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

Xconomy San Diego — 

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.