Threshold Pharmaceuticals Reports Fourth Quarter and Year End 2013
Financial and Operational Results
SOUTH SAN FRANCISCO, CA--(Marketwired - Mar 6, 2014) - Threshold
Pharmaceuticals, Inc. (NASDAQ: THLD), today reported financial
results for the fourth quarter and year ended December 31, 2013 and
reported on clinical development objectives for TH-302, the
Company's investigational hypoxia-targeted drug, which is currently
being evaluated in two pivotal Phase 3 clinical trials, one in
patients with advanced soft tissue sarcoma and the other in
patients with advanced pancreatic cancer. Revenue for the fourth
quarter and year ended December 31, 2013 was $3.2 million and $12.5
million, respectively. Net loss for the fourth quarter ended
December 31, 2013 was $7.6 million, which included the operating
loss of $7.8 million and non-cash income of $0.2 million related to
changes in the fair value of the Company's outstanding and
exercised warrants that was classified as other income (expense).
Net loss for the year ended December 31, 2013 was $28.4 million,
which included the operating loss of $26.0 million and non-cash
expense of $2.3 million related to changes in the fair value of the
Company's outstanding and exercised warrants. As of December 31,
2013, Threshold had $82.0 million in cash, cash equivalents and
marketable securities, with no debt outstanding. Subsequent to
December 31, 2013, Threshold received a $12.5 million milestone
payment, which was earned during the fourth quarter of 2013, under
its global license and co-development agreement with Merck KGaA,
Darmstadt, Germany. The agreement includes an option for Threshold
to co-commercialize TH-302 in the U.S.
"We began 2014 with the first pivotal trial of TH-302 in
advanced soft tissue sarcoma fully enrolled, the second pivotal
trial in advanced pancreatic cancer being conducted by our partner
Merck KGaA well underway, and a third registration program in
another solid tumor type expected to commence in the coming
months," said Barry Selick, Ph.D., Chief Executive Officer of
Threshold. "In 2014, we expect the Independent Data Monitoring
Committee for the soft tissue sarcoma trial, which monitors patient
safety on an ongoing basis, will conduct a planned interim efficacy
and safety analysis after 235 events are reported. Because the
interim analysis is event-driven, we cannot predict with certainty
when the interim analysis will commence, but current projections
suggest that the number of events may be reached around mid-year,
with the interim analysis to be conducted thereafter. Additionally,
the Phase 3 MAESTRO study in advanced pancreatic cancer initiated
by Merck KGaA a little over a year ago is currently on track with
respect to patient recruitment, and we also look forward to
providing more details on the expected third registration program
in solid tumors. Regarding earlier-stage trials, including multiple
myeloma and glioblastoma, we expect to have more data from the
expansion of ongoing studies this year that may further guide
strategic investment in additional development opportunities for
TH-302."
Fourth Quarter and Year End 2013 Financial and Operational
Results
Revenue for the fourth quarter and year ended December 31, 2013
was $3.2 million and $12.5 million, respectively, compared to $2.0
million and $5.9 million for the same periods in 2012,
respectively. For the year ended December 31, 2013, we recognized
$12.5 million in revenue from the amortization of the aggregate of
$110 million in upfront and milestone payments earned in 2013 and
2012 from our collaboration with Merck KGaA. For the year ended
December 31, 2012, we recognized $5.9 million in revenue from the
amortization of the $67.5 million in upfront and milestone payments
earned in 2012 from our collaboration with Merck KGaA. The revenue
from the upfront payment and milestone payments earned under the
agreement is being amortized over the relevant performance period,
rather than being immediately recognized when the upfront payment
and milestone are earned or received.
The net loss for the fourth quarter of 2013 was $7.6 million
compared to a net income of $28.4 million for the fourth quarter of
2012. Included in the net loss for the fourth quarter of 2013 was
an operating loss of $7.8 million and non-cash income of $0.2
million compared to an operating loss of $6.0 million and non-cash
income of $34.4 million in the fourth quarter of 2012. The net loss
for 2013 was $28.4 million compared to a net loss of $71.1 million
in 2012. Included in the net loss for 2013 was an operating loss of
$26.0 million and non-cash expense of $2.3 million compared to an
operating loss of $20.0 million and non-cash expense of $51.2
million in 2012. The non-cash income or expense is related to
changes in the fair value of the Company's outstanding and
exercised warrants that was classified as other income
(expense).
