Small cancer biotech Tracon secures licensing pact with J&J
- In a deal with Janssen Pharmaceutical, Tracon Pharmaceuticals has obtained access to two preclinical cancer candidates.
- TRC253, an androgen receptor inhibitor, is poised to enter Phase 1/2 clinical trials in the first half of 2017. The other candidate, TRC694, an oral kinase inhibitor for blood cancers, is in preclinical development, with an IND filing planned for 2018.
- The deal was facilitated with a $5 million investment in Tracon by Johnson & Johnson Innovation, which should offset the first year of R&D costs, according to Tracon CEO Charles Theuer.
Usually Big Pharma companies are the ones to cherry-pick pipeline candidates from smaller biotechs. In this case, Tracon is taking on development of two of Janssen's compounds.
It's a model that can work for both sides. For Janssen, it reduces risks for early stage development, with Tracon taking the proof-of-concept stage clinical risk. And in turn, for Tracon, the deal with a big pharma provides some much-needed cash and validates its in-house development capabilities, flagging the company's experience to other potential partners.
The deal is structured on multiple tiers, with different deals for the two candidates. Janssen could eventually earn more than $185 million for TRC253, and would have right of first negotiation after preclinical studies on TRC694. If that negotiation fails, Tracon would be obligated to pay Janssen up to $60 million plus royalties to continue to develop the candidate, based on milestones.
Tracon's shares have been on a slow decline since early 2015, having lost around 65% over the last 18 months to yesterday's close of $6.13, and it has remained stable on the news.
There's also a therapeutic area fit. Tracon's key focus is in cancer, with a targeted monoclonal antibody in phase 3 trials, and an agent to reverse chemoresistance in NCI-funded Phase 2 trials. Tracon also has a deal with Japanese company Santen, to develop an agent for wet age-related macular degeneration.
Perhaps unsurprising in a time of advances in science and rising prevalence, cancer collaborations are one of the biggest areas of dealmaking. According to a study by the industry association BIO, pharma companies struck 57 licensing or collaboration deals with a value over $10 million last year.
- Tracon Pharmaceuticals Statement
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