TRACON Pharmaceuticals, Inc.

good afternoon this is the operator today's conference call is scheduled to begin momentarily until that time your lines will be placed and hold thank you for your patience once again today's conference call is scheduled to begin momentarily until that time your lines will be placed and hold thank you for your patience Good day, ladies and gentlemen, and welcome to Tracon Pharmaceuticals' first quarter of 2022 Earnings Conference Call. At this time, all callers are in a listen-only mode. After the speaker's prepared remarks, we will conduct a question and answer session, and instructions will be given at that time. During today's call, we will be making certain forward-looking statements, including statements regarding expected timing of clinical trials and results, regulatory activities, future expenses, and cash runaway in our development plans and strategies. These statements are subject to various risks that are described in our filings made with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31, 2021, and subsequent quarterly reports on Form 10-Q. Your caution not to place undue reliance on the on these forward-looking statements, and we disclaim any obligation to update such statements. Now, I would like to turn the call over to Dr. Charles Tuor, President and CEO of TRACON Pharmaceuticals. Dr. Tuor?

Good afternoon, and thank you for joining TRACON's first quarter 2022 Financial Results and Business Update call. I will begin with an update on our pipeline and then review our recent activities. Following that, Scott Brown, our Chief Financial Officer, will review our financial results for the three months ended March 31st, 2022. Finally, we will conclude by taking your questions. I'll start with an update on our continued progress with the ENVASARC pivotal trial. Recall that in December 2021, the Independent Data Monitoring Committee recommended doubling the ENVA dose to 600 milligrams after noting that ENVA dosed at 300 milligrams was well tolerated and demonstrated a significantly higher objective response rate in lower-weight patients. This recommendation was incorporated into an amended protocol that was submitted to the FDA in January, approved by the FDA in February, and then approved by internal review boards or ethics committees at each of the 30 NVISARC sites, including 29 sites in the U.S. and one site in the United Kingdom. We believe the short timeframe between amendment submission in January and and amendment approval by April at each of the 30 clinical sites is another demonstration of the value of TRACON's CRO-independent product development platform that permits highly efficient interactions between TRACON and the sites that conduct our trials. We also noted in April that more than 10 patients had initiated treatment at the 600 milligram ENVA dose. ENVASARC enrollment continues to be brisk. And as a result, we expect to report on three key interim data monitoring committee assessments this year. First, we expect to report two safety assessments in mid-2022 at three weeks and 12 weeks following enrollment of the 20th patient. In the second half of this year, we expect to report on the interim efficacy assessment three months following enrollment of the 36th patient to allow for an assessment of the preliminary response rate. At that time, the Data Monitoring Committee will apply a formal futility rule that requires at least one response in 18 patients enrolled into each of the two cohorts at the 600 milligram ENVA dose. As a reminder, the ENVA-SARC trial includes one cohort who receives single-agent ENVA and a second cohort who receive ENVA in combination with Urovoi. The primary endpoint in each cohort is objective response rate by resist, as confirmed by blinded independent central review with duration of response being a key secondary endpoint. In each cohort, the demonstration of nine out of 80 objective responses by central review, or an 11.25% objective response rate, defines a level of response that satisfies the primary objective of the study, which is to statistically exceed the 4% objective response rate of Votrien, the only approved treatment for patients with refractory UPS and MFS. Notably, Votrien is a drug with a black box warning for fatal liver toxicity. We believe ENVA has the potential to transform the care of refractory sarcoma patients through the demonstration of superior efficacy and safety compared to Votrien. Based on data from trials of other checkpoint inhibitors in refractory UPS and MFS, we are targeting a 15% response rate for single-agent ENVA and up to a 30% response rate for ENVA given with your boy. Furthermore, we plan to approach the FDA to discuss a BLA filing strategy as soon as we determine nine responses in either cohort. Our second clinical stage immune oncology asset is YH001, a potential best-in-class CTLA-4 antibody licensed from Ucare BioPharma in October