After burning through close to $239 million over a decade the struggling regenerative medicine company Tengion has rounded up $15 million from investors in what its hometown newspaper in Winston-Salem, NC, describes as a last-ditch effort to complete ongoing therapeutic studies.
In its release Tengion announced that a group of investors including Celgene, RA Capital Management, Deerfield Management Company, Bay City Capital and HealthCap put up the money. The cash will be used to back a Phase I clinical trial for its neo-urinary conduit, slated to wrap at the end of this year, and support its IND filing for a neo-kidney augment during the first half of 2013.
Peter Tourtellot, managing director of Anderson Bauman Tourtellot Vos & Co., told the newspaper that Tengion's decision to provide stock warrants to debtholders for 51.1 million shares that can be exercised at a price of 75 cents a share will essentially wipe out other investors in an 11th-hour bid to keep the doors open.
"The conversion of 1,333 shares for every $1,000 of principal amount of the note equates to almost 20 million shares," Tourtellot told the Winston-Salem Journal. "That effectively will wipe out current shareholders, who presently have about 2.5 million shares. In effect, current equity is giving up ownership. Obviously, management had little choice as it was either this deal or go out of business."
"We are actively recruiting additional patients for our Phase I trial for the Neo-Urinary Conduit program and are on track to complete enrollment for this trial by year-end. We are also conducting the GLP study program recommended by the FDA to support an IND filing for our Neo-Kidney Augment during the first half of next year," said John Miclot, Tengion's CEO, in a statement.
- here's the press release
- read the story from the Winston-Salem Journal