Research and development expenses were $8.5 million for the
fourth quarter ended December 31, 2013, compared to $6.2 million
for the same period in 2012. The increase in research and
development expenses, net of reimbursement for Merck KGaA's 70%
share of total development expenses for TH-302, was due primarily
to a $1.3 million increase in clinical development expenses, a $0.6
million increase in consulting expenses and an increase of $0.4
million in employee related expenses, including a $0.3 million
increase in non-cash stock-based compensation expense. Research and
development expenses were $29.3 million for 2013, compared to $18.8
million in 2012. The increase in research and development expenses,
net of reimbursement for Merck KGaA's 70% share of total
development expenses for TH-302, was due primarily to a $6.4
million increase in clinical development expenses, a $1.0 million
increase in consulting expenses and an increase of $3.1 million in
employee related expenses, including a $1.0 million increase in
non-cash stock-based compensation expense.
General and administrative expenses were $2.5 million for the
fourth quarter of 2013 versus $1.9 million for the fourth quarter
of 2012. The increase in general and administrative expenses was
due primarily to an increase in employee-related expenses to
support the Company's ongoing collaboration with Merck KGaA,
including a $0.1 million increase in non-cash stock-based
compensation expense. General and administrative expenses were $9.2
million for 2013 versus $7.1 million in 2012. The increase in
general and administrative expenses was due primarily to an
increase in employee-related expenses to support the Company's
ongoing collaboration with Merck KGaA, including a $0.9 million
increase in non-cash stock-based compensation expense.
Non-cash stock-based compensation expense included in total
operating expenses was $1.4 million for the fourth quarter of 2013
versus $0.9 million for the fourth quarter of 2012. Non-cash
stock-based compensation expense included in total operating
expenses was $4.9 million for 2013 versus $3.0 million for 2012.
The increase in stock-based compensation expense was due to the
amortization of a greater number of options with higher fair
values.
As of December 31, 2013 and 2012, Threshold had $82.0 million
and $70.8 million in cash, cash equivalents and marketable
securities, respectively. The net increase in cash, cash
equivalents and marketable securities during 2013 was primarily due
to the $42.5 million in milestone payments received from
Threshold's collaboration with Merck KGaA and $2.4 million from the
exercise of warrants and stock options, partially offset by
operating cash requirements for 2013.
Clinical Development Outlook for Company- and Merck
KGaA-Sponsored Trials of TH-302
The development plan for TH-302 is designed to investigate its
safety and efficacy across a broad range of solid tumors and
hematologic malignancies. TH-302 is being developed in therapeutic
areas supported by preclinical and clinical data and where there is
high unmet need for new anti-cancer agents. To date, TH-302 has
been evaluated in more than 1,000 patients with cancer. Threshold
anticipates the following development activities related to
Company- and Merck KGaA-sponsored clinical trials for TH-302 in
2014:
- Planned interim safety and efficacy analysis of the Phase 3
clinical trial in soft tissue sarcoma to be conducted by the
Independent Data Monitoring Committee;
- Continued enrollment of patients in the Merck KGaA Phase 3
MAESTRO trial in patients with advanced pancreatic cancer;
- Initiation of a third registration program of TH-302 in another
solid tumor type in partnership with Merck KGaA;
- Completion of the dose expansion portion of the Company's Phase
1/2 trial in relapsed or refractory multiple myeloma and initiation
of the third portion of the trial to determine preliminary safety
and efficacy of TH-302 in combination with a proteasome
inhibitor;
- Completion of the dose escalation portion of the Company's
Phase 1 trial of TH-302 in combination with sunitinib to determine
the maximum tolerated dose; and
- Continued enrollment of patients in the Company's Phase 2
biomarker trial in advanced melanoma.
