On October 21, 2019 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 through our license to Santen Pharmaceutical Co. Ltd., and utilizing our product development platform to partner with ex-U.S. companies to develop and commercialize innovative products in the U.S., reported that it has entered into a Common Stock Purchase Agreement of up to $15.0 million with Aspire Capital Fund, LLC ("Aspire Capital") (Press release, Tracon Pharmaceuticals, OCT 21, 2019, View Source [SID1234542387]). Aspire Capital has committed to purchase up to $15.0 million of shares of the Company’s common stock at TRACON’s request from time to time during a 30 month period beginning on the effective date of a registration statement related to the transaction and at prices based on the market price at the time of each sale. There are no warrants, derivatives, or other share classes associated with this agreement. Proceeds from the Agreement will be used to further advance the Company’s pipeline and product development platform, as well as general corporate purposes.
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
"We are pleased to enter into another transaction with Aspire Capital and believe that this agreement provides TRACON with the opportunity to access capital in an efficient manner," said Charles Theuer, M.D., Ph.D., President and CEO of TRACON. "The financial flexibility provided by this transaction will further support our business development efforts as we continue to identify opportunities to leverage our product development platform through potential new partnerships with ex-U.S. companies that could benefit from our rapid and capital-efficient U.S. drug development and commercialization solution."
"We are very pleased to be expanding our investment in TRACON and to be continuing our long-term relationship with such an experienced and capable development team. Given the number of significant milestones anticipated in 2020 including data from ongoing clinical trials with DE-122, TRC253, and TJ004309, we firmly believe TRACON has the potential for considerable near-term value creation. Furthermore, TRACON has assembled and refined a highly efficient development platform which has already attracted a number of inimitable and potentially lucrative partnerships including those with Janssen and I-Mab. In particular, we feel the collaboration with I-Mab, which provides an opportunity to access an underappreciated, potentially best-in-class pipeline of bispecific antibodies, provides a strong foundation for similar, high-value ex-US partnerships in the future. We’re excited to see what’s next for TRACON and as a result, are thrilled to provide the company with added financial strength and flexibility as they continue their effort towards making meaningful therapeutic advances for patients with cancer and other diseases of high unmet need," said Steven G. Martin, Managing Member of Aspire Capital.
Under the terms of the Common Stock Purchase Agreement, TRACON will control the timing and amount of any further sale of shares of common stock to Aspire Capital. Aspire Capital has no right to require any sales by TRACON but is obligated to make purchases according to TRACON’s direction. There are no limitations on the use of proceeds, financial covenants or restrictions on future financings and there are no rights of first refusal, participation rights, penalties or liquidated damages in the purchase agreement. TRACON maintains the right to terminate the purchase agreement at any time, at its discretion, without any additional cost or penalty.
As consideration for Aspire Capital’s obligations under the Agreement, TRACON also issued 1,426,579 shares of common stock to Aspire Capital as a commitment fee. TRACON also entered into a Registration Rights Agreement with Aspire Capital in connection with its entry into the purchase agreement that requires TRACON to file a registration statement regarding the shares sold to Aspire Capital. Additional detail regarding the Common Stock Purchase Agreement and related Registration Rights Agreement is set forth in TRACON’s Current Report on Form 8-K, filed today with the SEC.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor will there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.