Shares of Threshold Pharmaceuticals Inc (NASDAQ:THLD) fell off a cliff last December after its lead product candidate evofosfamide (formerly TH-302) failed two Phase 3 studies, MAESTRO and TH-CR-406/SARC021. As a result, its co-developer Merck KGaA, cancelled commercialization plans for evofosfamide, which is an investigational hypoxia-activated prodrug which is activated under tumor hypoxic (low oxygen) conditions which typify many cancers. Low oxygen levels in solid tumors are due to insufficient blood supply as a result of abnormal vasculature.
But now, after a solid earnings report, THLD is starting to make a comeback. While shares are still a long way off from where they were back last year, we think not all hope is lost for shareholders and are quite optimistic about the company’s prospects going forward. The highlight of the report was what CEO Dr. Barry Selick had to say.
“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. 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.”
Getting the rights to evofosfamide back from Merck is a positive. The bigger news thou is that the Phase 3 MAESTRO trial showed positive results in the treatment of pancreatic cancer. 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. 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).
The 116 patients from the Japan 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.
While the news in December was a shocker, it has allowed the company to refocus. THLD has suspended the development of evofosfamide in various other tumor types. The company is now focused exclusively on its ongoing clinical development collaborations investigating evofosfamide in patients with pancreatic neuroendocrine tumors (pNET), recurrent glioblastoma (GBM) and hepatocellular carcinoma (HCC).
Besides evofosfamide, THLD is also making progress with its two Phase 2 proof-of-concept trials of tarloxotinib. Tarloxotinib is a prodrug designed to selectively release a covalent (irreversible) EGFR tyrosine kinase inhibitor under severe hypoxia, a feature of many solid tumors. We expect preliminary results by the middle of this year.
Currently trading with a market cap of just $38 million, THLD ended 2015 with $48 million cash in the bank. This is $10 million more than its current market cap and the company has no debt. Last year, THLD reduced its workforce by approximately two-thirds, resulting in between 20-25 remaining employees. This will go a long way in reducing the company’s burn rate and conserve cash. Overall, we think the worst is behind THLD and expect better days ahead for the company and its shareholders. We will be updating Insider Financial as soon as we know more. For continuing coverage on THLD and our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!
Disclosure: We have no position in THLD and have not been compensated for this article.