Q2 2021 TRACON Pharmaceuticals Inc Earnings Call
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Once again this is the operator today's conference is scheduled to begin shortly please continue to standby. Thank you for your patience.
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Good day, ladies and gentlemen, and welcome to Tracon Pharmaceuticals second quarter 2021 earnings conference call.
At this time, all callers are in a listen only mode.
After the Speakers' prepared remarks, we will conduct a question and answer session and instructions will be given at that time during today's call, we will be making certain forward looking statements, including statements regarding expected timing timing of clinical trials and results.
Our regulatory activities future expenses and cash runway.
And our development plans and strategy.
These statements are subject to various risks that are described in our filings made with the securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31, 'twenty 'twenty.
Subsequent quarterly reports on Form 10-Q.
You are cautioned not to place undue reliance on these forward looking statements and we disclaim any obligation to update such statements.
Now I would like to turn the call over to Dr. Charles Tour, President and CEO of Tracon Pharmaceuticals, Dr. Stuart you may begin.
Thank you for joining <unk> second quarter, 2021 financial results and business update call.
I'll begin with an update on our pipeline and then review our recent activities following that Scott Brown, Our Chief Financial Officer will review our financial results for the three and six months ended June 32021. Finally, we will conclude by taking your questions.
Our development efforts continue to focus on the pivotal <unk> trial.
<unk> is designed to allow potential approval of endo format in the sarcoma subtypes of undifferentiated pleomorphic sarcoma, or UBS and Myxofibrosarcoma or MFS as a reminder, and before mab as a potential best in class PD Lone checkpoint inhibitor without the risk of infusion reactions.
That may confer additional clinical benefit by virtue of its convenient and rapidly delivered subcutaneous route of administration.
We continue to make progress with <unk> and the <unk> pivotal trial first the data monitoring Committee completed its second review of Endo SAARC safety data last week and recommended that the trial procedures plan. Following the review of more than three months of safety data from the more than 20 patients enrolled into the trial as of May.
The review concluded the review included data for more than 10 patients enrolled into cohort of treatment with single agent <unk> and more than 10 patients enrolled into cohort b of treatment with <unk> and <unk>.
Second in June we announced that the FDA had granted orphan drug designation for <unk> in soft tissue sarcoma.
The FDA orphan drug Division had requested an amended application that included preclinical or clinical evidence of activity, even before Matt in sarcoma.
Given <unk> has been dosed to over 700 patients our partners <unk> medicines, and <unk> oncology, we're able to supplement our application with data from their clinical database, which included patients with alveolar soft part sarcoma or Sps treated with vendor format in prior phase one studies.
The data were quite compelling as two or five patients with Sps demonstrated confirmed objective responses with duration of response beyond six months, while the other three patients demonstrated stable disease.
These response rates are consistent with the known activity of other checkpoint inhibitors in this sarcoma subtype for example.
The PD lone checkpoint inhibitor to centric marketed by Roche demonstrated partial responses and 37% of <unk> patients treated in a trial sponsored by the National Cancer Institute.
Third we have initiated 26 clinical trial sites and continue to expect the availability of interim <unk> efficacy data by the end of this year.
The initial DMT mandated interim efficacy analysis occurs fond of 12 weeks TT scans in the 36th enrolled patient to allow for determination of the preliminary objective response rate.
Per the futility rules of the study there must be at least one response among the initial 18 patients enrolled into each cohort to continue enrollment of that cohort.
We expect to summarize the efficacy data from the initial 36 patients by the end of this year and a topline data release that includes the aggregate initial response rate across the two cohorts.
Fourth.
We expect positive interim efficacy data would be the basis for submitting a request to the FDA for fast track designation and or breakthrough therapy designation.
As either designation permits a rolling BLA submission that would facilitate a timely review of our BLA.
Looking forward, we anticipate a second interim efficacy assessment and final response assessment in 2022, and assuming positive data submitting a BLA for accelerated approval that if approved could allow for product launch in the U S. By the end of 2023.
Additionally, we reviewed the design of the <unk> trial in a poster at <unk> in June as a reminder, the <unk> trial includes two cohorts of 80 patients. Each one cohort received single agent <unk> and a second cohort received <unk> in combination with <unk>.