last year. As a reminder, we received a broad license for YH001 to develop and commercialize in North America in sarcoma, and multiple other indications, including microsatellite-stable colorectal cancer, renal cell carcinoma, and KRAS-positive lung cancer. Though with respect to our license, we can substitute any one of those indications for bladder cancer, endometrial cancer, or melanoma at our election. In these non-sarcoma indications, Y001 could be combined with existing standard of care agents, including marketed PD-1 antibodies. Our initial development plan for Y001 is to initiate a clinical trial in sarcoma in combination with ENVA in the second half of this year. Importantly, we can leverage data from two completed Phase I trials of Y001 performed by our partner, Ucure, to inform our dosing strategy. These two trials determine the recommended Phase II dose of Y001 as a single agent and in combination with the PD-1 antibody, toropalimab. We intend to initiate a Phase I-II clinical trial studying a triplet that includes Y001, ENVA, and doxorubicin chemotherapy, as doxorubicin is the current frontline standard of care treatment for sarcoma. Following the Phase I portion of the trial to assess the tolerability of the combination of ENVA and Y001 doublet, as well as the triple therapy that includes doxorubicin, we will assess the response rate of common and rare sarcoma subtypes to combination treatment, with the intent of demonstrating superior response rates compared to historical data using standard of care agents. For example, in leiomyosarcoma, we plan to compare the response rate of triple therapy to the historical 15% response rate of single agent doxorubicin. In the case of a rare sarcoma subtype like chondrosarcoma, where chemotherapy is not effective, We plan to study the doublet of Y001 and ENVA to assess the response rate compared to historical response rates of less than 5% with standard of care treatments. One of the purposes of this Phase I-II trial is to determine the subtypes of sarcoma that respond best to the combination of ENVA and Y001. Following the potential accelerated approval of ENVA through the ENVASARP trial, the FDA will require a randomized trial to demonstrate a survival benefit. We expect this Phase III post-approval trial will compare single-agent doxorubicin to the triple combination of doxorubicin with ENVA NY001 with PFS as the endpoint. This trial would be expected to enroll patients with UPS and MFS as well as other sarcoma subtypes shown to be responsive to triple therapy based on data from the Phase I-II trial that I described earlier. The ability for TRACON to commercialize two in-licensed immune oncology therapies together in sarcoma will be of great strategic benefit. It is important to understand the sales potential in sarcoma with ENVA at parity pricing is not just the forecasted $200 million in annual ENVA revenues from the initial indications in refractory UPS and MFS. Our clinical development strategy is designed to create the opportunity for ENVA to broadly benefit patients with sarcoma in the front line, adjuvant, and neoadjuvant settings by seeking supplemental indications. Moreover, we believe TRACON's total sarcoma-driven sales revenue should be further enhanced by marketing Y001 and ENVA together as part of the same treatment combination in sarcoma. While development in sarcoma is straightforward due to the lack of any approved immunotherapies, we also see a path forward for Y001 in other indications where there is clear evidence of activity with dual checkpoint inhibition. For example, the combination of Opdivo and Yervoy is approved for the first-line treatment of intermediate and high-risk patients with advanced renal cell carcinoma. However, our discussions with key opinion leaders indicate that most patients receive front-line treatment with a PD-1 antibody and a VEGF inhibitor rather than with Yervoy. Therefore, we believe the unmet medical need in advanced renal cell carcinoma patients is in the PD-1 refractory setting. Data presented at ASCO indicate that PD-1 refractive patients can be resensitized to immunotherapy, and we expect to evaluate Y8001 in this line of treatment. This strategy of second-line dual-checkpoint inhibition may be relevant for many tumor types where PD-1-directed treatment is given in combination with chemotherapy or a VEGF inhibitor, but without your boy in the frontline setting. In addition to our two checkpoint inhibitors, we are pleased the National Cancer Institute continues to fund development of our DNA damage repair inhibitor, TRC102. In February, the NCI initiated a randomized phase two trial assessing TRC102 in stage three non-squamous, non-small cell lung cancer in combination with chemoradiation. The TUMAR trial will enroll 78 patients to assess the benefit of adding TRC102 to current standard of care treatment of pemetrexed, cisplatin, and radiation