Threshold Pharmaceuticals earned a $20 million milestone payment from Merck KGaA for achieving a statistically significant progression-free survival benefit in Phase II study (404 trial) of cancer drug TH-302. The trial was conducted in 214 patients with first-line advanced pancreatic cancer and evaluated two doses of TH-302 in combination with gemcitabine compared to gemcitabine.
Merck gained rights to TH-302 in February when it paid Threshold $25 million up front and agreed to $770 million in milestone fees. The small molecule is a hypoxia-targeted drug that has reportedly been investigated in over 600 patients in Phase I/II trials covering a spectrum of tumor types, both as a monotherapy and in combination with chemotherapy treatments and other targeted cancer drugs. The most advanced program is a Phase III study evaluating TH-302 in combination with doxorubicin versus doxorubicin alone in patients with soft tissue sarcoma.
Under terms of the arrangement with Merck, Threshold stands to earn another $15 million in development milestones this year. Total milestone fees could reach $525 million, composed of $280 million in regulatory and development milestones and $245 million in sales-based milestones.
Merck KGaA will pay 70% of worldwide development costs for TH-302. In the U.S., Threshold will have primary responsibility for development of TH-302 in the soft tissue sarcoma indication. Threshold and Merck will jointly develop the drug in all other cancer indications.
Merck has exclusive global commercialization rights but will provide Threshold an option to co-commercialize the therapeutic in the U.S. Post FDA approval, Threshold stands to receive a tiered, double-digit royalty on sales, with an option to co-promote TH-302. If Threshold exercises its co-commercialization option it will receive up to 50% of the profits in the U.S. based on certain revenue tiers. Outside of the U.S., Threshold will receive a tiered, double-digit royalty on sales in these territories.