $3.5 million and
$0.6 million from labor and related costs.
The $9.2 million increase in research and development expense in 2018
was primarily due to higher outsourced preclinical, clinical and product
development costs of $8.5 million and $0.7 million from labor and
related costs.
General and administrative expenses in the fourth quarter of 2018 were
$2,739,000, compared with $1,849,000 for the fourth quarter of 2017.
General and administrative expenses for fiscal 2018 were $10,753,000,
compared to $7,551,000 for fiscal 2017. The $0.9 million increase in
general and administrative expense in the fourth quarter of 2018
compared with the fourth quarter of 2017 was principally due to higher
consulting and professional fees of $0.4 million and labor and related
costs of $0.5 million. The $3.2 million increase in general and
administrative expense in 2018 was principally due to higher consulting
and professional fees of $2.1 million and labor and related costs of
$1.1 million.
2019 Financial Guidance
For 2019, ArQule expects revenue to range between $3 and $5 million. Net
loss is expected to range between $40 and $43 million, and net loss per
share to range between $(0.37) and $(0.39) for the year. ArQule expects
to end 2019 with between $60 and $63 million in cash and marketable
securities.
Conference Call and Webcast
ArQule will hold its fourth quarter and full year financial results call
today, March 7, 2019 at 9:00 a.m. ET. The live webcast can be accessed
in the “Investors and Media” section of our website, www.arqule.com,
under “Events and 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 and 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 four 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 dual
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 potent and selective inhibitor of the
AKT serine/threonine kinase, planned to initiate registrational trial
cohorts in Proteus syndrome and PROS in 2019, and in phase 1b in
combination with the hormonal therapy, anastrozole, in patients with
advanced endometrial cancer; ARQ 751, a next generation highly potent
and selective AKT inhibitor, in phase 1 for patients with AKT1 and PI3K
mutations; and derazantinib, a multi-kinase inhibitor designed to
preferentially inhibit the fibroblast growth factor receptor (FGFR)
family, in a registrational trial for iCCA in collaboration with Basilea
and Sinovant. 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
headings “Key Highlights from 2018,” “Key Catalysts & Goals for 2019,”
and quotes of management in connection with the Company’s clinical
trials and planned clinical trials with ARQ 531, miransertib, ARQ 751
and derazantinib, as well as under “2019 Financial Guidance” with
respect to projected financial results. 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. For example, while
initial results from the development of ARQ 531, miransertib, ARQ 751
and derazantinib have been promising, such results are not necessarily
indicative of results that will be obtained from ongoing or subsequent
trials and the results achieved in ongoing or later stage trials may not
be sufficient to meet applicable regulatory standards or to justify
further development. 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. 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 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.
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. In addition, the Company uses or expects to use
companion diagnostics in biomarker-guided clinical trials with its
product candidates. The Company or its 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. 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, the Company may not have
the financial or human resources to successfully pursue drug discovery
in the future. With respect to partnered programs, even if certain
compounds show initial promise our collaborators may decide not to
continue to develop them. Our collaborators in the development of
derazantinib have certain rights to unilaterally terminate their
agreement with ArQule. If either were to do so, the Company
might not be able to complete development and commercialization of
derazantinib on its own in the affected territory. 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
disclaims any obligation to update the information contained in this
press release as new information becomes available.
ArQule, Inc. |
||||||||||||||||||||
Quarter Ended December 31, |
Year Ended December 31, |
|||||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||
Research and development revenue |
$ |
2,941 | $ | - | $ | 25,764 | $ | - | ||||||||||||
Costs and expenses: | ||||||||||||||||||||
Research and development | 8,850 | 4,721 | 28,710 | 19,468 | ||||||||||||||||
General and administrative | 2,739 | 1,849 | 10,753 | 7,551 | ||||||||||||||||
Total costs and expenses | 11,589 | 6,570 | 39,463 | 27,019 | ||||||||||||||||
Loss from operations | (8,648 | ) | (6,570 | ) | (13,699 | ) | (27,019 | ) | ||||||||||||
Interest income | 592 | 113 | 1,435 | 238 | ||||||||||||||||
Interest expense | (431 | ) | (401 | ) | (1,666 | ) | (1,520 | ) | ||||||||||||
Other expense (1) | - | (902 | ) | (1,552 | ) | (902 | ) | |||||||||||||
Net loss | (8,487 | ) | (7,760 | ) | (15,482 | ) | (29,203 | ) | ||||||||||||
Unrealized loss on marketable securities |
(63 |
) |
(15 |
) |
(79 |
) |
(18 |
) |
||||||||||||
Comprehensive loss | $ | (8,550 | ) | $ | (7,775 | ) | $ | (15,561 | ) | $ | (29,221 | ) | ||||||||
Basic and diluted net loss per share: | ||||||||||||||||||||
Net loss per share | $ | (0.08 | ) | $ | (0.09 | ) | $ | (0.16 | ) | $ | (0.39 | ) | ||||||||
Weighted average basic and diluted common shares outstanding | 108,994 | 85,292 | 99,035 | 74,813 | ||||||||||||||||
(1) Non-cash expense associated with the change in fair value of our
preferred stock warrant liability. At December 31, 2018 there was no
remaining balance in the warrant liability.
Balance sheet data (in thousands): (Unaudited) |
December 31, |
December 31, |
||||||
Cash, equivalents and marketable securities- short term | $ | 99,558 | $ | 48,036 | ||||
Marketable securities- long term | - | - | ||||||
$ | 99,558 | $ | 48,036 | |||||
Total assets | $ | 106,676 | $ | 48,902 | ||||
Stockholders’ equity | $ | 78,968 | $ | 14,181 |
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