The original business model for toolkit companies had an inherent flaw: for many, it relied on milestones and future royalties - usually in the low single digits - from the successful application of the technology by partners. The model fails to provide enough money in a relevant timeframe to build sustainable growth companies.

To get outside this box, ArQule Inc. has added a technology transfer element that provides significant upfront funding and a more predictable revenue stream. The new approach is reflected in the company's first technology transfer agreement, which provides Pfizer Inc. with ARQL's underlying combinatorial chemistry technology in exchange for a revenue stream that ARQL values at up to