The trial enrolls patients with UBS and MFS, who have progressed on one or two lines of prior treatment and have not received prior checkpoint inhibitor therapy.
The primary endpoint in both cohorts is objective response rate by resist as confirmed by blinded independent Central review with duration of response being a key secondary endpoint.
In each cohort the demonstration of nine out of 80 objective responses or 11, 5% objective response rate to fund the level of response that satisfies the primary objective of the study.
Which is to statistically exceed the 4% response rate of <unk>, the only approved therapy for refractory UBS and MFS.
In parallel our corporate partners <unk> medicines, and Alpha memo ecology submitted and reform of data from the completed pivotal trial in MSI high cancer in China as part of an NDA that was accepted for priority review by the Chinese and MPA in January.
We believe <unk> could be approved in China later this year.
We believe dual checkpoint inhibition that includes Enver format should also be studied in a first line treatment because a prior study indicated the response rate for dual checkpoint inhibition with Opdivo in your voice across all refractory soft tissue sarcoma subtypes was similar to the response rate for first line chemotherapy.
We therefore expect to begin a new trial of <unk> and doxorubicin this year to assess safety of the combination.
The trial could include a combination of doxorubicin and <unk> and an antibody to a second target such as <unk> or lag three.
As one of our business development priorities as in licensing another immuno oncology asset.
The clear advantage of this strategy has the potential to market two proprietary immunotherapy assets for the treatment of sarcoma patients.
We believe sales of <unk> in sarcoma could eventually reach $1 billion.
Which could be further enhanced through marketing our second immunotherapy by <unk> in this indication.
It is important to understand that the extent of our market opportunity in sarcoma with Enver pull map at parity pricing is not just the initial $200 million and expected annual revenues and EPS in MFS.
But potentially $1 billion as under <unk> could be broadly penetrate sarcoma in the first line adjuvant and neo adjuvant settings.
If we are able to also licensed the second immuno oncology asset that pairs as a combination treatment with and before in sarcoma and also has developed in other cancer indications trade downs total potential revenue could vastly increase.
While <unk> is our most advanced product candidate, we continue to progress two other promising clinical stage assets.
We expect Trc 102 to continue to advance through NCI sponsorship in lung cancer in combination with chemotherapy and radiation therapy.
Data presented at <unk> showed that Trc, one or two in combination with chemo radiation resulted in a 100% response rate in 15 patients with advanced localized lung cancer.
Including three patients who had a complete response to treatment.
These data compare favorably to the 51% response rate seen in prior trials of chemo radiation therapy for this disease.
Infancy, a PD lone checkpoint inhibitor is now approved as maintenance therapy for patients with advanced localized lung cancer, whose disease has not progressed following chemo radiation.
We therefore believe a randomized trial of chemo radiation with or without Trc, one or two.
Followed by <unk> maintenance is warranted in these patients and expect this concept too advanced for Ctrip consideration this year.
Based on NCI data reported in the publication in cancer cell in December 2020, and phase two data from refractory glioblastoma patients treated with Temodar and Trc 102.
Inhibiting base excision repair with tier two is able to induce synthetic lasalle in MGMT methylated patients.
We expect the NCI to report further data this year of the combination of tier 202, and Temodar and expanded cohort of lung cancer patients. However.
However, we believe the primary focus of further study of the combination is in Glioblastoma, where MGMT methylation occurs in approximately one third of cases.
We continue to discuss a potential trial temodar radiation therapy, and Trc 102 in first line Glioblastoma with Ctrip investigators.
Our third clinical stage asset is the <unk> antibody T. J <unk> that is being evaluated in an ongoing phase one dose escalation study as a single agent and in combination with the checkpoint inhibitor to centric.
Data from the ongoing phase one trial presented at the 2021 ESCO virtual meeting indicated that T. J with Eni was safe and well tolerated as a monotherapy and in combination with centric.
Exposure was dose dependent and T. J <unk> saturated CD 70 feet target in the blood at all dose levels.
Further there was evidence of clinical activity in both PD, one treatment naive and refractory cancer patients following treatment with TJ <unk> given with to centric.
We are developing TJ fourth airline in collaboration with I Mab Biopharma through one of our two strategic agreements with them.
For T J <unk> and one for our pipeline of Bispecific antibodies.
