ArQule, Inc. Reports Financial Results for First Quarter Ended March 31, 2001

Conference call scheduled for Thursday, April 19, 9:00 A.M. EST to discuss

First Quarter results.



Apr 19, 2001, 01:00 ET from ArQule, Inc.

    WOBURN, Mass., April 19 /PRNewswire/ -- ArQule, Inc. (Nasdaq:   ARQL) today
 announced its financial results for the first quarter ended March 31, 2001.
     During the first quarter 2001, the Company reported revenues of
 $13,941,000, up from $10,388,000, in the same period of 2000.  The Company
 reported net income for the first quarter, excluding stock-based compensation,
 amortization of intangibles and an in-process research and development charge
 relating to the merger with Camitro Corporation, of  $341,000 or $0.02 per
 diluted share, based on 20,610,000 weighted average shares outstanding.  This
 compares to a net loss of $1,342,000 or $0.10 per share in the comparable 2000
 quarter.  The first quarter 2001 results include Camitro beginning January 29,
 2001, the date the merger closed.
     Net loss for the quarter, including stock-based compensation, amortization
 of goodwill and purchased intangibles and an in-process research and
 development charge, was $20,256,000 or $1.07 per share.
    During the first quarter of 2001 ArQule closed its merger with Camitro
 Corporation, an in silico ADMET predictive modeling company, and entered into
 a technology co-development agreement with NanoDesign, Inc. for the de novo
 design of compounds.  In addition, ArQule has extended its collaborations with
 Solvay and Sankyo through 2003 and 2004, respectively. Also, during the first
 quarter ArQule was included in the NASDAQ Biotechnology Index as well as the
 S&P SmallCap 600 Index.
     Dr. Stephen A. Hill, President and CEO, commented, "I was gratified with
 our first quarter results as we were able to begin to integrate new drug
 discovery technologies while managing our financial resources effectively.
 ArQule has clearly established its leadership in "how to make" molecules and
 we are now focusing on assembling the key components of our "what to make"
 expertise.  We made tremendous progress in the first quarter towards
 fulfilling our mission of becoming a chemistry based drug discovery company."
     David C. Hastings, the Company's Chief Financial Officer, commented on the
 first quarter results, "This quarter ArQule continued its investments in our
 drug discovery platform.  Our funding of research and development continues to
 increase while our cash burn remains modest. We will continue to invest in our
 future as we seek to strengthen our core drug discovery capabilities and
 integrate critical new technologies.  Prospectively, quarterly variations may
 be encountered as the Company continues to pursue strategic initiatives in
 drug-discovery technologies."
     ArQule will hold a conference call at 9:00 a.m. Eastern.  Dr. Stephen A.
 Hill, CEO and President, and David C. Hastings, Chief Financial Officer, will
 lead the call.
 
           Date:                    Thursday, April 19, 2001
           Time:                    9:00 a.m. Eastern
           Conference Call Numbers:
           Toll Free:               (800) 406-5345
           Toll:                    (913) 981-5571
           Access Code:             705278
           Webcast:                 www.arqule.com
 
     There will be a replay of the conference call for 24 hours, which can be
 accessed by dialing toll-free (888) 203-1112, and outside the U.S. (719) 457-
 0820.  The access code is 705278.
     ArQule collaborates with leading pharmaceutical and biotechnology
 companies to synthesize and optimize small molecules that have the potential
 to enter clinical development and become medicines.  ArQule's Parallel Track
 Drug Discovery program integrates key technologies for high-throughput,
 automated synthesis of small molecules with technologies that enable more
 informed, intelligent decisions about what molecules to synthesize. Parallel
 use of these "what to make" and "how to make" technologies results in rapid,
 iterative cycles of lead generation, qualification, and optimization of
 clinical drug candidates.  In addition, ArQule also offers access to their
 high-throughput, automated synthesis and lead optimization platforms through
 technology licensing agreements. ArQule is based in Woburn and Medford,
 Massachusetts.  For additional information, please visit www.arqule.com.
     Camitro, a wholly owned subsidiary of ArQule, is dedicated to the
 development and application of innovative computational technologies for the
 design, selection and optimization of novel drug candidates. Camitro's
 predictive models enable scientists to assess ADMET properties of chemical
 compounds throughout the discovery process, from the earliest stages of
 compound selection and library design through lead candidate evaluation and
 re-design.  Its integrated platform of models permits the optimization of
 multiple ADMET properties simultaneously, at high throughput, based upon
 chemical structure alone.  Camitro is headquartered in Menlo Park, California
 with a wholly owned subsidiary, Camitro UK, Ltd., located in Cambridge, UK.
 For additional information, please visit www.camitro.com.
 
