ArQule, Inc. and Ontogeny, Inc. Announce
Collaboration for Discovery of Novel
Therapeutics xxxxDecember 18, 1997xxxx

MEDFORD, Mass., and CAMBRIDGE, Mass., Dec. 17 /PRNewswire/ via Individual
Inc. -- ArQule, Inc. (Nasdaq: ARQL) and Ontogeny, Inc., a privately held
biotechnology company, today announced a collaboration for the discovery of
novel, small molecule therapeutic candidates. This collaboration will
provide Ontogeny with access to ArQule's Mapping Array(TM) program for the
identification of new lead compounds, utilizing Ontogeny's OntoScreen(TM)
system. ArQule's Mapping Array(TM) program is comprised of libraries of
novel, diverse, small organic, pure compounds used for screening against
biological targets in new product discovery. OntoScreen(TM) is a battery of
developmental biology-based assays particularly well suited for elucidating
the role of genes and their pathways in organ repair and regeneration. When
leads are identified, ArQule and Ontogeny will use ArQule's Directed
Array(TM) program to rapidly optimize these lead compounds.

"Understanding the mechanisms involved in organ development is integral to
understanding the processes necessary for the treatment of disorders
associated with aging and degeneration," said Doros Platika, M.D., President
and CEO of Ontogeny. "We initially leveraged our expertise in this area by
forming alliances for the development of protein therapeutics and retaining
small molecule screening. By combining our capabilities with ArQule's
proprietary lead identification and optimization technologies, we hope to
begin to extract the value from our retained fields by rapidly discovering
novel chemical compounds for the treatment of a variety of diseases. We are
pleased to add ArQule's source of chemical diversity to Genetics Institute's
source of biological diversity for use in our OntoScreen(TM) drug discovery
system."

"Ontogeny's research in developmental biology has multiple applications in
cancer, central nervous system diseases, bone and other disorders, and we
look forward to assisting their drug discovery efforts," said John M.
Sorvillo, Ph.D., Vice President of Business Development of ArQule, Inc. "One
of our primary objectives for 1997 was to initiate collaborations with
promising biotechnology companies to accelerate the delivery of optimized
leads for clinical evaluation. We are delighted to add Ontogeny to our list
of biotechnology collaborators of 1997; which include Acacia, GenQuest,
Genzyme, FibroGen, RiboGene and ViroPharma."

Under terms of the agreement, Ontogeny will employ OntoScreen(TM) to
identify drug leads from ArQule's Mapping Array(TM) compound sets. The
OntoScreen(TM) system identifies genetic pathways involved in organ
development and generates assays amenable to screening both biological and
chemical libraries for therapeutic leads. The data provided by ArQule's
Mapping Array(TM) program will facilitate the rapid identification of
specific active drug leads. Once active leads are identified, the companies
intend to optimize such leads through ArQule's Directed Array(TM) program,
which is an iterative parallel process to select a desired compound.

Ontogeny, Inc., based in Cambridge, Massachusetts, is a privately held
biotechnology company. Its research and development are based on the study
of how cells, tissues and organs change as they interact during development,
known as developmental biology, including the discovery of the control
molecules that cause cell and tissue differentiation. The same processes and
molecules that are active during development are reactivated in adult
regenerative processes. Ontogeny is identifying ways to rejuvenate damaged
systems by looking at the signaling processes of cells during development
and restoring them in adults to trigger repair and regeneration. Ontogeny is
developing and seeking to commercialize therapeutics for neurological
diseases including Parkinson's and Alzheimer's diseases, diabetes, bone and
cartilage disorders including osteoporosis and fractures, fertility problems
and cancer.

ArQule, Inc. is a leading chemistry company in accelerated drug discovery
using its high throughput lead generation and lead optimization
technologies. ArQule provides new pathways to product discovery by
integrating five core technologies -- modular building block technology,
structure-guided design, high speed parallel chemical synthesis, information
technology and an Automated Molecular Assembly Plant (AMAP(TM)) parallel
synthesis system to accelerate the identification and optimization of drug
and product development candidates in the pharmaceutical, biotechnology, and
agrochemical industries. ArQule's Mapping Array(TM) program is comprised of
libraries of novel, diverse, small organic, pure compounds used for
screening against biological targets in new product discovery. ArQule's
Directed Array(TM) program is an iterative parallel process used to produce
analog sets of desired lead compounds and rapidly develop optimized drug
candidates. ArQule is based in Medford, Massachusetts.

Statements in this press release that are not strictly historical are "
forward looking" statements as defined in the Private Securities Litigation
Reform Act of 1995. The actual results may differ from those projected in
the forward looking statement due to risks and uncertainties that exist in
ArQule's and Ontogeny's operations and business environment. These risks and
uncertainties are described more fully in ArQule's Form 10-K for the year
ended December 31, 1996 and the Registration Statement of Form S-1 dated
April 4, 1997, filed with the Securities and Exchange Commission.

SOURCE ArQule, Inc.

/CONTACT: Eric B. Gordon, President and CEO of ArQule, 781-395-4100, or
Cynthia G. Clayton, Manager, Corporate Communications and Investor Relations
of Ontogeny, 617-876-0086 ext. 219, or Investor Relations: Marcia Kean or
Megan Burling of Feinstein Kean Partners Inc., 617-577-8110, or Renee Solano
of Noonan/Russo Communications, 212-696-4455, ext. 227/ /Web site:
http://www.arqule.com/ (ARQL)