13G Filing: Biotechnology Value Fund L P and Arqule Inc (ARQL)

Includes
1,115,932 shares of Common Stock currently issuable upon the exercise of certain warrants. As of October 16, 2017, the warrant
exercise limitation described in the next sentence limits the aggregate exercise of warrants by the Reporting Persons to 1,115,932
out of the 2,439,932 shares of Common Stock underlying the warrants owned by the Reporting Persons in the aggregate. The warrants
may not be exercised if, after such exercise, the Reporting Persons would beneficially own in the aggregate, as determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, more than 19.9% of the number of shares of Common Stock
then issued and outstanding. In providing beneficial ownership described herein, the Reporting Persons have assumed 1,115,932
of the 1,201,053 warrants owned by BVF would be exercised. BVF2 holds warrants to purchase 823,231 additional shares which are
excluded herein as a result of the 19.9% limitation. BVTOS holds warrants to purchase 199,687 additional shares which are excluded
herein as a result of the 19.9% limitation. The Reporting Persons through certain managed accounts holds warrants to purchase
215,961 additional shares which are excluded herein as a result of the 19.9% limitation. See Item 4(a) for a full description
of the Reporting Person’s beneficial ownership.