     This press release contains forward-looking statements as defined in the
 Private Securities Litigation Reform Act of 1995, including statements about:
 the integration of certain technologies, ArQule's leadership position and the
 anticipated spending during 2001.   The 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 without limitation: the ability to deliver
 our products to our corporate collaborators and to satisfy milestones so that
 we could earn future payments under our collaboration agreements; the progress
 of our product research and development activities and projected expenditures;
 the ability to enter into future collaborations with pharmaceutical and
 biotechnology companies; difficulties and costs associated with the
 integration of the technologies and the risks and uncertainties described in
 ArQule's Annual Report on Form 10-K  filed with the Securities and Exchange
 Commission on March 22, 2001.  The forward-looking statements contained herein
 represent the judgment of ArQule as of the date of this release.  ArQule
 disclaims any intent or obligation to update any forward-looking statement
 except to the extent required by law.
 
      ArQule Contact:
      David C. Hastings
      Chief Financial Officer
      (781) 994-0300
      www.arqule.com
 
      Media Contacts:
      Sharon Karlsberg
      Vivienne Blake
      Feinstein Kean Healthcare
      (617) 577-8110
 
     --financial tables follow--
 
                                    ArQule, Inc.
 
                         CONDENSED STATEMENT OF OPERATIONS
                      (In Thousands, Except Per Share Amounts)
 
                                                        Three Months Ended
                                                             March 31,
                                                            (Unaudited)
                                                       2001              2000
     Revenue:
         Compound development revenue                $12,285            $7,690
         Compound development revenue -
          related parties                              1,656             2,698
              Total revenue                           13,941            10,388
 
     Costs and expenses:
         Cost of revenue                               6,531             5,406
         Research and development                      5,888             4,188
         Marketing, general and
          administrative                               2,520             2,361
         Stock-based compensation                      1,316               -
         Amortization of intangibles                   1,281               -
         In-process research and
          development                                 18,000               -
              Total costs and expenses                35,536            11,955
 
              Loss from operations                   (21,595)           (1,567)
 
     Net investment income                             1,339               225
 
              Net loss                              $(20,256)          $(1,342)
 
     Basic and diluted net loss per share             $(1.07)           $(0.10)
 
     Weighted average common shares
      outstanding - basic and diluted                 18,971            13,205
 
 
                           SELECTED BALANCE SHEET INFORMATION
                                     (In Thousands)
 
                                                  March 31,        December 31,
                                                    2001              2000
                                                          (Unaudited)
 
         Cash, cash equivalents and
          marketable securities                     $99,662           $110,019
         Working capital                             83,522             93,437
         Total assets                               214,001            149,476
         Stockholders' equity                       171,276            120,420
 
 

SOURCE ArQule, Inc.
    WOBURN, Mass., April 19 /PRNewswire/ -- ArQule, Inc. (Nasdaq:   ARQL) today
 announced its financial results for the first quarter ended March 31, 2001.
     During the first quarter 2001, the Company reported revenues of
 $13,941,000, up from $10,388,000, in the same period of 2000.  The Company
 reported net income for the first quarter, excluding stock-based compensation,
 amortization of intangibles and an in-process research and development charge
 relating to the merger with Camitro Corporation, of  $341,000 or $0.02 per
 diluted share, based on 20,610,000 weighted average shares outstanding.  This
 compares to a net loss of $1,342,000 or $0.10 per share in the comparable 2000
 quarter.  The first quarter 2001 results include Camitro beginning January 29,
 2001, the date the merger closed.
     Net loss for the quarter, including stock-based compensation, amortization
 of goodwill and purchased intangibles and an in-process research and
 development charge, was $20,256,000 or $1.07 per share.
    During the first quarter of 2001 ArQule closed its merger with Camitro
 Corporation, an in silico ADMET predictive modeling company, and entered into
 a technology co-development agreement with NanoDesign, Inc. for the de novo
 design of compounds.  In addition, ArQule has extended its collaborations with
 Solvay and Sankyo through 2003 and 2004, respectively. Also, during the first
 quarter ArQule was included in the NASDAQ Biotechnology Index as well as the
 S&P SmallCap 600 Index.
     Dr. Stephen A. Hill, President and CEO, commented, "I was gratified with
 our first quarter results as we were able to begin to integrate new drug
 discovery technologies while managing our financial resources effectively.
 ArQule has clearly established its leadership in "how to make" molecules and
 we are now focusing on assembling the key components of our "what to make"
 expertise.  We made tremendous progress in the first quarter towards
 fulfilling our mission of becoming a chemistry based drug discovery company."
     David C. Hastings, the Company's Chief Financial Officer, commented on the
 first quarter results, "This quarter ArQule continued its investments in our
 drug discovery platform.  Our funding of research and development continues to
 increase while our cash burn remains modest. We will continue to invest in our
 future as we seek to strengthen our core drug discovery capabilities and
 integrate critical new technologies.  Prospectively, quarterly variations may
 be encountered as the Company continues to pursue strategic initiatives in
 drug-discovery technologies."
     ArQule will hold a conference call at 9:00 a.m. Eastern.  Dr. Stephen A.
 Hill, CEO and President, and David C. Hastings, Chief Financial Officer, will
 lead the call.
 
