TRACON Pharmaceuticals Inc (NASDAQ:TCON) is not going to have a good close to the week. The company just put out data from its lead glioblastoma trial, and the data missed on a number of key endpoints. As yet, market reaction is yet to reveal itself – the company is down around 13% pre market-open on Friday, but chances are this is going to deepen dramatically as the US opens for business and investors reduce their exposure to Tracon near term.

The question now, is what’s next? Can this one recover, and if so, is there an opportunity to pick up an exposure at a discount when it bottoms out?

Let’s take a look.

Right off the bat, we’re going to be pretty blunt with this one and go straight to our question: can the stock recover? The answer, yes, probably, but not driven by a brain cancer asset.

For those not familiar with the company, Tracon is a development stage biotechnology company focusing on the development and – eventual – commercialization of drugs using a family of antibodies called endoglins. An endoglin is a is a type I membrane glycoprotein located on cell surfaces and is part of the TGF beta receptor complex. That’s a bit jargony, and isn’t overly important to know; what is important, is the role that this glycoprotein plays in a process called angiogenesis, which is the physiological process through which new blood vessels form from pre-existing vessels. In tumors, angiogenesis is key to cancer spreading. Tracon’s drugs target this process, with its lead asset – called TRC105 – being an inhibitor of the process through which endoglins initiate and facilitate the angiogenesic process.

To put this another way, the drugs are designed to stop tumors creating blood vessels, which will eventually starve them of blood and – by proxy – hopefully reduce the size of the tumors in question.

So, that’s the theory, but how did it play out in practice? Well, as mentioned, in a glioblastoma trial, the drug failed to hit its endpoint of improvement in progression free survival when administered as a combination therapy with the already approved Avastin, versus administration of Avastin alone.

The failing on this endpoint is not great, of course, but in the grand scheme of things, it is not too much of a hit for the company. The trial was funded by the National Cancer Institute, meaning Tracon isn’t overly out-of-pocket from the failure, and there are a number of concurrent trials running with the same asset (or versions of it) in other tumor types. Additionally, the company has a follow-up development program investigating safety and efficacy in a range of ophthalmic and fibrotic diseases using a similar (but slightly altered) version of the oncology asset.

We hear you say that if the assets has failed to improve survival in one cancer, why should it improve survival in another (or in an ophthalmic indication, for that example)? Well, that’s a valid question, but GBM is an incredibly hard cancer to treat. Surgical resection is all but impossible, and in the best cases, progression free survival generally only comes in at around 3 1/2 months. Some of the other solid tumor targets this program is going after are far simpler to treat, and as such, we expect a much improved efficacy profile on these solid cancers when the data hits.

To put this another way, the glioblastoma study was a bit of a moon shot.

If it had worked, the company would’ve run up considerably from a market capitalization perspective, and been able to target a market that is desperately in need of a viable treatment asset right now to fill an unmet need gap. Since it is probably not going to be able to do so, in light of the latest data, it is disappointing for shareholders as things stand.

Disappointing, yes, but far from terminal.

The other programs are where real value lies, and there is a realistic chance that this drug will work in one or more of the solid tumor indications it is targeting going forward.