WINSTON-SALEM, N.C., Aug. 14, 2013 /PRNewswire/ -- Tengion, Inc. (OTCQB: TNGN), a leader in regenerative medicine, today provided a business update and reported its financial results for the second quarter ended June 30, 2013.
"We made strong progress advancing our Neo-Kidney Augment into the clinic this quarter and will continue to focus on this program as well as completing enrollment in our Neo-Urinary Conduit trial. During the quarter, we received a $15.0 million strategic investment from Celgene and completed a $18.6 million financing with other experienced investors to fund our efforts to accomplish these goals," commented John L. Miclot, President and Chief Executive Officer of Tengion. "Following the April approval by the Swedish Medical Products Agency for the Neo-Kidney Augment Phase 1 trial, we began activities to enroll patients with chronic kidney disease. We also continue to actively recruit patients in the Neo-Urinary Conduit Phase 1 trial to further advance that program toward completed enrollment."
Neo-Urinary Conduit Clinical Program Update
Tengion's most advanced product candidate is the Neo-Urinary Conduit, which is designed to replace the standard of care for bladder cancer patients undergoing cystectomy (removal of bladder). The Neo-Urinary Conduit is intended to eliminate the need for bowel resection and the occurrence of typical post-operative co-morbidities associated with current standard of care including urine absorption-related metabolic disorders. It also offers patients potential improvements over the standard of care, including a shorter and less complex surgical procedure, improved recovery times and faster hospital discharges.
Tengion has implanted seven patients with the Neo-Urinary Conduit and is actively seeking to enroll three additional patients by the end of 2013. The trial is designed to translate the surgical procedure successfully used in preclinical animal models into clinical trials with human patients, as well as to assess the safety and preliminary efficacy of the Neo-Urinary Conduit.
Neo-Kidney Augment Program Update
The Neo-Kidney Augment is Tengion's second clinical program and is being developed with the goal of using a patient's own kidney cells to augment or replace renal function for patients with chronic kidney disease (CKD) who are rapidly progressing toward end stage renal disease (ESRD). The Neo-Kidney Augment is intended to prevent or delay the need for dialysis or kidney transplant by catalyzing the regeneration of functional kidney tissue in patients with ESRD.
In April 2013, Tengion announced the acceptance of the Company's Clinical Trial Application filed with the Medical Products Agency in Sweden to initiate a Phase 1 clinical trial to evaluate the safety and delivery of the Neo-Kidney Augment, in patients with CKD. The Company plans to enroll up to five patients in the Phase 1 trial in 2013 and will follow each patient for up to two years. The trial will involve delivery of an active regenerative dose of Neo-Kidney Augment in patients with CKD. The Company plans to initiate a Phase 1 trial in the U.S. during the fourth quarter of 2013 to evaluate the Company's Neo-Kidney Augment in patients with CKD.
Recent Corporate Highlights
In June 2013, Tengion closed transactions totaling $33.6 million, including a strategic investment from Celgene Corporation in the form of a $15 million payment in cash. Celgene was granted right of first negotiation on the Neo-Kidney Augment program and also the exclusive option to acquire the assets required for development of a neo-esophageal implant. Celgene also received warrants to purchase shares of Tengion common stock. Additionally, the Company completed a private placement of $18.6 million aggregate principal amount of Senior Secured Convertible Notes and warrants to both new and existing investors.
Second Quarter Financial Update
For the second quarter ended June 30, 2013, the Company reported an adjusted net loss of $5.8 million, or $1.75 per basic and diluted common share, compared to an adjusted net loss of $4.5 million, or $1.89 per basic and diluted common share, for the same period in 2012. The increased adjusted net loss for the 2013 period was primarily due to an increase in interest expense of $1.7 million, offset in part by a decrease in research and development expense of $0.3 million.
The increase in interest expense was primarily due to amortization of $1.3 million of debt discount and deferred financing costs associated with the private placement of $15.0 million and the private placement of $18.6 million aggregate principal amount of Senior Secured Convertible Notes completed in October 2012 and June 2013, respectively. The decrease in research and development expense for the three months ended June 30, 2013 was primarily due to a reduction in compensation and related expenses resulting from fewer employees as compared to the three months ended June 30, 2012, as well as a reduction in external services.
As of June 30, 2013, the Company held $13.9 million in cash and cash equivalents. The Company received proceeds of $20.6 million in July 2013 relating to the Celgene and financing transactions consummated in June 2013.
