Initial drawdown of $10 million extends cash trail to mid-2023
SAN DIEGO, Sept. 06, 2022 (GLOBE NEWSWIRE) — TRACON Pharmaceuticals, Inc. (Nasdaq: TCON), a clinical-stage biopharmaceutical company using a cost-effective, CRO-independent product development platform to advance its pipeline of new cancers therapeutics and partner with other life science companies, today announced entry into a $35 million non-dilutive long-term debt facility with Runway Growth Capital LLC (Runway), a major provider of corporate loans funded by non-risky, non-dilutive capital seeking companies.
“This non-dilutive funding extends our cash trail to support the robust build-up of the pivotal ENVASARC trial pending completion of the TJ4309 Phase 1 clinical trial which triggers I- Mab for $9 million as well as the outcome of the arbitration linkage with I-Mab, both of which are expected this quarter,” said Charles Theuer, MD, Ph.D., President and Chief Executive Officer of TRACON. We are excited to partner with Runway, which seeks long-term relationships with late-stage life science companies that will benefit from non-dilutive capital.”
“We are excited to enter this facility with TRACON to help them achieve their goal of commercializing envafolimab, the world’s first subcutaneous checkpoint inhibitor, in the underserved indication of sarcoma,” said Igor DaCruz, General Manager, Life Sciences at Runway.
$10 million of the $35 million loan was funded at closing. The additional $25 million available under the facility may be funded upon completion of certain clinical milestones and at Runway’s discretion. The loan has a 24 month interest only term followed by 24 monthly principal and interest payments. As part of the debt financing, TRACON issued Runway warrants to purchase up to 150,753 of its common shares at an exercise price of $1.99 per share.
Proceeds from the facility will be used to support the ongoing ENVASARC pivotal trial and for general corporate purposes.
Envafolimab (KN035), a single-domain antibody against PD-L1 invented by Alphamab Oncology, is the first approved PD-(L)1 inhibitor injected subcutaneously. Envafolimab was approved by the Chinese NMPA in November 2021 for adult patients with advanced MSI-H/dMMR solid tumors who have failed systemic therapy and do not have satisfactory alternative treatment options. In December 2019, Alphamab Oncology, 3D Medicines and TRACON entered into a collaboration under which TRACON has the rights to develop and commercialize envafolimab for the treatment of soft tissue sarcoma in North America. Envafolimab is currently being studied in the pivotal US Phase 2 ENVASARC trial sponsored by TRACON and a pivotal Phase 3 trial in combination with gemcitabine and oxaliplatin in patients with advanced bile duct cancer in China sponsored by TRACON business partners Alphamab Oncology and 3D Medicines.
About ENVASARC (NCT04480502)
The pivotal ENVASARC trial is a multicentre, open-label, randomised, non-comparative, parallel cohort study in 30 leading cancer centers in the US and UK, which began administration in December 2020. TRACON s expects trial to enroll more than 160 patients with UPS or MFS who have progressed after one or two lines of prior therapy and have not received an immune checkpoint inhibitor, with 80 patients included in a cohort treatment with envafolimab monotherapy 600 mg every three weeks and 80 patients included in a cohort treatment with envafolimab 600 mg every three weeks with Yervoy. The primary endpoint is objective response rate by central examination, with duration of response being a key secondary endpoint.
TRACON is a clinical-stage biopharmaceutical company that uses a cost-effective, CRO-independent product development platform to advance its portfolio of novel targeted cancer therapies and to partner with other life science companies. The Company’s clinical-stage pipeline includes: Envafolimab, a PD-L1 single-domain antibody administered by rapid subcutaneous injection that is being studied in the pivotal ENVASARC trial for sarcoma; YH001, a potentially best-in-class CTLA-4 antibody in Phase 1 development; TRC102, a small molecule Phase 2 drug candidate for the treatment of lung cancer; and TJ004309, a CD73 antibody in phase 1 development for the treatment of advanced solid tumors. TRACON is actively seeking additional corporate partnerships through a Profit Share or Revenue Share partnership, or through franchising TRACON’s product development platform. TRACON believes it can serve as a solution for companies without clinical and commercial capabilities in the United States or who wish to become independent of CROs. To learn more about TRACON and its product portfolio, visit the TRACON website at www.traconpharma.com.
Statements made in this press release regarding matters that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. These statements include, but are not limited to, statements regarding TRACON’s plans to further develop its product candidates, TRACON’s expected benefits from the partnership and financing with Runway and the expected cash flow resulting from the financing, expectations of TRACON regarding the timing and success of clinical milestones, TRACON’s ability to obtain additional future financing, including the fulfillment of conditions necessary to obtain additional advances under the facility with Runway, and the outcome of the binding arbitration with I-Mab Biopharma. which could cause actual results to differ from those expressed. Matters contained in these forward-looking statements include: the risks associated with the clinical development and regulatory approval of new drug product candidates; increased inflation and interest rates among other adverse market conditions; whether TRACON or others will be able to complete or initiate clinical trials within TRACON’s expected timelines, if at all, including due to the risks associated with the COVID-19 pandemic and other geopolitical events; that future clinical results may not be consistent with preliminary results or results of prior studies; that TRACON has limited control over whether third party collaborators complete ongoing trials, initiate additional trials, or seek regulatory approval of TRACON’s product candidates; TRACON’s collaboration agreements are subject to early termination; whether TRACON will be able to enter into additional collaboration agreements on favorable terms or not at all; potential changes in regulatory requirements in the United States and foreign countries; TRACON’s reliance on third parties for the development of its product candidates, including the conduct of its clinical trials and the manufacturing of its product candidates; whether TRACON will be able to secure additional funding; and other risks described in TRACON’s filings with the Securities and Exchange Commission under the heading “Risk Factors”. All forward-looking statements contained in this press release speak only as of the date they are made and are based on management’s assumptions and estimates as of that date. TRACON undertakes no obligation to update these statements to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law.