Threshold Pharmaceuticals, Inc., a biotechnology company is planning to realign several areas of its operations and reduce staff by approximately one-third from 83 employees to 53.
As part of this action, Janet Swearson, the company's chief financial officer will leave the company, and Michael Ostrach, chief operating officer, will also serve as chief financial officer, effective September 1, 2006. Janet Swearson will remain as a consultant to the company until the end of 2006
The small molecule therapeutics company, reporting its financial results for the second quarter ended June 30, 2006, pointed to a corporate realignment is on cards to focus on programmes for multiple potential cancer indications and adoption of a shareholder rights plan.
In light of the decision to discontinue development of TH-070 for BPH, the company is committed to reducing cash burn and refocusing its R&D efforts, the company said in a release.
The company will reduce consulting and other external expenses. In connection with these actions, Threshold expects to pay severance benefits of approximately $1.2 million in the second half of 2006. The company expects research and development expenses to increase in the second half of 2006 primarily due to expenses associated with discontinuation of the TH-070 programme, including additional safety follow up for TH-070 patients, completion of the ongoing glufosfamide trials, initiation of additional glufosfamide trials and severance expenses. The company expects cash used for operations to be in the range of $53 to $58 million in 2006. The company expects current cash, cash equivalents and marketable securities to be sufficient to fund projected activities at least through the middle of 2008.
"While a reduction of this magnitude is difficult, it is a necessary realignment that enables us to preserve cash and focus on multiple cancer indications with our existing programs as well as potential external opportunities," said Barry Selick, Threshold's chief executive officer. "We are saddened that we must part ways with colleagues and friends, all of whom have poured their hearts and talent into this company. As one example, Jan Swearson has been instrumental to the growth of Threshold from shortly after its founding. Her passion and experience in all aspects of building and running Threshold have been invaluable and she will be missed. I wish her, as well as all of the other Threshold employees that will be leaving the company, success in their future endeavors."
The company's research and development efforts will be primarily focused on glufosfamide and 2-deoxyglucose (2DG). It expects to have top-line results from a pivotal phase 3 trial of glufosfamide for the second-line treatment of pancreatic cancer by the end of this year. The company plans to start additional phase 2 trials of glufosfamide in all, or a subset of, ovarian cancer, sarcoma and small cell lung cancer by the end of this year. The phase 1 2DG trial will continue, with top-line results expected in the beginning of 2007.
TH-302, a hypoxically activated prodrug designed to exploit low oxygen levels in tumours. This is a compound that was discovered by Threshold scientists and is currently in preclinical development. The company has nominated this lead compound as its next clinical candidate and, assuming that pre-clinical and manufacturing programs proceed as planned, plans to file an IND (Investigational New Drug) application by the middle of 2007. Evaluating in-licensing opportunities to potentially add to its existing pipeline.
The net loss for the second quarter of 2006 was $15.5 million compared to $10.2 million for the second quarter of 2005. Research and development expenses were $13.1 million for the second quarter of 2006 versus $7.9 million for the second quarter of 2005. The increase in research and development expenses primarily reflects higher clinical development expenses for the expanded Phase 2 and Phase 3 multi-centre clinical trials evaluating TH-070 for the treatment of benign prostatic hyperplasia (BPH), as well as collecting and analyzing the safety and efficacy data for these trials after the US BPH programme was placed on partial clinical hold by the FDA in May 2006 due to adverse events related to elevated liver enzymes. Last month the company announced that it would no longer develop TH-070 for BPH.
As of June 30, 2006, Threshold had $76.2 million in cash and marketable securities.