TRACON Pharmaceuticals Reports Third Quarter 2015 Results and Provides Corporate Update

Ongoing complete response reported in Phase 2 clinical trial of TRC105 in choriocarcinoma 

TRC102 advanced to Phase 2 clinical development 

Cash and short-term investments balance of $57.7 million at September 30, 2015 

SAN DIEGO, Nov. 03, 2015 (GLOBE NEWSWIRE) — TRACON Pharmaceuticals (NASDAQ:TCON), a clinical stage biopharmaceutical company focused on the development and commercialization of novel targeted therapeutics for cancer, wet age‐related macular degeneration and fibrotic diseases, today announced its financial results for the third quarter ended September 30, 2015. 

Third Quarter 2015 and Recent Corporate Highlights 

  • In October, the National Cancer Institute (NCI) initiated a dual arm Phase 1/2 trial consisting of a Phase 2 cohort to assess the activity of TRC102 with Alimta® (pemetrexed) in patients with mesothelioma, and a Phase 1 cohort to evaluate TRC102 with Alimta and cisplatin in patients with refractory solid tumors.
  • In October, TRACON announced the hiring of Ronald Shazer, M.D., M.B.A., as Chief Medical Officer. Dr. Shazer was most recently Senior Director, Clinical Lead Oncology at Pfizer where he led the clinical development of multiple immuno-oncology compounds including antibody drug conjugates, dual targeting T-cell engaging antibodies, and small molecules. Prior to Pfizer, Dr. Shazer was Director, Clinical Research Oncology at Bristol-Myers Squibb and served as the study lead on the registrational study for elotuzumab which received U.S. Food and Drug Administration (FDA) breakthrough therapy designation in 2014.
  • In September, at the 18th World Congress on Gestational Trophoblastic Diseases, Dr. Neil Horowitz of the Dana Farber Cancer Institute reported positive data from a single patient compassionate use Phase 2 study combining TRC105 and Avastin® (bevacizumab) in a patient with refractory and metastatic choriocarcinoma, a tumor type known to express high levels of endoglin.  The patient was treated with TRC105 dosed 10 mg/kg weekly in combination with Avastin dosed 10 mg/kg every other week.  The patient had completed 7 cycles (28 weeks) of treatment at the time of the presentation. Beta human chorionic gonadotropin (β-hCG), a known, reliable marker of disease burden in choriocarcinoma, normalized during the fourth cycle of treatment, decreasing from greater than 3,000 IU/L at treatment initiation to less than 1 IU/L from cycles 4 through 7, indicating an ongoing complete response.
  • In July, TRACON announced that its partner, Santen Pharmaceutical Co. Ltd., Inc., filed an Investigational New Drug (IND) application with the U.S. FDA for the initiation of clinical studies for DE‐122 in patients with wet AMD. DE‐122 is the ophthalmic formulation of TRACON’s proprietary anti-endoglin antibody, TRC105. Under the terms of the licensing agreement with Santen, the IND filing for DE‐122 triggered a $3 million milestone payment to TRACON, which was received during the third quarter. 

“The third quarter was marked by progress across our entire pipeline, and we are particularly excited by the ongoing complete response seen in choriocarcinoma. We have now seen complete durable responses following combination treatment of TRC105 and a VEGF inhibitor in two tumor types that over expresses high levels of endoglin, choriocarcinoma and angiosarcoma,” said Charles P. Theuer, M.D., Ph.D., President and CEO of TRACON. “Going forward, we expect to have a significant number of potential value-creating milestones over the next six to twelve months, and look forward to our first KOL meeting for investors on November 13.” 