And the T. J <unk> agreement, we are responsible for the regulatory and clinical development of T. J <unk> in the U S and Europe.
Following the completion of the phase one trial, which is expected in 2022 <unk> has the right to terminate the agreement for a payment of $9 million.
For the license agreement if <unk> elected to license as that term is defined in the agreement T. J fourth year nine to a third party in any region outside China, Macau or Taiwan were entitled to receive escalating portions of non royalty and royalty payments.
These range from a high single digit to mid teen percentage of non royalty consideration as well as a double digit percentage of royalty consideration depending on the phase of development, we complete under the T. J for 309.
<unk>.
As we've noted in the past in March 2020, I Mab issued a press release announcing a strategic partnership with kg bio.
Whereby kg bio received with the press release described as a right of first negotiation for exclusive rights to commercialize T. J fourth Eni in multiple Asian African and middle Eastern countries for up to $340 million in potential payments to imap.
We believe that based on the kg bio transaction Tracon is entitled to receive a payment under the T. J <unk> Your line agreement.
Although <unk> has disputed that this payment is due.
The dispute is being heard before and international Chamber of Commerce Arbitration Tribunal seeded in New York City and will be arbitrated under New York Law with the hearing set for February 2022.
In February 2021, IMF sent us a notice purporting to terminate the T. J <unk> nine agreement, which as I mentioned, which resulted in <unk>, a pre specified termination fee of $9 million. However.
However, I.
<unk> does not have an option to terminate the T. J <unk> agreement without cause until the ongoing phase <unk> clinical trial is complete as that term is defined in the agreement.
And therefore trading responded by disputing the basis for IMS reported termination.
In March 2021.
<unk> bottle lawsuit and the Delaware Court of Chancery seeking an order of specific performance requiring tracon to comply with IMS reported termination notice.
That lawsuit was stayed in May and subsequently this matter was included in the dispute for the arbitration Tribunal, which we'll be hearing this matter in February 2022.
Along with our claim with respect to the Bispecific antibody agreement.
Pending the resolution of the dispute we continued to perform their obligations under the terms of both agreements.
Moving on in the second quarter, we enhanced our senior management team with three new hires Dr.
Dr. Brenda marks he was appointed as senior Vice President and head of regulatory Affairs <unk>.
She was recently vice President of regulatory affairs at Ferring, where she oversaw all U S regulatory activities, including the BLA filing for fairings bladder cancer gene therapy that received both fast track and breakthrough designation.
Her appointment complements the appointment of Dr. <unk>, Wang as Vice President Statistics and biometrics.
And Mr. Yao Wang as executive director of Statistical programming.
With these appointments we have assembled a highly experienced team to lead the filing for the expected and the full amount BLA.
From a business development perspective, we continue to evaluate and pursue additional external clinical stage assets, which would complement our pipeline. This year in order to leverage our CFO of independent product development platform and second generation immuno oncology targets are of particular interest.
We believe our product development platform will continue to allow us to establish key new partnerships that will drive significant long term shareholder value.
Additionally in September for Spokes will publish the book unnecessary expense, an antidote to the $1 billion drug problem that is offered by Tracon Senior management and is now available for preorder on Amazon.
The book details the advantages of Tracon CRO independent product development platform and profit share deal structure that provides for rapid and high quality development of novel drug candidates.
We believe our platform serves as a compelling solution for companies, who wish to access the U S pharmaceutical market and retain a substantial share of their products profitability.
In July we raised approximately $13.5 million in net proceeds in an underwritten common stock offering with the capital raise we estimate that our cash runway now extends into 2023.
This provides us with a cash runway for more than a year past initial interim <unk> efficacy data expected at the end of this year and past expected final and the start data expected in 2022.
We expect our enhanced balance sheet will increase the impact of important 2021 milestones and provide capital to execute clinical trials of potential new drug candidates, we may add to our pipeline.
At this time, Scott will provide an update on our financials.
Thank you Charles and good afternoon, everyone.
Research and development expenses were $3.1 million and $5.4 million for the three and six months ended June 32021, respectively, compared to $2.2 million and $4.2 million for the comparable periods of 2020.
The increase was related to enrollment in the pivotal <unk> trial in 2021.
