Threshold Pharmaceuticals Reports Second Quarter Financial Results
August 01 2016 - 8:00AM
-- Presented additional subset data at ASCO from
Phase 3 MAESTRO trial of evofosfamide in pancreatic cancer;
meaningful improvement in overall survival in patients from Asia
--
Threshold Pharmaceuticals, Inc. (Nasdaq:THLD), a clinical-stage
biopharmaceutical company developing novel therapies for cancer,
today reported financial results for the second quarter ended June
30, 2016 and provided an update on the Company's corporate and
clinical development activities.
“Encouraged by the MAESTRO data presented recently at ASCO that
demonstrated meaningful improvement in overall survival in the
subgroup of patients from Japan and South Korea, we are pursuing a
registration strategy for Japan,” said Barry Selick, Ph.D., Chief
Executive Officer of Threshold. “We have also been encouraged by
the translational data evaluating the role of hypoxia in mediating
treatment resistance to cancer immunotherapy conducted by
collaborators at the MD Anderson Cancer Center and to initiating a
clinical trial evaluating evofosfamide in combination with
checkpoint blockade.”
Recent HighlightsEvofosfamide
– The Company’s lead product candidate is an investigational
hypoxia-activated prodrug that is designed to be activated under
tumor hypoxic conditions, a hallmark of many cancers.
- Additional data analyses from the MAESTRO Phase 3 trial, which
were presented at the American Society of Clinical
Oncology (ASCO) Annual Meeting recently, reported on the
subgroup of 123 Asian patients enrolled at Japanese and South
Korean sites in which the risk of death was reduced by 48 percent
for patients on the treatment arm compared to patients on the
control arm with an associated stratified hazard ratio of 0.52 (95%
CI: 0.32 - 0.85);
- The Company is evaluating the feasibility of submitting a New
Drug Application (NDA) for registration with the Pharmaceuticals
and Medical Devices Agency, or PMDA, in Japan based on the results
seen in the Japanese sub-population;
- Clinical development collaborations investigating evofosfamide
in patients with pancreatic neuroendocrine tumors (pNET), recurrent
glioblastoma (GBM) and hepatocellular carcinoma (HCC) remain
ongoing; and
- A recent presentation by one of the Company’s collaborators
from the MD Anderson Cancer Center highlighted the promise of
evofosfamide in combination with “checkpoint antibodies” to improve
the efficacy of this class of potent anti-cancer therapies. A
clinical trial evaluating evofosfamide plus ipilimumab to treat a
variety of solid tumors is planned.
Tarloxotinib – Beyond the evofosfamide program,
the Company is pursuing the Phase 2 proof of concept studies with
tarloxotinib, a hypoxia-activated epidermal growth factor receptor
(EGFR) tyrosine kinase inhibitor (TKI), which is designed to
selectively release an irreversible EGFR-TKI in hypoxic tumors.
- Investigations continue in two proof-of-concept, Phase 2
clinical trials in patients with advanced non-small cell lung
cancer (NSCLC) and patients with metastatic squamous cell carcinoma
of the head and neck and skin; the designs of both trials
necessitate a minimum response rate for study continuation. When
the specified target numbers of patients have been assessed, the
Company plans to report the preliminary results; this is estimated
to occur in the third quarter of 2016.
Second Quarter 2016 Financial Results
- Cash, cash equivalents and marketable securities totaled $33.6
million at June 30, 2016 compared to $38.0 million at March 31,
2016; the net decrease of $4.4 million was a result of operating
cash requirements for the quarter ended June 30, 2016. With the
previously announced decision to cease joint development of
evofosfamide under the Company’s former collaboration with Merck
KGaA and the workforce reduction, the Company continues to expect
its operating cash requirements to be lower for the second half of
fiscal year 2016 compared to the first half of 2016.
- No revenue was recognized in the second quarter ended June 30,
2016 compared to $3.7 million for the same period of 2015. Revenue
for the quarter ended June 30, 2015 related to the amortization of
the aggregate of $110 million in upfront and milestone payments
received from the Company’s former collaboration with Merck KGaA,
Darmstadt, Germany. The revenue from the upfront payment and
milestone payments received under the agreement were previously
being amortized over the relevant performance period, rather than
being immediately recognized when the upfront payment and
milestones were earned or received. As a result of Merck KGaA,
Darmstadt, Germany's and the Company’s decision to cease further
joint development of evofosfamide in December 2015, the Company
immediately recognized all of the remaining deferred revenue into
revenue during the quarter ending December 31, 2015. Also as
a result of the termination of the agreement, the Company is no
longer eligible to receive any further milestone payments from
Merck KGaA, Darmstadt, Germany.
- Research and development expenses were $4.0 million for the
second quarter ended June 30, 2016, compared to $10.1 million for
the same period in 2015. The decrease in research and development
expenses, net of reimbursement for Merck KGaA, Darmstadt, Germany’s
70 percent share of total eligible collaboration expenses for
evofosfamide, was due primarily to a $3.6 million decrease in
employee related expenses, including a $0.9 million decrease in
non-cash stock-based compensation expense and a $2.5 million
decrease in clinical development expenses and consulting expenses.
