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Without question, Threshold Pharmaceuticals (symbol: THLD) is on the cusp of becoming a blockbuster stock for those of you following the new developments, their pipeline, orphan drug status, EU approval, and discovery into Hypoxia and how it relates to cancer.

More info on Tumor Hypoxia: Click this link

Threshold first hit the radar at $3, then at $5, and has traded recently as high as $9.00 on Orphan Drug status and continued success. They are a development stage company and have a very good pipeline looking down the road. For a small company, it's about as good as you may ever see!

Now, let's take a serious look at Threshold Pharmaceuticals:

Threshold has a "New Class of Drug" called TH-302 and is an anti-cancer agent in clinical development. Pre-clinically, it is activated under hypoxic conditions and has demonstrated potent anticancer activity in many preclinical cancer models. TH-302 is converted selectively to the drug's active form, dibromo isophoramide mustard, a potent DNA alkylator, within hypoxic tumor cells. TH-302 targets levels of hypoxia that are common in tumors but are rare in normal tissues - this is how selective targeting of the tumor occurs. After conversion to the active form of the drug, the more resistant hypoxic cells are exposed to high concentrations of released cytotoxic agent, which can also diffuse into the surrounding oxygenated regions of the tumor, exerting what is referred to as a bystander effect. In this way, TH-302 can kill more of the tumor than can otherwise be accounted for by the hypoxic fraction alone. Because of its selective activation in the hypoxic regions of solid tumors, we believe that TH-302 will be less likely to produce the systemic toxicity caused by most cytotoxic chemotherapies.

Now, if you've followed us before on VVUS, AFFY, INHX, INCY and other stocks you already know that an investment in biotech stocks is like taking a gamble (to some extent) until a drug is proven by the FDA. We try to minimize our risk by digging deep into the facts and try to make an educated decision on whether or not to take a position in such a risky endeavor based on the facts that we uncover.

Keep in mind that like Vivus (pending drug: Qnexa) or other stocks that may have hit some turbulence along the way, the important thing to remember here is where we see these types of stocks heading in the next few quarters or year in the approval process and then worldwide sales. Today, these developing biotech stocks are very cheap, but upon evidence of successful trials and later approval, they could become multi-baggers in the next several months or years. Going back, Threshold (symbol: THLD) was a $96 stock in 2006 and below $1.50 in February of 2012!

As you evaluate the risks in biotech stocks, especially developmental stage biotech investments like this idea, you will need to factor in the following:

1. The probability of the drug getting FDA and EU approval? A central tradeoff facing the FDA involves balancing two goals: fulfilling its mission set by Congress to assure the "safety" and "efficacy" of drugs, while at the same time advancing the public health by not slowing down or disabling the innovative process by which new medical products reach the market.

2. Will it pass on "Safety" and "Efficacy?"

3. If proven safe and effective, what is the target value placed in the market for the drug in the US and then worldwide with EU approval? Could the company have a Multi- Billion Dollar per year blockbuster drug?

4. Then, if approved what is the process for getting the drug to market? This is very costly too and takes a lot of preparation and expense. Partnerships are often developed from Big pharma.

So, while all of this is going on in the background you might experience severe swings up and down in the price of the shares of stock like you may have ever seen before. Short term volatility should be part of the equation in doing business here, so please be prepared as you will certainly earn your return if a stock like this one does what we think it will do in the long run.

We are very impressed with CEO Dr. Barry Selick and his team who has addressed TH-302 and here are some details. Let's address some details:

GLOBAL RESOURCES

Threshold Pharmaceuticals and MerckKGaA Announce Global Agreement to Co-Develop and Commercialize Phase 3 Hypoxia-Targeted Drug TH-302

MARKET FOR THE DRUGS

Threshold is entering a multi-billion dollar market for multiple known diseases targeted with their pipeline. See the pipeline info below.