General and administrative expenses were $6.1 million and $8.8 million for the three and six months ended June 32021, respectively, compared to $2.1 million and $4 million for the comparable periods of 2020.
The increase was related to legal expenses for the now state Delaware case, an ongoing arbitration with imap.
Importantly, we expect Q2 of 2021 to be the high point for G&A expenses this year.
Our net loss was $8.9 million and $14 million for the three and six months ended 2021, respectively compared to $4.5 million and $8.5 million for the comparable periods of 2020.
Turning to the balance sheet at June 32021, our cash cash equivalents and investments totaled $25.6 million compared to $30.4 million and $36.1 million at March 31, 2021, and December 31, 2020, respectively with.
With the net proceeds of approximately $13.5 million raised in July we expect our current capital resources to be sufficient to fund our planned operations into 2023.
With that I will turn the call back over to Charles.
Thank you Scott to recap, we continue to execute our clinical development plan around our lead product candidate and of a format and have made substantial progress in the <unk> pivotal trial.
We have now completed each of the two DMC safety reviews, and expect to complete the initial interim efficacy assessment and summarize topline data prior to year end.
We believe the <unk> trial provides a potential fast to market opportunity to deliver and perform up to sarcoma patients in significant need of a new therapy as expeditiously as possible.
Importantly, we believe our recent capital raise will be sufficient to fund the company into 2023.
Which is more than a year following expected initial interim <unk> efficacy data and past expected final and <unk> data, which could demonstrate the potential friend of a format to rapidly transform the standard of care for refractory sarcoma patients.
We also continue to expect to leverage our unique product development platform and profit share deal structure to further enhance our pipeline and leverage our ability to execute clinical trials at low cost and thereby avoid the unnecessary expense of zero conducted clinical trials.
We look forward to providing further updates in the coming months and we remain confident that we have the right strategy in place to deliver on our development and business plans for the benefit of patients and shareholders. Thank you for your time and attention and we are now available to answer your questions.
Thank you Sir at this time I would like to remind every participants if you would like to ask a question you will need to press star one on your telephone keypad again that is star one to ask a question and answer. Your question has been answered in these Preston do we draw yourself from the queue you mean paclitaxel.
Our first question comes from the line of Maury.
Carl.
Jefferies. Your line is open.
Hi, Charles and team Thanks for taking my questions and congrats on the progress.
Maybe first question.
I think on the first quarter call. You said that you plan to have all 25 sites open for Brian.
<unk>.
By the end of Q and so I'm just checking to see if you have opened all the remaining sites and is there anything else you can say on enrollment maybe.
Simulation radar safety at this point.
Sure Mark I appreciate the question Yeah. So we've been opening sites.
As we speak we actually have 26 sites initiated which is actually our target for the entire study I will say more of there has been a lot of interest at some sites that were not initially included in the 26. So you actually might see some more sites come on beyond that but right. Now we have opened 26 sites goes 25, we did open 26, so far and in terms of accrual raw.
On track with respect to having 36 patients in this quarter, which would then allow the interim efficacy analysis to be delivered by end of this year.
In terms of safety I can tell you that we've had now two safety reviews.
There were no comments with respect to changing the study protocol at either the three week or 12 week period after enrollment of the 20th patient.
I'd say in general we've seen them before <unk> is expected to be well tolerated as a single agent and also I would say, it's been very well tolerated with youre avoid dual checkpoint inhibitor strategy.
Okay. That's helpful are you seeing any difference on the.
The profile versus.
I guess with.
Some benefit on our colitis or even ISR.
Okay.
Yes.
I would say just overall, both as a single agent and in combination with your avoided both cohorts, it's been a very tolerable regimen.
I won't get into specific details other than to say as expected in <unk> as a single agent and also with your board has been a very tolerable drug.
Got it okay. That's helpful.
Sorry go ahead.
I appreciate the question, Yes go ahead.
And then the other question I had was just.
We noticed on <unk> dot Gov that two new phase twos posted by <unk>.
One is in solid tumors, the other ones and biliary tract cancers.
Just wondering if you can provide any more insight into.
The strategy behind those studies and if they could factor into guidance development plans and will they be enrolling any patients in the United States.
Yes, I think great question, Mark I think the ability attract cancer trial I think is relevant for the following reasons. So they are currently enrolling a trial in biliary tract cancer in China.
