Why Threshold Pharmaceuticals Tumbled
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What: Shares of oncology-focused biotech company Threshold Pharmaceuticals (NAS: THLD) dove as much as 33% earlier in the trading session following the release of additional mid-stage data on the company's proprietary drug TH-302. It's being tested in combination with Eli Lilly's (NYS: LLY) Gemzar to treat pancreatic cancer.
So what: In February we were given statistically significant evidence that TH-302 -- a drug that works by targeting the hypoxic cells often found in solid tumors but rarely found in normal tissue -- in combination with Gemzar successfully extended survival rates to 5.5 months from 3.5 months with Gemzar treatment alone. Today's results added to that initial study demonstrating a 2.3 month survival improvement at the median, to 9.2 months from 6.9 months.
On the flip side, adding TH-302 with Gemzar as opposed to using Gemzar alone only reduced the relative risk of death by a not-so-significant 4.5%. Threshold also alluded that about one-third of its 214-patient mid-stage trial may have skewed the results in favor of TH-302. That one-third was switched from Gemzar alone to the combination therapy as soon as tumor progression was noticed.
Now what: Threshold is bound to be a fickle and highly volatile company with just one drug in its pipeline, TH-302. However, TH-302 is being tested in 11 different clinical trials at the moment, including in combination with Pfizer's (NYS: PFE) blockbuster Sutent to treat renal cell carcinoma and gastrointestinal stromal tumors, so the chances for success in at least some of these trials appears promising based on its initial survival rate increases.
But Threshold won't have an easy go of things even if it gains FDA approval of TH-302 in combination with Gemzar. Both Peregrine Pharmaceuticials' (NAS: PPHM) bavituximab, which is begin targeted at treating pancreatic cancer as well as a secondary treatment for non-small cell lung cancer, and Celgene's (NAS: CELG) Abraxane which, when combined with Gemzar, demonstrated stabilization in disease progression in 13 of 16 patients in an early stage study, stand to make pancreatic cancer a crowded field. I remain optimistic about Threshold's bountiful pipeline, but I'd keep your expectations reasonable.
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