-- Rights to Evofosfamide and Relevant Merck
KGaA, Darmstadt, Germany Technology Returned to Threshold; Merck
KGaA, Darmstadt, Germany Retains Certain Royalty and Milestone
Payments Dependent Upon Successful Development and
Commercialization of Evofosfamide --
Threshold Pharmaceuticals, Inc.
(Nasdaq:THLD), a clinical-stage biopharmaceutical company
developing novel therapies for cancer, today reported financial
results for the fourth quarter and year ended December 31, 2015 and
provided an update on the Company's corporate and clinical
development activities.
“A key focus for Threshold has been to analyze all of the
evofosfamide clinical data to determine whether there might be a
path forward in patients with pancreatic cancer as well as other
cancer indications,” said Barry Selick, Ph.D., Chief Executive
Officer of Threshold. “We have finalized an agreement with Merck
KGaA, Darmstadt, Germany to license back all rights to evofosfamide
and, based upon a detailed ongoing analysis of the data from the
Phase 3 MAESTRO trial, we have seen a meaningful improvement in
median overall survival and other secondary efficacy endpoints in
the 116 Japanese patients with pancreatic cancer who were enrolled
in that trial.”
Corporate HighlightsOn March 10, 2016, the
Company terminated the global license and co-development agreement
(License Agreement) with Merck KGaA, Darmstadt, Germany, originally
entered into February 2, 2012 for evofosfamide, Threshold’s
investigational hypoxia-activated prodrug of a cytotoxic
DNA-alkylating agent. Under the terms of the Termination Agreement,
all rights to evofosfamide under the original agreement were
returned to Threshold, as well as all rights to Merck KGaA,
Darmstadt, Germany technology developed under the License
Agreement. The Termination Agreement provides tiered royalties on
sales and milestone payments to Merck KGaA, Darmstadt, Germany
contingent upon the future successful development and
commercialization of evofosfamide.
In January 2016 at the American Society of Clinical Oncology
2016 Gastrointestinal Cancers Symposium (ASCO GI), Merck KGaA,
Darmstadt, Germany’s analysis of the results from the Phase 3
MAESTRO trial were presented. While the primary efficacy endpoint
of overall survival narrowly missed statistical significance,
secondary efficacy endpoints of progression-free survival and
confirmed overall response rates demonstrated significant
improvements for patients treated with gemcitabine plus
evofosfamide (the “treatment arm”) compared to gemcitabine plus
placebo (the “control arm”). No new safety findings were identified
in the MAESTRO study and the safety profile was consistent with
that previously reported in other studies of evofosfamide plus
gemcitabine.
As previously reported, a meaningful improvement in overall
survival was reported for the subgroup of 123 Asian patients
enrolled at Japanese and South Korean sites in which the risk of
death was reduced by 42 percent for patients on the treatment arm
compared to patients on the control arm with an associated hazard
ratio of 0.58 (95% CI: 0.36 – 0.93).
Of particular note, based upon Merck KGaA, Darmstadt, Germany’s
MAESTRO data, the Company reported that the 116 patients from Japan
from the treatment arm had a median overall survival of 13.6 months
compared to 9.1 months for those patients in the control arm. The
patients from Japan also had significant improvements in
progression free survival, objective response rates, and reductions
in the pancreatic cancer biomarker, CA19-9.
The Company is conducting additional analyses of data from the
MAESTRO study in pancreatic cancer and intends to discuss potential
registration pathways with health regulatory authorities. While the
Company has ongoing clinical development collaborations
investigating evofosfamide in patients with pancreatic
neuroendocrine tumors (pNET), recurrent glioblastoma (GBM) and
hepatocellular carcinoma (HCC), it has suspended the development of
evofosfamide in various other tumor types.
“The detailed analysis of the MASTRO data combined with our
previous Phase 2 experience strongly suggests that evofosfamide
plus gemcitabine is an active regimen in patients with pancreatic
cancer, most notably in the Japanese patients, and we look forward
to being able to share our future plans based on these data,” added
Dr. Selick. “Beyond evofosfamide, we continue to make progress with
our two Phase 2 proof-of-concept trials of tarloxotinib, our
hypoxia-activated EGFR tyrosine kinase inhibitor, and plan to share
preliminary results of those clinical trials in mid-2016.”
