Bay Area Threshold Pharma Slashing Two-Thirds of its Workforce After Failed Trials
December 21, 2015
By Alex Keown, BioSpace.com Breaking News Staff
San Francisco, Calif. – Stock for the Bay Area’s Threshold Pharmaceuticals is down more than 10 percent in early trading after the company announced it was slashing two-thirds of its workforce in order to direct financial resources at a mid-stage cancer drug.
The workforce elimination, which will be between 20 and 25 employees, comes after another one of its experimental cancer drugs, evofosfamide, failed two late-stage trials. Threshold said the one-time severance charges associated with the terminations will be approximately $2.6 million. The company said most of the charges will be paid by the end of the first quarter of 2016. According to the San Francisco Business Times, Threshold had 64 employees at the end of September.
"We are enacting this reduction in workforce as a result of the recently announced outcomes from our two Phase 3 trials of evofosfamide in which neither trial met its primary endpoint of demonstrating a statistically significant improvement in overall survival," Barry Selick, Threshold’s chief executive officer said in a statement. "I would like to express my sincere gratitude to our employees who are being affected by this difficult but necessary action. This is a loss to our Threshold family of talented and dedicated individuals who have worked with integrity and passion towards improving the lives of people living with cancer."
Earlier this month Threshold announced two Phase III trials of evofosfamide, an investigational hypoxia-activated prodrug for the treatment of advanced pancreatic adenocarcinoma and advanced soft tissue sarcoma, in combination with chemotherapy, failed to achieve primary endpoints in both trials. In the Maestro trial for pancreatic cancer the drug did not demonstrate a statistically significant improvement in overall survival compared to placebo. The same was true for the treatment of patients with advanced soft tissue sarcoma.
Following the trial failures, Germany-based Merck KgaA , which had partnered with Threshold in the evofosfamide trials, announced it would no longer pursue further investigation of the drug.
Threshold has not totally abandoned development of evofosfamide. Selick said the company is still evaluating “potential further development” and “other strategic options for the company.” He said Threshold will have a better notion of its plans in early 2016.
Meanwhile, Threshold said it will now focus its efforts on mid-stage trials of tarloxotinib bromide, the company's novel epidermal growth factor receptor tyrosine kinase inhibitor. Tarloxotinib is being evaluated for the treatment of non-small cell lung cancer as well as for patients with recurrent or metastatic squamous cell carcinomas of the head and neck or skin.
Before the morning bell, Threshold was trading at 49 cents per share. After the company announced the failure of the evofosfamide trials, stock plunged 85 percent from $3.42 per share to 60 cents per share. In September Threshold’s stock had been as high as $5.11 per share.