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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
ArQule, Inc.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
04269E107
(CUSIP Number)
William Roiniotis
BVF Partners L.P.
900 North Michigan Avenue
Suite 1100
Chicago, Illinois 60611
(312) 506-6500
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
March 10, 2008
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box |_|
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
--------------------------------------------------------------------------------
1. Names of Reporting Persons.
Biotechnology Value Fund, L.P.
--------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See
Instructions)
(a) |X|
(b) | |
--------------------------------------------------------------------------------
3. SEC Use Only
--------------------------------------------------------------------------------
4. Source of Funds (See Instructions) WC
--------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required
Pursuant to Items 2(d) or 2(e)
[ ]
--------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
--------------------------------------------------------------------------------
Number of Shares 7. Sole Voting Power
Beneficially Owned 0
by Each Reporting
Person With -----------------------------------------------------------
8. Shared Voting Power
2,310,360
-----------------------------------------------------------
9. Sole Dispositive Power
0
-----------------------------------------------------------
10. Shared Dispositive Power
2,310,360
--------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting
Person: 2,310,360
--------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)[ ]
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11): 5.3%
--------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions): PN
--------------------------------------------------------------------------------
2
--------------------------------------------------------------------------------
1. Names of Reporting Persons.
Biotechnology Value Fund II, L.P.
--------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See
Instructions)
(a) |X|
(b) | |
--------------------------------------------------------------------------------
3. SEC Use Only
--------------------------------------------------------------------------------
4. Source of Funds (See Instructions) WC
--------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required
Pursuant to Items 2(d) or 2(e)
[ ]
--------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
--------------------------------------------------------------------------------
Number of Shares 7. Sole Voting Power
Beneficially Owned
by Each Reporting 0
Person With
-----------------------------------------------------------
8. Shared Voting Power
1,626,900
----------------------------------------------------------
9. Sole Dispositive Power
0
-----------------------------------------------------------
10. Shared Dispositive Power
1,626,900
--------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting
Person: 1,626,900
--------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)[ ]
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11): 3.7%
--------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions): PN
--------------------------------------------------------------------------------
3
--------------------------------------------------------------------------------
1. Names of Reporting Persons.
BVF Investments, L.L.C.
--------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See
Instructions)
(a) |X|
(b) | |
--------------------------------------------------------------------------------
3. SEC Use Only
--------------------------------------------------------------------------------
4. Source of Funds (See Instructions) WC
-------------------- -----------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required
Pursuant to Items 2(d) or 2(e)
[ ]
--------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
--------------------------------------------------------------------------------
Number of Shares 7. Sole Voting Power
Beneficially Owned
by Each Reporting 0
Person With
-----------------------------------------------------------
8. Shared Voting Power
5,543,800
-----------------------------------------------------------
9. Sole Dispositive Power
0
-----------------------------------------------------------
10. Shared Dispositive Power
5,543,800
--------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting
Person: 5,543,800
--------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)[ ]
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11): 12.7%
--------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions): OO
--------------------------------------------------------------------------------
4
--------------------------------------------------------------------------------
1. Names of Reporting Persons.
Investment 10, L.L.C.
--------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See
Instructions)
(a) |X|
(b) | |
--------------------------------------------------------------------------------
3. SEC Use Only
--------------------------------------------------------------------------------
4. Source of Funds (See Instructions) WC
--------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required
Pursuant to Items 2(d) or 2(e)
[ ]
--------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Illinois
--------------------------------------------------------------------------------
Number of Shares 7. Sole Voting Power
Beneficially Owned
by Each Reporting 0
Person With
-----------------------------------------------------------
8. Shared Voting Power
681,000
-----------------------------------------------------------
9. Sole Dispositive Power
0
-----------------------------------------------------------
10. Shared Dispositive Power
681,000
--------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting
Person: 681,000
--------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)[ ]
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11): 1.6%
--------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions): OO
--------------------------------------------------------------------------------
5
--------------------------------------------------------------------------------
1. Names of Reporting Persons.
BVF Partners L.P.
--------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See
Instructions)
(a) |X|
(b) | |
--------------------------------------------------------------------------------
3. SEC Use Only
--------------------------------------------------------------------------------
4. Source of Funds (See Instructions) OO
--------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required
Pursuant to Items 2(d) or 2(e)
[ ]
--------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
--------------------------------------------------------------------------------
Number of Shares 7. Sole Voting Power
Beneficially by
Owned by Each 0
Reporting Person
With
-----------------------------------------------------------
8. Shared Voting Power
10,162,060
-----------------------------------------------------------
9. Sole Dispositive Power
0
-----------------------------------------------------------
10. Shared Dispositive Power
10,162,060
--------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting
Person: 10,162,060
--------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)[ ]
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11): 23.3%
--------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions): PN, HC
--------------------------------------------------------------------------------
6
--------------------------------------------------------------------------------
1. Names of Reporting Persons.
BVF Inc.