therapy, followed by consolidated dervalumab treatment. The primary endpoint of the trial is PFS, and the trial is designed to detect an improvement in PFS at one year from 56% to 75%. Enrollment is expected to begin this year, and results are expected in 2024. Our fourth clinical stage asset is the CD73 antibody TJ4309 that TRACON is evaluating in a Phase I study as a single agent and in combination with the checkpoint inhibitor, Ticentric. We are working to complete data analysis of the trial, which has enrolled the last patient. As a reminder, IMAP has indicated their desire to exercise their option to terminate the TJ4309 license following completion of the Phase I trial for a payment to TRACON of $9 million, which is expected later this year. Next. Next. I will provide a legal update on the two disputes which are in arbitration with our corporate partner, IMAP. As a reminder, in February this year, arguments for alleged breaches of both of our license agreements with IMAP were heard before an International Chamber of Commerce Arbitration Tribunal under New York law. As we have noted in the past, in March 2020, IMAP issued a press release announcing a strategic partnership with KG Bio whereby KGBio received what the press release described as a right of first negotiation for exclusive rights to commercialize TJ4309 in multiple Asian, African, and Middle Eastern countries for up to $340 million in potential payments to IMAP. We believe that based on the KGBio license, TRACON was entitled to receive a payment at that time under the TJ4309 agreement, although IMAP has disputed that this payment is due. The other dispute with IMAP regards our bi-civic antibody agreement with them. The disputes in this agreement include issues related to IMAP's two license and collaboration agreements with ABO-Bio in July 2018 that preceded our agreement with IMAP in November 2018. As of today, the GJ4309 agreement and bi-civic antibody agreement disputes remain under post-hearing consideration by the tribunal and we have been guided to expect their binding decision later this year. Pending results of the arbitration, we continue to meet our obligations under the terms of both agreements. We will promptly provide an update when the tribunal panel announce their findings. Given the challenging capital markets, the expectation to secure non-dilutive capital from our corporate partner is important. and may be further supplemented by opportunities for non-dilutive capital enabled through our CRO-independent product development platform that we believe makes us one of the most efficient clinical development organizations. We expect to continue to leverage our platform in two ways that provide for potential non-dilutive capital to TRACON. First, we are evaluating drug candidates whereby TRACON performs clinical trials at a premium to our costs, and TRACON then earns a share in the revenue including sub-licensing fees and or royalties from commercialization. This is an aligned structure we used in the past, for example, with Johnson & Johnson. Second, we are exploring a franchise model whereby we are paid to share our proprietary capabilities and know-how to enable other companies to independently internalize clinical operations and use these new capabilities to avoid contracting with CROs to execute clinical trials. As has been the experience at TRACON, such an investment would be expected to result in substantial time and cost savings for our partner. We believe that over time, our product development platform has earned strong credibility as a compelling solution for companies who wish to become CRO independent and therefore reap the rewards of conducting trials faster, at higher quality, and at lower costs than those trials typically contracted to CROs. At this time, Scott will provide an update on our financials.

Thank you, Charles, and good afternoon, everyone. TRACON's research and development expenses were $3 million for the first quarter of 2022, compared to $2.3 million for the comparable period of 2021. The increase was primarily related to additional enrollment in the pivotal NVSARP trial. General and administrative expenses were $6.5 million for the first quarter of 2022, compared to $2.7 million for the comparable period of 2021. increase was primarily related to legal expenses in connection with the arbitration with IMAP, and we expect G&A expenses to decrease significantly for the remainder of the year as the arbitration hearing is now complete. Our net loss was $9.5 million for the first quarter of 2022, compared to $5.1 million for the comparable period of 2021. Turning to the balance sheet, At March 31, 2022, our cash, cash equivalents, and investments totaled $16.6 million compared to $24.1 million at December 31, 2021. We expect our current capital resources to be sufficient to fund our planned operations in 2023. With that, I will turn the call back over to Charles.