By Frances Bishopp

Six months after a successful initial public offering (IPO) that generated $34.5 million, ArQule Inc. has raised $24 million in a 2 million-share offering, of which 1.63 million shares are being sold by ArQule and 367,500 shares are being sold by stockholders. The offering was based on a price of $12 per share.

ArQule's stock (NASDAQ:ARQL) closed Monday at $13.25, up $0.50.

ArQule, of Medford, Mass., had originally filed for an IPO of 2 million shares, but increased the offering to 2.875 million shares at $12 per share, 2.5 million of which were sold on the IPO and 375,000 when the over-allotment was exercised. As of Dec. 31, 1996, ArQule had $37 million in cash and reported a net loss of $3 million. ArQule currently has 11.5 million shares outstanding.

Hambrecht & Quist, of San Francisco, Oppenheimer & Co., of New York, and Vector Securities International Inc., of Deerfield, Ill., are the underwriters for the offering and have been granted an option to purchase 300,000 additional shares to cover over-allotments.

"We were very pleased with our general reception in the marketplace," James Fitzgerald, chief financial officer at ArQule, told BioWorld Today. "We were complimented that in a very different equity market this time, we were able to successfully complete the offering. It was a difficult, but more receptive, market when we closed in October.

"We had pretty strong support from the institutions that are out there. Some older institutions increased their position and there were some new players that came in on this deal as well," Fitzgerald said.

Fitzgerald said ArQule plans to use the newly raised capital to take care of technology opportunities over the next couple of years.

ArQule has created a new technology platform for the discovery and production of chemical compounds with commercial potential. The company's modular building block technology integrates structure-guided drug design, high-speed parallel chemical synthesis and information technology to accelerate the identification and optimization of drug development candidates.

The technology is applicable not only to drug discovery, but also to drug delivery, separations and diagnostics.

ArQule is using its combinatorial chemistry techniques in collaborations with the Solvay Group, of Brussels; Abbott Laboratories, of Abbott Park, Ill.; Pharmacia Biotech AB, of Uppsala, Sweden, a subsidiary of Pharmacia & Upjohn, of Kalamazoo, Mich.; Roche Bioscience, of Palo Alto, Calif., a division of Roche Holding Ltd., of Basel, Switzerland; and Monsanto, of St. Louis. The Monsanto agreement focuses on the development of agrochemicals.

ArQule has initiated joint discovery programs for lead generation and optimization with a number of biotech companies, such as Aurora Biosciences, of La Jolla, Calif., for mammalian cell-based assays; Cadus Pharmaceuticals Corp., of Tarrytown, N.Y., and Sugen Inc., of Redwood City, Calif., for signal transduction; Cubist Pharmaceuticals Inc., of Cambridge, Mass.; for infectious diseases; ICAgen Inc., of Durham, N.C., for ion channel receptors; Scriptgen Pharmaceuticals Inc., of Medford, Mass., for RNA/protein interaction; Signal Pharmaceuticals Inc., of San Diego, for gene transcription/transcription factors; and T Cell Sciences Inc.,of Needham, Mass., for T cell activation/inhibition. *