On September 6, 2022 TRACON Pharmaceuticals, Inc. (Nasdaq: TCON), a clinical stage biopharmaceutical company utilizing a cost-efficient, CRO-independent product development platform to advance its pipeline of novel targeted cancer therapeutics and to partner with other life science companies, reported entry into a $35 million non-dilutive long-term debt facility with Runway Growth Capital LLC (Runway), a leading provider of loans to venture and non-venture backed companies seeking non-dilutive capital (Press release, Tracon Pharmaceuticals, SEP 6, 2022, View Source [SID1234619070]).

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"This non-dilutive financing extends our cash runway to support the robust accrual of the pivotal ENVASARC trial while we await completion of the Phase 1 TJ4309 clinical trial that triggers I-Mab’s license termination option for $9 million as well as the outcome of the binding arbitration with I-Mab, both of which are expected this quarter," said Charles Theuer, M.D., Ph.D., President and CEO of TRACON. "We are pleased to partner with Runway, which seeks long-term relationships with late-stage life science companies who will benefit from non-dilutive capital."

"We are excited to enter into this facility with TRACON to help them achieve their goal of bringing envafolimab, the world’s first subcutaneous checkpoint inhibitor, to market in the underserved indication of sarcoma," said Igor DaCruz, Managing Director, Life Sciences at Runway.

$10 million of the $35 million loan was funded upon closing. The additional $25 million available under the facility may be funded upon achievement of certain clinical milestones and at Runway’s discretion. The loan has a 24-month interest-only period followed by 24 monthly payments of principal and interest. In connection with the debt financing, TRACON issued Runway warrants to purchase up to 150,753 of its common stock at an exercise price of $1.99 per share.

Proceeds from the facility will be used to support the ongoing pivotal ENVASARC trial and for general corporate purposes.

About Envafolimab

Envafolimab (KN035), a single-domain antibody against PD-L1 invented by Alphamab Oncology, is the first approved subcutaneously injected PD-(L)1 inhibitor. Envafolimab was approved by the Chinese NMPA in November 2021 in adult patients with MSI-H/dMMR advanced solid tumors who failed systemic treatment and have no satisfactory alternative treatment options. In December 2019, Alphamab Oncology, 3D Medicines and TRACON entered into a collaboration whereby TRACON has the right to develop and commercialize envafolimab in soft tissue sarcoma in North America. Envafolimab is currently being studied in the pivotal ENVASARC Phase 2 trial in the United States sponsored by TRACON and a Phase 3 pivotal trial in combination with gemcitabine and oxaliplatin in advanced biliary tract cancer patients in China sponsored by TRACON’s corporate partners, Alphamab Oncology and 3D Medicines.

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. TRACON expects the trial to enroll more than 160 patients with UPS or MFS who have progressed following one or two lines of prior treatment and have not received an immune checkpoint inhibitor, with 80 patients enrolled into a cohort of treatment with single agent envafolimab at 600 mg every three weeks and 80 patients enrolled into a cohort of treatment with envafolimab at 600 mg every three weeks with Yervoy. The primary endpoint is objective response rate by central review with duration of response a key secondary endpoint.