CLINICAL PIPELINE
Investigational Product Development Programs

SAFETY & EFFICACY

TH-302 tested now in over 500 patients, has been shown to be safe in every study. As presented at a recent conference earlier this year, the side effects are minor treatable skin and mucosal toxicity, resulting in a rash and in some cases, blistering. Also, take note that data suggests that TH-302 is safer than any standard of care treatments currently available today.

Threshold announces results from positive Phase 2b trial of TH-302

ORPHAN DRUG STATUS
Threshold Receives Orphan Drug Status in the EU for Soft Tissue Sarcoma

MILESTONE PAYMENTS ON REAL RESULTS
Threshold receives $20 million milestone payment from Merck

FINANCIAL STATUS
Threshold now has about $86 million in the bank and ZERO debt! As trials progress we expect more milestone payments from Merck.

BREAKING NEWS

1. Unlike Ever Before, Something Else Is Developing In Our Favor: The US May Speed The Approval Of Breakthrough Drugs.

2. University of Georgia professor Ying Xu and his colleagues released some recent key research suggesting that Hypoxia might very well be the key to treating multiple types of cancers. See the Journal of Molecular Cell Biology Advance Access published April 20, 2012.

We give Dr. Ying Xu and his team great praise in tackling the issue of oxygen and it's role in defeating cancer. Without question, Dr. Xu's current research confronts traditional Western medicine's belief that low oxygen levels in cells, not genetic mutations, may fuel uncontrollable cancer growth. His findings support those described almost 80 years ago by Dr. Otto Warburg, who not only was awarded the Nobel Prize in 1931, but was nominated three additional times! Dr. Warburg's discovery has opened up new avenues in the field of cellular metabolism and cellular respiration. He has shown, among other things, that cancerous cells can live and develop, even in the absence of oxygen. In summary, his achievements highlighted the fact that cancer cells proliferate in a "Hypoxic" state. When that state changes to a non-hypoxic state, the cancer cells die! Oxygen therapies, as embraced by non-traditional practitioners, does indeed have merit as Dr. Xu has discovered. With great certainty in Hypoxia research from Warburg and Xu, the medical community is taking notice.

OK, what's next? More data is expected out soon and the American Society of Clinical Oncology - ASCO is pending as well. Top line results are expected by year end 2012. We are very bullish and stand behind the management of this company and see tremendous upside into 2012 - 2013. I strongly believe as we did on Vivus (symbol: VVUS) from $10 to $25, Inhibitex (acquired by BMY in Jan 2012) from $11 to $26 (symbol: INHX) and a few others that our group follows...that TH-302 will continue to be proven to be safe and effective. THLD is financially strong and has the necessary relationships and resources to get TH- 302 to market worldwide on continued success.

Threshold short interest is: 5,945,300 shares and 3.6 days to cover.

Lastly, as you may know, investing in biotechs are very risky and there is a trade-off between risk and reward so please treat this idea as such. We ask that you please review the enclosed details with your financial advisor if interested in any stocks researched by this author, editor, and chief strategist of EXPstocktrader.com.

Disclosure: I am long THLD.

VIVUS, NASDAQ: VVUS, is a biopharmaceutical company developing therapies to address obesity, sleep apnea, diabetes and male sexual health. The company's lead investigational product in clinical development, Qnexa®, has completed phase 3 clinical trials for the treatment of obesity and is currently being considered for approval by US and EU regulators. The market for prescription weight loss pharmacotherapy is estimated to be $5 billion by 2015. The potential for new prescription drugs to treat obesity and maintain weight loss is enormous to say the least. In the US, about $60 billion is spent every year on weight loss products including multiple diet programs, dietary foods and beverages, OTC supplements, appetite suppressants, gym memberships, videos, books, exercise equipment, and even bariatric surgery. There is currently one FDA approved drug for weight loss Xenical (orlistat), but unpleasant GI side effects has resulted in very low popularity.