About TH-302
TH-302 is an investigational hypoxia-targeted drug that is
designed to be activated under tumor hypoxic conditions, a hallmark
of many cancers. Areas of low oxygen levels (hypoxia) in solid
tumors are due to insufficient blood supply as a result of aberrant
vasculature. Similarly, the bone marrow of patients with
hematological malignancies has also been shown, in some cases, to
be severely hypoxic.
TH-302 is currently under evaluation in two pivotal Phase 3
clinical trials: one in combination with doxorubicin versus
doxorubicin alone in patients with advanced soft tissue sarcoma,
and the other in combination with gemcitabine versus gemcitabine
and placebo in patients with advanced pancreatic cancer. Both Phase
3 trials are being conducted under Special Protocol Assessment
agreements with the U.S. Food and Drug Administration (FDA). The
FDA and the European Commission have granted TH-302 Orphan Drug
Designation for the treatment of soft tissue sarcoma and pancreatic
cancer. TH-302 is also being investigated in hematological
malignancies and in combination with other therapies in a variety
of solid tumors.
Threshold has a global license and co-development agreement for
TH-302 with Merck KGaA, Darmstadt, Germany, which includes an
option for Threshold to co-commercialize in the U.S.
About Threshold Pharmaceuticals
Threshold is a biotechnology company focused on the discovery
and development of drugs targeting tumor hypoxia, the low oxygen
condition found in microenvironments of most solid tumors as well
as the bone marrows of some hematologic malignancies. This approach
offers broad potential to treat a variety of cancers. By
selectively targeting tumor cells, we are building a pipeline of
drugs that hold promise to be more effective and less toxic to
healthy tissues than conventional anticancer drugs. For additional
information, please visit our website (www.thresholdpharm.com).
Forward-Looking Statements
Except for statements of historical fact, the statements in this
press release are forward-looking statements, including all
statements regarding anticipated development activities and outlook
related to company- and Merck KGaA-sponsored clinical trials for
TH-302; potential additional development opportunities for TH-302;
the potential commencement of a third registration program for
TH-302 and the timing thereof; the planned interim safety and
efficacy analysis of the Phase 3 clinical trial in soft tissue
sarcoma by the Independent Data Monitoring Committee and the timing
thereof; the anticipated expansion of ongoing TH-302 studies and
the expectation for additional data and the timing thereof; the
completion of clinical trial events and expected continued
enrollment in TH-302 clinical trials and the timing thereof; and
the potential therapeutic uses and benefits of TH-302 to treat
patients with soft tissue sarcoma, advanced pancreatic cancer,
multiple myeloma, glioblastoma, advanced melanoma and other solid
tumors and hematologic malignancies. These statements involve risks
and uncertainties that can cause actual results to differ
materially from those in such forward-looking statements. Potential
risks and uncertainties include, but are not limited to: the
ability of Threshold and Merck KGaA to enroll or complete TH-302
clinical trials; Threshold's dependence on its collaborative
relationship with Merck KGaA, including its dependence on decisions
by Merck KGaA regarding the amount and timing of resource
expenditures for the development of TH-302 and the risk of
potential disagreements with Merck KGaA regarding the commencement
of additional clinical trials or milestone payments; the difficulty
and uncertainty of pharmaceutical product development, including
the time and expense required to conduct TH-302 clinical trials and
analyze data, and the uncertainty of clinical success and
regulatory approval; the risk that later trials may not confirm the
results of earlier trials; that risk that clinical data from
Company- and Merck KGaA-sponsored clinical trials may be
insufficient to support any regulatory approval to market TH-302;
issues arising in the regulatory process and the results of such
clinical trials (including product safety issues and efficacy
results); Threshold's and Merck KGaA's dependence on single source
suppliers, including the risk that these single source suppliers
may be unable to meet clinical supply demands for TH-302 which
could significantly delay the development of TH-302; and
Threshold's need for and the availability of resources to develop
TH-302 and to support Threshold's operations. Further information
regarding these and other risks is included under the heading "Risk
Factors" in Threshold's Quarterly Report on Form 10-Q, which has
been filed with the Securities and Exchange Commission on November
4, 2013 and is available from the SEC's website (www.sec.gov) and
on our website (www.thresholdpharm.com) under the heading
"Investors". We undertake no duty to update any forward-looking
statement made in this news release.
