EDISON EQUITY RESEARCH - THRESHOLD PHARMACEUTICALS

EDISON EQUITY RESEARCH: THRESHOLD PHARMACEUTICALS - ON THE THRESHOLD OF A BLOCKBUSTER OPPORTUNITY

 Phase III data for evofosfamide (TH-302) in soft tissue sarcoma (STS) and pancreatic cancer are expected by early 2016. These two indications alone could lead to blockbuster sales with partner Merck KGaA. Our estimates suggest the current market cap is more than underpinned by the risk-adjusted potential in STS together with net cash. We value Threshold at $949m based on evofosfamide in STS and pancreatic cancer and in a number of further opportunities in other solid tumours and blood cancers.

 Threshold Pharmaceuticals is a US oncology company focused on tumour hypoxia, a low-oxygen condition found in most solid tumours and some blood cancers. Evofosfamide is in Phase III for STS and pancreatic cancer and earlier trials in multiple other cancers, and is partnered with Merck KGaA.

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