On May 10, 2023 TRACON Pharmaceuticals, Inc. (Nasdaq: TCON), a clinical stage biopharmaceutical company utilizing a cost-efficient, CRO-independent product development platform to advance its pipeline of novel targeted cancer therapeutics and to partner with other life science companies, reported financial results for the first quarter ended March 31, 2023 (Press release, Tracon Pharmaceuticals, MAY 10, 2023, View Source [SID1234631404]). The Company will host a conference call and webcast today at 4:30 PM Eastern Time / 1:30 PM Pacific Time.

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"We were pleased with the arbitration award of approximately $23 million, which will extend our cash runway into early 2024, when collected," said Charles Theuer, M.D., Ph.D., President and CEO of TRACON. "Most importantly, in the third quarter we expect the second and final interim efficacy analysis in the ongoing ENVASARC pivotal trial that will review 46 patients in the cohort of single agent envafolimab and 46 patients in the cohort of envafolimab dosed with Yervoy (ipilimumab), after each patient has had two on-study scans. Accrual in ENVASARC remains ahead of projections and we expect to complete enrollment before year end, with final data anticipated in mid-2024 and potential commercial launch in 2025."

Recent Corporate Highlights

In March, we announced a private placement of approximately $3.0 million with an accredited institutional healthcare-focused fund, which was completed at market price.
In April, we announced we received an arbitration award of approximately $23.0 million from the arbitration with I-Mab Biopharma.
In May, we entered into a Common Stock Purchase Agreement with Lincoln Park Capital Fund, LLC ("LPC"), in which LPC has committed to purchase up to $26.0 million of shares of our common stock from time to time at prices based on the market price calculated over a certain period of time and in accordance with terms set forth in the Common Stock Purchase Agreement. Additionally, LPC has committed to purchase upon our request up to $1.0 million of shares of our common stock when all conditions to commencement are met, including that a resale registration statement is filed and declared effective.
Expected Upcoming Milestones

Report an ad hoc analysis from the ENVASARC pivotal trial by the independent data monitoring committee (IDMC) as required by the IDMC Charter that requires a review of available safety and efficacy data at a minimum of every six months, which we expect in the second quarter of 2023.
Report the second and final interim efficacy analysis from the ENVASARC pivotal trial following the review of more than 12 weeks of efficacy data (including two on-study CT scans) by the IDMC from 46 patients who receive envafolimab as a single agent and 46 patients who receive envafolimab in combination with Yervoy, which we expect in the third quarter of 2023 as the ENVASARC trial has enrolled more than 92 patients to date.
Complete full accrual of the ENVASARC pivotal trial before the end of 2023.
Report Phase 1 data from the Phase 1/2 clinical trial of YH001 in combination with envafolimab and doxorubicin in patients with soft tissue sarcoma, which we expect in the second half of 2023.
First Quarter 2023 Financial Results

Cash and cash equivalents were $6.6 million at March 31, 2023, compared to $17.4 million at December 31, 2022, which is expected to fund the Company into the third quarter of 2023, and with the amounts we expect to recover from I-Mab pursuant to the arbitration award, when received, into early 2024.
Research and development expenses for the first quarter of 2023 were $5.0 million, compared to $3.0 million for the first quarter of 2022. The increase was primarily related to envafolimab drug product purchased in the first quarter of 2023.
General and administrative expenses for the first quarter of 2023 were $2.3 million, compared to $6.5 million for the first quarter of 2022. The decrease was primarily attributable to legal expenses incurred in the first quarter of 2022 in connection with the arbitration hearing with I-Mab.
Net loss for the first quarter of 2023 was $8.5 million, compared to $9.5 million for the first quarter of 2022.
Conference Call Details

To access the call by phone, please register using this link and you will be provided with dial-in details.

A live webcast of the conference call will be available online from the Investor/Events and Presentation page of the Company’s website at www.traconpharma.com.

After the live webcast, a replay will remain available on TRACON’s website for 60 days.

About Envafolimab

Envafolimab (KN035), a single-domain antibody against PD-L1 invented by Alphamab Oncology and licensed by TRACON, is the first approved subcutaneously injected PD-(L)1 inhibitor. Envafolimab was approved by the Chinese NMPA in November 2021 in adult patients with MSI-H/dMMR advanced solid tumors who failed systemic treatment and have no satisfactory alternative treatment options. In December 2019, Alphamab Oncology, 3D Medicines and TRACON entered into a collaboration whereby TRACON has the right to develop and commercialize envafolimab in soft tissue sarcoma in North America. Envafolimab is currently being studied in the pivotal ENVASARC Phase 2 trial in the United States sponsored by TRACON and a Phase 3 pivotal trial in combination with gemcitabine and oxaliplatin in advanced biliary tract cancer patients as well as multiple Phase 1 and Phase 2 clinical trials in China sponsored by TRACON’s corporate partners, Alphamab Oncology and 3D Medicines. TRACON has received orphan drug designation from the U.S. Food and Drug Administration for envafolimab for patients with soft tissue sarcoma and fast track designation from the U.S. Food and Drug Administration for envafolimab for patients with locally advanced, unresectable or metastatic undifferentiated pleomorphic sarcoma (UPS) and myxofibrosarcoma (MFS) who have progressed on one or two prior lines of chemotherapy.

About ENVASARC (NCT04480502)

The ENVASARC pivotal trial is a multicenter, open label, randomized, non-comparative, parallel cohort study at 30 top cancer centers in the United States and the United Kingdom that began dosing in December 2020. TRACON expects the trial to enroll more than 160 patients with UPS or MFS who have progressed following one or two lines of prior treatment and have not received an immune checkpoint inhibitor, with 80 patients enrolled into a cohort of treatment with single agent envafolimab at 600 mg every three weeks and 80 patients enrolled into a cohort of treatment with envafolimab at 600 mg every three weeks with Yervoy. The primary endpoint is objective response rate by central review with duration of response a key secondary endpoint.

About YH001

YH001 is an IgG1 antibody against CTLA-4 that has shown enhanced antibody dependent cellular cytotoxicity and complement dependent cytotoxicity in vitro. In preclinical studies YH001 demonstrated superior T cell activation and superior tumor growth inhibition activity compared to ipilimumab. YH001 also demonstrated superior activity compared to ipilimumab in human transgenic mouse tumor models when combined with a PD-(L)1 antibody. In these models, single agent YH001 depleted regulatory T cells and increased CD8+ T cells in tumor tissue. YH001 is being studied with envafolimab and doxorubicin in a Phase 1/2 clinical trial sponsored by TRACON (NCT05448820), and has been studied in multiple Phase 1 trials in China and Australia sponsored by TRACON’s corporate partner Eucure, a division of Biocytogen.

About TRC102

TRC102 (methoxyamine) is a novel small molecule inhibitor of the DNA base excision repair pathway, which is a pathway that causes resistance to alkylating and antimetabolite chemotherapeutics. TRC102 is currently being studied in multiple Phase 1 and Phase 2 clinical trials sponsored by the National Cancer Institute through a Cooperative Research and Development Agreement (CRADA) and has orphan drug designation from the FDA in malignant glioma, including glioblastoma.