Threshold brings on Merck KGaA as validation approaches


With a $25m upfront fee in the bank and a further $55m in potential payments available during 2012, Threshold Pharmaceuticals has much resting on the clinical success of TH-302 this year.

Licensed by Merck KGaA today, TH-302 is a targeted chemotherapy agent that is activated under tumour hypoxic conditions, areas of low oxygen levels found within many solid tumours due to insufficient blood vessel growth. Positive results are needed later this year from trials in pancreatic cancer and other malignancies not only to top up the California company’s coffers, but also to validate this mechanism of action. Big pharma attention was enough for investors for now: shares in Threshold soared 77% to $2.27 in early trade.


Merck’s decision to tranche its early milestone payments no doubt reflect TH-302’s unproven mode of action. Targeting hypoxic regions is not a new idea - Sanofi pushed an agent called tirapazimine that worked on this principle through various phase III trials without success, finally abandoning the project in 2007.

Tumour hypoxia occurs as a result of the chaotic vasculature of a tumour, and an uneven distribution of blood vessels. This leads to regions deficient in oxygen and nutrients, microclimates that contain slowly dividing cells prone to mutation. Given that most cancer-killing agents target areas of fast cell division, and many drugs do not penetrate cells far removed from the vasculature, these hypoxic zones lie at the root of resistance to traditional therapies, Threshold believes.

TH-302 is a prodrug of the DNA alkalater bromo-isophosphoramide mustard, a potent analogue of a class of drug long used as chemotherapy agents. It is inactive in normal regions – normoxia – but when in hypoxic regions the compound is reduced and regains its DNA damaging attributes.

As such, Threshold believes TH-302 can penetrate the tumour deep into the hypoxic zone where it delivers its payload, killing cells within and outside the hypoxic regions via a "bystander effect". The company reckons the drug’s biggest promise lies in combination with agents that target cells in normoxic regions, allowing cells to be killed throughout the tumour.

Glimpse of potential

Results due before the end of the month will give a glimpse of the drug’s effectiveness, from a phase II study that recruited 214 pancreatic cancer patients. The trial compared gemcitabine to gemcitabine plus TH-302 at two different doses; progression free survival is the primary endpoint.

The aggressive nature of pancreatic cancer means many novel therapies have been defeated in the past and gemcitabine, Eli Lilly’s now off-patent Gemzar, only extends life by a couple of months. Adding significant benefit would be a notable achievement.

It would also trigger a further $20m milestone payment from Merck. A further $35m in development milestones are on the cards for 2012, although the companies have not disclosed what these rest on.

A 450-patient, phase III study in soft tissue sarcoma is ongoing, but is unlikely to yield results until 2014. A phase II in high grade glioma, seeking 28 patients, is also underway, but is not due to complete until the middle of next year, according to Earlier stage testing is being undertaken in a range of solid tumours and blood cancers, including non-small cell lung, prostate, leukaemia and renal cell carcinoma, so further data is likely to emerge in the coming months.

Push forward

With such broad potential, Threshold needed to bring a bigger partner on board now to push forward full speed with TH-302’s clinical development. Merck has bought co-development and global commercialisation rights, while the smaller company has retained an option to co-promote in the US and receive 50% of the profits; otherwise it will receive double-digit royalties, in the US as elswhere.

Threshold has also retained primary responsibility for developing TH-302 in the soft tissue sarcoma indication in the US, while the two partners will jointly develop the product in all other cancer indications, with Merck picking up 70% of worldwide development costs.

Targeting chemotherapy agents is not a new idea and some success has been achieved so far with the antibody drug conjugates. Without the expensive antibody component TH-302 could represent a more cost-efficient way of targeting its payload.

But considering past failures in this space, clinical successes are needed to justify Threshold's share price jump today.

Late stage TH-302 pipeline
Indication Trial ID
Phase 3 Soft Tissue Sarcoma NCT01440088
Phase 2 Pancreatic Adenocarcinoma NCT01144455
High grade glioma NCT01403610

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