Upcoming Development Milestones 

  • On November 5, Dr. Steven Attia of the Mayo Clinic will present updated data from the Phase 1b/2 trial of TRC105 and Votrient® (pazopanib) in soft tissue sarcoma at the Connective Tissue Oncology Society meeting in Salt Lake City, including updates on angiosarcoma patients with complete responses initially presented at ASCO in June 2015. Angiosarcoma is a tumor type, like choriocarcinoma, known to express high levels of endoglin.
  • TRACON expects to initiate two additional clinical studies of TRC105 before the end of 2015:
    • A multi-center Phase 1b/2 trial of TRC105 and Nexavar® (sorafenib) in patients with hepatocellular carcinoma (HCC).
    • A Phase 1b trial of TRC105 with Avastin and carboplatin/paclitaxel in patients with non-small cell lung cancer.
  • TRACON expects the NCI to initiate two additional clinical studies of TRC102 in the next six months:
    • A Phase 2 trial of TRC102 and Temodar® (temozolomide) in glioblastoma.
    • A Phase 1b trial of TRC102 and chemoradiation therapy in patients with lung cancer.
  • TRACON will present updated data at the Kidney Cancer Association annual meeting on November 6 and 7 for the dose escalation Phase 1b portion of a Phase 1b/2 study of TRC105 in combination with Inlyta® (axitinib) in 18 patients with renal cell cancer.
  • TRACON will host an investor meeting in New York on November 13 that will feature key opinion leaders Dr. Steven Attia of the Mayo Clinic and Dr. Robert Maki, Chief of the Sarcoma Program at Mt. Sinai. The event will focus on current advances in sarcoma treatment, including an overview of TRC105.

 Third Quarter 2015 Financial Results 

  • Cash, cash equivalents and short-term investments totaled $57.7 million at September 30, 2015, compared to $61.2 million and $35.0 million at June 30, 2015 and December 31, 2014, respectively. 
  • Collaboration revenue for the third quarter of 2015 was $1.2 million, compared to $1.1 million for the third quarter of 2014. 
  • Research and development expenses for the third quarter of 2015 were $5.9 million, compared to $2.3 million for the third quarter of 2014. The increase in the 2015 period as compared to the 2014 period was primarily due to increased manufacturing activities and TRC105 clinical study-related expenses, as well as increased compensation-related expenses resulting from increased headcount in 2015. 
  • General and administrative expenses for the third quarter of 2015 were $1.5 million, compared to $0.6 million for the third quarter of 2014. The increase in the 2015 period as compared to the 2014 period was primarily due to increased expenses as a result of being a public company and increased compensation-related expenses as a result of increased headcount in 2015. 
  • The net loss for the third quarter of 2015 was $6.4 million, compared to a net loss of $1.9 million for the third quarter of 2014. 

Investor Conference Call 

The Company will hold a conference call today at 4:30 p.m. EST / 1:30 p.m. PST to provide an update on corporate activities and to discuss the financial results of its third quarter 2015. The dial-in numbers are (855) 779-9066 for domestic callers and (631) 485-4859 for international callers. Please use passcode 67467432. 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 TRC105 

TRC105 is a novel, clinical stage antibody to endoglin, a protein overexpressed on proliferating endothelial cells that is essential for angiogenesis, the process of new blood vessel formation. TRC105 is currently being studied in multiple Phase 2 clinical trials sponsored by both TRACON and the National Cancer Institute for the treatment of multiple solid tumor types in combination with VEGF inhibitors. TRC105 is also being developed in combination with VEGF inhibitor treatments in wet AMD. For more information about the clinical trials, please visit TRACON’s website at http://www.traconpharma.com/clinical_trials.php

About TRC102 

TRC102 is a novel, clinical-stage 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 Phase 1 and Phase 2 clinical trials sponsored by the National Cancer Institute. For more information about the clinical trials, please visit TRACON’s website at http://www.traconpharma.com/clinical_trials.php

About TRACON 

TRACON develops targeted therapies for cancer, wet age-related macular degeneration and fibrotic diseases. TRACON’s pipeline includes two clinical-stage product candidates: TRC105, an anti-endoglin antibody that is being developed for the treatment of renal cell carcinoma, soft tissue sarcoma, hepatocellular carcinoma, glioblastoma and choriocarcinoma, and TRC102, a small molecule that is being developed for the treatment of lung cancer and glioblastoma. To learn more about TRACON and its product candidates, visit TRACON’s website at www.traconpharma.com

