TRACON(US:TCON)2020-11-10 22:02Clinical Trials and Product Development - The pivotal ENVASARC trial for envafolimab includes approximately 160 patients, with a primary endpoint of objective response rate (ORR) expected to demonstrate superiority over the 4% ORR of Votrient in soft tissue sarcoma [101]. - Envafolimab showed a 32% confirmed ORR in 41 patients with MSI-H/dMMR colorectal cancer, with a duration of response (DOR) of at least 12 months in 75% of patients [103]. - TRC102 has demonstrated a 100% ORR in a Phase 1 trial for locally advanced non-squamous non-small cell lung cancer, significantly higher than historical data [106]. - TRC253, a treatment for metastatic castration-resistant prostate cancer, had an 8% PSA response rate in 63 evaluable patients, with 27% achieving stable disease for over five months [108]. - The company plans to submit a biologics license application (BLA) for envafolimab in 2023, assuming positive data from the ENVASARC trial [102]. - The company retains global rights to develop and commercialize TRC102, which received orphan drug designation from the FDA for malignant glioma treatment [105]. - The company has initiated an out-licensing process for TRC253 to identify a corporate partner for development in China [108]. - The company utilizes a CRO-independent product development platform to enhance capital efficiency and improve communication with clinical trial sites [113]. - The company has entered into collaborations with 3D Medicines, Alphamab, I-Mab, and Janssen to diversify its product pipeline without upfront license fees [113]. - The company expects to disclose interim data from the ENVASARC trial in 2021 and final data in 2022 [102]. Financial Performance and Projections - As of September 30, 2020, the company had cash and cash equivalents totaling $26.5 million [114]. - The company incurred net losses of $22.7 million and $35.0 million for the years ended December 31, 2019 and 2018, respectively, with an accumulated deficit of $174.8 million as of September 30, 2020 [116]. - The company expects to continue incurring significant expenses and operating losses for at least the next several years, with expenses anticipated to remain constant for the remainder of 2020 and increase in 2021 [117]. - The company anticipates needing to raise substantial additional capital to fund operations and product development [117]. - As of September 30, 2020, the company had an accumulated deficit of $174.8 million and expects to continue incurring net losses for the foreseeable future [157]. - The company has incurred losses and negative cash flows from operations since inception, necessitating additional capital through various financing methods [157]. - The company completed its initial public offering in February 2015, resulting in net proceeds of approximately $35.0 million [158]. - Net cash used in operating activities was $13.4 million for the nine months ended September 30, 2020, compared to $19.4 million for the same period in 2019 [167]. - Net cash provided by financing activities was $23.5 million for the nine months ended September 30, 2020, primarily from the sale of common stock and warrants [169]. - The company sold 2,633,838 shares of common stock at an average price of $1.66 per share in August 2020, generating net proceeds of approximately $10.0 million [162]. - The company had sold an aggregate of 4.8 million shares under the 2019 Purchase Agreement with Aspire Capital for gross proceeds of $9.6 million as of September 30, 2020 [164]. Expenses and Cost Management - Research and development expenses for the three months ended September 30, 2020, were $1.8 million, a decrease of $1.3 million compared to $3.1 million in the same period of 2019 [152]. - Research and development expenses for the nine months ended September 30, 2020, were $6.0 million, down $6.6 million from $12.6 million in the same period of 2019, primarily due to the termination of carotuximab development [155]. - The company expects research and development expenses to remain relatively constant for the remainder of 2020 and increase in 2021 due to enrollment in the ENVASARC pivotal trial [144]. - General and administrative expenses for the three months ended September 30, 2020, were $2.1 million, slightly up from $2.0 million in the same period of 2019 [153]. - General and administrative expenses for the nine months ended September 30, 2020, were $6.0 million, compared to $5.9 million in the same period of 2019 [156]. Collaborations and Agreements - Under the Envafolimab Collaboration Agreement, the company is responsible for conducting and bearing the costs of clinical trials for envafolimab in North America [119]. - The company will owe tiered double-digit royalties on net sales of envafolimab for sarcoma in North America, ranging from the teens to mid-double digits [122]. - The company entered into collaboration agreements with I-Mab for the development of multiple immuno-oncology programs, including cost-sharing arrangements for clinical trials [126]. - In the TJ004309 Agreement, the company will bear 40% of the costs for pivotal clinical trials, while I-Mab will cover 60% [127]. - The company is entitled to receive royalties on net sales by I-Mab in North America ranging from mid-single digits to low double digits [128]. - If the company exercises its licensing option for a product candidate, it would owe I-Mab a one-time upfront payment of up to $80.0 million, along with milestone payments and royalties based on the development phase [133]. Capital and Financing - The 2018 Amended SVB Loan has an interest rate of 9.0% per annum, with a final payment of 4.0% of the original principal due at maturity [160]. - The company has entered into a Purchase Agreement with Aspire Capital to purchase up to $15.0 million of shares, with $9.6 million already raised as of September 30, 2020 [164]. - The company is evaluating in-licensing and acquisition opportunities to access new product candidates, which may increase future funding requirements [170]. - The company is in compliance with all covenants and conditions of the 2018 Amended SVB Loan as of September 30, 2020 [161]. Impact of COVID-19 - The company cannot predict the extent to which the COVID-19 pandemic will impact clinical trials or increase expenses [145].