On November 04, 2015 ArQule, Inc. (NASDAQ:ARQL) reported its financial results for the third quarter of 2015 (Press release, ArQule, NOV 4, 2015, View Source [SID:1234507939]).
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For the quarter ended September 30, 2015, the Company reported a net loss of $2,354,000 or $0.04 per share, compared to a net loss of $6,399,000 or $0.10 per share, for the third quarter of 2014. For the nine-month period ended September 30, 2015, the Company reported a net loss of $10,922,000 or $0.17 per share, compared to a net loss of $19,879,000 or $0.32 per share for the nine-month period ended September 30, 2014.
At September 30, 2015, the Company had a total of $43,759,000 in cash, equivalents and marketable securities.
Key Highlights
Tivantinib phase 2 data in hepatocellular carcinoma presented at International Liver Cancer Association (ILCA) Conference supports tumor MET status as a prognostic and predictive biomarker: The biomarker-driven phase 3 trial for tivantinib, METIV-HCC, in second line hepatocellular carcinoma (HCC) is expected to complete patient accrual by year end. The METIV-HCC trial is randomized 2:1 against best supportive care and will enroll approximately 300 MET-high patients with the primary end-point of overall survival.
Exercise of co-commercialization option for tivantinib in the U.S.: The Company exercised its co-commercialization option under its collaboration agreement with partner, Daiichi Sankyo; if the METIV-HCC trial is approved by regulatory authorities, the first commercial indication for tivantinib would be second-line HCC.
ESMO presentation and PLOS ONE publication support AKT1 and PI3K mutations as targets for ARQ 092 and ARQ 751 – fifth partial response (PR) observed in phase 1b trial: A phase 1b trial of ARQ 092 as a single agent is on-going in lymphoma, endometrial and other cancers harboring the AKT1 or P13K mutations. Five PRs have now been observed in 27 patients who have been dosed in the trial thus far.
Phase 1 trial for Proteus syndrome with ARQ 092 is open for enrollment: Our collaborator, the National Institutes of Health (NIH), has completed pre-trial preparations and recently opened the site for enrollment.
Phase 2 trial for ARQ 087 in intrahepatic cholangiocarcinoma (iCCA) continues to enroll: Five sites are now open and enrolling in the U.S. for iCCA patients with the FGFR translocation. Additional sites in Italy are expected to be enrolling shortly. ARQ 087 is a small molecule, multi-kinase inhibitor designed to preferentially inhibit the fibroblast growth factor receptor (FGFR) family. The FGFR2 gene fusion is a pre-defined biomarker being used to enroll patients in the trial.
Updated 2015 financial guidance reflects disciplined cost controls resulting in higher expected 2015 year-end cash balance: ArQule now expects net use of cash to be between $22 and $24 million for 2015. The company expects to end 2015 with between $37 and $39 million in cash, equivalents and marketable securities, an increase from the previous guidance of $32 to $35 million.
"The last few months have been very productive for ArQule from both an operational and pipeline development standpoint," said Paolo Pucci, Chief Executive Officer of ArQule. "As we are approaching the completion of recruitment for the METIV-HCC trial we have exercised our co-commercialization option with Daiichi Sankyo in the U.S. for tivantinib. We are also making progress with ArQule’s proprietary pipeline which continues to show promising results in multiple biomarker-driven trials."
"We continue to show excellent progress in our AKT program with the achievement of the fifth PR in the phase 1b expansion cohort," said Dr. Brian Schwartz, M.D., Head of Research and Development and Chief Medical Officer at ArQule. "These data validate the preclinical hypothesis underlying the recently published PLOS ONE manuscript. We will be presenting additional data on ARQ 092 and ARQ 751, as well as tivantinib and ARQ 087, at the AACR (Free AACR Whitepaper)-NCI-EORTC conference, triple meeting, in Boston this weekend. We are also looking forward to our collaborator, the NIH, dosing the first patient with ARQ 092 in Proteus syndrome."
"In summary, we had a very strong quarter," said Mr. Pucci. "In addition to progress across our clinical pipeline we also announced revised 2015 financial guidance to reflect a higher cash balance expected at year-end."
Revenues and Expenses
The Company reported research and development revenue of $2,653,000 for the quarter ended September 30, 2015, compared with $2,662,000 for the quarter ended September 30, 2014. For the nine-month period ended September 30, 2015, research and development revenue for the company was $8,442,000, compared with $8,239,000 for the nine-month period ended September 30, 2014.
Research and development revenue in the three and nine months ended September 30, 2015 is comprised of revenue from the Daiichi Sankyo tivantinib development agreement and the Kyowa Hakko Kirin exclusive license agreement for tivantinib. The revenue increase in the nine month period is due to higher revenue from our Daiichi Sankyo tivantinib program.
Total costs and expenses for the quarter ended September 30, 2015 were $5,019,000 compared to $9,110,000 for the third quarter of 2014. For the nine-month period ended September 30, 2015, total costs and expenses were $19,722,000 compared with $28,398,000 for the nine-month period ended September 30, 2014.
Research and development costs for the three and nine months ended September 30, 2015 were $3,180,000 and $11,920,000 respectively, compared with $5,014,000 and $17,981,000 for three and nine-month periods of 2014.
Research and development expense in the quarter ended September 30, 2015 decreased by $1.8 million primarily due to lower labor related costs of $0.5 million from reduced headcount, outsourced clinical and product development costs of $0.6 million, facility costs of $0.6 million and lab expenses of $0.1 million.
Research and development expense in the nine months ended September 30, 2015 decreased by $6.1 million primarily due to lower labor related costs of $2.2 million from reduced headcount, outsourced clinical and product development costs of $1.7 million, facility costs of $1.4 million and lab expenses of $0.7 million.
General and administrative expense for three and nine-month periods ended September 30, 2015 were $1,839,000 and $7,802,000 respectively, compared to $2,997,000 and $9,318,000 for the three and nine-month periods of 2014.
General and administrative expense decreased by $1.2 million in the quarter ended September 30, 2015 principally due to lower facility costs of $0.9 million and labor related costs from reduced headcount of $0.2 million.
General and administrative expense decreased by $1.5 million in the nine months ended September 30, 2015 principally due to lower facility costs of $0.7 million and labor related costs of $0.6 million from reduced headcount.
Restructuring and other costs for the three and nine months ended September 30, 2014 were $1.1 million. There were no restructuring expenses incurred in the three or nine-month periods ended September 30, 2015.
Updated 2015 Guidance
For 2015, ArQule expects net use of cash to range between $22 and $24 million. Revenues are expected to range between $10 and $11 million. Net loss is expected to range between $13 and $15 million, and net loss per share is expected to range between $(0.21) and $(0.24). ArQule expects to end 2015 with between $37 and $39 million in cash, equivalents and marketable securities.