Closing ARQL (Arqule) underperform
The E2F-1 inhibitor program still looks really bad to me, but it doesn't appear that the company is going to voluntarily discontinue it in the near future as I predicted. Instead, they're rolling out a new E2F-1 (ARQ761) which is simply a pro-drug that reverts to ARQ501 in plasma. My assumption has been that ARQ501 has weak efficacy, explaining its disappearance from the quarterly statements. So ARQ761 seems like a placeholder to maintain share price until better data comes out for ARQ197. However, I suspect that Roche will force the issue by dropping the E2F-1 collaboration at the end of 2008 when the current agreement lapses, rather than picking up the 2009 extension. Regardless, the gap down I was expecting from the loss of the E2F-1 program won't happen this year, and the share price has shown significant support at the current level. In fact, I'm going to reverse and take a hopefully brief bullish position for a recovery to the 4.2 range before positioning myself for the inevitable E2F-1 related plunge.