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ArQule Supplies Updates on Clinical Trials in Hepatocellular Carcinoma and Non-Small Cell Lung Cancer with Tivantinib

January 21, 2014

ArQule, Inc. announced clinical updates on the ongoing pivotal Phase 3 METIV-HCC trial in hepatocellular carcinoma (liver cancer) conducted by the Company and its partner, Daiichi Sankyo Co., and on the completed amended Phase 3 ATTENTION trial in non-squamous non- small cell lung cancer (NSCLC) conducted in Asian territories by its partner, Kyowa Hakko Kirin Co.

METIV-HCC Trial

According to a release, the Data Monitoring Committee (DMC) of the METIV-HCC trial has recommended continuation of the ongoing pivotal Phase 3 METIV-HCC trial of tivantinib as a single agent in hepatocellular carcinoma with a lower dose of tivantinib, 120 milligrams (mg) tablets administered twice daily (BID). This decision followed the DMC's review of data analyses from a predefined number of patients who received this lower dose.

Recently completed safety analyses among patients treated with 120 mg BID tivantinib tablets showed that the incidence of neutropenia was reduced with this lower dose. In addition, pharmacokinetic analyses from this patient cohort, reviewed by the DMC, demonstrated that the plasma exposure of the 120 mg BID tablets dose was comparable to the exposure achieved with the 240 mg BID capsules dose employed in the Phase 2 trial, with similar medians and overlapping ranges.

A dose reduction from 240 mg BID tablets to 120 mg tablets BID was implemented in September, 2013 following the observation of a higher incidence of neutropenia in the initial phase of the METIV- HCC trial than was observed in the Phase 2 trial in the same patient population where a 240 mg BID capsule dose was administered. Certain enhanced patient monitoring procedures had been temporarily instituted to confirm the safety profile of the lower dose.

The METIV-HCC trial is a pivotal randomized, double-blind study of tivantinib as single agent therapy in previously treated patients with MET diagnostic-high, inoperable HCC. The primary endpoint is overall survival in the intent-to-treat population, and the secondary endpoint is progression free survival in the same population. METIV-HCC is being conducted under a Special Protocol Assessment (SPA).

ATTENTION Trial

Kyowa Hakko Kirin has provided the Company with top-line results of the amended Phase 3 ATTENTION clinical trial evaluating the combination of tivantinib (ARQ 197) and erlotinib in patients with advanced or metastatic non-squamous non-small cell lung cancer (NSCLC) with wild-type EGFR (epidermal growth factor receptor) in Asia (Japan, Korea and Taiwan).

Enrollment in ATTENTION had been originally planned for 460 patients, and the trial's statistical analysis plan was calibrated accordingly and remained unchanged. Recruitment of new patients was permanently suspended in October, 2012 based on a recommendation by the trial's Safety Review Committee following an observed imbalance in interstitial lung disease (ILD) cases as a drug-related adverse event. Patients who received treatment in ATTENTION as of October, 2012 were allowed to continue thereafter in the trial after being re- consented, and including such patients, a total of 307 patients were included in the final analysis.

In the ITT population, overall survival (OS) favored the treatment arm of tivantinib plus erlotinib compared to the erlotinib only control arm, but it was not statistically significant (median OS of 12.9 months vs 11.2 months, hazard ratio = 0.89, p = 0.4). Progression free survival (PFS) and overall response rate (ORR) results also showed a numerical trend toward improvement favoring the treatment arm.

The safety profile observed in ATTENTION was in line with what had been previously observed in other NSCLC trials with tivantinib, with the exception of a reported imbalance in ILD, which is a known adverse event in Japanese patients treated with EGFR inhibitors such as erlotinib. In the Phase 3 MARQUEE trial in non-squamous NSCLC conducted in Western countries, no imbalance was observed in the incidence of ILD between treatment and control arms, with one case (0.2 percent) reported in the treatment arm and four cases (0.8 percent) in the control arm.

ATTENTION is a Phase 3 randomized, double-blind trial comparing OS of second or third line non-squamous NSCLC patients with wild- type EGFR treated with tivantinib and erlotinib to OS of patients treated with placebo and erlotinib. Complete data from this study, including biomarker analyses, are expected to be presented at a future scientific meeting.

Tivantinib is an orally administered, selective inhibitor of MET, a receptor tyrosine kinase, which is currently in Phase 2 and 3 clinical trials. In certain healthy adult cells, MET is present in low to normal levels to support natural cellular function, but in some cancer cells, MET is inappropriately and continuously activated. When abnormally activated, c-Met plays multiple roles in aspects of human cancer, including cancer cell growth, survival, angiogenesis, invasion and metastasis. The activation of certain cell signaling pathways, including MET, has also been associated with the development of resistance to EGFR inhibitors such as cetuximab.

Pre-clinical data have demonstrated that tivantinib inhibits MET activation in a range of human tumor cell lines and shows anti- tumor activity against several human tumor xenografts. In clinical trials to date, treatment with tivantinib has been generally well tolerated and has shown clinical activity in the tumors studied. Tivantinib has not yet been approved for any indication in any country.

On December 19, 2008, ArQule and Daiichi Sankyo Co. signed a license, co-development and co-commercialization agreement to co- develop tivantinib in the U.S., Europe, South America and the rest of the world, excluding Japan, China (including Hong Kong), South Korea and Taiwan, areas for which Kyowa Hakko Kirin has exclusive rights for development and commercialization under an exclusive license agreement signed with ArQule in 2007.

ArQule is a biotechnology company engaged in the research and development of next-generation, small-molecule cancer therapeutics.

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