Small-Cap Stock Spotlight: Threshold Pharmaceuticals Inc. (THLD) Spikes on Multi-Million Cancer Drug Pact with Merck KGaA
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    Small-Cap Stock Spotlight: Threshold Pharmaceuticals Inc. (THLD) Sets a New 52-Week High

    Small-Cap Stock Spotlight: Threshold Pharmaceuticals Inc. (THLD) Sets a New 52-Week High

    Shares of Threshold Pharmaceuticals Inc. (NASDAQ: THLD) powered to a new 52-week high of $4.08 on Monday, extending Friday’s gains when investors applauded the news that the company has partnered with German drug maker Merck KGaA to develop Threshold’s cancer-fighting agent TH-302. The drug is currently in a global Phase III clinical trial in patients with soft tissue sarcoma, a randomized Phase II trial in patients with advanced pancreatic cancer from which top-line results are expected this month, as well as additional clinical studies in other solid tumors and hematological malignancies.Merck KGaA will pay Threshold $25 million upfront under the co-development and commercialization deal, of which Threshold could also receive up to $35 million in development milestones this year and $20 million with positive results from its randomized Phase II trial in pancreatic cancer.

    “We are excited by the new resources that our partnership is going to bring to the development of TH-302 and the expertise in clinical development and commercialization that Merck will contribute to this program,” Barry Selick, president and CEO of Threshold, commented in the release.  “This collaboration provides Threshold a strong and committed partner with a shared vision for TH-302.”

    Threshold, based out of Red Wood City, CA, will have primary responsibility for development of TH-302 in the soft tissue sarcoma indication in the United States. It and Merck will jointly develop TH-302 in all other cancer indications being pursued, with Merck KGaA paying 70% of worldwide development costs for the drug.

    Merck KGaA will commercialize TH-302 in the United States, with Threshold receiving a tiered, double-digit royalty on sales.  Threshold, however, retains the option to co-promote and co-commercialize the drug, allowing the company to participate in up to 50% of the profits in the United States based on certain revenue tiers.

    Outside of the U.S., Merck KGaA will be solely responsible for the commercialization of the drug, with Threshold receiving a tiered, double-digit royalty on sales in these territories.

    In total, Threshold could receive up to $525 million in milestone payments, comprised of $280 million in regulatory and development milestones and $245 million in sales-based milestones.

    TH-302 is a hypoxia-targeted drug that is thought to be activated under tumor hypoxic conditions, a hallmark for many cancer indications.To date, the drug has been investigated in over 550 patients in Phase I/II clinical trials in a broad spectrum of tumor types, both as a monotherapy and in combination with chemotherapy treatments and other targeted cancer drugs.

    Shares of THLD added $0.39, or 13.04%, to close Monday’s trade at $3.38.  Over 19.72 million shares exchanged hands during the session, topping the 10-day average of 1.81 million.

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