Sign in

You're signed outSign in or to get full access.

TP

Tracon Pharmaceuticals, Inc. (TCON)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 2024 was operationally focused: ENVASARC (single‑agent envafolimab) fully enrolled (82 patients) with final response assessment data expected in Q3 2024; interim ORR was 11% (investigator) and 5.5% (BICR) in 73 patients, all confirmed, with median DoR >6 months by BICR .
  • OpEx fell sharply YoY as enrollment completed and Cohort D was terminated; R&D was $1.9M vs $5.0M YoY and G&A was $1.4M vs $2.3M YoY; net loss narrowed to $3.2M vs $8.5M YoY .
  • Liquidity remains tight: cash and equivalents were $7.9M at March 31, 2024, funding “late into the third quarter of 2024”; management aims to generate non‑dilutive capital via PDP licensing/services; Nasdaq compliance remains a near‑term overhang (reverse split executed; equity/market‑value remedies under evaluation) .
  • Near‑term stock catalysts: ENVASARC pivotal final data in Q3 2024 and any PDP monetization that bolsters shareholder equity and listing compliance; management plans to approach FDA on BLA if the ENVASARC primary endpoint (≥9 BICR responses out of 82; 11%) is met .

What Went Well and What Went Wrong

What Went Well

  • ENVASARC fully enrolled; interim BICR median DoR >6 months with confirmed responses. CEO: “We look forward to reporting the final response assessment data…expected in the third quarter.” .
  • Material OpEx reductions: R&D fell due to trial enrollment completion/Cohort D termination; G&A declined on lower legal spend, improving the P&L trajectory YoY .
  • Clear regulatory and commercial path outlined if the primary endpoint is achieved, including intent to discuss BLA strategy and plan for a potential post‑approval randomized trial in frontline sarcoma (ENVA + doxorubicin) .

What Went Wrong

  • Revenue remains de minimis ($0.1M), and the quarter posted a net loss of $3.2M; the business remains dependent on financing and business development .
  • BICR ORR of 5.5% in 73 patients at interim was below the 11% primary endpoint threshold, keeping outcome risk for Q3 final data elevated despite investigator‑assessed 11% ORR; success requires ≥9 BICR responses among 82 patients .
  • Nasdaq compliance remains unresolved: reverse split completed, but company still needs to satisfy equity/market‑value criteria by the stated deadlines; management is pursuing PDP monetization and other alternatives (press release noted June 3, while call referenced June 30, indicating potential timing uncertainty) .

Financial Results

P&L, EPS, and Cash (units: $USD Thousands except per-share)

MetricQ1 2023Q3 2023Q4 2023Q1 2024
Revenue$0 $0 $3,045 $100
Research & Development$4,969 $2,326 $1,494 $1,878
General & Administrative$2,344 $1,262 $1,144 $1,434
Arbitration Success Fees$0 $(2,000) $0 $0
Total Operating Expenses$7,313 $1,588 $2,638 $3,312
Income (Loss) from Operations$(7,313) $(1,588) $407 $(3,212)
Total Other Income (Expense)$(1,191) $12,351 $32 $44
Net Income (Loss)$(8,504) $10,763 $439 $(3,168)
EPS (Basic & Diluted)$(6.76) $0.29 $0.01 $(1.33)
Cash & Equivalents (End of Period)—$7,763 $8,564 $7,891

Notes:

  • Q4 2023 revenue reflects PDP license revenue; the company had minimal Q1 2024 revenue .
  • Management reiterated cash is expected to fund operations into late Q3 2024 .

Actual vs. S&P Global Consensus (Q1 2024)

MetricActualConsensus (S&P Global)Surprise
Revenue ($USD Thousands)$100 N/AN/A
EPS (Basic & Diluted)$(1.33) N/AN/A

Consensus unavailable in our environment via S&P Global for TCON (GetEstimates mapping missing).

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
ENVASARC final response assessment readout2024“Final data anticipated in the second half of 2024” (Q4’23 update) “Final response assessment data…expected in the third quarter of 2024” Narrowed timing to Q3
ENVASARC enrollmentQ1 2024“On track to complete enrollment…later this quarter” (Q4’23) Fully enrolled (82 patients) Completed
Cash runway2024Not specified in Q4 release Funding expected “late into the third quarter of 2024” New disclosure
Nasdaq compliance2024Not specified in Q4 release Panel granted extension “through June 3, 2024” (press); call referenced “by June 30” Ongoing; discrepancy in date references

