TRACON Pharmaceuticals, Inc. (TCON) Stock Plummets Following Upsizing of Underwritten Public Offering

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TRACON Pharmaceuticals, Inc. (TCON) stock prices were down 4.27% as of the market closing on July 21st, 2021, bringing the price per share down to USD$4.93 at the end of the trading day. Subsequent premarket fluctuations saw the stock plummet by 23.33%, bringing it down to USD$3.78.

Upsizing of Public Offering

July 21st, 2021 saw the company announce the upsizing of its previously announced public offering as a result of the level of demand. The upsizing will consist of a firm commitment to purchase 3,926,702 shares of common stock, with each share being priced at USD$3.82. Furthermore, the agreement comes equipped with a 30-day option to purchase up to an additional 589,005 shares of common stock at the public offering price. The closing of the public offering is expected to close on July 26th, 2021.

Details of the Offering

The public offering is expected to generate gross proceeds in the amount of roughly USD$15 million, before the deduction of expenses related to the offering and excluding the exercising of the over-allotment option. The capital raised is forecasted to be allocated towards the supporting of the continued clinical development of envafolimab, as well as for working capital and general corporate purposes.

Orphan Drug Designation

June 29th, 2021 saw the company announce the granting of Orphan Drug Designation to envafolimab by the U.S Food and Drug Administration. The innovative, single-domain antibody against PD-L1 is being developed for the treatment of patients with soft tissue sarcoma. This development followed the submissions of a revised application that consisted of data from the Phase 1 clinical trial from sarcoma patients treated with single-agent envafolimab.

Basis of Envafolimab ODD

The Orphan Drug Designation submission for the use of envafolimab in sarcoma included clinical data that signaled confirmed objective partial responses by RECIST with response durations exceeding six months. This promising development was observed in two out of five patients with refractory metastatic alveolar soft part sarcoma (ASPS), with the patients having been administered single-agent envafolimab in Phase 1 clinical trials. The trials were conducted by the company’s partner, 3D Medicines and Alphamab Oncology. The Phase 1 trials did not include patients with undifferentiated pleomorphic sarcoma (UPS) or myxofibrosarcoma (MFS) were not treated as part of Phase 1 trials.

Future Outlook for TCON

Armed with the added influx of capital generated from the company’s public offering, TCON is poised to capitalize on the opportunities afforded to it as a result of the granting of Orphan Drug Designation for its flagship treatment. Investors are hopeful that management will be able to facilitate the hasty commercialization and effective proliferation of the treatment as it continues to work closely with the FDA.

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