Threshold Pharmaceuticals, Inc. (THLD): A Biotech That Investors Need To Know About

Page 1 of 2

Biotech stocks can provide astronomical returns but also depressing losses. Before investing in these volatile stocks, investors need to understand the full picture, including fundamentals, technical, and upcoming catalysts. Below are 2 biotechs that appear to be well on their way to greatness.

Threshold Pharmaceuticals, Inc. (NASDAQ:THLD)

Threshold Pharmaceuticals, Inc. (NASDAQ:THLD)

Threshold Pharmaceuticals, Inc. (NASDAQ:THLD) is an early stage biotechnology company engaged in the discovery, development, and commercialization of cancer therapeutics based on a novel and powerful approach of targeting tumor hypoxia. There is a lot to like about Threshold Pharmaceuticals, Inc. (NASDAQ:THLD), including its recent trading action, fundamentals, partnerships, and upcoming business catalysts. The 2 year chart below shows the large trading move that the stock has seen.

The share price saw a large jump in early 2012 because of a flurry of positive press releases. Threshold announced a partnership with Merck KGaA (known as the “German Merck”.) Merck KGaA is very well known in Germany and is one of the largest biotechnology companies in Europe. The deal was extremely favorable for Threshold. Under the terms of the deal, Threshold received a $25 million upfront payment. Additionally, the company received a $20 million milestone payment based on positive results from its randomized Phase II clinical trial for pancreatic cancer. In total, the agreement gives Threshold the opportunity to earn up to $525 million in total milestone payments. The real bright spot of the deal is that Merck KGaA agreed to pay 70% of the worldwide development costs for TH-302. This means that investors will have to worry less about dilution than is normally typical for biotech companies of this size.

As mentioned above, this agreement is for Threshold Pharmaceuticals, Inc. (NASDAQ:THLD)’s therapy candidate called TH-302. TH-302 is being tested in multiple studies for the treatment of pancreatic cancer, soft tissue sarcoma, and other solid tumors. The two main trials for Threshold are TH-CR 406 and MAESTRO. TH-CR 406 is a Phase III clinical trial of TH-302 in combination with doxorubicin to treat patients with soft tissue sarcoma. MAESTRO is a Phase III clinical trial of TH-302 in combination with gemcitabine to treat patients with pancreatic cancer. The company is expected to release interim results of these trials in the fall this year with complete results expected in late 2014.

Fundamentally, Threshold Pharmaceuticals, Inc. (NASDAQ:THLD) also appears to be making great strides. For biotechs, cash is king. Threshold ended 2012 with $11 million in cash & cash equivalents and $59.8 million in short term investments for a total of $70.8 million. This was an increase of approximately $50 million from 2011 cash levels. Threshold also improved on the income statement by generating $5.9 million in revenue compared to just $62,000 for 2011.

Risks

Despite all of the above, it’s important for investors realize the potential downfalls to investing in Threshold Pharmaceuticals, Inc. (NASDAQ:THLD). First, the volatility for Threshold has been intense over the past 2 years. The share price traded as low $1.20 and as high as $9.28. It now trades at $5.48 and appears to have settled down but that will most likely change later this year once trial results are released. Second, the competition for pancreatic cancer therapies is intense. Celgene Corporation (NASDAQ:CELG) is heavily involved in this area with its potential therapy called Abraxane. In fact, just recently, the US Food and Drug Administration granted priority review for Abraxane. Celgene is seeking approval of Abraxane in combination with a product called Gemzar.. Should Abraxane receive approval, Celgene stands to gain a foothold on the market and potentially put Threshold in a catch up position. Additionally, Celgene Corporation (NASDAQ:CELG) could potentially be a tough opponent for Threshold based on its fundamentals. Analysts are expecting Celgene to show sales growth of 11.7% in 2013 and 14.5% in 2014. On top of that, Celgene was able to grow its year over year revenue by 13.5% from $4.84 billion to $5.5 billion. Celgene Corporation (NASDAQ:CELG) is not a company to be taken lightly and Threshold investors should understand this.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!