MTEM Molecular Templates Inc

EDISON EQUITY RESEARCH: THRESHOLD PHARMACEUTICALS - DISAPPOINTING PHASE III EVOFOSFAMIDE DATA

Evofosfamide has not met the primary endpoint of improving overall survival in two Phase III trials in soft tissue sarcoma (STS) and pancreatic cancer. Although some benefit was seen in pancreatic cancer, partner Merck KGaA will not file either indication with regulators and Threshold expects Merck to terminate the agreement. If this occurs, Threshold will consider all options for future evofosfamide development, which could include in combination with checkpoint inhibitors. We have placed our valuation and forecasts under review pending further updates. Threshold is now trading broadly in line with expected YE15 cash of $40-45m. THLD estimates that this should be sufficient to fund operations to end 2016, beyond initial tarloxotinib Phase II data availability, which is expected around mid-2016e.
 
Threshold Pharmaceuticals is a US oncology company focused on tumour hypoxia, a low-oxygen condition found in most solid tumours and some blood cancers. Tarloxotinib is in two Phase II trials. Future development of evofosfamide is currently under review.

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