ArQule Announces $9.5 Million Private Placement of Preferred Stock

11/8/17

BURLINGTON, Mass.--(BUSINESS WIRE)--ArQule, Inc. (NASDAQ: ARQL) today announced the closing of a private placement with institutional investors led by The Pontifax Group pursuant to which the Company raised gross proceeds of $9.5 million through the sale of approximately 8,370 shares of series A convertible preferred stock (Series A Preferred) and warrants covering 2,260 shares of Series A Preferred (Warrants). Each share of Series A Preferred together with the associated Warrant is priced at $1,135 and will automatically convert into 1,000 shares of common stock upon the adoption of an amendment to the Company’s restated certificate of incorporation.

ArQule estimates the net proceeds from this offering will be approximately $9.3 million. The Warrants have a pre-conversion exercise price of $1,750 per share of Series A Preferred (post-conversion price of $1.75 per share of common stock), are exercisable immediately and expire approximately four years from the date of the adoption of an amendment to the Company’s restated certificate of incorporation.

“Taking into account the net proceeds from this private placement, ArQule now expects to end 2017 with between $47 and $49 million in cash and marketable securities to fund the next business cycle that is rich in potential milestones for its oncology and rare diseases programs,” said Paolo Pucci, Chief Executive Officer of ArQule. “Based on this estimate, the company currently anticipates cash and marketable securities to provide funding well into 2019, not including any potential proceeds from future business development activities.”

ArQule intends to use the net proceeds from this offering to advance clinical trials related to its proprietary pipeline, including derazantinib (ARQ 087), miransertib (ARQ 092), ARQ 531 and ARQ 751, and for general corporate purposes, including working capital. Based on recent positive clinical and regulatory developments for miransertib in Proteus syndrome, further investments in expanding the rare disease strategy will be prioritized.

In addition, effective immediately, the company has increased the size of its Board of Directors by one member and elected Ran Nussbaum, managing partner and co-founder of The Pontifax Group, to such newly created vacancy. Mr. Nussbaum was a founding Board Member of Kite Pharma and holds other Board positions at Pontifax portfolio companies.

“We are pleased to welcome Ran to our Board of Directors," said Pat Zenner, Chairperson of the Board of Directors of ArQule. "The Pontifax Group brings important new strategic relationships to ArQule at a time when we anticipate significant progress from our proprietary pipeline. Ran adds a very attractive set of skills and expertise to an already well-rounded Board of Directors."

“Considering the recent positive clinical developments across ArQule’s proprietary pipeline I am excited to join as an investor and a Board Member,” said Ran Nussbaum, Managing Partner and co-founder of The Pontifax Group. “I am looking forward to working with Pat, Paolo, and the ArQule team to further develop its clinical assets with a focus on the rare disease strategy, highlighted by the practice altering potential that miransertib is demonstrating in the treatment of Proteus syndrome and Overgrowth Diseases.”

About The Pontifax Group

The Pontifax Group is a life sciences venture capital firm with an extensive global portfolio focused on unmet needs within the healthcare industry. Prior to joining Pontifax, Mr. Nussbaum was a partner at Israel’s largest business intelligence and strategic consulting firm. Mr. Nussbaum serves, or has served, as a board member on many of Pontifax’s portfolio companies, including Kite Pharma, Keros (as chairman), UroGen Ltd, cCam Biotherapeutics (bought by Merck), Eloxx Pharmaceuticals, and NovellusDX.

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 proprietary pipeline includes: Derazantinib (ARQ 087), a multi-kinase inhibitor designed to preferentially inhibit the fibroblast growth factor receptor (FGFR) family, in phase 2 for iCCA and in phase 1b for multiple oncology indications; 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), as well as in multiple oncology indications; ARQ 751, a next generation AKT inhibitor, in phase 1 for patients with AKT1 and PI3K mutations; and ARQ 761, a ?-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. In addition, we have advanced ARQ 531, an investigational, 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. ArQule’s current discovery efforts are focused on the identification and development of novel kinase inhibitors, leveraging the Company’s proprietary library of compounds. You can follow us on Twitter and LinkedIn.

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