--------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See
Instructions)
(a) |X|
(b) | |
--------------------------------------------------------------------------------
3. SEC Use Only
--------------------------------------------------------------------------------
4. Source of Funds (See Instructions) OO
--------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required
Pursuant to Items 2(d) or 2(e)
[ ]
--------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
--------------------------------------------------------------------------------
Number of Shares 7. Sole Voting Power
Beneficially by
Owned by Each 0
Reporting Person
With
-----------------------------------------------------------
8. Shared Voting Power
10,162,060
-----------------------------------------------------------
9. Sole Dispositive Power
0
-----------------------------------------------------------
10. Shared Dispositive Power
10,162,060
--------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting
Person: 10,162,060
--------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)[ ]
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11): 23.3%
--------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions): CO, HC
--------------------------------------------------------------------------------
7
ITEM 1. SECURITY AND ISSUER
This Schedule 13D relates to the common stock, par value $0.01 per share
(the "Common Stock") of ArQule, Inc., a Delaware corporation ("ArQule"). The
principal executive office of ArQule is located at 19 Presidential Way, Woburn,
MA 01801-5140.
ITEM 2. IDENTITY AND BACKGROUND
The persons filing this Statement, the persons enumerated in Instruction C of
this Statement and, where applicable, their respective places of organization,
principal office, general partners, managers, directors, executive officers,
controlling persons and certain information regarding each of them, are as
follows:
(a) Biotechnology Value Fund, L.P., a Delaware limited partnership ("BVF"),
Biotechnology Value Fund II, L.P., a Delaware limited partnership ("BVF2"), BVF
Investments, L.L.C., a Delaware limited liability company ("Investments"),
Investment 10, L.L.C., an Illinois limited liability company ("ILL10"), BVF
Partners L.P., a Delaware limited partnership ("Partners") and BVF Inc., a
Delaware corporation ("BVF Inc.") specialize in holding biotechnology stocks for
investment purposes. Together, BVF, BVF2, Investments, ILL10, Partners and BVF
Inc. are the "Reporting Persons." Mark N. Lampert, an individual, ("Lampert"),
is the sole shareholder, sole director and an officer of BVF Inc.
(b) The business address of BVF, BVF2, Investments, ILL10 and Partners is
900 North Michigan Avenue, Suite 1100, Chicago, Illinois 60611. The business
address of BVF Inc. and Lampert is One Sansome Street, 31st Floor, San
Francisco, California 94104.
(c) Partners is the general partner of BVF and BVF2, which are investment
funds. Partners also is the manager of Investments, which is also an investment
fund. ILL10 is a managed account, which Partners advises pursuant to an
investment management agreement. BVF Inc. is an investment adviser to and
general partner of Partners. For Lampert's occupation, please refer to (a)
above.
(d) During the last five years, none of the Reporting Persons or Lampert
has been convicted in a criminal proceeding (excluding traffic violations and
similar misdemeanors).
(e) During the last five years, none of the Reporting Persons or Lampert
has been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction nor, as a result of such proceeding, was or is subject to
a judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
(f) Lampert is a citizen of the United States of America. For the
citizenship of each of BVF, BVF2, Investments, ILL10, Partners, and BVF Inc.,
please refer to (a) above
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Partners, in its capacity as (i) general partner of BVF, has purchased on
behalf of such limited partnership an aggregate number of 2,310,360 shares of
the Common Stock for an aggregate consideration of $12,417,882.25, (ii) general
partner of BVF2, has purchased on behalf of such limited partnership an
aggregate number of 1,626,900 shares of Common Stock for an aggregate
consideration of $8,602,421.60, (iii) manager of Investments, has purchased on
8
behalf of such limited liability company an aggregate number of 5,543,800 shares
of Common Stock for an aggregate consideration of $30,452,981.50, and (iv)
investment adviser to ILL10, purchased on behalf of such limited liability
company an aggregate of 681,000 shares of Common Stock for an aggregate
consideration of $3,643,426.10. Each of BVF, BVF2, Investments and ILL10
purchased the shares held by it using its own working capital. No borrowed funds
were used to purchase the Common Stock other than any borrowed funds used for
working capital purposes in the ordinary course of business.
