ArQule and Daiichi Sankyo enter two deals for development of cancer drugs

US drugmaker ArQule and Japanese pharmaceutical firm Daiichi Sankyo have entered into two agreements that form the basis of a strategic relationship for the development and discovery of novel oncology therapeutics. The companies will co-develop ARQ 197, a proprietary, orally-administered, small-molecule inhibitor of the c-Met receptor tyrosine kinase, to treat cancer. In addition, they will advance the application of ArQule's kinase inhibitor discovery platform to develop a new generation of highly-selective, anticancer kinase inhibitors intended to ensure a long-term presence in this therapeutic category. On a combined basis, the two deals include $75.0 million in cash upfront to ArQule from Daiichi. The binding letter of intent on ARQ 197 provides for a $60.0 million cash upfront licensing fee to ArQule, as well as development and sales milestones. The firms will split the costs of Phase II and III studies, with ArQule's share of late-stage trial expenses payable solely from Daiichi's milestone and royalty obligations.