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Merck, Threshold Shake Hands in $550M Collaboration
By Catherine Shaffer
Staff Writer
Stock in Threshold Pharmaceuticals Inc. surged more than 131 percent on news that it signed a deal with Merck KGaA valued at up to $550 million to develop and commercialize Threshold's cancer candidate, TH-302.
Shares of the South San Francisco-based firm (NASDAQ: THLD) gained $1.70 to close Friday at $2.99.
"We're ecstatic to have Merck as a partner," Threshold CEO Barry Selick told BioWorld Today. "They are a very highly regarded validating partner for a small company like Threshold. They bring a lot to the table with respect not only to financial resources, but clinical development expertise and commercialization capability."
Under the terms of the agreement, Darmstadt, Germany-based Merck will pay $25 million up front, with a potential $280 million in regulatory and development milestones, and up to another $245 million in sales-based milestones.
Selick credits Threshold's vice president of corporate development, Eric Malek, with doing most of the "heavy lifting" on the deal with Merck, which gives primary responsibility for development of TH-302 in soft-tissue sarcoma to Threshold. The two companies will work together to jointly develop it in all other indications. Merck supplies 70 percent of worldwide development costs for the drug.
Upon FDA approval, Merck will be responsible for commercialization, with Threshold eligible for tiered, double-digit royalties on sales. Threshold retains a co-promotion option in the U.S. It also retains an option to co-commercialize drug, for an opportunity to participate in up to 50 percent of profits in the U.S.
TH-302 is a hypoxia-targeted prodrug with a DNA alkylator group that Selick describes as a "warhead." In low oxygen compartments within solid tumors, the chemical group shielding the DNA alkylator is removed and the warhead is released to kill cells, leading to tumor shrinkage.
The drug entered clinical trials in 2007. Selick said Threshold has treated more than 550 patients with it to date, and that it has shown activity against a variety of tumor types, alone and in combination.
The company is carrying out a Phase III trial of TH-302 in soft-tissue sarcoma in combination with doxorubicin, compared to doxorubicin alone, with a primary efficacy endpoint of overall survival. The FDA issued a special protocol assessment for the trial, and it is being run in partnership with the Sarcoma Alliance for Research through Collaboration. (See BioWorld Today, Oct. 3, 2011.)
In a Phase I/II trial of TH-302 in soft-tissue sarcoma in 60 patients, the results were: one complete response (2 percent), 18 partial responses (30 percent) and 32 patients with stable disease (53 percent). Median progression-free survival was 6.4 months and median overall survival was 16.1 months.
Threshold also reported promising Phase I results in advanced leukemia. In 32 patients with acute myelogenous leukemia or acute lymphoblastic leukemia, TH-302 showed stabilization or reduction of bone marrow and peripheral blast counts in multiple subjects. There was also one complete response.
An ongoing Phase IIb trial, due to report top-line data at the end of February, is generating a great deal of interest. It took longer than expected to reach the requisite 144 progression-free survival events to trigger primary analysis, but that's good news because it implies that progression-free survival is longer than expected, too.
It historically has been difficult to treat cells in hypoxic compartments. And it's the cells in those compartments that give rise to invasive metastatic phenotypes that lead to treatment failure.
"Most, if not all, solid tumors have regions of hypoxia," Selick said. "Hypoxia makes treatment with conventional chemotherapy and radiation very difficult."
Even radiation therapy is not very effective in cells with low oxygen levels, because it requires the generation of free radicals, and oxygen is a necessary part of that chemistry.
Many cancer biologists believe that cancer stem cells evade treatment by hiding within those hypoxic niches within tumors.
TH-302 is actually a second-generation hypoxia-targeted molecule. The original molecule in the class, tirapazamine, was invented by Stanford University's Martin Brown. Stanford licensed the drug to Sanofi SA, but that drug failed in a Phase III trial in advanced head and neck cancer, due to a lack of evidence of efficacy.
Threshold's vice president of clinical operations and biostatistics, Mark Matteucci, studied tirapazamine and identified several significant liabilities in that molecule that may have limited its effectiveness. Those liabilities were addressed in the design of TH-302.
Thus far, TH-302 has outperformed tirapazamine in clinical trials, leading to a reasonable hope that it will be able to get to the finish line in sarcoma.
According to Selick, no new agents have been approved for soft-tissue sarcoma since 1987. Threshold believes that TH-302 and doxorubicin in combination will be a particularly powerful treatment combination because it will target both vascular and hypoxic components of the tumor.