ArQule, Inc. (ARQL - Free Report) recently reported a loss of 9 cents per share in the first quarter of 2013, narrower than the Zacks Consensus Estimate of a loss of 11 cents per share. The company had reported a loss of 8 cents in the year-ago quarter.
Revenues of $5.7 million in the first quarter of 2013 were down 33.4% from a year ago. Revenues, however, beat the Zacks Consensus Estimate of $3 million.
Quarter in Detail
The decline in ArQule’s quarterly revenues was primarily due to the reduction of $4.9 million from the company’s AKIP agreement with Daiichi Sankyo and $0.3 million from the ARQ 092 agreement with the latter. This was partially offset by a $0.5 million increase in revenue from the company’s agreement with Daiichi Sankyo related to the tivantinib program along with increases from a one-time research project.
Research and development expenses were $8.2 million, down 12.1% from the year-ago quarter mainly due to lower outsourced clinical and product development costs related to tivantinib and pipeline programs. General and administrative expenses were $3.4 million, down 5.5% from the year-ago quarter.
We note that ArQule regained global rights for the development and commercialization of compounds in Apr 2013, which are covered under its AKT collaboration with Daiichi Sankyo Co., Ltd. ArQule gained back its rights of the AKT program and also of ARQ 092 after Daiichi Sankyo decided to terminate the license and co-commercialization agreement.
2013 Outlook Reiterated
ArQule continues to expect revenues between $12 and $15 million in 2013. The Zacks Consensus Estimate of $15 million was at the high-end of the guidance. ArQule anticipates net loss between $28 million and $31 million in 2013. Loss per share is estimated between 45 cents and 50 cents in 2013. The Zacks Consensus estimate for 2013 hints at a loss of 49 cents.
ArQule will continue to focus on developing its oncology candidate, tivantinib (ARQ 197), which has now entered into phase III with the initiation of the METIV-HCC (MET-high patients with tivantinib in HCC) trial in second-line HCC (hepatocellular carcinoma or liver cancer).
The METIV-HCC trial, initiated in early 2013, is a controlled study of previously treated patients with MET-high inoperable HCC who will receive tivantinib as a single agent or placebo. The trial is being conducted in collaboration with Daiichi Sankyo. The company enrolled its first patient for this trial in the first quarter of 2013.
ArQule currently carries a Zacks Rank #3 (Hold). Right now, Furiex Pharmaceuticals , Onyx Pharmaceuticals, Inc. and WuXi PharmaTech (Cayman) Inc. , look well placed with a Zacks Rank #2 (Buy).