Tengion Says Its Capital Running Out
Tengion Says Its Capital Running Out [Winston-Salem Journal, N.C.]
From Winston-Salem Journal (NC) (March 18, 2013)
March 18--Tengion Inc. warned again Monday that its financing may be running out, possibly as early as May.
The Winston-Salem regenerative medicine company is best known for the research of Dr. Anthony Atala, its founder, who runs the Wake Forest Institute for Regenerative Medicine.
For almost two years, Tengion has been in a race to achieve a clinical breakthrough with its kidney and urinary research -- thus bolstering investor confidence -- before its capital runs out.
The company said it held $7.5 million in cash and cash equivalents on Dec. 31. It gained $15 million in debt financing in October and said it could receive an additional $20 million this year.
However, the company cautioned that based on current expense and debt-repayment levels, it has only enough money to finance its operations to May.
Biotechnology companies, such as Tengion, tend to report major losses for several quarters after going public because their research and development costs are much greater than their revenue sources. In Tengion’s case, it doesn’t report quarterly revenue at all.
As a result, most analysts put their focus on research updates rather than quarterly earnings.
Tengion reported a lower loss in the fourth quarter to $4.09 million, primarily because of a 41 percent decrease in research and development expenditures.
The company reported a $14.1 million loss in the fourth quarter of 2011, primarily because it took a $7.4 million charge related to property and equipment.
Tengion had an earnings loss of $1.72 a share compared with a loss of $5.91 a share a year ago.
For the full year, Tengion reported a $16.9 million loss compared with a $19.1 million loss a year ago. Its earnings loss was $7.13 a share compared with a loss of $8.82 a year ago.
In December, the company said it would have to go past the end of 2012 to enroll clinical trial patients for a pivotal clinical trial. It has enrolled seven of 10 patients to date. It is attempting to enroll the remaining three from five sites.
It is developing a neo-urinary conduit to help bladder-cancer patients. The conduit is an implant intended to aid the regeneration of the patient’s own urinary tissues after bladder removal.
"We look forward to successfully implanting the remaining three patients in the trial and then working with the Food and Drug Administration this year to plan for a potential Phase 2 and Phase 3 clinical trial," said John Miclot, Tengion’s president and chief executive.
For its neo-kidney augment research, Tengion said it filed a clinical trial application in January with the Medical Products Agency in Sweden to initiate a Phase 1 clinical trial to evaluate safety and delivery of the product in up to five patients with chronic kidney disease. If it receives approval, Tengion expects to initiate a Phase 1 trial in Sweden in the second quarter.
It already announced plans to submit an investigational new drug filing for the neo-kidney augment to the FDA during the second quarter. If the company gets that approval, Tengion expects to initiate a Phase 1 clinical trial in the United States in the fourth quarter and expects it will provide initial human proof-of-concept data in 2014.
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Posted: March 2013