SEC Form 4

FORM 4		UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940	OMB APPROVAL OMB Number: 3235-0287 Estimated average burden hours per response: 0.5
	Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person* PEQUOT CAPITAL MANAGEMENT INC (Last) (First) (Middle) 500 NYALA FARM ROAD (Street) WESTPORT CT 06880 (City) (State) (Zip)	2. Issuer Name and Ticker or Trading Symbol THRESHOLD PHARMACEUTICALS INC [ THLD ]	5. Relationship of Reporting Person(s) to Issuer (Check all applicable) Director 10% Owner Officer (give title below) X Other (specify below) See Footnote 1
	3. Date of Earliest Transaction (Month/Day/Year) 09/25/2006
	4. If Amendment, Date of Original Filed (Month/Day/Year)	6. Individual or Joint/Group Filing (Check Applicable Line) Form filed by One Reporting Person X Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
			Code	V	Amount	(A) or (D)	Price

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
				Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares
Stock Option (Right-to-buy)	$6.26	09/25/2006		D(3)			15,000(2)(3)(3)	06/19/2005	05/19/2015	Common Stock	15,000(2)(3)	(3)	0(2)(3)	I(2)	Investment Advisor(1)
Stock Option (Right-to-buy)	$4.13	09/25/2006		D(4)			15,000(2)(4)(4)	06/25/2006	05/24/2016	Common Stock	15,000(2)(4)	(4)	0(2)(4)	I(2)	Investment Advisor(1)

1. Name and Address of Reporting Person* PEQUOT CAPITAL MANAGEMENT INC (Last) (First) (Middle) 500 NYALA FARM ROAD (Street) WESTPORT CT 06880 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director 10% Owner Officer (give title below) X Other (specify below) See Footnote 1

1. Name and Address of Reporting Person* ENRIGHT PATRICK G (Last) (First) (Middle) 500 NYALA FARM ROAD (Street) WESTPORT CT 06880 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer X Director 10% Owner Officer (give title below) Other (specify below)

Explanation of Responses:

1. Pequot Capital Management, Inc. ("Pequot") is an investment advisor registered under Section 203 of the Investment Advisers Act of 1940 and has voting and investment power with respect to securities in its clients' accounts. Pequot disclaims any obligation to file this report, and this report shall not be deemed an admission that Pequot is subject to Section 16 with respect to the Issuer of such securities. Patrick G. Enright is an employee of Pequot and serves on the Board of Directors of the Issuer and disclaims beneficial ownership of these securities except to the extent of his pecuniary interest.

2. Pequot disclaims beneficial ownership of these securities, and this report shall not be deemed an admission that Pequot is, for the purposes of Section 16 of the Exchange Act or otherwise, the beneficial owner of such securities.

3. On September 25, 2006, the Issuer cancelled, pursuant to the Issuer's Option Exchange Program (the "Program"), an option granted to the Reporting Person on May 19, 2005 to purchase 15,000 shares of the Issuer's common stock at an exercise price of $6.26 per share, which vested monthly over one year (1/12th per month) beginning on June 19, 2005. In exchange for the cancellation of the option, the Reporting Person will receive a replacement option on September 27, 2006 for the same number of shares, that will have an exercise price equal to the closing price of the Issuer's common stock as of the close of business on September 27, 2006 and will be fully vested as of the same date of the replaced option grant.

4. On September 25, 2006, the Issuer cancelled, pursuant to the Issuer's Option Exchange Program (the "Program"), an Option granted to the Reporting Person on May 25, 2006 to purchase 15,000 shares of the Issuer's common stock at an exercise price of $4.13 per share, which vested 1/12th for the first 11 months following the date of the grant and the remaining shares will vest on the date of the Issuer's annual stockholder meeting for the year following the year of the grant of the Option. In exchange for the cancellation of the Option, the Reporting Person will receive a replacement option on September 27, 2006 for the same number of shares, that will have an exercise price of equal to the closing price of the Issuer's common stock as of the close of business on September 27, 2006 and will be fully vested as of the same date of the replaced option grant.

	Aryeh Davis, GC & COO, Pequot Capital Management, Inc.	09/27/2006
	Patrick G. Enright, Director (1)	09/27/2006
	** Signature of Reporting Person	Date
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* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
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