By Matthew Willett

ArQule Inc. filed Monday with the Securities and Exchange Commission for the sale of 2.5 million shares of common stock for estimated net proceeds of up to $50.925 million.

That funding is earmarked for general corporate purposes, including operating expenses and technology acquisition.

According to the Woburn, Mass., company's SEC filing, ArQule will have 16.12 million shares outstanding after the offering.

ArQule's stock (NASDAQ:ARQL) rose $2.19 Monday, or 11 percent, closing at $22.56.

ArQule, founded in 1993, had $46.7 million cash and cash equivalents as of Sept. 30.

Managing the offering are UBS Warburg LLC, CIBC World Markets Corp., Gerard Klauer Mattison & Co. LLC and Legg Mason Wood Walker Inc.

ArQule focuses on synthesized compound arrays for use in lead compound generation and optimization. The company, which also provides research and development services, has established a number of joint ventures for drug discovery, and it pursues a pipeline of internal development.

The company uses its proprietary Parallel Track Drug Discovery program, which integrates high-throughput and automated small-molecule synthesis technologies.

The core of its technology is the AMAP Chemistry Operating System, a highly automated and integrated series of chemistry workstations and processes designed to enable rapid, parallel generation of thousands of novel, pure, diverse and spatially addressed arrays of compounds.

ArQule collaborates with a number of pharmaceutical companies, providing mapping arrays and directed array libraries, including Pfizer Inc., of New York; Bayer AG, of Leverkusen, Germany; Wyeth-Ayerst Laboratories, a division of American Home Products Corp., of Madison, N.J.; and Abbott Laboratories, of Abbot Park, Ill.

In the biotech sector, ArQule collaborates for drug discovery with Genome Therapeutics Inc., of Waltham, Mass., in a deal that centers on anti-infectives using compounds derived from GTI's PathoGenome Database. ArQule will receive an equal share of any revenue generated through that deal, which was entered into last week.

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