TRACON Pharmaceuticals Announces Termination of ENVASARC Trial and Will Explore Strategic Alternatives Leveraging its In-House Product Development Platform
TRACON Pharmaceuticals (NASDAQ: TCON) announced the termination of its ENVASARC pivotal trial after the objective response rate (ORR) in 82 evaluable patients was only 5%, falling short of the 11% required to support a biologics license application (BLA). Consequently, TRACON will explore strategic alternatives, including potential mergers, acquisitions, or asset sales, leveraging its in-house Product Development Platform (PDP), which has been utilized for over 15 oncology trials at more than 120 sites. The company aims to reduce cash burn and improve its position for strategic transactions but cannot guarantee any successful outcomes.
- Exploring strategic alternatives, including mergers, acquisitions, or asset sales.
- Leveraging in-house Product Development Platform (PDP) for potential strategic transactions.
- ENVASARC trial terminated due to low ORR of 5%, failing to meet the 11% primary endpoint.
- No assurance of successful strategic transactions or attractive terms.
- Potential risk of not continuing as a going concern if strategic alternatives are not realized.
- Immediate reduction in cash burn indicates financial strain.
Insights
The termination of the ENVASARC trial and the pivot towards exploring strategic alternatives significantly impacts TRACON Pharmaceuticals' financial outlook. With the primary endpoint of 11% ORR not met, the company faces a major setback, leading to the discontinuation of envafolimab's development.
The immediate focus on strategic alternatives hints at potential mergers, acquisitions, or asset sales. This pivot underscores a need to conserve cash and potentially monetize existing assets. TRACON's Product Development Platform (PDP) can be an attractive asset given its history of cost-effective and high-quality clinical trials.
From an investor's perspective, the uncertainty of the outcome of strategic alternatives poses a risk. The company stated there is no assurance that any strategic transaction will be successful or on favorable terms, which adds a layer of risk regarding its continuity as a going concern. However, if TRACON successfully leverages its PDP, it could attract potential buyers or partners, mitigating some financial risks.
Short-term, the market might react negatively due to the trial failure and the uncertainty of future moves. Long-term outcomes depend on the successful execution of strategic alternatives, which could either stabilize or further jeopardize the company's financial health.
The ENVASARC trial's failure underscores the challenges inherent in clinical trials, especially in oncology. The objective response rate (ORR) of 5% is significantly below the 11% needed to support a BLA for envafolimab. This highlights the difficulties in achieving meaningful clinical outcomes, even with promising agents.
TRACON's decision to terminate the trial and focus on strategic alternatives reflects a pragmatic approach to resource allocation. By leveraging their in-house Product Development Platform (PDP), which has a proven track record of conducting numerous trials efficiently, they aim to attract strategic partnerships or acquisition interest.
Despite the setback, TRACON's PDP remains a valuable asset. It allows for cost-effective and timely execution of trials, which is a critical factor for potential partners looking to optimize clinical development processes. The pivot to strategic alternatives, while risky, could unlock new opportunities if the PDP's value is recognized by the right partners.
For retail investors, understanding the inherent risks and potential in the biotech sector is crucial. While the immediate news is negative, the long-term value might be realized through successful strategic partnerships or acquisitions leveraging the PDP.
The objective response rate by blinded independent central review in the fully enrolled ENVASARC pivotal trial in the 82 evaluable patients is
Company will focus on exploring strategic alternatives, that may include a variety of strategic transactions such as a reverse merger, acquisition, sale of all assets, or other strategic transactions leveraging its in-house Product Development Platform of CRO-independent clinical trial execution
SAN DIEGO, July 01, 2024 (GLOBE NEWSWIRE) -- TRACON Pharmaceuticals (NASDAQ: TCON) today announced the objective response rate (ORR) by blinded independent central review (BICR) in the fully enrolled ENVASARC pivotal trial in the 82 evaluable patients is
In pursuit of any potential strategic transaction, TRACON plans to leverage its turnkey in-house Product Development Platform (PDP) utilizing integrated Veeva systems that has been used to conduct more than 15 Phase 1, 2 or 3 oncology trials at more than 120 sites in the U.S. and Europe across more than ten tumor types over 12 years, at a fully burdened cost of less than
There can be no assurance the exploration of strategic alternatives will result in any agreements or transactions, or, if completed, any agreements or transactions will be successful or on attractive terms. To the extent that it cannot complete a strategic transaction, there is no guarantee that the Company will continue as a going concern. TRACON does not expect to disclose developments with respect to this process until the evaluation of strategic alternatives has been completed or the Board of Directors has concluded disclosure is appropriate or legally required.
“We are proud of our execution of the largest trial ever done in the sarcoma subtypes of undifferentiated pleomorphic sarcoma and myxofibrosarcoma using TRACON’s Product Development Platform,” said Charles Theuer, M.D., Ph.D., TRACON’s Chief Executive Officer. “While individual patients derived benefit from envafolimab, the response rate by blinded independent central review in the ENVASARC trial of envafolimab as a single agent does not support a BLA. We are therefore discontinuing all of our clinical development activities and intend to take action to immediately reduce cash burn to better position the company for this strategic alternative process. We plan to leverage the value of our PDP in pursuing strategic alternatives.”
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. The primary endpoint is ORR by blinded independent central review of nine responses in cohort C of approximately 80 patients with duration of response a key secondary endpoint. The trial was fully enrolled and the primary endpoint was not met. As a result, TRACON discontinued further development of envafolimab.
About TRACON
TRACON utilizes a cost-efficient, CRO-independent, product development platform to advance development of therapeutics faster and at lower cost. TRACON believes it can serve as a solution for companies without clinical capabilities who wish to become CRO-independent. To learn more about TRACON, 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 the anticipated benefits of TRACON’s PDP platform, including advantages related to cost, timing and quality of conduct of clinical trials; TRACON’s ability to complete a strategic transaction; TRACON’s ability to continue as a going concern even if a strategic transaction is completed; TRACON’s ability to leverage its in-house PDP of CRO-independent clinical trial execution in connection with a strategic transaction; anticipated benefits of a merger, reverse merger, acquisition, other business combination, sales of assets, licensing or other strategic transactions of TRACON; TRACON’s ability to preserve cash during the strategic alternatives process; or other statements not of historical fact. Risks that could cause actual results to differ from those expressed in these forward‐looking statements include: risks relating to cost variability of clinical trials; whether TRACON will be able to complete or achieve the anticipated benefit from any potential strategic transactions, including any potential strategic transactions leveraging its PDP; whether TRACON will be able to obtain additional financing on favorable terms or at all; 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 except as required by law.
| Company Contact: | Investor Contact: |
| Charles Theuer | Brian Ritchie |
| Chief Executive Officer | LifeSci Advisors LLC |
| (858) 550-0780 | (212) 915-2578 |
| ctheuer@traconpharma.com | britchie@lifesciadvisors.com |
FAQ
What was the ORR in TRACON's ENVASARC trial?
Why did TRACON terminate the ENVASARC trial?
What strategic alternatives is TRACON considering?
How does TRACON plan to leverage its Product Development Platform (PDP)?
What are the financial implications for TRACON if strategic alternatives fail?