|
|
THRESHOLD PHARMACEUTICALS, INC. |
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|
(in thousands, except per share amounts) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Year Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2013 |
|
|
2012 |
|
|
2013 |
|
|
2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
3,212 |
|
|
$ |
2,021 |
|
|
$ |
12,495 |
|
|
$ |
5,867 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
8,533 |
|
|
|
6,163 |
|
|
|
29,334 |
|
|
|
18,786 |
|
|
General and administrative |
|
|
2,453 |
|
|
|
1,851 |
|
|
|
9,185 |
|
|
|
7,080 |
|
|
|
Total
Operating Expenses |
|
|
10,986 |
|
|
|
8,014 |
|
|
|
38,519 |
|
|
|
25,866 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(7,774 |
) |
|
|
(5,993 |
) |
|
|
(26,024 |
) |
|
|
(19,999 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income (expense), net |
|
|
32 |
|
|
|
25 |
|
|
|
136 |
|
|
|
80 |
|
|
Other income (expense) (1) |
|
|
234 |
|
|
|
34,356 |
|
|
|
(2,325 |
) |
|
|
(51,216 |
) |
|
|
Income (loss) before provision for taxes |
|
|
(7,508 |
) |
|
|
28,388 |
|
|
|
(28,213 |
) |
|
|
(71,135 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
81 |
|
|
|
- |
|
|
|
202 |
|
|
|
- |
|
|
|
Net
income (loss) |
|
$ |
(7,589 |
) |
|
$ |
28,388 |
|
|
$ |
(28,415 |
) |
|
$ |
(71,135 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.13 |
) |
|
$ |
0.50 |
|
|
$ |
(0.49 |
) |
|
$ |
(1.31 |
) |
|
Diluted |
|
$ |
(0.13 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.49 |
) |
|
$ |
(1.31 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used in per common share
calculation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
59,226 |
|
|
|
56,298 |
|
|
|
57,832 |
|
|
|
54,219 |
|
|
Diluted |
|
|
59,226 |
|
|
|
62,627 |
|
|
|
57,832 |
|
|
|
54,219 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Noncash income (expense) related to change in the fair value of
the Company's outstanding and exercised warrants, classified as
other income (expense). |
|
|
|
THRESHOLD PHARMACEUTICALS, INC. |
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
(in thousands) |
|
|
|
|
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2013 |
|
|
2012 |
|
|
|
(unaudited) |
|
|
(1) |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and marketable securities |
|
$ |
82,033 |
|
|
$ |
70,848 |
|
|
Collaboration Receivable |
|
|
18,094 |
|
|
|
15,635 |
|
|
Prepaid expenses and other current assets |
|
|
2,246 |
|
|
|
1,167 |
|
|
Property and equipment, net |
|
|
686 |
|
|
|
812 |
|
|
Other assets |
|
|
1,059 |
|
|
|
1,059 |
|
|
|
Total
assets |
|
$ |
104,118 |
|
|
$ |
89,521 |
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities (2) |
|
$ |
27,016 |
|
|
$ |
17,451 |
|
|
Deferred Revenue |
|
|
76,916 |
|
|
|
53,097 |
|
|
Long-term liabilities (3) |
|
|
23,661 |
|
|
|
32,826 |
|
|
Stockholders' equity (deficit) |
|
|
(23,475 |
) |
|
|
(13,853 |
) |
|
Total liabilities and stockholders' equity
(deficit) |
|
$ |
104,118 |
|
|
$ |
89,521 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Derived from audited financial statements |
(2) |
|
Amount includes current portion of deferred revenue of $14.7
million and $8.5 million as of December 31, 2013 and 2012,
respectively. |
(3) |
|
Includes as of December 31, 2013 and 2012, $23.4 million and $32.6
million of warrant liability, respectively. |
|
|
|
Contact Laura Hansen, Ph.D. Senior Director, Corporate
Communications Phone: 650-474-8206 E-mail:
lhansen@thresholdpharm.com
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