ITEM 4. PURPOSE OF TRANSACTION
The Reporting Persons are engaged in the investment business. In pursuing
this business, the Reporting Persons analyze the operations, capital structure
and markets of companies, including the Issuer, on a continuous basis through
analysis of documentation and discussions with knowledgeable industry and market
observers and with representatives of such companies (often at the invitation of
management). From time to time, one or more of the Reporting Persons may hold
discussions with third parties or with management of such companies in which the
Reporting Persons may suggest or take a position with respect to potential
changes in the operations, management or capital structure of such companies as
a means of enhancing shareholder value. Such suggestions or positions may relate
to one or more of the transactions specified in clauses (a) through (j) of Item
4 of Schedule 13D of the Exchange Act, including, without limitation, such
matters as disposing of or selling all or a portion of the company or acquiring
another company or business, changing operating or marketing strategies,
adopting or not adopting certain types of anti-takeover measures and
restructuring the Issuer's capitalization or dividend policy.
Except as set forth above, the Reporting Persons do not have any present
plans or proposals that relate to or would result in any of the actions required
to be described in Item 4 of Schedule 13D. Each of the Reporting Persons may, at
any time, review or reconsider its position with respect to the Issuer and
formulate plans or proposals with respect to any of such matters, but has no
present intention of doing so.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
The Reporting Persons' percentage ownership of Common Stock is based on
43,710,379 shares being outstanding.
(a) As of March 10, 2008, BVF beneficially owns 2,310,360 shares of Common
Stock, BVF2 beneficially owns 1,626,900 shares of Common Stock, Investments
beneficially owns 5,543,800 shares of Common Stock, ILL10 beneficially owns
681,000 shares of Common Stock and each of Partners and BVF Inc. may be deemed
to beneficially own 10,162,060 shares of Common Stock, representing percentage
ownership of approximately 5.3%, 3.7%, 12.7%, 1.6% and 23.3%, respectively.
(b) Each of BVF, BVF2, Investments and ILL10 shares with Partners voting and
dispositive power over the Common Stock each such entity beneficially owns.
Partners and BVF Inc. share voting and dispositive power over the 10,162,060
shares of Common Stock they may be deemed beneficially to own with BVF, BVF2 and
Investments, and ILL10.
9
(c) The following purchases of Common Stock have been made by the following
Reporting Persons within the last 60 days. All such transactions were made for
cash in open market, over-the-counter transactions,
PURCHASE OF SHARES
REPORTING PERSON DATE SHARES PURCHASED PRICE PER SHARE
---------------- ---- ---------------- ---------------
BVF
01/10/2008 3,200 $4.26
01/10/2008 77,027 $4.37
01/14/2008 5,800 $4.50
01/15/2008 26,300 $4.65
01/23/2008 38,600 $4.47
01/31/2008 126,000 $4.71
02/01/2008 41,000 $5.00
02/04/2008 52,100 $5.08
02/07/2008 91,300 $4.90
02/08/2008 63,000 $4.98
02/11/2008 20,700 $4.96
02/15/2008 12,600 $5.08
02/19/2008 8,300 $5.10
02/20/2008 7,100 $5.05
02/21/2008 45,000 $4.95
02/22/2008 2,200 $4.75
03/10/2008 337,283 $3.90
Reporting Person Date Shares Purchased Sales Price
BVF2
01/10/2008 3,000 $4.26
01/10/2008 52,000 $4.37
01/14/2008 4,000 $4.50
01/15/2008 18,000 $4.65
01/23/2008 26,000 $4.47
01/31/2008 86,000 $4.71
02/01/2008 28,000 $5.00
02/04/2008 35,000 $5.08
02/07/2008 62,000 $4.90
02/08/2008 44,000 $4.98
02/11/2008 14,000 $4.96
02/15/2008 8,000 $5.08
02/19/2008 5,000 $5.10
02/20/2008 5,000 $5.05
02/21/2008 32,000 $4.95
02/22/2008 1,000 $4.75
03/10/2008 231,000 $3.90
10
REPORTING PERSON DATE SHARES PURCHASED SALES PRICE
---------------- ---- ---------------- ---------------
BVFLLC
01/10/2008 9,000 $4.26
01/10/2008 180,000 $4.37
01/14/2008 15,000 $4.50
01/15/2008 63,000 $4.65
01/23/2008 90,000 $4.47
01/31/2008 298,000 $4.71
02/01/2008 96,000 $5.00
02/04/2008 123,000 $5.08
02/07/2008 215,000 $4.90
02/08/2008 152,000 $4.98
02/11/2008 49,000 $4.96
02/15/2008 29,000 $5.08
02/19/2008 19,000 $5.10
02/20/2008 16,000 $5.05
02/21/2008 109,000 $4.95
02/22/2008 5,000 $4.75
03/10/2008 795,000 $3.90
REPORTING PERSON DATE SHARES PURCHASED SALES PRICE