Qnexa may have the potential, if approved, to garner the lion's share of this market. The weight-loss drug Qnexa, was rejected by the FDA in October, 2010. VIVUS received a Complete Response Letter, or CRL, to the initial Qnexa NDA on October 28, 2010. Qnexa is also in phase 2 clinical development for the treatment of type 2 diabetes and obstructive sleep apnea. In the area of sexual health, VIVUS has submitted an NDA for avanafil, a PDE5 inhibitor being studied for the treatment of erectile dysfunction. For more information about the company, please visit www.vivus.com.

Qnexa was developed by Dr. Thomas Najarian, the inventor of Qnexa who opened a weight-loss clinic in 2001 and has seen great success by engaging through a regulatory loophole of sorts, whereby many obesity doctors prescribe the two already approved separate drugs that make up Qnexa . When taken together, they are essentially the same medicine. So, the combination of these two existing drugs, phentermine, an appetite suppresor, and topiramate, a drug typically used for epilepsy and migraines is currently found to be working, and has done so for several years . Some doctors believe the component drugs are very effective at managing obesity, and the two drugs can be prescribed separately to patients under this loophole despite the dangers sited by the FDA.

However, the FDA is concerned about the documented side effects of Qnexa, and as a result, the FDA may require a large new clinical trial to reassess if Qnexa increases the risk of heart attacks. This approval requirement, if implemented, would delay FDA approval on the drug once again.

Mountain View, California, Oct. 17, 2011 - VIVUS, Inc. announced that the company has resubmitted the New Drug Application (NDA) for Qnexa® (diet drug) to the U.S. Food and Drug Administration (FDA). The resubmission follows an agreement reached in September 2011 with officials of the Endocrine and Metabolic Division of the FDA on the filing strategy for Qnexa. The NDA resubmission seeks approval for an initial indication for the treatment of obesity, including weight loss and maintenance of weight loss for obese patients (BMI > 30 kg/m2), or overweight patients (BMI > 27 kg/m2) with weight-related co-morbidities such as hypertension, type 2 diabetes, dyslipidemia, or central adiposity (abdominal obesity). The proposed labeling for Qnexa includes a contraindication (Not to be used) for women of childbearing potential (WOCBP). The NDA resubmission also includes a proposed Risk Evaluation and Mitigation Strategy (REMS).

After further discussion with the agency, FDA has asked and VIVUS agreed to remove the contraindication for WOCBP because a contraindication typically indicates that a drug should not be used in that population because of the risk of use clearly outweighs any possible therapeutic benefit. In addition, FDA asked that VIVUS include less restrictive elements in its REMS program that focus on patient and physician educational measures because it was concerned that more restrictive measures may result in greater off-label use of currently marketed topiramate and phentermine products to treat obesity in WOCBP without the benefit of an appropriate risk mitigation program. In response to these concerns, VIVUS removed the contraindication in WOCBP and modified its risk mitigation strategy.

Documents posted online last Friday, showed that the FDA reiterated concerns about two safety issues that plagued the pill the time first around: Potential heart problems and birth defects in women who become pregnant while taking the drug. On Wednesday the FDA will ask experts at a public meeting to weigh in on those issues, specifically risks of cleft lip defects associated with one of the ingredients in Qnexa. The experts will also discuss blood pressure and higher heart details reported from patients taking the drug.

Utimately, the panel of doctors will take a final vote on whether the drug appears safe and effective. The group's recommendation is not binding, and the FDA is expected to make its final decision during April 2012.

Medical Need Sited
Results from the 2007-2008 National Health and Nutrition Examination Survey indicate that approximately 68% of adults in the United States are obese or overweight (Flegal 2010). Obesity is associated with numerous co-morbidities, including dyslipidemia, coronary artery disease, hypertension, stroke, cancer, and type 2 diabetes (Must 1999; Poirier 2006). Epidemiological data indicate obesity and excess weight as factors associated with an increased risk of premature death (Adams 2006; Katzmarzyk 2003). Recent data suggest that current increases in obesity rates could continue. At present, the only effective treatment for obesity is bariatric surgery; however, this approach has been reported to have significant complications.

