Threshold Pharma Enters Into Definitive Co-Promotion Agreement For Evofosfamide With Merck KGaA, Darmstadt, Germany

SOUTH SAN FRANCISCO, CA--(Marketwired - November 18, 2015) - Threshold Pharmaceuticals, Inc. (NASDAQ: THLD) today announced that it finalized a definitive Co-Promotion Agreement for evofosfamide with Merck KGaA, Darmstadt, Germany pursuant to the companies' License and Co-Development Agreement entered into on February 2, 2012. Under the terms of the License and Co-Development Agreement, Threshold may co-promote evofosfamide (previously known as TH-302) in the U.S. subject to Food and Drug Administration (FDA) approval of evofosfamide. Evofosfamide is Threshold's investigational hypoxia-activated prodrug, which is currently the subject of two fully enrolled Phase 3 clinical trials in advanced soft tissue sarcoma and advanced pancreatic cancer for which Threshold expects to announce top-line data around the end of 2015.

Under the commercial leadership of Merck KGaA, Darmstadt, Germany, the terms of the License and Co-Development Agreement give Threshold the right, at its own cost, to field and be responsible for its own sales force in collaboration with Merck KGaA, Darmstadt, Germany's sales force in the U.S. pursuant to the terms of the new Co-promotion Agreement. Merck KGaA, Darmstadt, Germany remains responsible for all other commercial and medical affairs functions associated with the launch and promotion of evofosfamide. The development milestone payment and royalty payment portions of the License and Co-Commercialization Agreement remain the same. To date Threshold has received upfront and milestone payments of $110 million and can earn additional potential milestone payments of up to $440 million.

"We are pleased to have reached an agreement with our partner Merck KGaA, Darmstadt, Germany on definitive terms for our option to co-promote evofosfamide in the U.S.," said Barry Selick, Ph.D., Chief Executive Officer at Threshold. "The ability to co-promote and field a sales force represents one of two key options allowing Threshold to participate in the commercial phase of evofosfamide's lifecycle should it receive FDA approval. Importantly, the license agreement also provides us with an option to co-commercialize evofosfamide in the U.S., depending upon achieving certain milestones, which would allow us to share in up to fifty percent of the profits from the sale of the drug. Threshold is well positioned to integrate a commercial arm to its oncology discovery and development organization."

About Evofosfamide
Evofosfamide (previously known as TH-302) is an investigational hypoxia-activated prodrug that is thought to be activated under severe hypoxic tumor conditions, a feature of many solid tumors. Areas of low oxygen levels (hypoxia) in solid tumors are due to insufficient blood vessel supply. Similarly, the bone marrow of patients with hematological malignancies has also been shown, in some cases, to be severely hypoxic. Evofosfamide is currently in two Phase 3 trials, both of which are fully recruited: one in combination with doxorubicin versus doxorubicin alone in patients with locally advanced unresectable or metastatic soft tissue sarcoma (STS) (the TH-CR-406 trial), and the other in combination with gemcitabine versus gemcitabine and placebo in patients with locally advanced unresectable or metastatic pancreatic cancer (the MAESTRO trial). Top-line data for both trials are expected around the end of 2015. Both Phase 3 trials are being conducted under Special Protocol Assessment (SPA) agreements with the FDA. The FDA and the European Commission have granted evofosfamide Orphan Drug designation for the treatment of STS and pancreatic cancer. The FDA has also granted Fast Track designation for evofosfamide for both STS and pancreatic cancer. Evofosfamide is also being investigated in a Phase 2 trial designed to support registration for the treatment of non-squamous non-small cell lung cancer, and in earlier-stage clinical trials of other solid tumors and hematological malignancies.

Threshold has a global license and co-development agreement for evofosfamide with Merck KGaA, Darmstadt, Germany, which includes an option for Threshold to co-commercialize in the U.S.

About Threshold Pharmaceuticals
Threshold Pharmaceuticals, Inc. is a biotechnology company focused on the discovery and development of drugs targeting tumor hypoxia, the low oxygen condition found in the microenvironments of most solid tumors as well as the bone marrows of some patients with hematologic malignancies. This approach offers broad potential to treat a variety of cancers. By selectively targeting tumor cells, we are building a pipeline of drugs that hold promise to be more effective and less toxic to healthy tissues than conventional anticancer drugs. For additional information, please visit our website (www.thresholdpharm.com).

Forward-Looking Statements
Except for statements of historical fact, the statements in this press release are forward-looking statements, including statements regarding the benefits of the agreement between Threshold and Merck, including future financial and operating results, the combined plans, objectives, expectations and intentions of Threshold and Merck, anticipated development activities and clinical development outlook related to company- and Merck KGaA, Darmstadt, Germany-sponsored clinical trials for evofosfamide, including the expected efficient execution and expected timing of and availability of the top-line results from the ongoing evofosfamide Phase 3 clinical trials the potential therapeutic uses and benefits of evofosfamide. These statements involve risks and uncertainties that can cause actual results to differ materially from those in such forward-looking statements. Potential risks and uncertainties include, but are not limited to: the possibility that FDA approval of evofosfamide may not be realized or may not be realized within the expected tie period, due to, among other things, the impact of pharmaceutical industry regulation, health policies, and pending legislation that could affect the pharmaceutical industry, the ability of Threshold and Merck KGaA, Darmstadt, Germany, to enroll or complete evofosfamide clinical trials; the time and expense required to conduct such clinical trials and analyze data; issues arising in the regulatory or manufacturing process and the results of such clinical trials (including product safety issues and efficacy results); the risk that the final data from ongoing trials may be materially different from the preliminary data that Threshold has reported; risks related to Threshold's dependence on its collaborative relationship with Merck KGaA, Darmstadt, Germany, including its dependence on decisions by Merck KGaA, Darmstadt, Germany regarding the amount and timing of resource expenditures for the development of evofosfamide, including the commencement of additional clinical trials; and Threshold's need for and the availability of resources to develop evofosfamide and to support Threshold's operations. Further information regarding these and other risks is included under the heading "Risk Factors" in Threshold's Quarterly Report on Form 10-Q, which has been filed with the Securities and Exchange Commission on November 2, 2015 and is available from the SEC's website (www.sec.gov) and on our website (www.thresholdpharm.com) under the heading "Investors." We undertake no duty to update any forward-looking statement made in this news release.