Fourth Quarter and Year End 2015 Financial
Results
- As of December 31, 2015 and 2014, Threshold had $48.7 million
and $58.6 million in cash, cash equivalents and marketable
securities, respectively. The net decrease of $9.9 million in cash,
cash equivalents and marketable securities during 2015 is primarily
due to the Company's operating cash requirements for 2015,
partially offset by the $28.1 million in net proceeds from our
public offering in February 2015 and $0.7 million in cash proceeds
from the exercise of stock options and purchase rights related to
our stock-based equity incentive plans.
- Revenue for the fourth quarter and year ended December 31, 2015
was $65.9 million and $76.9 million, respectively, compared to $3.7
million and $14.7 million for the same periods in 2014,
respectively. Revenue for the years ended December 31, 2015 and
December 31, 2014, related to the amortization of the aggregate of
$110 million in upfront and milestone payments earned in 2013 and
2012 from the Company’s collaboration with Merck KGaA, Darmstadt,
Germany. The revenue from the upfront payment and milestone
payments earned under the agreement was previously being amortized
over the relevant performance period, rather than being immediately
recognized when the upfront payment and milestone were earned or
received. As a result of Merck KGaA, Darmstadt, Germany’s and our
decision to cease further joint development of evofosfamide in
December 2015, we immediately recognized $65.9 million of the
remaining deferred revenue into revenue during the quarter ending
December 31, 2015. Also as a result of the termination of the
agreement, we are no longer eligible to receive any further
milestone payments from Merck KGaA, Darmstadt, Germany.
- Research and development expenses were $11.4 million for the
fourth quarter ended December 31, 2015, compared to $8.6 million
for the same period in 2014. The increase in research and
development expenses, net of reimbursement for Merck KGaA,
Darmstadt, Germany’s 70% share of total development expenses for
evofosfamide, was due primarily to a $1.2 million increase in
employee related expenses, including a $0.3 million increase in
non-cash stock-based compensation expense and a $1.6 million
increase in clinical development expenses and consulting expenses.
Research and development expenses were $40.3 million for 2015,
compared to $35.8 million in 2014. The increase in research and
development expenses, net of reimbursement for Merck KGaA,
Darmstadt, Germany’s 70% share of total development expenses for
evofosfamide, was due primarily to a $2.1 million increase in
clinical development expenses and an increase of $2.7 million in
employee related expenses, including a $1.0 million increase in
non-cash stock-based compensation expense. Partially offsetting
these increases was a $0.4 million decrease in consulting
expenses.
- General and administrative expenses were $2.2 million for the
fourth quarter of 2015 versus $2.6 million for the fourth quarter
of 2014. The decrease in general and administrative expenses was
due primarily to a $0.2 million decrease in consulting expenses and
a $0.2 million decrease in employee related expenses. General and
administrative expenses were $9.7 million for 2015 versus $10.1
million for 2014. The decrease in general and administrative
expenses was due primarily to a $0.4 million decrease in consulting
expenses.
- Non-cash stock-based compensation expense included in total
operating expenses was $2.0 million for the fourth quarter of 2015
versus $1.6 million for the fourth quarter of 2014. Non-cash
stock-based compensation expense included in total operating
expenses was $6.8 million for 2015 versus $5.5 million for 2014.
The increase in stock-based compensation expense was due to the
amortization of a greater number of options with higher fair
values.
- Net income for the fourth quarter of 2015 was $69.7 million
compared to a net loss of $6.0 million for the fourth quarter of
2014. Included in the net income for the fourth quarter of 2015 was
an operating income of $52.3 million and non-cash income of $17.4
million compared to an operating loss of $7.6 million and non-cash
income of $1.6 million in the fourth quarter of 2014. The net
income for 2015 was $43.8 million compared to a net loss of $21.6
million in 2014. Included in the net income for 2015 was an
operating income of $26.9 million and non-cash income of $16.8
million compared to an operating loss of $31.3 million and non-cash
income of $9.3 million in 2014. The non-cash income or expense is
related to changes in the fair value of the Company’s outstanding
and exercised warrants that was classified as other income
(expense).
About EvofosfamideEvofosfamide (previously
known as TH-302) is an investigational hypoxia-activated prodrug of
a bis-alkylating agent that is preferentially activated under
severe hypoxic tumor conditions, a feature of many solid tumors.
Areas of low oxygen levels (hypoxia) in solid tumors are due to
insufficient blood vessel supply. Similarly, the bone marrow of
patients with hematological malignancies has also been shown, in
some cases, to be severely hypoxic. On December 6, 2015, the
Company announced the outcomes of two Phase 3 studies (MAESTRO and
TH-CR-406/SARC021) of evofosfamide stating that neither study met
its primary endpoint. The related news release can be accessed on
the Company's website.