Forward-Looking Statements 

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. Such statements include, but are not limited to, statements regarding TRACON’s plans to further develop its product candidates, expectations regarding the initiation and timing of future clinical trials by TRACON or third parties, and expected development milestones and availability of additional clinical data. Risks that could cause actual results to differ from those expressed in these forward‐looking statements include: risks associated with clinical development; whether TRACON, the NCI or others will be able to complete or initiate clinical trials on TRACON’s expected timelines, if at all; the fact that future preclinical studies and clinical trials may not be successful or otherwise consistent with results from prior studies; the fact that TRACON has limited control over whether Santen advances TRC105 (DE‐122) in ophthalmological indications or whether the NCI sponsors additional trials of TRACON’s product candidates; 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 manufacture of its product candidates; whether TRACON will be able to obtain additional financing; 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 on which they were made and are based on management’s assumptions and estimates as of such date. TRACON undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made. 

     
TRACON Pharmaceuticals, Inc.
Unaudited Condensed Statements of Operations
(in thousands, except share and per share data)
     
  Three Months Ended
September 30,

  Nine Months Ended
September 30,
    2015       2014       2015       2014  
Collaboration revenue $ 1,180     $ 1,133     $ 6,509     $ 2,558  
Operating expenses:        
Research and development   5,885       2,269       15,121       5,090  
General and administrative   1,530       567       4,019       1,394  
Total operating expenses   7,415       2,836       19,140       6,484  
Loss from operations   (6,235 )     (1,703 )     (12,631 )     (3,926 )
Total other income (expense)   (212 )     (216 )     (732 )     (334 )
Net loss   (6,447 )     (1,919 )     (13,363 )     (4,260 )
Accretion to redemption value of redeemable convertible preferred stock         (70 )     (31 )     (202 )
Net loss attributable to common stockholders $ (6,447 )   $ (1,989 )   $ (13,394 )   $ (4,462 )
                               
Net loss per share attributable to common stockholders, basic and diluted   $ (0.53 )   $ (1.23 )   $ (1.24 )   $ (2.76 )
Weighted‑average common shares outstanding, basic and diluted   12,117,988       1,615,006       10,761,383       1,614,903  
                               

  

     
TRACON Pharmaceuticals, Inc.
Condensed Balance Sheets
(in thousands)
     
    September 30,     December 31,
    2015       2014  
Assets   (Unaudited)      
Current assets:    
Cash and cash equivalents $ 47,152     $ 35,000  
Short-term investments   10,503        
Prepaid and other assets   2,204       728  
Total current assets   59,859       35,728  
Property and equipment, net   141       97  
Other assets   40       2,346  
Total assets $ 60,040     $ 38,171  
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)            
Current liabilities:    
Accounts payable and accrued expenses $ 6,990     $ 3,974  
Current portion of deferred revenue   4,320       4,357  
Preferred stock warrant liabilities         246  
Long‑term debt, current portion   321       4,676  
Total current liabilities   11,631       13,253  
Deferred revenue         2,546  
Other long-term liabilities   748       408  
Long‑term debt, less current portion   6,601       4,258  
Commitments and contingencies    
Redeemable convertible preferred stock         49,880  
Stockholders’ equity (deficit):    
Common stock   12       2  
Additional paid‑in capital   88,591       2,004  
Accumulated deficit   (47,543 )     (34,180 )
Total stockholders’ equity (deficit)   41,060       (32,174 )
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit) $ 60,040     $ 38,171  
               
CONTACT: Company Contact:		
Casey Logan			
Chief Business Officer		
(858) 550‐0780 ext. 236		
clogan@traconpharma.com

Investor Contact:
Andrew McDonald
LifeSci Advisors LLC
646-597-6987
Andrew@lifesciadvisors.com

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