Threshold begins $18M refinancing

The USA's Threshold Pharmaceuticals has entered into a purchase agreement with a select group of investors to sell an $18.3 million stake in the firm.

Threshold's common stock has a par value of $0.001 per share, but will be purchased at a premium of $0.34 per share. Investors will receive a warrant to buy 0.4 shares of common stock for each unit purchased. The warrants will have a five-year term and an exercise price equal to $0.39 per share. The company anticipates issuing 53,823,530 shares, and warrants to purchase a further 21,529,413. Four members of the firm's management team will buy 1,470,588 of the shares with the rest divided between Sutter Hill Ventures, HealthCare Ventures, Alta Partners and Three Arch Partners. The company anticipates that the offering will close in the third quarter.

Threshold will use the proceeds of the financing to complete an ongoing Phase I/II clinical trial evaluating TH-302, a hypoxia-activated prodrug for the treatment of various solid tumors, as well as to complete at least one additional Phase I/II clinical study of the drug in an additional indication and to initiate at least one controlled Phase II clinical trial of the drug alone or in combination with chemotherapy. It will also begin preclinical activities related to another HAP clinical candidate.