Threshold Pharmaceuticals Inc. ( THLD - Snapshot Report ) reported fourth-quarter 2012 net loss per share of 10 cents, narrower than the Zacks Consensus Estimate of a loss of 12 cents and the year-ago loss of 11 cents.

Fourth-quarter revenues were $2 million, compared with $62000 in the year-ago quarter. Revenues missed the Zacks Consensus Estimate of $3 million.

Full year 2012 net loss per share was $1.31, narrower than the Zacks Consensus Estimate of a loss of $1.89 and the year-ago loss of $56 cents. Revenues in 2012 were $5.9 million, compared with $62000 in 2011. Revenues for 2012 were below the Zacks Consensus Estimate of $7 million.

In fourth quarter 2012, research and development (R&D) expenses were $6.2 million, down 7.5% year over year. $3.0 million was received as Merck KGaA's ( MKGAF ) 70% share of funding the development of TH-302. This amount was partially offset by a rise of $2.5 million in clinical development and employee related expenses.

In the reported quarter, general and administrative expenses were $1.9 million, up 35.7% from the year-ago period. The increase was driven by an increase in employee related expenses and consulting expenses.

Pipeline Update

In Feb 2012, Merck KGaA signed an agreement with Threshold for global license and co-development of TH-302. TH-302 is in a phase III study that will evaluate the efficacy and safety of TH-302 plus Eli Lilly and Company’s ( LLY - Analyst Report ) Gemzar (gemcitabine) in patients with previously untreated, locally advanced unresectable or metastatic pancreatic adenocarcinoma.

The study is being conducted under the US Food and Drug Administration’s (FDA) Special Protocol Assessment (SPA) program. The randomized, double-blind, placebo controlled, international and multi-center study will enroll roughly 660 patients and will compare TH-302 plus Gemzar with placebo plus Gemzar. The study’s primary endpoint is overall survival and the secondary endpoints include efficacy measured by progression-free survival (PFS), overall response rate and disease control rate.

Another phase III trial is being conducted with TH-302 also under the FDA’s SPA program. The 406 trial will compare TH-302 in combination with doxorubicin to doxorubicin alone for treating patients with soft tissue sarcoma (STS). Merck KGaA has orphan drug status in the US as well as the European Union for TH-302 for the STS indication. Enrollment is expected to be completed roughly at the end of 2013.

The successful development of TH-302 will be a major milestone for Threshold Pharma, which currently does not have any marketed products in its portfolio. Threshold Pharma carries a Zacks Rank #3 (Hold). Right now, Cytokinetics, Inc. ( CYTK - Snapshot Report ) looks more attractive with a Zacks Rank #1 (Strong Buy).