They have orphan drug designation for biliary tract cancer designation in the U S. So we expect that they'll probably have a readout on that trial in China, maybe in a year or two years and I think on that clinical trial is dot Gov. Posting that you mentioned there are niche I think the initial startup date is roughly in the time period, where.
You would expect final data from the Chinese study. So we don't think it will have a major impact anytime soon with respect to the U S label and I think it will be important to see what the data is coming out of China. Initially in order to assess the impact of the U S potential planned trial.
Got it okay. Thanks for taking my questions I appreciate it thank you.
Our next question comes from the line of Jason Mccarthy.
<unk> group you May ask your question.
Hi, This is Joanne Lee on the call for Jason Mccarthy. Thanks for taking my question.
For my first question regarding the targeted one theory.
Sorry.
Just wondering if you could comment.
What are you guys saw any differences observed.
In terms of safety tolerability between the subset of patients treated with any single agent capacity.
They were treated with the combination of <unk>.
Hi, Joanne Thanks for your question, Yes, I would just say in both cases, the drug as a single agent or in combination with Europe ROI was very well tolerated.
Also mentioned that as expected when you're receiving to check me here was rather than one youre going to see some more adverse events with respect to Europe always known side effect profile and that was expected.
Given was expected didn't change with respect to how the protocol is being implemented.
Great. Thank you and can you just get some color on when we might actually be.
The additional data readouts. Thank you Trc.
Sure.
Sure, Yes, so I think with respect to tier so I wanted to I think in fourth quarter, we will see the NCI presented data from a study that's been ongoing for a couple of years, which is a study of <unk> in patients with solid tumors. It was initially a phase one study, but based on activities seen in ovarian cancer colorectal cancer and lung.
Cancer and the phase one portion they enrolled three separate expanded cohorts and they reported already in the colorectal cancer cohort, which is actually very nice data that help really confirm the.
Fact that MGMT methylated patients seem to be particularly sensitive to temodar plus trc, one or two and that was the data published in cancer cell last year that corroborated data, we hedge in GBM from earlier in 2019.
This year before end of the year I would expect to report data on the lung cancer cohort of treatment with Temodar tiers to one or two so that's the data I expect to see I'm, not sure which conference, but I do expect to see those data this year.
Got it thanks for the additional color and congrats on all the progress.
Thank you John.
Our next question comes from the line of Ed White.
H C. Wainwright you May ask your question now.
Thanks, Good evening, Charles and Scott.
Hi, Ed.
Alright so.
Just a question on.
TJ 43 owned nine arbitration and the impact on.
SG&A expenses what worthy.
Legal expenses, if you could break those out and you said that the second quarter should be the high point of the year.
Do we expect to continue to see litigation expenses throughout the year and this is the highest quarter or how should or do they go away how should we be thinking of that.
Yes, yes, thanks Ed.
Yes to answer your first of all we haven't broken them out, but you could assume.
The increase from last year, the majority of that would be related to legal expenses in Q2, and then going forward. We expect Q3 and Q4 to be more similar to Q1, because the majority of those expenses were due to the Delaware lawsuit and since that was stayed we won't have expenses for that going forward and the <unk>.
Ongoing ones are just related to the arbitration as they were in Q1.
Okay. Thanks, Scott how should we be thinking about arbitration it sounds like.
It's a timing matter and a question of $9 million.
It seems as if they.
They do.
Wanted to get out of the agreement in which case, they with Oyu $9 million. According to the contract. According to you guys.
Is that at the end of it or is there a chance that you can continue to develop.
Past phase one.
Yes, so with T J four through nine.
As we mentioned in the call. There is a revenue sharing provision with respect to any deal that IMF does around TJ four through nine.
Prior to terminate the agreement.
And for instance.
We believe that the.
Diluted with kg bio has triggered a payment under the stipulation in the agreement.
But then at some point for instance at the completion of phase one they do have the.
We are entitled to terminate the agreement and.
They serve a termination notice that's valid at that time, we will obviously respect that and until that time, we would expect to be part of any revenue sharing deals that they would do including the previous wanted to do with <unk>.
Okay. Thanks Charles.
And just a question on.
Enrollment so.
