1. SARC021 A Randomized Phase 3, Multicenter, Open- Label Study Comparing TH-302 in Combination with Doxorubicin vs. Doxorubicin Alone in Subjects with Locally Advanced Unresectable or Metastatic Soft Tissue Sarcoma PI: William Tap, MD Memorial Sloan-Kettering Cancer Center

2. TH-302 Combination Therapy in Soft Tissue Sarcoma Phase 3 Study Design  Collaborative Trial by Threshold Pharmaceuticals and Sarcoma Alliance for Research through Collaboration (SARC)  Trial managed (including data management) by PAREXEL  An Independent Data Monitoring Committee (IDMC) will monitor the safety and efficacy. (Ron Blum)  An Independent Review Facility will be used to collect radiographs and may be used to independently evaluate tumor response and PFS

3. 3 Hypoxia Activated Prodrugs (HAPs)  Hypoxia-activated prodrugs (HAPs) selectively target hypoxic tumor cells  Hypoxia is a feature of solid tumors  Associated with a worse prognosis  Associated with an aggressive phenotype, invasiveness, metastasis, and relapse  Often underlies treatment failure  HAPs should complement conventional cancer therapies

4. Chemotherapy Targets Oxygenated Tumor Compartment Vessels: Red Doxorubicin: Blue Hypoxia: Green Minchinton, A. and Tannock, I. Nat. Rev. Cancer. 6: 583-92, 2006 Mouse mammary tumor 4

5. 5 e.g. NADPH-cytochrome P450 reductase O 2 O 2 superoxide TH-302 Radical anion - Non-toxic prodrug reduced to radical anion (by 1e - reductase) - Back-oxidation to the original compound in presence of O 2 and production of superoxide - e.g. NADPH-cytochrome P450 reductase O 2 TH-302 - - Radical anion Hydroxyl amine Br-IPM Further reduction Fragmentation Chemistry Strategy for Targeting Hypoxia Hypoxia-Activated Prodrugs (HAPs)

6. 6 0% O 2 0.5% O 2 5% O 2 10% O 2 Blood vessel Normoxic zoneHypoxic zone TH-302Chemotherapy

7. Waterfall Plot: Change in Target Lesion Diameters TH-302 + Doxorubicin in Soft Tissue Sarcoma The 403 Phase 1/2 Trial: 84% of Patients Experienced SD or Better (10/27/11)

8. Phase 2 Response by Sarcoma Subtype Response rate (CR + PR): 36%

9. TH-302 MAINTENANCE FOLLOWING TH-302 PLUS DOXORUBICIN INDUCTION: THE RESULTS OF A PHASE 2 STUDY OF TH-302 IN COMBINATION WITH DOXORUBICIN IN SOFT TISSUE SARCOMA Ganjoo KN 1, Cranmer LD 2, Van Tine B 3, Reed DR 4, Okuno SH 5, Butrynski JE 6, Adkins D 3, Hendifar A 7, Chu ED 8, Kroll SM 8, Chawla SP 7 1. Stanford University Medical Center, Stanford, CA, USA; 2. Arizona Cancer Center, Tucson, AZ, USA; 3. Washington University, St. Louis, MO, USA; 4. H. Lee Moffitt Cancer Center and Research Institute, Tampa, FL, USA; 5. Mayo Clinic, Rochester, MN, USA; 6. Dana-Farber Cancer Institute, Boston, MA, USA; 7. Sarcoma Oncology Center, Santa Monica, CA, USA; 8. Threshold Pharmaceuticals, South San Francisco, CA, USA. Update on Overall Survival of 91 pts and Maintenance of 48 pts

10. TH-302 Maintenance in Soft Tissue Sarcoma- Response Rates Response Rates: Overall response rate for 48 subjects receiving maintenance was 44% prior to receiving maintenance and 54% including both induction and maintenance. During the maintenance portion of the study 6 subjects had an upgrade in response category: 5 SDs converting to PR 1 PR converting to CR Table 5: Best Response (Unconfirmed) to Overall Treatment All (N=91*) Maintenance after Induction (N=48) Maintenance (N=48) Best Response Complete Response2 (2%)1 (2%)2 (4%) Partial Response30 (34%)20 (42%)24 (50%) Stable Disease43 (48%)27 (56%)22 (46%) Progressive Disease14(16%)0 (0%) Overall Response Rate (RR) (Partial Response + Complete Response)32 (36%)21 (44%)26(54%) * Two patients discontinued with reason subject decision (1) and PI decision (1) prior to initial tumor response assessment.

11. TH-302 Maintenance in Soft Tissue Sarcoma- Progression-free Survival Figure 1B: Progression-free Survival after Initiating Maintenance (N=48) Progression-free Survival: The median PFS on study was 6.7 months (95% CI: 6.2 to 7.8 months). Figure 1A. The median PFS after TH-302 maintenance was 3.7 months (95% CI: 2.5 to 5.5 months). Figure1B. Figure 1A: Progression-free Survival on Study (N=91)

12. SARC021 Schema Eligible Patients (N=450) ≥ 15 Years of Age Locally Advanced Unresectable or Metastatic Soft Tissue Sarcoma Stratification/Randomization TH-302 + Doxorubicin 21 Day Cycle Day 1 = TH-302 (300 mg/m 2 ) and Doxorubicin (75 mg/m 2 ) Day 8 = Th-302 (300 mg/m 2 ) and Day 8 or Day 9 = G-CSF Doxorubicin 21 Day Cycle Day 1 = Doxorubicin (75 mg/m 2 ) Response evaluations end of cycles 2, 4 and 6 until progression or discontinuation Note: Patient continues monotherapy TH-302 maintenance after cycle 6 without doxorubicin and G-CSF until discontinuation Response evaluations end of cycles 2, 4 and 6 until progression or discontinuation Note: Patient is discontinued after cycle 6 Survival Follow-up

13. TH-302 Combination Therapy in Soft Tissue Sarcoma Phase 3 Study Status  Approximately 25% of 450 subjects enrolled  Approximately 50% of planned sites now active  Sites open in Belgium, Canada, Germany, Israel, Italy, Hungary, Poland, Spain and United States  Sites soon to open in Austria, Denmark, France and Russia  Initial PFS futility analysis (113 events) projected to occur in 2 nd quarter of 2013  Enrollment on schedule to be completed by end of 2013  Initial OS interim for early efficacy stoppage (175 deaths) projected for end of 2013  Primary analysis (323 deaths) projected for end of 2014/beginning of 2015

14. Thank You  William Tap, MD Memorial Sloan-Kettering Cancer Ctr/SARC P: 646-888-4163 tapw@mskcc.org  Denise Reinke, MS, NP SARC P: 734-930-7600 dreinke@sarctrials.org  Clarence Eng Threshold P: 650-474-8222 ceng@thresholdpharm.com  Katherine Randolph PAREXEL International P:858-487-8259 Katherine.Randolph@parexel.com 14 Who to contact if interested or with questions: