The current week has seen a few important deals in the pharmaceutical world, and another one was announced this morning by TRACON Pharmaceuticals Inc (NASDAQ:TCON). Following the news, TCON stock soared over 18%.
Big News
TRACON announced this morning that it has signed a collaborative partnership agreement with Jiangsu Alphamab Biopharmaceuticals Co. Ltd and 3D Medicines (Beijing) Co. Ltd. TRACON is going to work with these two companies in order to develop envafolimab, which is also referred to as KNO35. KNO35 is a PD-L1 single-domain antibody that is administered through injections to combat the development of soft tissue sarcoma in North America.
It goes without saying that this is a significant development for the company, and the news of the deal was welcomed enthusiastically by the market.
The Chief Executive Officer and President of TRACON spoke about the aims of the company from the collaboration: “Given the activity of other PD-1 and PD-L1 inhibitors in sarcoma, we believe a registration enabling the study of envafolimab in the sarcoma subtype of UPS will be meaningful to patients and providers.” As part of the deal, TRACON Pharmaceuticals will be in charge of both the development and commercialization of envafolimab.
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After the news broke this morning, TCON stock climbed significantly and gained as much as 18% at $2.94.
However, there are certain exceptions to this rule. If the product finds approval in other indications, then the company will have the right to co-market it. As part of the deal, Jiangsu Alphamab and 3D Medicines will supply TRACON Pharmaceuticals with envafolimab at predetermined prices. That is a significant advantage for the company as it tries to develop the product.
However, Jiangsu Alphamab and 3D Medicines will be entitled to significant royalties once the product goes into sales. It is believed that the two companies will get royalties ranging from the teens up to mid-double digits. TRACON is looking to start a registration enabling the study of the product at some point in 2020.
However, TCON stock is still down over 60% so far in 2019.
Featured image: DepositPhotos © VitalikRadko