You gave a nice timeline there I was just wondering.
With the 26 centers sites and may be more have any income.
Acted by the Delta Varian and do you expect to see any kind of an.
The impact to them before you get reach full enrollment.
It's a great question, Yes, I would say right now we haven't seen a significant impact of Covid I would say, whether it was COVID-19 alpha or Covid Delta and I would say that because.
Sarcoma patients that have very few treatment options that need therapy and so the.
The centers have been used to dealing with COVID-19 restrictions in terms of ollie's space out patients in the waiting room for example, but they have to continue to treat these patients and so I don't think we've seen a major impact either COVID-19 output. During the initial portion of startup for <unk> or even more recently Covid Delta.
It just hasnt come up with the investigators I haven't specifically asked about it but it just hasn't even come up on investigator calls as an example.
That said, we'll keep a close eye on things but.
Right now it hasn't been an issue.
We have a protocol guidelines allow patients to be vaccinated on study and we encourage that so we're doing everything to protect patients as well.
Okay. Thanks, Charles for taking my questions. Thank you Ed.
Our next question comes from the line of Matthew Cross.
Alliance Global Partners you May ask your question now.
Hey, guys good afternoon, and thanks for the update.
Two quick questions related to <unk> first off what kind of asking.
Different question directed at enrollment.
These guys.
I was curious to get some additional granularity given that you stated.
This week and I think back in June that at least 10 patients per arm or at least 20 patients total had been.
<unk> had been analyzed for safety and <unk>.
So.
I guess just over half of that 36 patients that you ultimately for this first interim.
Curious if the similarity in terms of numbers between those.
Two safety updates over a couple of months.
It seems like the differentiating factor is the time for follow up but now Thats three months I was just hoping we could break that down a little bit.
Have more than I guess that number if we say 20 plus.
Been enrolled but simply not followed for the three months that have been that's been most recently alluded to in the safety analysis.
Should we expect kind of.
A bolus of patients to be enrolled imminently to support the <unk>.
36 patients that youre, hoping to get by the end of this this quarter.
And then secondly, I just wanted to clarify related to the interim efficacy assessments.
These are effectively utility determination is more or less I would imagine.
Or is above 11% for either arm.
Neither of these readouts and I'll start with the first obviously.
That would be essentially a positive indicator for the full trial, but I'm imagining that you would not be that that wouldn't be sufficient to file whether you wouldnt take data on 36 patients to the FDA for an approval.
Thanks, Matt for your question. So just to clarify on the safety review. These are mandated reviews by the protocol such that they occur at specific time points. After enrollment of the 20th patients so to be clear we've been far more than 20 patients as of the current date.
We've done that so that allows us to then present the interim efficacy data on 36 patients by year end given the three month delay in getting all the scans for those patients. So it would be just crystal clear 20 patients were enrolled as of May and once the 20th patient enrolled three weeks. After the patient was enrolled was the first DMC safety analysis.
Yes.
12 weeks after the 20th patient was enrolled what's the second DMC safety analysis. So it's done on the 20 patients enrolled with a fixed time period between that patient enrolling.
Aggregating all the safety data from the treatments that they have received so to be clear patients who have been enrolling since may after 20 patients were in to the point, where we can constantly project that will have 36 patients in this quarter for which we'll have efficacy data that will allow us to then do the first interim efficacy assessment and report those data.
Publicly.
With respect to the <unk> analysis.
Alluded to in the script the futility rule as specified by the protocol that we have to have at least one confirmed response in the first 18 patients who have had at least three months of scans with in each of the two cohorts in order to continue that cohort.
As you pointed out the efficacy bar to continue enrollment is different from the primary endpoint goal, which is 11% response rate.
The only way we would terminate the trial early would be if we achieve the nine anticipated responses minimum bar.
Before we enroll 80 patients.
And then only in that case would it be after we discuss those data with the FDA. So for example, we have nine responses.
Say for sake of argument in 40, or 50 patients, which obviously would mean meet the bar of the study because 9% and 11% response rate than we could think about approaching the FDA. So that will be determined in real time.
Perfect.
No I appreciate the clarity on both fronts Charles.
Looking forward to the data later this year.
Thank you Matt.
Yes.
As a reminder, if you have question you May press Star one.
Again that is star one to ask a question.
