Celgene's previous Abraxane data in pancreatic cancer must be interpreted cautiously since the study included no control arm. Investigators may have inadvertently enrolled relatively healthier patients into the study, skewing results in the drug's favor and making it difficult to confirm the benefit in larger, randomized trials. Abraxane's toxicity, especially in possibly healthier-than-normal patients, raises further concern.

Celgene's massive $33 billion market capitalization is largely linked to the company's impressive Revlimid franchise. I'm not convinced Abraxane can make a big enough dent in pancreatic cancer to make this an investable catalyst. There are reasons to own Celgene but not based on Abraxane in pancreatic cancer alone.

Threshold Pharmaceuticals

Threshold shares have nearly quintupled this month due to positive results from a non-blinded 214-patient Phase 2b trial of TH-302, again combined with gemcitabine, in pancreatic cancer. TH-302 is a modified version of a decades-old anti-cancer agent that the company believes becomes activated in hypoxic (low oxygen) areas of solid tumors in which traditional therapies have limited efficacy. The mechanism seems interesting but has little history; no marketed drug that I know of exerts its effects in this manner.

Despite my caution, TH-302 appears to have activity. In the Phase 2b, the drug delayed disease progression -- a metric known as progression free survival, or PFS -- by two months compared to gemcitabine alone. Patients in the TH-302 group also had a higher response rate than controls, a finding that matches earlier studies.

My concerns are about TH-302's unproven mechanism-of-action, the non-blinded Phase 2b trial -- which can lead to biased data interpretations -- and the risks of relying on a surrogate marker like PFS, which does not always translate reliably to overall survival. Although the two measures are correlated, the correlation varies from study to study. As an investor, I need to be more comfortable that the solid PFS differences observed in the Phase 2b trial -- an improvement from 3.6 months to 5.6 months -- will translate to a clinically significant difference in survival.

Nonetheless, with a market capitalization of less than $300 million, a recently inked development partnership with Germany-based Merck KGaA, and promising results from initial studies, Threshold seems worth a small long position.

Disclosure: Sadeghi has no positions in Clovis Oncology, Celgene, Threshold Pharmaceuticals or any of the other stocks mentioned in this article.

--Written by Nathan Sadeghi-Nejad in New York.
Nathan Sadeghi-Nejad has 15 years experience as a professional health-care investor, most recently as a sector head for Highside Capital. He has worked on the sell side (with independent research boutiques Sturza's Medical Research and Avalon Research) and the buyside (at Kilkenny Capital prior to Highside). Sadeghi-Nejad is a graduate of Columbia University and lives in New York. You can follow him on Twitter @natesadeghi.

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