About Tarloxotinib BromideTarloxotinib bromide
(the proposed International Nonproprietary Name, previously known
as TH-4000), or "tarloxotinib", is a prodrug designed to
selectively release a covalent (irreversible) EGFR tyrosine kinase
inhibitor under severe hypoxia, a feature of many solid tumors.
Accordingly, tarloxotinib has the potential to effectively shut
down aberrant EGFR signaling in a tumor-selective manner, thus
potentially avoiding or reducing the systemic side effects
associated with currently available EGFR tyrosine kinase
inhibitors. Tarloxotinib is currently being evaluated in two Phase
2 proof-of-concept trials: one for the treatment of patients with
mutant EGFR-positive, T790M-negative advanced non-small cell lung
cancer progressing on an EGFR tyrosine kinase inhibitor, and the
other for patients with recurrent or metastatic squamous cell
carcinomas of the head and neck or skin. Threshold licensed
exclusive worldwide rights to tarloxotinib from the University of
Auckland, New Zealand, in September 2014.
About Threshold Pharmaceuticals Threshold is a
clinical-stage biopharmaceutical company focused on the discovery
and development of drugs and diagnostic agents targeting tumor
hypoxia, the low oxygen condition found in microenvironments of
most solid tumors as well as the bone marrows of some hematologic
malignancies. This approach offers broad potential to treat a
variety of cancers. By selectively targeting tumor cells, we are
building a pipeline of drugs that hold promise to be more effective
and less toxic to healthy tissues than conventional anticancer
drugs. For additional information, please visit the Company’s
website.
Forward-Looking StatementsExcept for statements
of historical fact, the statements in this press release are
forward-looking statements, including all statements regarding
anticipated development activities and clinical development outlook
related to company-sponsored clinical trials for evofosfamide and
tarloxotinib, including establishing collaborations for our product
candidates, the planned analyses of evofosfamide and tarloxotinib
clinical trials, and the timing thereof; the expected efficient
execution of, and the anticipated timing of protocol-specified
events and the availability of the results of the primary efficacy
analyses from the evofosfamide and tarloxotinib clinical trials;
the potential submission of marketing applications for
evofosfamide; the timing of the Phase 2 proof-of-concept study of
tarloxotinib; potential development opportunities for evofosfamide,
including the potential for Threshold’s evofosfamide Phase 3
clinical trial to support registration for the treatment of
patients with advanced pancreatic cancer, and other cancers; and
the therapeutic potential of tarloxotinib. These statements involve
risks and uncertainties that can cause actual results to differ
materially from those in such forward-looking statements. Potential
risks and uncertainties include, but are not limited to: the
ability of Threshold to establish collaborations for our product
candidates or otherwise raise substantial additional capital;
Threshold's dependence on the transfer of development activities
from Merck KGaA, Darmstadt, Germany, including its dependence on
decisions by Merck KGaA, Darmstadt, Germany regarding the amount
and timing of resource expenditures for the transfer of
evofosfamide development activities and the risk of potential
disagreements with Merck KGaA, Darmstadt, Germany, regarding the
time and expense required to transfer clinical trials and analyze
data; the uncertainty of clinical success and regulatory approval;
the risk that later analysis may not confirm the results of earlier
analysis; the risks that the design of, or data collected from, the
Phase 3 clinical trials of evofosfamide may be inadequate to
demonstrate safety and efficacy, or otherwise may be insufficient
to support any marketing authorization submissions and/or
regulatory approvals, and that despite the potential benefits of
the SPA agreements with the FDA, significant uncertainty remains
regarding the regulatory approval process for evofosfamide and that
evofosfamide may not receive any marketing approvals in a timely
manner or at all; issues arising in the regulatory process and the
results of such clinical trials (including product safety issues
and efficacy results); dependence of Threshold on single source
suppliers, including the risk that these single source suppliers
may be unable to meet clinical supply demands for evofosfamide
and/or tarloxotinib which could significantly delay the development
of evofosfamide and/or tarloxotinib; Threshold’s ability to enroll
or complete tarloxotinib clinical trials, including the ability of
Threshold to complete the ongoing clinical trials in the expected
timeframe or at all; the risks that Threshold’s evaluation of
tarloxotinib is at an early stage and it is possible that
tarloxotinib may not be found to be safe or effective in the Phase
2 proof-of-concept study of tarloxotinib or in any other studies of
tarloxotinib that Threshold may conduct, and that Threshold may
otherwise fail to realize the anticipated benefits of its licensing
of this product candidate; and Threshold’s need for and the
availability of resources to develop evofosfamide and tarloxotinib
and to support Threshold’s operations. Further information
regarding these and other risks is included under the heading "Risk
Factors" in Threshold's Annual Report on Form 10-K, which has been
filed with the Securities and Exchange Commission on March 10, 2016
and is available from the SEC's website (www.sec.gov) and on our
website (www.thresholdpharm.com) under the heading "Investors". We
undertake no duty to update any forward-looking statement made in
this news release.