The Company expects research and development expenses to continue
to decline in 2016 as result of the decision to cease further joint
development of evofosfamide under the Company’s former
collaboration with Merck KGaA and the workforce reduction.
- General and administrative expenses were $1.9 million for the
second quarter ended June 30, 2016 compared to $2.5 million for the
same period in 2015. The decrease in general and administrative
expenses was due primarily to a $0.5 million decrease in employee
related expenses and a $0.1 million decrease in consulting
expenses.
- Non-cash stock-based compensation expense included in total
operating expenses was $0.8 million for the second quarter of 2016
compared to $1.9 million for same period in 2015. The decrease in
stock-based compensation expense was due to the amortization of a
smaller number of options with lower fair values.
- Net loss for the second quarter of 2016 was $6.9 million
compared to $8.3 million for the same period in 2015. Included in
the net loss for the second quarter of 2016 was an operating loss
of $5.9 million and non-cash expense of $1.0 million compared to an
operating loss of $8.9 million and non-cash income of $0.6 million
for the second quarter of 2015. 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.
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
outlooks related to company-sponsored clinical trials for
evofosfamide and tarloxotinib, including 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 in Japan in view that the FDA recently considered the
MAESTRO data insufficient to support registration in the U.S., the
varying interpretations of the MAESTRO data which could prevent
registration; and even if approved, the reduced commercial
potential of evofosfamide, if only approved in Japan; the timing of
the Phase 2 proof of concept study of tarloxotinib, its therapeutic
potential; and Threshold’s ability to advance development of
evofosfamide and tarloxotinib without establishing new
collaborations for our product candidates and otherwise raise
substantial additional capital. 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 and even if we are
successful in raising the additional capital necessary, Threshold’s
ability to advance the development of its product candidates;
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, 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; the amount and timing of licensing fees, milestone
payments and royalty payments that we are obligated to pay; 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 was 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 |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
- |
|
|
$ |
3,680 |
|
|
$ |
- |
|
|
$ |
7,361 |
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
|
Research and development |
|
4,016 |
|
|
|
10,141 |
|
|
|
10,021 |
|
|
|
20,821 |
|
General and administrative |
|
1,892 |
|
|
|
2,480 |
|
|
|
4,141 |
|
|
|
5,096 |
|
Total Operating
Expenses |
|
5,908 |
|
|
|
12,621 |
|
|
|
14,162 |
|
|
|
25,917 |
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
(5,908 |
) |
|
|
(8,941 |
) |
|
|
(14,162 |
) |
|
|
(18,556 |
) |
|
|
|
|
|
|
|
|
Interest income (expense), net |
|
40 |
|
|
|
39 |
|
|
|
72 |
|
|
|
72 |
|
Other income (expense) (1) |
|
(996 |
) |
|
|
596 |
|
|
|
(626 |
) |
|
|
(976 |
) |
Net loss |
$ |
(6,864 |
) |
|
$ |
(8,306 |
) |
|
$ |
(14,716 |
) |
|
$ |
(19,460 |
) |
|
|
Net loss per
common share |
|
Basic |
$ |
(0.10 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.21 |
) |
|
$ |
(0.28 |
) |
Diluted |
$ |
(0.10 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.21 |
) |
|
$ |
(0.28 |
) |
|
|
|
|
|
|
|
|
Weighted-average shares used in per common |
|
|
|
|
|
|
|
share
calculation: |
|
|
|
|
|
|
|
Basic |
|
71,511 |
|
|
|
71,334 |
|
|
|
71,500 |
|
|
|
69,046 |
|
Diluted |
|
71,511 |
|
|
|
72,815 |
|
|
|
71,500 |
|
|
|
69,046 |
|
|
|
|
|
|
|
|
(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) |
|
|
|
|
|
|
|
|
|
|
|
|
June
30, 2016 (unaudited) |
|
December
31, 2015 (1) |
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Cash, cash equivalents
and |
|
|
|
marketable
securities |
$ |
33,591 |
|
|
$ |
|
48,680 |
|
|
Collaboration
Receivable |
|
921 |
|
|
|
|
1,891 |
|
|
Prepaid expenses and
other current assets |
|
1,294 |
|
|
|
|
2,599 |
|
|
Property and equipment,
net |
|
208 |
|
|
|
|
333 |
|
|
Other assets |
|
166 |
|
|
|
|
166 |
|
|
Total assets |
$ |
36,180 |
|
|
$ |
|
53,669 |
|
|
|
|
|
|
|
Liabilities and stockholders' equity |
|
|
|
|
|
|
|
|
Total current
liabilities |
$ |
5,789 |
|
|
$ |
|
10,828 |
|
|
Long-term liabilities
(2) |
|
2,577 |
|
|
|
|
1,995 |
|
|
Stockholders' equity
(deficit) |
|
27,814 |
|
|
|
|
40,846 |
|
|
Total liabilities and
stockholders' equity (deficit) |
$ |
36,180 |
|
|
$ |
|
53,669 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Derived from audited financial
statements |
(2) Includes as of June 30, 2016 and December 31,
2015, $2.5 million and $1.9 million of warrant liability,
respectively. |
|
|
|
|
Contact:
Denise Powell
denise@redhousecomms.com
510.703.9491
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