Shares of San Diego-based Tracon Pharmaceuticals Inc. (NASDAQ:TCON) fell 49% to 66 cents Friday as the company decided to quit testing its lead candidate, carotuximab (TRC-105), in cancer. The decision followed advice from independent experts who saw no likely benefit from combining the drug with Votrient (pazopanib, Novartis AG) in the phase III advanced angiosarcoma trial called Tappas.

The outcome, which follows two earlier midstage study failures of carotuximab in glioblastoma and renal cell carcinoma, leaves Tracon heavily reliant on its partners, Santen Pharmaceutical Co. Ltd., Janssen Pharmaceutica NV and I-Mab Biopharma Co. Ltd., as well as its ability to find what Tracon President and CEO Charles Theuer said on Friday would be the company's preferred next deal, for "a clinical-stage asset that we can plug directly into the platform and then commercialize with time." (See BioWorld, Feb. 13, 2017.)

Most relevant to carotuximab's immediate future is an ongoing midstage study in wet age-related macular degeneration. Santen disclosed positive top-line results from a phase I/II study of its opthalmic formulation of the drug, DE-122, in early 2018 and is continuing to enroll the randomized phase II trial Avante.

Speaking indirectly to the question of how much Tracon-watchers should read through from cancer to wet AMD, Theuer said the futility analysis of Tracon's angiosarcoma study "was mainly on the basis of efficacy, or lack thereof." But "oncology is a much more complex disease than AMD," he said, suggesting that targeting endoglin to inhibit angiogenesis as carotuximab does "may be more relevant in wet AMD than in oncology."

Top-line data from Avante are expected in early 2020. Tracon could potentially see a $10 million milestone payment from the deal within the next year or two, Theuer said, but the bigger value of the deal, $135 million in regulatory and commercial milestones plus royalties, lies further ahead. (See BioWorld, Feb. 15, 2018.)

Within closer reach are potential payouts from Tracon's partnership with Janssen, under which Tracon is developing TRC-253 (formerly JNJ-63576253), a small-molecule inhibitor of wild-type androgen receptors (AR) and multiple AR mutant receptors that confer resistance to currently approved prostate cancer treatments. Tracon is enrolling the phase II portion of a phase I/II study of the candidate with expectations of seeing top-line data in 2020.

So far, the company has seen slower-than-anticipated enrollment in the study due to a lower-than-expected frequency of a specific tumor mutation the drug targets among metastatic prostate cancer patients. But if investigators do arrive at clinical proof of concept for the asset, it could put that trouble in the rear view mirror: Janssen holds a time-limited right to re-acquire the asset, a move that would trigger a $45 million up-front payment and potential milestone payments of up to $137.5 million as well as a low single-digit royalty on sales.

Meanwhile, on the basis of a substantial new agreement inked with I-Mab in November 2018, Tracon is poised to become "a preferred clinical development and commercialization solution in the U.S.," especially for "ex-U.S. companies with first-in-class or best-in-class clinical-stage assets who would benefit from leveraging the Tracon product development platform," Theuer said.

Whether the company can claim that mantle will be defined in large part by how successful it is in executing a five-year bispecifics-focused partnership with I-Mab. The deal, which calls for the development of up to five bispecific antibodies in North America, will see Tracon leading clinical development and bearing the cost of early stage trials. It would then share with I-Mab the cost for more advanced development stages and commercialization. "We expect to initiate clinical development of the first bispecific antibody in 2020," Theuer said.

This quarter, Tracon is also expected to initiate first-in-human dosing of I-Mab's antibody, TJ-4309, also known as TJD-5. That molecule, a CD73 antagonist, will be dosed in cancer patients as both a single agent and in combination with Tecentriq (atezolizumab, Roche Holding AG).

At the end of 2018, Tracon had cash, cash equivalents and short-term investments totaling $39.1 million. "Looking ahead, as a result of diminished clinical development and manufacturing expenses related to the termination of the TCR-105 development program, we now expect our current cash runway to extend to the third quarter of 2020 and to significantly reduce planned expenditures in 2020 and 2021," Theuer said.

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