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

    Small-Cap Stock Spotlight: Threshold Pharmaceuticals Inc. (THLD) Spikes on Multi-Million Cancer Drug Pact with Merck KGaA

    Red Wood City, Calif.-based Threshold Pharmaceuticals Inc. (NASDAQ: THLD) on Friday announced a co-development and commercialization deal on its experimental cancer-fighting drug, TH-302, with Merck KGaA . The news sent shares in the company surging as much as 133% on above-average volume of over 13 million shares.

    TH-302 is a hypoxia-targeted drug that is thought to be activated under tumor hypoxic conditions, a hallmark for many cancer indications. 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 in this month, as well as additional clinical studies in other solid tumors and hematological malignancies.

    Under the deal, Darmstadt, Germany-based Merck KGaA will pay Threshold $25 million immediately. In addition, Threshold could 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.

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

    Threshold will have primary responsibility for development of TH-302 in the soft tissue sarcoma indication in the United States. The company and Merck will jointly develop TH-302 in all other cancer indications being pursued, with Merck paying 70% of worldwide development costs for the drug.

    The deal provides for Merck KGaA to 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.

    Merck KGaA will be solely responsible for the commercialization of TH-302 outside of the U.S., with Threshold receiving a tiered, double-digit royalty on sales in these territories.

    “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.”

    Shares of THLD added $1.70, or 131.8%, to close Friday’s trade at $2.99.  Shares have gained 119.9% in the last five days; 116.7% in the last month; and 69.9% year-to-date.

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