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3’23, Q4’23)Current Period (Q1’24)Trend
ENVASARC efficacy and timelineQ3: Interim BICR ORR 8.7% (46 pts), >6m DoR; final data mid‑2024; complete accrual in Q4’23 . Q4: on track to complete 80 patients; final data 2H’24 .Interim in 73 pts: 5.5% BICR ORR (4 responses), 11% investigator ORR; median DoR >6m; fully enrolled (82); final data Q3’24 .Continued progress; timing narrowed
Regulatory pathExpect ENVASARC final data to support next steps .Plan to approach FDA for BLA if ≥9 BICR responses; outline for potential frontline combo with doxorubicin and post‑approval randomized trial .More explicit plan
PDP monetization (non‑dilutive capital)Target licensing PDP by year‑end; collected $22M arbitration and $3M PDP license in 2023 .Pursuing additional PDP license and CRO‑replacement services; highlights prior $3M license and potential margins .Ongoing focus
Liquidity and runwayCash $7.8M at Q3; $8.6M at Q4 .Cash $8.0M including restricted; runway late into Q3’24 .Stable but tight
Nasdaq listingNot detailed .Reverse split executed; extension granted; working on equity/market‑value solutions .Active remediation
TRC102 programNCI‑supported program referenced historically .Ongoing randomized Phase 2 in Stage III NSCLC; 15 sites open; final results expected in 2025 .Steady execution

Management Commentary

  • “With ENVASARC fully enrolled we are focused on leveraging our Product Development Platform to generate non‑dilutive capital… We look forward to reporting the final response assessment data… expected in the third quarter.” — Charles Theuer, CEO .
  • “We plan to approach the FDA to discuss a BLA filing strategy if we determine 9 responses by independent central review.” — Charles Theuer, CEO .
  • “The NCI is sponsoring an ongoing randomized Phase II trial assessing TRC102… 15 sites are now open… final results are expected in 2025.” — Charles Theuer, CEO .
  • “R&D expenses were $1.9M… compared to $5.0M… due to termination of Cohort D… G&A… $1.4M… compared to $2.3M… due to lower legal expenses… cash, cash equivalents and restricted cash totaled $8M.” — Scott Brown, CFO .

Q&A Highlights

  • PDP economics: Management cited a prior 30‑patient oncology trial example with $9M revenue vs. “a bit under $3M” cost ($100k per patient cost base vs. ~$300k CRO pricing), implying ~200% gross margin potential under a pay‑for‑performance model .
  • Nasdaq compliance path: Preferred approach is PDP monetization (trial execution revenues and/or licenses) to cure shareholder equity deficiency; fundraising remains an option; management referenced compliance requirements of $35M market value or $2.5M stockholders’ equity by late June (noting discrepancy vs. June 3 press release) .
  • Timing: Final ENVASARC data expected in Q3 2024, just after the compliance deadline window .

Estimates Context

  • We attempted to retrieve S&P Global consensus for Q1 2024, but consensus data were unavailable in our environment for TCON (missing mapping). As a result, we cannot provide a definitive beat/miss analysis versus S&P Global consensus for revenue or EPS this quarter.
  • Given limited revenue and no formal financial guidance, model sensitivity will hinge on Q3 ENVASARC outcomes and any PDP monetization cadence; no explicit quantitative guidance was provided to anchor revisions .

Key Takeaways for Investors

  • Q3 2024 ENVASARC BICR readout is the pivotal near‑term catalyst; outcome versus the 11% BICR ORR threshold (≥9/82 responses) will drive regulatory path and valuation inflection .
  • Interim efficacy (BICR ORR 5.5% in 73 pts; investigator 11%) leaves binary risk into Q3; confirmatory responses and DoR >6 months are supportive but not determinative until final analysis .
  • Operating discipline is evident (R&D/G&A down materially YoY), but liquidity is tight (cash funds operations into late Q3’24); watch for PDP transactions to extend runway and support Nasdaq compliance efforts .
  • Any PDP monetization (licenses or CRO‑replacement engagements) could be a positive surprise and reduce equity financing needs; management highlighted prior transaction economics and strategy .
  • Regulatory roadmap is clearer: if the primary endpoint is met, management intends to seek BLA and pursue a frontline sarcoma strategy (ENVA + doxorubicin) with a post‑approval randomized trial, offering a longer‑term growth path .
  • Monitor the listing compliance timeline; press release cites June 3 extension, while the call referenced end‑June—clarity on timing and remediation steps will be important for near‑term trading sentiment .

Sources

  • Q1 2024 8‑K 2.02 press release and financials: .
  • Q1 2024 earnings call transcript: .
  • Additional Q1‑period 8‑K (preliminary cash and ATM update): .
  • Prior quarters for trend analysis: Q4 2023 8‑K 2.02 (press, financials) ; Q3 2023 8‑K 2.02 (press, financials) .