Plus, news about Merck, Orion, Tonix, Freeflow and Y-mAbs Therapeutics:
Tracon Pharmaceuticals seeks ‘strategic alternatives’ after PD-L1 fails Ph2 trial: In an 82-person sarcoma study, only four patients responded to envafolimab, an injectable PD-L1 therapy. The company stopped the Phase 2 study and now plans to pursue a “reverse merger, acquisition, sale of all assets, or other strategic transactions.” The antibody-based treatment was approved in China in 2021 for patients with microsatellite instability-high or mismatch repair deficient advanced solid tumors. Tracon holds the US license. — Lei Lei Wu
Ovid to lay off 43% of staff: The New York company plans to let go of 17 people as part of a workforce reduction plan that should extend its runway into 2026, according to an SEC filing. The layoffs include the COO and general counsel. On Monday, Ovid announced new healthy volunteer data from a ROCK2 inhibitor program. It plans to start a Phase 2 trial in cerebral cavernous malformations later this year. — Max Gelman
Merck opts into Orion’s cancer drug: The pharma converted its co-development and co-commercialization pact into an exclusive global license for opevesostat. The option, which comes with no payment, centers on Orion’s CYP11A1 inhibitor for metastatic castration-resistant prostate cancer. Merck could pay the Finnish biotech up to $30 million in development milestones, up to $625 million in regulatory biobucks and up to $975 million for sales-based achievements. Annual tiered royalties are also on the table. — Kyle LaHucik
Tonix secures DoD contract: The Defense Threat Reduction Agency will pay the biotech up to $34 million over five years for work on a small molecule antiviral for “medical readiness of military personnel in biological threat environments.” — Kyle LaHucik
Freeflow Ventures raises additional $50M: The California VC firm, which invests in biotechs like ADC startup Catena Bio, added $35 million to its second fund and $15 million to its opportunity fund. — Kyle LaHucik
Y-mAbs Therapeutics details securities class action settlement: The biotech said that if a proposed settlement is approved, it would resolve a securities class action lawsuit. The company expects about 80% of the $19.65 million settlement to be paid by its insurance carriers. It also said the proposed settlement “does not constitute an admission of fault or wrongdoing by the company or any of the individual defendants.” — Kyle LaHucik