Threshold Pharmaceuticals Inc (NASDAQ:THLD): Here's What's Next?

Threshold Pharmaceuticals Inc (NASDAQ:THLD) picked up some strength towards the end of last week, running from close to $0.75 a share on Friday morning, before settling to close in and around the $0.54 mark. This is one we have looked at on a few occasions in the past (we actually called the merger a few months before it hit press) and one that, in line with our coverage, we have suggested could be a decent long-term play based on various 2017 and 2018 catalysts.With the just mentioned merger now in the rearview mirror, these catalysts have changed somewhat based on the additional assets now included in Threshold's pipeline. We looked at these in some detail last time, so we won't spend any time on them today. What we are going to look at today, however, is an asset (and specifically, a development program associated with said asset) that we see as potentially driving a near-term reevaluation for Threshold going forward.The asset in question is Evofosfamide, which is the company's lead development asset and one that hasn't fared particularly well along its development pathway over the last 24 months or so. The company put it through its paces in a target indication of the treatment of various solid tumors back in 2015 as part of a couple of phase 3 trials, but failed to demonstrate clinical benefit (when used as a monotherapy) in either trial.However, and despite its failure as a monotherapy, there exists some potential as a combination therapy with a current standard of care treatment in oncology and it is this potential that the company is investigating as part of the program we see as driving the above-noted revaluation.Threshold is investigating the potential benefits of Evofosfamide when used in combination with ipilimumab, which many readers will likely be more familiar with as Yervoy, Bristol-Myers Squibb Co (NYSE:BMY)'s blockbuster melanoma asset.The idea behind using Evofosfamide as an adjunct to Yervoy is relatively simple. The former is designed to work in what are called hypoxic environments, which are environments that contain little or no oxygen. These environments are commonly found in and around the site of solid tumors and, because of the lack of oxygen, many standard of care therapies (including immunotherapies like Yervoy) are ineffective in these regions. To quickly explain why, T cells are unable to function without oxygen. The mechanism of action that underpins the vast majority of immunotherapies, especially in oncology, is rooted in the employing of T cells to attack otherwise untouchable cancer cells. Without oxygen in the environment, T cells can't function, meaning immunotherapies are ineffective.The addition of a drug that can function in a hypoxic environment, therefore, like Evofosfamide, should serve to improve the clinical benefit brought about by the therapy as compared to using Yervoy as a monotherapy in this indication.So why is this important now?Well, Threshold announced early last month that it had dosed the first patient in a phase 1 study investigating the clinical benefit (and safety) of treatment with a combination of Evofosfamide and Yervoy in patients with solid tumors.If this trial can demonstrate a statistically significant improvement in the outcomes of patients treated with the combination therapy as compared to the monotherapy, it would set threshold up for an exciting mid-stage development program that – potentially – could lead to its development asset (an asset that markets have already written off in many cases) being approved as a standard of care adjuvant to a blockbuster oncology treatment in the US.It's a relatively slow burning trial, with initial completion set for January 2019 and study completion slated for May the same year. There is plenty of room for interim analysis, however, and by proxy, a fair number of catalysts associated with the study could hit press between now and topline readout.Threshold doesn't have any immediate cash concerns based on the injection picked up as part of the merger but we may see a raise early to mid-2018 to fund the latter portion of the trial in question. It's not prohibitive to an exposure but it's a consideration on the risk side of the equation nonetheless.Here's the trial listing for anyone interested in a bit more detail.Check out our previous coverage of this one here. We will be updating our subscribers as soon as we know more. For the latest updates on THLD, sign up below!Image courtesy of Ed Uthman via FlickrDisclosure: We have no position in THLD and have not been compensated for this article.