THRESHOLD PHARMACEUTICALS, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(in thousands, except per share
amounts) |
(Unaudited) |
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
|
2015 |
|
|
|
2014 |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
65,874 |
|
|
$ |
3,681 |
|
|
$ |
76,915 |
|
|
$ |
14,722 |
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
|
Research and
development |
|
11,369 |
|
|
|
8,609 |
|
|
|
40,271 |
|
|
|
35,832 |
|
General and
administrative |
|
2,248 |
|
|
|
2,623 |
|
|
|
9,716 |
|
|
|
10,141 |
|
Total Operating Expenses |
|
13,617 |
|
|
|
11,232 |
|
|
|
49,987 |
|
|
|
45,973 |
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
|
52,257 |
|
|
|
(7,551 |
) |
|
|
26,928 |
|
|
|
(31,251 |
) |
|
|
|
|
|
|
|
|
Interest income
(expense), net |
|
26 |
|
|
|
24 |
|
|
|
125 |
|
|
|
121 |
|
Other income
(expense) (1) |
|
17,430 |
|
|
|
1,563 |
|
|
|
16,769 |
|
|
|
9,344 |
|
Income (loss) before provision for taxes |
|
69,713 |
|
|
|
(5,964 |
) |
|
|
43,822 |
|
|
|
(21,786 |
) |
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(202 |
) |
Net
income (loss) |
$ |
69,713 |
|
|
$ |
(5,964 |
) |
|
$ |
43,822 |
|
|
$ |
(21,584 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) per common share |
|
Basic |
$ |
0.98 |
|
|
$ |
(0.09 |
) |
|
$ |
0.62 |
|
|
$ |
(0.36 |
) |
Diluted |
$ |
0.86 |
|
|
$ |
(0.12 |
) |
|
$ |
0.54 |
|
|
$ |
(0.49 |
) |
|
|
|
|
|
|
|
|
Weighted-average shares used in per common |
|
|
|
|
|
|
|
share calculation: |
|
Basic |
|
71,457 |
|
|
|
62,814 |
|
|
|
70,242 |
|
|
|
60,335 |
|
Diluted |
|
73,686 |
|
|
|
63,544 |
|
|
|
73,483 |
|
|
|
63,386 |
|
|
|
|
|
|
|
|
(1) Noncash income (expense) related to change in the fair
value of the Company's outstanding and exercised |
warrants, classified as other income (expense). |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THRESHOLD PHARMACEUTICALS, INC. |
|
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
December 31,2015 |
|
|
|
December 31,2014 (1) |
|
|
|
|
(unaudited) |
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and |
|
|
|
|
marketable securities |
$ |
48,680 |
|
|
$ |
58,600 |
|
|
Collaboration Receivable |
|
1,891 |
|
|
|
7,248 |
|
|
Prepaid expenses and other current assets |
|
2,599 |
|
|
|
832 |
|
|
Property and equipment, net |
|
333 |
|
|
|
557 |
|
|
Other assets |
|
166 |
|
|
|
1,159 |
|
|
Total
assets |
$ |
53,669 |
|
|
$ |
68,396 |
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity |
|
|
|
|
|
|
|
|
|
|
Total current liabilities (2) |
$ |
10,828 |
|
|
$ |
25,974 |
|
|
Deferred Revenue |
|
- |
|
|
|
62,194 |
|
|
Long-term liabilities (3) |
|
1,995 |
|
|
|
4,204 |
|
|
Stockholders' equity (deficit) |
|
40,846 |
|
|
|
(23,976 |
) |
|
Total liabilities and stockholders' equity (deficit) |
$ |
53,669 |
|
|
$ |
68,396 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Derived from audited financial statements |
|
(2) Amount includes current portion of deferred
revenue of $0 million and $14.7 million as of December 31, 2015 and
2014, respectively. |
|
(3) Includes as of December 31, 2015 and 2014, $1.9
million and $4.0 million of warrant liability, respectively. |
|
Contact:
Denise Powell
denise@redhousecomms.com
510.703.9491
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