Texas biotech executes a reverse merger with a battered Threshold
Five months after watching its stock go into a meltdown on the mid-stage failure of its cancer drug tarloxotinib, South San Francisco-based Threshold Pharmaceuticals $THLD has worked out a reverse merger with a small, Austin-based biotech called Molecular Templates. And the deal comes with the prospect of a fresh injection of capital.
Longitude Capital has agreed to pump in $20 million for the combined company, provided Threshold can work out an additional $20 million investment.
Molecular Templates has been working on a platform called Engineered Toxin Bodies, or ETBs, which are described as having the “affinity of an antibody.” They go after cancer cells and also add antigens into cancer cells so that the immune system will be more likely to target them for destruction.
Molecular Templates’ most advanced program is an early-stage drug dubbed MT-3724, which “targets the CD20 cell surface antigen present in a variety of lymphomas and leukemias.” And it’s picked up about $26 million from the Cancer Prevention and Research Institute of Texas.
In the reverse, Molecular Templates’ investors will own a majority of the company and they’ll change the ticker symbol to $MTEM.
Eric Poma, CEO Molecular Templates, commented:
The combined company will have two exciting clinical-stage compounds in evofosfamide and MT-3724 and a unique biological platform with a differentiated mechanism of action in oncology. Longitude’s commitment to invest in the company is a strong testament to the promise inherent in the combined companies’ clinical assets and technology platform.