TRACON Pharmaceuticals Inc. (TCON:NASDAQ) just received word that the deadline for a decision in its ongoing arbitration with I-Mab Biopharma was pushed back to Sept. 30, 2022, reported H.C. Wainwright & Co. analyst Edward White in a June 15 research note.
"A win for TRACON could mean an inflow of nondilutive capital, which is not included in our models," White noted.
TRACON is a California-based clinical-stage biopharmaceutical company focused on developing and commercializing targeted drugs to treat cancer. I-Mab, headquartered in China, is developing biologics for immuno-oncology.
The arbitration hearing between TRACON and I-Mab ended on Feb. 28, 2022. Subsequently, in May, the two companies submitted post-hearing briefs to the arbitration tribunal.
The basis of the arbitration, White explained, is TRACON's contention that I-Mab breached its contractual obligations outlined in two collaboration and clinical trial agreements signed in 2018.
Those trial agreements relate to the development of TJ004309, a CD73 antibody, by TRACON. They also relate to five of I-Mab's proprietary bispecific antibody product candidates to be selected, by I-Mab within five years, for development and commercialization in North America.
The court stayed the initial lawsuit filed by I-Mab, followed by a counterclaim on the part of TRACON, in favor of arbitration, White added.
The analyst pointed out that this arbitration with the extended decision date differs from the arbitration concerning I-Mab's potential $9 million payment to TRACON with respect to the option for TJ004309.
H.C. Wainwright & Co. has a Buy rating and a $12 per share target price on TRACON, the current share price of which is around $1.30.
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Disclosures for H.C. Wainwright & Co., TRACON Pharmaceuticals Inc. , June 15, 2022
H.C. Wainwright & Co, LLC (the “Firm”) is a member of FINRA and SIPC and a registered U.S. Broker-Dealer.
I, Edward White, certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst’s household has a financial interest in the securities of TRACON Pharmaceuticals, Inc. and I-Mab (including, without limitation, any option, right, warrant, future, long or short position). As of May 31, 2022 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of TRACON Pharmaceuticals, Inc. and I-Mab.
Neither the research analyst nor the Firm knows or has reason to know of any other material conflict of interest at the time of publication of this research report. The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.
The firm or its affiliates received compensation from TRACON Pharmaceuticals, Inc. and I-Mab for non-investment banking services in the previous 12 months. The Firm or its affiliates did not receive compensation from I-Mab for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report. The Firm or its affiliates did receive compensation from TRACON Pharmaceuticals, Inc. for investment banking services within twelve months before, and will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report. H.C. Wainwright & Co., LLC managed or co-managed a public offering of securities for TRACON Pharmaceuticals, Inc. during the past 12 months. The Firm does not make a market in TRACON Pharmaceuticals, Inc. and I-Mab as of the date of this research report.
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