Our next question comes from the line of Nick Abbott.
<unk> Fargo you May ask your question now.
Alright.
Thank you very much and congrats on the progress channels in place.
Place Preorders for the book can I get the first question next quarter.
I'll, let you buy one for every family member and relative.
Sure.
Okay.
Okay.
It really just in relation to that last question and just to make sure I understood. Your answer clearly is you do see a potential opportunity continentally finally in relation to that can you talk about securing supply.
Supply of commercial and in the U S and also presumably you intend to reference the safety data that's been submitted to the regulatory body in China.
Yeah, great questions, Nick I think so with respect to the <unk>.
Commercial production our partners in China, and Alpha <unk> is really the commercial production partner.
The process of producing commercial scale for the anticipated launch in China.
They filed for approval in January or excuse me December they got priority review in January. So we expect will be approved this year and then that will launch actually their commercialization partner in China has some seer, which has a large commercial sales force there already so we would expect to use the product that they will produce a commercial still from China as part of our.
Commercial if you will supply the appropriate time, which again is late 2023 as the early projected launch period.
That will I think is a big advantage for us because it should already be commercially available in China, well in advance of when we would marketed need supplies in the United States.
So that's I think an important consideration and then I'm sorry. Your second question was about the.
About the safety data database.
Yes, yes, sorry, yes, so actually that's a great question and we are actually discussing that internally that there is an incredible safety database available patients with those 700 are partners of those 700 patients with the drug as a single agent some with chemotherapy as an example.
That said.
Our new head of regulatory Brendan <unk> made it clear that you don't have to necessarily include every.
Patient data point.
From studies done outside your R&D in order to successfully file a BLA. So we're discussing what would actually be the optimum BLA filing package and because we have orphan drug designation, especially we may not need to for instance include every safety data point from trials done outside of our IND.
So that's something to stay tuned on that discussion, but I think it's an important point that we're discussing in light of our our new head of regulatory Brenda Marci, who has a lot of experienced filing and interacting with the FDA around these types of questions.
Okay. Thanks, and then just coming back to Allison that does that and let's see.
Object to an FDA.
Visits and revenue.
Yes, you could assume it hasnt been FDA inspected with respect to.
It hasnt been the basis for filing for approval I would say without breaching confidentiality has been inspected by international regulatory authorities. So.
So I could tell you that Nick and.
Main confident of their ability to produce <unk>.
Commercial supplies for us as well.
Okay perfect.
And then in terms of.
Our second immunotherapy asset considering.
Considering can you provide any commentary about how far along you are in securing at asset. So you kind of mentioned that.
I want to use that for the docs combo trials.
Which clearly would need to have an IRB approved in the U S I'm, assuming or at least the IMD ready MFS.
Alright.
That on later.
No great point, Nick Yes, so we're looking at several assets at this time.
And we've been in discussions with several companies for.
A prolonged period of time I would say our goal still remains to get one or two deals done this year.
To your point it could be that it's an IND ready asset whereby we'd still do an initial safety trial before combining for instance, with <unk> docs. So if that's the case, we can do the <unk> initial combo and then add that on a little bit later timeframe.
Some assets of <unk> for instance have clinical data, whether it's opened USD <unk> 90 for instance, in Australia, Covid more logically plugs straight into a combination trial with docs and <unk>. So I think there are potential assets on the board that are in both of those categories, Nick and we're excited to continue those discussions with the <unk>.
<unk> licensing one or two more assets this year.
Okay terrific.
And then next one for me and it kind of builds on the previous <unk>.
Conversation.
Do you wish that you would just sort of getting.
Hopefully our nine back and collected the $9 million I know there is no.
I mean, I'm, assuming you have the option to do that.
Obviously that doesn't have the contractual right to do that.
Or do you feel like the.
Potential.
Payments you can get into traditional commercial collaborations considerably.
In Europe considerable value in the past.
That might be.
Yes, that's a good question I think.
The disputes around two agreements the T J <unk> agreement and the Bispecific antibody agreement.
And our position is to respect the agreements to respect the contractual.
No requirements and obligations in the agreement and that's going to be our position going forward and we will continue to move in that direction.
To your point I think if you think of it on a pure business standpoint, just from TJ four through nine.