Market Potential
Within 5 years Qnexa could attain a significant share or the greatly enhances obesity market due to its efficacay and flexible dosing options, which could fit a wide variety of patient profiles.

Target
Qnexa is expected to replace current available agents and expand the weight management category to patients not currently receiving pharmacotherapy. Also, the drug would be heavily marketed to primary care physicians who currently account for about 90% of the current weight loss prescriptions, as well as, they would be seeking a global partner.

Medical Concerns
1) Heart rate issues
2) Blood Pressure issues
3) Birth defects with WOCBP/teratogenicity is not unique for Qnexa - so strong REMS and labeling should satisfy the FDA. WOCBP - just exclude them.

Investors placing their bets on approval sited here:
SC 13G VIVUS INC (ORBIMED ADVISORS LLC) 02/14/12
SC 13G VIVUS INC(QVT FINANCIAL LP) 09/02/11
SC 13G VIVUS INC(SUTTONBROOK CAPITAL MANAGEMENT LP) 03/09/11
SC 13G VIVUS INC(FIRST MANHATTAN CO) 02/15/11
SC 13G VIVUS INC(CITADEL ADVISORS LLC) 02/04/11
SC 13G VIVUS INC(BLACKROCK INC.) 01/29/10
SC 13G VIVUS INC(FMR LLC) 2/17/09

BofA/Merrill has increased expectations of a positive recommendation of VIVUS's Qnexa following a review of the FDA's briefing documents. Shares are Buy rated with a $16 price target.

Lastly, it is reported that Qnexa exceeds the FDA's minimum effictiveness requirement, but the real question is whether or not the new safety date presented will sway the new FDA panel? This year there are 22 panel members scheduled to vote. FDA advisors meet this coming Wednesday, however the final approval to approve the Qnexa weight loss drug, the first new prescription diet pill in 13 years, is slated for April 2012.

Disclosure: I am long VVUS.

This article is a recap of events currently underway in the Hepatitis C arena compiled with facts from industry experts and articles over the last several weeks about what is currently talking place right now.

Hepatitis C virus (HCV) reports say that there about 170+ million people globally, including 4.1 million Americans, and annual projections range from $3 billion to $20 billion by 2020. Volume may be seen as high as $100 billion over the next decade according to Mark Schoenebaum of ISI Group. Mark Schoenebaum is a Senior Managing Director, heads ISI's Health Care Research Team and is ISI's Biotechnology & Pharmaceuticals-Major Analyst. He has been ranked Institutional Investor #1 biotechnology analyst for the past 7 years. In addition, Mark has been highly ranked in the Greenwich Associates survey for several years.

HCV spreads through contact with contaminated blood which is the most common form of the virus who carry the virus. It's by far the leading cause of chronic liver disease, and can lead to liver cancer. The current treatment includes treatment which is not tolerated by everyone and includes injections of the drug interferon alpha, which side effects include fatigue, fever and depression. Most liver transplants performed in the U.S. are due to progressive liver disease caused by the Hepatitis C virus.

We are on the threshold of a watershed moment in the treatment of Hepatitis C - according to a recent editorial in the New England Journal of Medicine. A world-renowned expert in the field, Raymond Chung, MD, from Massachusetts General Hospital and Harvard Medical School opines, "This is a watershed moment in the annals of HCV therapy because it shows that a sustained virologic response can be achieved without interferon. Implicit in this finding is the concept that 2 potent agents with complementary resistance profiles, given for a sufficient duration, can impose a stranglehold on viral replication and result in clearance of the virus." More significantly he suggests "Can we do even better? Certainly. with inclusion of "nucs"...nucleotide polymerase inhibitors, which are unique among direct-acting antiviral classes because they offer a high barrier to the selection of viral resistance we can anticipate regimens with substantially lower breakthrough rates. He concludes "We are on the threshold of a treatment revolution that will greatly improve the effectiveness of HCV therapy by dramatically increasing the number of persons treated. There has never been a more exciting time for patients and providers who grapple with this silent killer."

