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Setback for ArQule, Shares Fall

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ArQule Inc. (ARQL - Free Report) and partner Daiichi Sankyo recently announced disappointing phase II results on oncology candidate, tivantinib (ARQ 197). The study evaluated ArQule’s lead pipeline candidate, tivantinib, in combination with Pfizer’s (PFE - Free Report) Camptosar (irinotecan) and Bristol-Myers Squibbs/Eli Lilly’s (BMY/LLY) Erbiutx (cetuximab) in patients with refractory or relapsed colorectal cancer (CRC). 
The study failed to meet its key endpoint of progression-free survival (PFS) - median PFS was 8.3 months in the tivantinib arm compared with 7.3 months in the control arm (irinotecan and cetuximab plus placebo). The secondary endpoint of objective response rate (ORR) was also not statistically significant compared to the control arm (45% versus 33%).   
The disappointing news led to an 11.6% decline in the stock price. We note that this is the second setback for ArQule after the discontinuation of the MARQUEE (M et inhibitor ARQ 197 plus E rlotinib versus E rlotinib plus placebo in non-squamous non-small cell lung cancer {NSCLC}) study. In Oct 2012, ArQule had announced that the independent Data Monitoring Committee recommended that the phase III MARQUEE study should be discontinued as it was not likely to meet its primary endpoint of improved overall survival. MARQUEE was a pivotal study which was conducted under a special protocol assessment to evaluate tivantinib in combination with Roche’s (RHHBY - Free Report) Tarceva (erlotinib) in previously treated patients with locally advanced or metastatic, non-squamous NSCLC. 
Given the recent pipeline setbacks, we prefer to be on the sidelines and hence, have a Neutral recommendation on ArQule which carries a Zacks Rank #3 (Hold). 
Right now, Medivation, Inc. (MDVN) looks attractive with a Zacks Rank #1 (Strong Buy). 

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