Merck, Biopharm to Partner on Hypoxia-Targeting Cancer Drug

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Threshold Pharmaceuticals Inc., a biopharmaceutical company in South San Francisco, California and Merck KGaA, the global drug manufacturer in Darmstadt, Germany have agreed to co-develop and commercialize Threshold’s drug TH-302. The drug TH-302 targets hypoxia, caused by low oxygen levels due to insufficient blood vessel growth, a common condition of tissues with many solid tumors, and in some cases bone marrow.

Under the agreement, Merck will receive co-development rights, exclusive worldwide commercialization rights, and provide Threshold an option to co-commercialize TH-302 in the U.S.  Threshold will receive payments of up to $525 million, comprised of $280 million in regulatory and development milestones and $245 million in sales-based milestones.

Threshold will receive an initial payment of $25 million, and up to $35 million in additional development milestones during 2012. Threshold is also eligible to receive a $20 million milestone payment based on positive results from its phase 2 trial in pancreatic cancer.

In the U.S., Threshold will be primarily responsible for developing TH-302 for soft tissue sarcoma, aggressive cancers of connective tissue of the body for which there are currently few treatments. Threshold and Merck will jointly develop TH-302 for other type of cancers, with Merck contributions 70 percent of worldwide development costs for TH-302.

Subject to FDA approval of TH-302, Merck will be responsible for commercializing the drug worldwide, with Threshold receiving royalties described only as “double-digit.” Threshold retains the option, however, of commercializing TH-302 in the U.S., where the company would be entitled to half of the profits from sales in the U.S.

Threshold is conducting a phase 2 clinical trial of TH-302 combined with the chemotherapy drug gemcitabine, compared to gemcitabine alone, for the treatment of pancreatic cancer. Results of that trial are expected to be released later this month.

A phase 3 clinical trial of TH-302 combined with the chemotherapy drug doxorubicin, compared to doxorubicin alone, for the treatment of soft tissue sarcoma began in September 2011 and is still recruiting participants. That trial expects to enroll some 450 patients.

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