Tengion, a clinical-stage regenerative medicine company, is focused on developing its Organ Regeneration Platform™ to harness the intrinsic regenerative pathways of the body to regenerate a range of native-like organs and tissues with the goal of delaying or eliminating the need for chronic disease therapies, organ transplantation, and the administration of anti-rejection medications. An initial clinical trial is ongoing for the Company's Neo-Urinary Conduit™, an autologous implant that is intended to catalyze regeneration of native-like urinary tissue for bladder cancer patients requiring a urinary diversion following bladder removal. Seven patients have been implanted with the Neo-Urinary Conduit to date. The Company commenced a Phase 1 clinical trial in May 2013 in Sweden for its Neo-Kidney Augment™, which is designed to prevent or delay dialysis or kidney transplantation by increasing renal function in patients with advanced chronic kidney disease. In addition, the Company plans to initiate a Phase 1 trial in the U.S. during the fourth quarter of 2013 to evaluate the Company's Neo-Kidney Augment in patients with chronic kidney disease.
Certain statements set forth above may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements using words such as anticipate, expect, project, intend, plan, believe, words and terms of similar substance and any discussion of future plans, actions, or events generally identify forward-looking statements. Forward-looking statements regarding the Company include but are not limited to (i) the Company's use of proceeds for its most recently completed investment rounds; (ii) plans to develop and commercialize its product candidates, including the Neo-Urinary Conduit and the Neo-Kidney Augment; and (iii) expectations regarding ongoing and planned preclinical studies, clinical trials and related filings or submissions with regulatory authorities. Although Tengion believes that these statements are based upon reasonable assumptions within the bounds of its knowledge of its business and operations, there are a number of factors that may cause actual results to differ from these statements. Tengion's business is subject to significant risks and uncertainties and there can be no assurance that actual results will not differ materially from expectations. Factors which could cause actual results to differ materially from expectations include, among others: (i) regulatory agencies, such as the U.S. Food and Drug Administration or Sweden's Medical Products Agency, could place the Company's clinical trials on clinical hold; (ii) patients enrolled in the Neo-Urinary Conduit or Neo-Kidney Augment clinical trials may experience adverse events; (iii) the Company may have difficulty enrolling patients in its clinical trials; (iv) data from the Company's ongoing preclinical studies, including the GLP program for the Neo-Kidney Augment, may not continue to be supportive of advancing such preclinical product candidates; and (v) the Company may be unable to progress its product candidates that are undergoing preclinical testing into clinical trials and the Company may not be successful in designing such clinical trials in a manner that supports development of such product candidates. Any of these factors could delay one of the Company's clinical trials or cause the Company to terminate the development of one of its product candidates. For additional factors that could cause actual results to differ from expectations, you should refer to the reports filed by the Company with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. The forward-looking statements in this release are made only as of the date hereof and the Company disclaims any intention or responsibility for updating predictions or expectations in this release.TENGION, INC.
(A Development-Stage Company)
Statements of Operations (in thousands, except per share data)(unaudited)Three Months EndedJune 30,Six Months EndedJune 30,2012201320122013Revenue$
—Operating expenses:Research and development$
4,660General and administrative1,4381,4452,8193,295Depreciation11562251145Other expense, net449192121 Total operating expenses4,3864,0788,6458,221
Loss from operations(4,386)(4,078)(8,645)(8,221)
Interest income42117Interest expense(151)(1,830)(325)(3,257)Change in fair value of embedded derivative and derivative liability—(4,104)—(4,438)Change in fair value of warrant liability1,214(1,925)691(1,800)
(17,709)Basic and diluted net loss per share$
Weighted-average common stock outstanding – basic and diluted2,3733,3252,3713,034 TENGION, INC.
(A Development-Stage Company)
BALANCE SHEET DATA(in thousands)(unaudited)December 31,2012June 30, 2013Cash and cash equivalents
13,873Total assets12,43538,970Derivative liability2,449—Warrant liability6,17821,010Long-term debt (including current portion and embedded derivative)11,26928,510Total liabilities23,77855,480Total stockholders' deficit(11,343)(16,510) TENGION, INC.
(A Development-Stage Company)RECONCILIATION OF NON-GAAP FINANCIAL MEASURES(in thousands)(unaudited)In accordance with Regulation G of the Securities and Exchange Commission, the table set forth below reconciles certain financial measures used in this
press release that were not calculated in accordance with generally accepted accounting principles, or GAAP, with the most directly comparable
financial measure calculated in accordance with GAAP. Three Months EndedJune 30,Six Months Ended
June 30,2012201320122013Net loss attributable to common stockholders –
(17,709)Change in fair value of embedded derivative
and derivative liability—4,104—4,438Change in fair value of warrant liability(1,214)1,925(691)1,800Other expense, net449192121
Adjusted net loss$
(11,350)Shares used in computing basic and diluted net loss:Basic and diluted2,3733,3252,3713,034Basic and diluted net loss per share – GAAP$
(5.84)Adjustment per share(0.49)1.84(0.25)2.10
Basic and diluted net loss per share - adjusted$
|SOURCE Tengion, Inc.|
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