---------------- ---- ---------------- ---------------
ILL10
01/10/2008 1,000 $4.26
01/10/2008 22,000 $4.37
01/14/2008 2,000 $4.50
01/15/2008 8,000 $4.65
01/23/2008 11,000 $4.47
01/31/2008 37,000 $4.71
02/01/2008 12,000 $5.00
02/04/2008 15,000 $5.08
02/07/2008 27,000 $4.90
02/08/2008 19,000 $4.98
02/11/2008 6,000 $4.96
02/15/2008 4,000 $5.08
02/19/2008 2,000 $5.10
02/20/2008 2,000 $5.05
02/21/2008 14,000 $4.95
02/22/2008 1,000 $4.75
03/10/2008 99,000 $3.90
11
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER
Partners is the general partner of each of BVF and BVF2 pursuant to limited
partnership agreements which authorize Partners, among other things, to invest
the funds of BVF and BVF2 in the shares of Common Stock and other securities and
to vote, exercise or convert and dispose of such securities. Pursuant to such
limited partnership agreements, Partners is entitled to receive fees based on
assets under management and allocations based on realized and unrealized gains
on such assets. Pursuant to the operating agreement of Investments, Partners is
authorized, among other things, to invest the funds of Ziff Asset Management,
L.P., the majority member of Investments, in the shares of Common Stock and
other securities and to vote, exercise or convert and dispose of such securities
and is entitled to receive fees based on assets under management and allocations
based on realized and unrealized gains on such assets. Pursuant to an investment
management agreement with ILL10, Partners and BVF Inc. have authority, among
other things, to invest funds of ILL10 in the shares of Common Stock and other
securities and to vote, exercise or convert and dispose of such securities.
Pursuant to such investment management agreement, Partners and BVF Inc. receive
fees based on assets under management and realized and unrealized gains thereon.
BVF Inc. is the general partner of Partners and may be deemed to own
beneficially securities over which Partners exercises voting and dispositive
power.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
A Joint filing Agreement on behalf of the Reporting Persons is filed herewith as
Exhibit A.
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.
Dated: March 13, 2008
BIOTECHNOLOGY VALUE FUND, L.P.*
By: BVF Partners L.P., its general partner
By: BVF Inc., its general partner
By: /s/ MARK N. LAMPERT
---------------------------
Mark N. Lampert
President
BIOTECHNOLOGY VALUE FUND II, L.P.*
By: BVF Partners L.P., its general partner
By: BVF Inc., its general partner
By: /s/ MARK N. LAMPERT
---------------------------
Mark N. Lampert
President
12
BVF INVESTMENTS, L.L.C.*
By: BVF Partners L.P., its manager
By: BVF Inc., its general partner
By: /s/ MARK N. LAMPERT
---------------------------
Mark N. Lampert
President
INVESTMENT 10, L.L.C.*
By: BVF Partners L.P., as investment manager
By: BVF Inc., its general partner
By: /s/ MARK N. LAMPERT
---------------------------
Mark N. Lampert
President
BVF PARTNERS L.P. *
By: BVF Inc., its general partner
By: /s/ MARK N. LAMPERT
-------------------------------
Mark N. Lampert
President
BVF INC.*
By: /s/ MARK N. LAMPERT
---------------------------
Mark N. Lampert
President
*The Reporting Person disclaims beneficial ownership except to the extent of its
pecuniary interest therein.
13
Exhibit A
JOINT FILING AGREEMENT
The undersigned agree that this schedule 13D dated March 13, 2008, relating to
the common Stock of ArQule, Inc. shall be filed on behalf of the undersigned.
BIOTECHNOLOGY VALUE FUND, L.P.
By: BVF Partners L.P., its general partner
By: BVF Inc., its general partner
By: /s/ MARK N. LAMPERT
---------------------------
Mark N. Lampert
President
BIOTECHNOLOGY VALUE FUND II, L.P.
By: BVF Partners L.P., its general partner
By: BVF Inc., its general partner
By: /s/ MARK N. LAMPERT
---------------------------
Mark N. Lampert
President
BVF INVESTMENTS, L.L.C.
By: BVF Partners L.P., its manager
By: BVF Inc., its general partner
By: /s/ MARK N. LAMPERT
---------------------------
Mark N. Lampert
President
INVESTMENT 10, L.L.C.
By: BVF Partners L.P., as investment manager
By: BVF Inc., its general partner
By: /s/ MARK N. LAMPERT
---------------------------
Mark N. Lampert
President
14
BVF PARTNERS L.P.
By: BVF Inc., its general partner
By: /s/ MARK N. LAMPERT
------------------------------
Mark N. Lampert
President
BVF INC.
By: /s/ MARK N. LAMPERT
------------------------------------
Mark N. Lampert
President
15