On February 3, 2012, Merck announced the signing of a global agreement with Threshold Pharmaceuticals, Inc., South San Francisco, CA (USA), to co-develop and commercialize TH-302, Threshold’s small molecule hypoxia-targeted drug.
Under the terms of the agreement, Merck will receive co-development rights, exclusive global commercialization rights and will provide Threshold an option to co-commercialize the therapeutic in the United States. In exchange, Threshold will receive an upfront payment of € 19 million (US$ 25 million) and could receive up to € 26.5 million (US$ 35 million) in additional development milestones during 2012. Threshold is also eligible to receive a € 15 million (US$ 20 million) milestone payment based on positive results from its randomized Phase II trial in pancreatic cancer.
In the United States, Threshold will have primary responsibility for development of TH-302 in the soft tissue sarcoma indication. Threshold and Merck will jointly develop TH-302 in all other cancer indications being pursued. Merck will pay 70% of worldwide development costs for TH-302.
Subject to FDA approval in the United States, Merck will initially be responsible for commercialization of TH-302 with Threshold receiving a tiered, double-digit royalty on sales. Under the royalty-bearing portion of the agreement, Threshold retains the option to co-promote TH-302 in the United States. Additionally, Threshold retains the option to co-commercialize TH-302 allowing the company to participate in up to 50% of the profits in the United States, based on certain revenue tiers. Outside of the United States, Merck will be solely responsible for the commercialization of TH-302 with Threshold receiving a tiered, double-digit royalty on sales in these territories.