Back in December, when Tengion first sallied forth with its plan to raise about $40 million from an IPO, analysts were making encouraging noises about the market potential for new drug developers. Since then, IPO expectations have been subjected to a chilly reappraisal, but this week the regenerative medicine company is set to brave the market anyway as it sets out to sell up to $4.4 million shares in hopes of netting up to $40.9 million for its work in regenerative medicine.
Its current investors have already agreed to take $15 million of the new stock, money that can be funneled into clinical trial work that will take a patient's cells for use in building replacement organs and tissue.
"We believe we are the only regenerative medicine company focused on discovering, developing, manufacturing and commercializing a range of replacement organs and tissues, or neo-organs and neo-tissues," the company said in an SEC filing. Like most small developers, though, Tengion's books are largely written with red ink. It has spent more than $100 million over the last three years on its work.
If the IPO is successful, the East Norriton, PA-based biotech says that it will use $10 million for preclinical work and $9 million for the clinical work needed for its program to create new bladder tissue. The Winston-Salem Journal, though, noted that its bladder program was slowed after the FDA expressed some concerns about patient complications in a Phase II trial.
Once again, we're about to see if a high-risk developer with a long development path ahead can attract investors' interest.