The stage has been set for effective a complete cure in a hitherto incurable and widespread disease by aggressive and judicious use of combination therapy with a regimen that includes distinct antiviral classes esp. nucleotide polymerase inhibitors, given their high genetic barrier to resistance and pan-genotypic coverage, will be a crucial ingredient in such combination regimens.

Here are the facts as we know them:

• Biotech's are hot again in the first quarter of 2012
• People may be are scared of biotech stocks this year because they were beaten up last year. Review Murphy's Law? Maybe they were just cleaned out by the hedge funds for a run this year?
• Biotech merger mania is back as stronger than ever per industry experts and our research
• Case in point: Pharmasset (VRUS) is acquired for $11B http://www.reuters.com/article/2011/11/21/us-gilead-pharmasset-idUSTRE7AK0XU20111121
• Anadys is acquired for $230M http://www.marketwatch.com/story/roche-to-buy-anadys-to-boost-hepatitis-therapies-2011-10-17
• January 7, 2012 Bristol-Myers Squibb to Acquire Inhibitex for $2.5 billion. Reports suggest that Inhibitex was acquired and there were as many as 5 bidders. http://www.businesswire.com/news/home/20120107005030/en/Bristol-Myers-Squibb-Acquire-Inhibitex
• Other recent Pharma Buyout news: Illumina (ILMN) received a buyout offer http://www.reportlinker.com/news/2012/01/Pharma-Buyout-Bid-Roche-Offers-5-7-Billion-for-Illumina-645
• Many hedge fund and trader s are also seeing what we are seeing in the Biotech arena...HEP C plays because Idenix has the last "nuc", nucleocide
• Researchers say that if you are chasing the Hep C virus without a nuc than if will be an uphill battle
• After recent buyouts of VRUS and IHNX stocks, valuations for M&A are very rich now...many HCV stocks have already doubled in valuations
• New 13G's have been recently filed on IDIX (5% ownership required filings)

1) T ROWE PRICE ASSOCIATES - 7.8% stock ownership - 8,336,002 shares

2) BAUPOST GROUP - 5.29% stock ownership - 5,665,000 shares
http://en.wikipedia.org/wiki/Baupost_Group#Investment_Strategy

