Threshold Pharmaceuticals, Inc. (NASDAQ:THLD) has announced that it has accepted a merger deal with Molecular Templates. The merger will be an all-stock deal. Threshold Pharmaceuticals is listed on the Nasdaq and the entity that will result will be listed on the exchange as well. The mission of the resulting entity will be the developments of cancer-treatment drugs. Both firms’ board of directors are understood to have given approval for the merger which will now await shareholder approval besides meeting other customary closing conditions.
Biotech stocks merger
The all-stock deal will see Molecular Templates merge with a subsidiary that is wholly owned by Threshold Pharmaceuticals. After the merger the stake of Molecular Templates’ shareholders in the new entity will be 65.6%. Threshold Pharmaceuticals’ shareholders, on the other hand, will own the remaining stake amounting to 34.4%. After the merger, Threshold Pharmaceuticals will take up a new name – Molecular Templates and the new stock symbol will be MTEM.
The new entity that will result from the merger will, going forward, possess two drug candidates that are in the clinical stage. This includes MT-3724, a lead product of Molecular Templates and evofosfamide, a drug developed by Threshold Pharmaceuticals. Currently, there have been positive results reported for MT-3724 for the treatment of refractory and relapsed non-Hodgkin’s lymphoma. Evofosfamide is, however, yet to go to trial but an early-stage combination trial together with ipilumumab, a drug developed by Bristol-Myers Squibb, is in the works.
Additionally, Molecular Templates is undertaking some pre-clinical programs including drug candidates designed to treat multiple myeloma, breast cancer, and melanoma. Equally, Threshold Pharmaceuticals has pre-clinical drug candidates designed to treat prostate and liver cancers as well as acute lymphocytic leukemia.
Merging of the two firms comes six months after Threshold Pharmaceuticals discontinued the development of tarloxotinib, a cancer therapy that had been considered promising at some point. This came after studies in the second phase showed negative results. Consequently, this led to the exit of the chief operating officer, Stewart Kroll. About 25% of the firm’s workforce were also declared redundant.
In the pre-market trading hours, the share price of Threshold Pharmaceuticals Inc, one of the biotechnology stocks, stood at $0.557.