ArQule, Inc. (ARQL)

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ArQule, Inc. (ARQL)

Q2 2008 Earnings Call Transcript

August 11. 2008 9:00 am ET


William Boni - VP of IR

Paolo Pucci - CEO

Brian Schwartz - CMO

Peter Lawrence - President and COO

Rob Weiskopf - VP of Finance

Tom Chan - SVP, Discovery and Preclinical Development


Mark Monane - Needham & Company

Glenn - Needham & Company

Joel Sendek - Lazard Capital Markets

Han Li - Stanford Group

Ren Benjamin - Rodman

Katherine Kim - Banc of America

Howard Liang - Leerink Swann

George Zavoico - Cantor Fitzgerald



Good day, ladies and gentlemen, and welcome to the second quarter 2008 ArQule, Incoporated earnings conference call. My name is [Shaquana] and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will facilitate a question-and-answer session towards the end of this conference. (Operator Instructions) I would now like to turn the presentation over to your host for today's call, Mr. William Boni, Vice President of Investor Relations. Please proceed, sir.

William Boni

Good morning, everyone. Welcome to the ArQule investor conference call reviewing operational and financial results for the second quarter of fiscal year 2008. This is Bill Boni. I am here today with Paolo Pucci, Chief Executive Officer of ArQule, Brian Schwartz, Chief Medical Officer, Peter Lawrence, Chief Operating Officer, and Rob Weiskopf, Vice President of Finance.

This morning, we issued a press release that reported results for the fiscal quarter ending June 30th, 2008. This release is available on our website at Leading the call today will be Paolo Pucci, ArQule's new Chief Executive Officer, who joined the Company on June 9th from Bayer AG. Shortly thereafter, ArQule added another member of senior management with the arrival on July 14th of Dr. Brian Schwartz, our new Chief Medical Officer.

Details regarding the extensive oncology product development backgrounds of both Paolo and Brian are contained in press releases posted on our website. Following this morning's operational update by Paolo, Rob Weiskopf, Vice President of Finance, will provide a financial review of the quarter.

Before we begin, please note that we will be making forward-looking statements as defined in the Private Securities Litigation Act of 1995. Actual results may differ materially from those projected in the forward-looking statements, due to numerous risks and uncertainties that exist in ArQule's operations, development efforts and the business environment, including those factors discussed in our press release announcing this call and posted on our website, as well as in our reports on forms 10-Q and 10-K, and subsequent documents filed with the Securities and Exchange Commission. The forward-looking statements contained in this call represent the judgment of ArQule as of today. ArQule disclaims any intent or obligation to update any forward-looking statement except to the extent required by law.

I would now like to welcome Paolo Pucci and Brian Schwartz to their inaugural conference call at ArQule.

Paolo Pucci

Bill, thank you very much for your kind introduction. Thank you, all, ladies and gentlemen, for joining us this morning. My name is Paolo Pucci and as you heard, I very recently joined ArQule at a very important point in the life of this Company, which I feel is on the verge of fully exploiting its potential.

The potential of ArQule rests in multiple projects that are in different stages of development, but also into its emerging discovery platform that we believe has immediate utility in further exploring the field of oncology, but further down the road has applicability further beyond oncology.

As the investor community, we are also here at ArQule focused on our lead candidate, which is ArQule 197, a novel and highly differentiated small molecule, which is an inhibitor of the c-Met receptor tyrosine kinase. We have advanced, as you know, into a Phase II program for ArQule 197 and we are actively looking for that proof of principle about -- and the data that supports the therapeutic impact of this candidate on c-Met inhibition. Which as you know is one of the most exciting targets today in the field of oncology.

While the data that Royal Marsden hospital in London has generated for ArQule 197 shows that 197 inhibits c-Met effectively, the data also suggests that our current Phase II programs might benefit from an increased dosing level for ArQule 197. So diligently, we have taken the information that has emerged from the Royal Marsden study and we have discussed it with clinical investigators and we have amended our trial protocols to allow --for these protocols to incorporate higher dosing regimen.

You will remember that our regional dosing regimen was 120-milligram, administered twice daily, and that is the regimen that had been implemented until the Royal Marsden study was presented at ASCO. And going forward, we are working with information that there is maximum tolerated dose of 300 milligrams BID, as identified by the Royal Marsden investigators. So, we will use going forward for our Phase II programs the equivalent of the 300-milligram BID dose identified at the Royal Marsden study.

Now, the trials that we have ongoing for 197 are in MIT tumors, pancreatic cancer and those trials are continuing and also continuing is the Phase I trial for ArQule 197, with the Erlotinib combination. And also in this trial, we will be applying the recently acquired dosing knowledge that came from the Royal Marsden study.

We are also looking then at ways to evolve all those trials to protocol adjustments that address the dosing, but also address other items that are of importance, like expanded end points, which are suitable to this class of drugs in their very specific characteristics.

Obviously, we are not forgetting that a trial program Phase II leading to a Phase III leading to a label is only as good as the opportunity it affords you down the road to achieve success for commercial entry. This is a very important aspect for us, as ArQule 197 would be our first commercial entry in the market.

So, we are running in parallel to the process of assessing our current development program, a process of assessing the potential of each one of those development studies for affording us a proper commercial entry. And we are taking into consideration very complex elements, like ability to achieve the proper pricing point and to achieve the proper reimbursement at that pricing point down the road. It's never too early to look into those opportunities and challenges.

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