Merck KGaA establishes cancer drug agreement with Threshold worth as much as $80 million

Merck Serono, a division of Merck KGaA, entered into a global agreement with Threshold Pharmaceuticals Inc. to co-develop and commercialize TH-302, an investigational, small molecule, hypoxia-targeted drug Threshold is evaluating as a treatment for soft tissue sarcoma, pancreatic cancer, other solid tumors and hematological malignancies. Under the agreement, Merck will receive co-development rights and exclusive worldwide commercialization rights to the compound. In exchange, Threshold...

Merck Serono, a division of Merck KGaA, entered into a global agreement with Threshold Pharmaceuticals Inc. to co-develop and commercialize TH-302, an investigational, small molecule, hypoxia-targeted drug Threshold is evaluating as a treatment for soft tissue sarcoma, pancreatic cancer, other solid tumors and hematological malignancies.

Under the agreement, Merck will receive co-development rights and exclusive worldwide commercialization rights to the compound. In exchange, Threshold will receive an up-front payment of approximately $25 million and could receive as much as approximately $35 million in additional development milestones this year. Additionally, Threshold is eligible to receive a $20 million milestone payment based on positive results from an ongoing randomized, Phase II trial of TH-302 in patients with advanced pancreatic cancer.

If the Food and Drug Administration approves TH-302, Merck KGaA initially will be responsible for the commercialization of the drug. Threshold retains the option to co-promote and co-commercialize TH-302 in the United States and can participate in as much as 50 percent of the profits in the United States, based on certain revenue tiers. Merck KGaA will be solely responsible for the commercialization of TH-302 in all other territories, with Threshold receiving a tiered, double-digit royalty on non-U.S. sales.

Among the trials currently under way are a Phase III study in patients with soft tissue sarcoma and a Phase II trial in patients with advanced pancreatic cancer. Top-line results from the Phase II pancreatic cancer trial are expected in February.

In the United States, Threshold will have primary responsibility for developing TH-302 in the soft tissue sarcoma indication. The two companies will jointly develop the compound in all other cancer indications being pursued, and Merck KGaA will pay 70 percent of worldwide development costs.