• On January 9, Idenix announced that its lead drug candidate for HCV, IDX184 showed No serious side effects in patients after 28 days of treatment
• January 11, 2012 Merck announced that it may consider acquisitions to expand its Hep C drug lineup
• January 13, 2012 Idenix announced that is open to find a partner to create a combination treatment to fight the virus with its drug candidate called IDX184, CEO Ron Renaud said.
• January 20, 2012 ISI Group biotech analyst Mark Schoenebaum held a lunch meeting for 120 investors to discuss the current state of hepatitis C drug development. As part of his meeting, Schoenebaum surveyed his investor audience -- made up of 30% generalists, 20% arbs and 30% specialists -- on their views and opinions about the current red-hot topics in hepatitis C. Asked if Idenix Pharma has a greater than 50% chance of being acquired, 79% of the investors responded in the affirmative, 21% said no.
• February 3, 2012 Idenix Says FDA Partial Hold On Hep C Drug IDX184 was lifted ...very good news
• February 6, 2012...house cleaning...Idenix's building is sold to BioMet Realty? Is a move in the works?
• February 6, 2012....more house cleaning... Idenix allegedly pushes out controversial long time director since 2003, Charles W. Cramb, after allegations regarding Avon stock http://www.forbes.com/sites/walterpavlo/2012/01/31/avon-vice-chairman-fired-amid-bribery-probe/
• Analysts feel that IDX184 can be used as a "patch" and needs another potent drug to cover for its shortcomings. Combined drugs are desired because they attack different checkpoints for the HCV disease as they travel through the body. This last nuc could be the right patch?
• Industry experts and our research suggests that it is very possible that Merck's FDA already approved drug MK-5172 / Victrelis (boceprevir) is the Best fit for IDX184
• As suggested, the most notable drug in Merck's HCV pipeline is its FDA approved first-in-class, oral hepatitis C virus (HCV) NS3/4A protease inhibitor,MK-5172, a pan-genotypic protease inhibitor (PI). However MK-5172, despite high potency, has one potential drawback in that it may still select for fit mutations due to lower genetic barrier to resistance as compared to the nukes. It would hence make sense for this to be paired with a nucleotide polymerase inhibitors, given their high genetic barrier to resistance. A once daily PI + nuc combination of MK-5172+IDX184 might well be one of the attractive treatment options for Hep C infection. The fact is Merck desperately needs to find a nuc for MK-5172 to remain relevant in the field of Hep C, and IDX184 is now the only nuke left in the field that is in Phase II development.
• Also noted, TheStreet Senior biotech columnist Adam Feuerstein commented that based on a conversation with a "Hep C bull" at the JP Morgan Healthcare conference and tweeted on Jan 13 a prediction that "Merck (MRK) would buy Idenix (IDIX) for $3B." Merck has made no secret for its desire to be at the forefront of the race to cure Hep C. "Our goal is to be a leader in hepatitis C, and we will do what it takes to get there," says Merck's Roger Pomerantz, worldwide head of licensing and acquisitions, reports Bloomberg. "We would consider small deals to large deals, whatever is necessary to lead in hepatitis."
• Bank of America raises its price objective on IDIX to $18 from $9 previously on much more attractive valuation following the INHX acquisition
• Wedbush sets a new price target for IDIX at $24 on renewed takeover speculation sighting $MRK, $JNJ and $ABT as potential suitors
• Geoff Meacham, senior biotechnology analyst at J.P. Morgan raised IDIX from $12 to $25 following their J.P. Morgan Health Care Conference in San Francisco, January 2012
• February 7, 2012 Idenix Pharmaceuticals to Present at Two Upcoming Investor Conferences
  http://www.prnewswire.com/news-releases/idenix-pharmaceuticals-to-present-at-two-upcoming-investor-conferences-138877929.html

In conclusion: We are in the midst of a Hep C "Gold Rush" so to speak, and as industry experts feel, just as we do...it's really just a matter of time before we find out more about the right suitor for Idenix's nuc drug candidate IDX184. Remember, reports suggested that Inhibitex (INHX) was acquired for $2.5B for their 1 drug candidate and there were as many as 5 bidders, four who lost out, but may be eyeing Idenix? Further, Inhibitex only had 1 drug, but Idenix has at least "four" with a very strong pipeline. Here is a link to the Idenix pipeline according to their website:http://phx.corporate-ir.net/phoenix.zhtml?c=131556&p=irol-productpipeline

Disclosure: The editor of this article is long Idenix stock as well as many other biotech companies and may initiate adding to positions within the next 72 hours.

Credit Articles / News Services / Conferences / Research Firms:

• Fda.gov/News Events/Newsroom/PressAnnouncements ...Media. Erica Jefferson Erica.jefferson@fda.hhs.gov
• New Drug Combo for Hepatitis C Shows Promise by Mary Marcus, HealthDay Jan 18, 2012
• Idenix Pharmaceuticals / Investor Page phx.corporate-ir.net/phoenix.zhtml?c=131...
• Bloomberg news: Idenix Seels Partner for Hepatitis C Combination Drug, CEO Renaud Says
• Benzinga News: http://www.benzinga.com/trading-ideas/long-ideas/12/01/2254086/going-nuc-lear-on-hepatitis-c-is-idenix-the-next-target
• Reuters news
• Biospace news
• Forbes news
• BusinessWire
• Wedbush research
• JP Morgan research
• TheStreet, Adam Feuerstein - Biotechnology Columnist
• JP Morgan Healthcare Conference / San Francisco January 2012
• New England Journal of Medicine
• Raymond Chung, MD, from Massachusetts General Hospital and Harvard Medical School

Disclosure: I am long IDIX.