You could potentially terminate and take 9 million, but it wouldn't be a legal termination. So given there is a dispute are already going on with that agreement.
And also divisive agreement, we just didn't feel that was the right course of action for our company.
Okay. Thanks, and then lots of retails on the base excision repair inhibitory now given this restaurant and provincial and synthetic lethality.
Surprised there's not been more interest inbound interest.
Companies wanting to add.
Clinical asset with the known safety profile.
Sure.
All of the alternatives.
You look to bring in an asset.
Yes.
6000 repair inhibitor.
No. It's a good question I mean, I think we really want to see with tiers, we wanted to and I think what which will really distinguish the asset is randomized data in <unk>.
I do feel good about what will happen this year with respect to tier two being advanced into a randomized trial in advanced localized lung cancer that will definitively prove whether it's active or not.
We've got very encouraging single arm data, but we need randomized data I think those data. We will then elevate the profile of that asset.
With respect to external potential partners, but also internally in terms of how we prioritize the asset so I think to your point its an undervalued asset, but I do think the the wheels are turning which will generate data that can make make it much more appreciated by by external potential external partners.
Okay perfect. Thanks al.
Much appreciate the questions Nick Thank you.
Yes.
Our next question comes from the line of Thomas Quarry Upjohn Straining your line of Hilton.
Again, Hi, Shlomi.
Joe when you might be on mute.
Hi, Thank you for taking the question I was on mute.
The first one is on the <unk> dock San apologies, if I missed that point are you planning to start the frontline trial this year.
And.
Are you and another one is on the.
Born in the <unk>.
The financial guidance, you're thinking cash into 2023, but it looks like you are burning about 2008.
Millions a year.
And you are also considering in license for their <unk>.
Asset so are there any milestones we should be.
Modeling any non model. Thank you.
Sure sure.
Yes, so with respect to your first question on <unk>.
We do expect to see that trial open this year with respect to end the docs and again it could be a third agent in there as well for next question, but the initial studies and with Docs first line would you expect to initiate sites this year.
There's a lot of interest in that trial I will say from the initial sites that are part of the <unk> trial, a lot of them would like to be part of a frontline trial and those would be sub types of sarcoma beyond ups's MFS to be clear and so.
Definitely something of keen interest to investigators.
With respect to spending I think as Scott pointed out we expect the peak and G&A to be this year related to the now stayed Delaware Chancery Court case, and then following that in quarter three quarter. Four we will see the spend to be more similar to quarter, one and so we've taken that into account to project. The current cash position to get us to 2000.
23.
Now you did mentioned we are looking for new assets, but we're looking for new assets. We're looking to do it in a way that leverages our product development platform of zero independent research that would be consistent with prior agreements whereby we havent paid significant upfronts and we havent paid significant milestones, but what we give our partners is that really really beneficial.
Sure on the backend and our motivation to move their product toward very quickly. So really the cost when we think about a new asset is the cost of actually doing the trial.
And that brings in place what we have in terms of capabilities here in our special sauce. So to speak is our ability to execute trials.
To do a 30 patient trial, we estimate the cost is about $3 million and Thats spent over about eight quarters. So when you start breaking that down youre talking about incremental spend thats almost immaterial with respect to our overall cash expenditures. So we can still license assets then employ our platform do phase one.
Early stage development without a significant spend in terms of the burn.
I would point out that we're not including any non dilutive capital, which would come in as we discussed earlier for instance from from partners opting to terminate current agreements around TJ for 309, but even without those non dilutive capital payments were confident of our position to get into 2023.
And I know a lot of companies Couldnt make that statement showman, but again it plays into the fact, when Youre cero independent and you have really no significant manufacturing responsibilities because those are done by your partner.
Your developmental costs become incredibly our developmental expenses become incredibly low.
Got it now this is really helpful. Thank you again and congrats on the progress.
Thank you Sherman.
Once again as a reminder, if you have questions you May press star one.
There are no further questions at this time I will now turn the call over back to you Dr. Charles Stewart, President and CEO of Tracon Pharmaceuticals.
Our closing remarks.
Thank you everybody for your attention and for your questions. So we look forward to speaking you again next quarter.
Hey.
This concludes today's conference call. Thank you again for participating you may now disconnect.
Okay.
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