ArQule, Inc. and Daiichi Sankyo Co., Ltd. today announced the expansion of their research, development and
license agreement for the discovery of novel kinase inhibitors in the field
of oncology. This expanded agreement establishes a third therapeutic target,
with an option for a fourth, in the field of oncology, and it includes a
two-year extension based on the application of the proprietary ArQule Kinase
Inhibitor Platform (AKIP(TM)) technology.

“This technology has provided us with a unique and innovative
approach for discovery in the treatment of cancer,” said Dr. Hideyuki
Haruyama, the Global Head of Research, Daiichi Sankyo. “We expect that the
expansion of this collaboration will produce other drug candidates and lay
the foundation for future growth in this field.”

Consistent with the existing AKIP collaboration, the economic
terms provided for in the expanded agreement include payments for research
support, licensing fees for compounds discovered as a result of this
research, milestone payments related to clinical development, regulatory
review and sales, and tiered royalty payments on net sales of each product.
Daiichi Sankyo will have an option to license compounds directed to the
targets defined under the agreement following the completion of certain
pre-clinical studies. ArQule retains the option to co-commercialize any
resulting licensed products in the U.S.

“Our initial drug discovery collaboration has identified a
development candidate for one target, and we are optimizing advanced lead
compounds for the other target,” said Dr. Thomas C.K. Chan, chief scientific
officer of ArQule. “The expansion of this collaboration will continue to
deploy AKIP technology to discover inhibitors with novel modes of action for
additional oncology targets over the next two years.”