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)