           Date:                    Thursday, April 19, 2001
           Time:                    9:00 a.m. Eastern
           Conference Call Numbers:
           Toll Free:               (800) 406-5345
           Toll:                    (913) 981-5571
           Access Code:             705278
           Webcast:                 www.arqule.com
 
     There will be a replay of the conference call for 24 hours, which can be
 accessed by dialing toll-free (888) 203-1112, and outside the U.S. (719) 457-
 0820.  The access code is 705278.
     ArQule collaborates with leading pharmaceutical and biotechnology
 companies to synthesize and optimize small molecules that have the potential
 to enter clinical development and become medicines.  ArQule's Parallel Track
 Drug Discovery program integrates key technologies for high-throughput,
 automated synthesis of small molecules with technologies that enable more
 informed, intelligent decisions about what molecules to synthesize. Parallel
 use of these "what to make" and "how to make" technologies results in rapid,
 iterative cycles of lead generation, qualification, and optimization of
 clinical drug candidates.  In addition, ArQule also offers access to their
 high-throughput, automated synthesis and lead optimization platforms through
 technology licensing agreements. ArQule is based in Woburn and Medford,
 Massachusetts.  For additional information, please visit www.arqule.com.
     Camitro, a wholly owned subsidiary of ArQule, is dedicated to the
 development and application of innovative computational technologies for the
 design, selection and optimization of novel drug candidates. Camitro's
 predictive models enable scientists to assess ADMET properties of chemical
 compounds throughout the discovery process, from the earliest stages of
 compound selection and library design through lead candidate evaluation and
 re-design.  Its integrated platform of models permits the optimization of
 multiple ADMET properties simultaneously, at high throughput, based upon
 chemical structure alone.  Camitro is headquartered in Menlo Park, California
 with a wholly owned subsidiary, Camitro UK, Ltd., located in Cambridge, UK.
 For additional information, please visit www.camitro.com.
 
     This press release contains forward-looking statements as defined in the
 Private Securities Litigation Reform Act of 1995, including statements about:
 the integration of certain technologies, ArQule's leadership position and the
 anticipated spending during 2001.   The 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 without limitation: the ability to deliver
 our products to our corporate collaborators and to satisfy milestones so that
 we could earn future payments under our collaboration agreements; the progress
 of our product research and development activities and projected expenditures;
 the ability to enter into future collaborations with pharmaceutical and
 biotechnology companies; difficulties and costs associated with the
 integration of the technologies and the risks and uncertainties described in
 ArQule's Annual Report on Form 10-K  filed with the Securities and Exchange
 Commission on March 22, 2001.  The forward-looking statements contained herein
 represent the judgment of ArQule as of the date of this release.  ArQule
 disclaims any intent or obligation to update any forward-looking statement
 except to the extent required by law.
 
      ArQule Contact:
      David C. Hastings
      Chief Financial Officer
      (781) 994-0300
      www.arqule.com
 
      Media Contacts:
      Sharon Karlsberg
      Vivienne Blake
      Feinstein Kean Healthcare
      (617) 577-8110
 
     --financial tables follow--
 
                                    ArQule, Inc.
 
                         CONDENSED STATEMENT OF OPERATIONS
                      (In Thousands, Except Per Share Amounts)
 
                                                        Three Months Ended
                                                             March 31,
                                                            (Unaudited)
                                                       2001              2000
     Revenue:
         Compound development revenue                $12,285            $7,690
         Compound development revenue -
          related parties                              1,656             2,698
              Total revenue                           13,941            10,388
 
     Costs and expenses:
         Cost of revenue                               6,531             5,406
         Research and development                      5,888             4,188
         Marketing, general and
          administrative                               2,520             2,361
         Stock-based compensation                      1,316               -
         Amortization of intangibles                   1,281               -
         In-process research and
          development                                 18,000               -
              Total costs and expenses                35,536            11,955
 
              Loss from operations                   (21,595)           (1,567)
 
     Net investment income                             1,339               225
 
              Net loss                              $(20,256)          $(1,342)
 
     Basic and diluted net loss per share             $(1.07)           $(0.10)
 
     Weighted average common shares
      outstanding - basic and diluted                 18,971            13,205
 
 
                           SELECTED BALANCE SHEET INFORMATION
                                     (In Thousands)
 
                                                  March 31,        December 31,
                                                    2001              2000
                                                          (Unaudited)
 
         Cash, cash equivalents and
          marketable securities                     $99,662           $110,019
         Working capital                             83,522             93,437
         Total assets                               214,001            149,476
         Stockholders' equity                       171,276            120,420
 
 SOURCE  ArQule, Inc.