Celgene has invested further in the cash-hungry regenerative medicine specialist Tengion, which tapped the biopharma powerhouse ($CELG) and other backers for a total of $33.6 million to support its two lead programs in early clinical development.
The bulk of the latest financing comes from the sale of $18.6 million in convertible notes to repeat investors Bay City Capital, Deerfield Management, HealthCap and RA Capital Management as well as new investors QVT Financial and Perceptive Life Sciences.
Celgene, which has a cellular therapy unit, forked over $15 million in cash for the right to first negotiation on Tengion's Neo-Kidney Augment product candidate, which aims to restore renal function to delay transplantation or dialysis for patients with chronic kidney disease. Based on a previous deal, Celgene has similar rights to Tengion's experimental Neo-Urinary Conduit system for cancer patients who seek implants after having their bladders surgically removed.
|John Miclot, Tengion CEO|
"We are eager to make progress towards our primary objectives of establishing new standards of care for patients with chronic kidney disease and for bladder cancer patients undergoing cystectomy, or removal of their bladder," John Miclot, Tengion's president and CEO, stated.
Both the kidney augment and urinary conduit systems are in Phase I clinical development, meaning that the experimental products will require significantly more capital to advance through all three phases of trials typically required to gain approvals. As of March 31, Tengion had already burned through $252.9 million in investors' money during its nearly 10-year history.
Celgene also formed a new collaboration with Tengion that gives the Summit, NJ-based drugmaker an exclusive option to acquire assets such as its technology for growing esophageal implants. In an October 2012 financing, Tengion raised $5 million from Celgene, which has rights to the biotech outfit's two leading product candidates and has helped keep its operations afloat.
Winston-Salem, NC-based Tengion has landed the financing after completing the first quarter ending March 31 with cash and equivalents of just $2.9 million, a dangerously low level of money in the bank for any clinical-stage biotech operation.
- here's the release
- see The Business Journal's report
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