Tracon Files for $57.5M IPO to Move Cancer Drugs to Next Stage

San Diego-based Tracon Pharmaceuticals, which raised $27 million in a Series B financing round in September, plans to raise a total of $57.5 million in an IPO, according to a recent regulatory filing. The company was founded in 2004 to develop new drugs for treating cancer, age-related macular degeneration, and fibrotic diseases.

Curiously, this is the third San Diego life sciences company to file the necessary paperwork in the final few weeks of 2014 for an IPO that would raise less than $100 million.

In terms of whether it would be worth the underwriting costs, the most-surprising registration was submitted by BeneChill, a San Diego medical device maker that intends to raise just $14.6 million to advance its rapid-chilling technology for treating heart-attack patients.

Another San Diego company, AltheaDx, plans to raise as much as $69 million to commercialize technology intended to help doctors use a patient’s own genetic make-up to identify the optimal drugs to prescribe for certain types of disease.

Tracon IPO logoTracon specializes in developing antibodies that bind to endoglin, a glycoprotein on cell surfaces that is essential to the formation of new blood vessels. Endoglin also is a key contributor to tissue scaring, or fibrosis.

With research funding from the National Cancer Institute, Tracon has advanced an anti-endoglin antibody, TRC105, to mid-stage clinical trials for treating multiple types of solid tumors. The drug would be used in combination with other drugs that also inhibit new blood vessels from growing by targeting the signaling pathway for vascular endothelial growth factor (VEGF) proteins.

A second drug candidate, TRC102, is a small molecule in clinical development for the treatment of lung cancer and glioblastoma.

If warranted by the outcome of mid-stage trials currently underway, Tracon says it expects the NCI to provide continued funding needed to advance both TRC105 and TRC102 to pivotal clinical trials.

Last March, Tracon licensed worldwide rights for its anti-endoglin antibodies to Santen for use in AMD and other ophthalmology indications. Santen paid Tracon $10 million upfront, and agreed to pay as much as $155 million in future milestone payments.

At the end of September, the company had slightly more than $39 million in available cash. Tracon says it has raised slightly more than $79 million from the private placement of redeemable convertible preferred shares and common stock. Investors (and their ownership stake in Tracon) include JAFCO (19.5 percent), New Enterprise Associates (17.4 percent), Brookline Investments (15.5), Nextech Invest (8.8), BioMed Ventures (6.2), Arcus Ventures, and BHP.

Tracon plans to trade on the Nasdaq market under the ticker symbol TCON.

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.