WINSTON-SALEM, N.C., May 15, 2014 (GLOBE NEWSWIRE) -- Tengion, Inc. (OTCQB:TNGN), a leader in regenerative medicine, today reported its financial results for the first quarter ended March 31, 2014.
"We are actively continuing patient enrollment in our ongoing Phase 1 clinical trials for the Neo-Kidney Augment in both Sweden and in the United States. We are also working with key opinion leaders to determine future development plans for the Neo-Urinary Conduit," commented John L. Miclot, President and Chief Executive Officer of Tengion. "We believe the Neo-Kidney Augment product candidate has the potential to make life-changing differences for patients with advanced chronic kidney disease."
Neo-Kidney Augment™ Clinical Program Update
Tengion is currently conducting Phase 1 clinical trials for the Neo-Kidney Augment in Sweden and the United States. The Neo-Kidney Augment is being developed to prevent or delay the need for dialysis by increasing renal function in patients with advanced chronic kidney disease (CKD). The Neo-Kidney Augment consists of selected regenerative renal cells obtained from a cortical biopsy of the patient's kidney, expanded ex vivo, and then formulated in a thermolabile gelatin for laparoscopic injection into the patient's kidney by a multi-ported needle, which is intended to allow the Neo-Kidney Augment to diffuse throughout the kidney and catalyze regeneration of functional kidney tissue. Both Phase 1 trials are designed to evaluate the safety and delivery of an active regenerative dose of Neo-Kidney Augment in patients with CKD who will then be followed for up to two years.
The Company expects to enroll up to 12 patients in the U.S. trial during 2014. In March 2014, Tengion received regulatory approval from the Medical Products Agency (MPA) in Sweden to expand enrollment in the ongoing Phase 1 clinical trial in Stockholm from five to 15 patients. The Neo-Kidney Augment has been safe and well-tolerated in the first six patients implanted to-date, including the first patient implanted in the United States. The Company has been collecting data on a range of measurements of kidney function and expects to announce six-month data for the first five patients in the Swedish trial in July 2014.
Neo-Urinary Conduit™ Clinical Program Update
In January 2014, Tengion completed enrollment in its ongoing Phase 1 clinical trial for the Neo-Urinary Conduit. Bladder cancer patients were enrolled in the trial to assess the safety and preliminary efficacy of the Neo-Urinary Conduit, as well as to translate the surgical implantation procedure utilized in preclinical studies. The Company is working with key opinion leaders on future development plans for the Neo-Urinary Conduit, and will seek to execute a strategic or financial transaction to provide targeted funding for future development of the Neo-Urinary Conduit. In the absence of such funding, the Company has no current plans to continue independent development of the Neo-Urinary Conduit program.
First Quarter 2014 Financial Results
For the first quarter ended March 31, 2014, the Company reported an adjusted net loss of $6.2 million, or $0.35 per basic and diluted common share, compared to an adjusted net loss of $5.5 million, or $2.02 per basic and diluted common share, for the same period in 2013. The increased adjusted net loss for the 2014 period was primarily due to an increase in research and development expense of $0.3 million and an increase in interest expense of $0.5 million, offset in part by a decrease in general and administrative expense of $0.1 million.
The increase in research and development expense for the first quarter ended March 31, 2014 was primarily due to an increase in compensation and related expenses resulting from additional employees and an increased use of clinical and regulatory consultants, as well as an increase in external services related to the clinical trials for the Neo-Kidney Augment program. The decrease in general and administrative expense for the first quarter ended March 31, 2014 was primarily due to a decrease in legal fees. The increase in interest expense was primarily due to non-cash interest expense associated with the 2013 Convertible Notes issued in the second quarter of 2013.
As of March 31, 2014, the Company held $15.4 million in cash and cash equivalents. Based upon the Company's current expected level of operating expenditures and debt repayment, and assuming it is not required to settle any outstanding warrants in cash or redeem, or pay cash interest on, any of its convertible notes, the Company expects to be able to fund its operations through December 31, 2014.
About the Neo-Kidney Augment™
The Neo-Kidney Augment is being developed to prevent or delay the need for dialysis by increasing renal function in patients with advanced chronic kidney disease (CKD). The Neo-Kidney Augment consists of selected regenerative renal cells obtained from a cortical biopsy of the patient's kidney, expanded ex vivo, and then formulated in a thermolabile gelatin for laparoscopic injection into the patient's kidney by a multi-ported needle, which allows the Neo-Kidney Augment to diffuse throughout the kidney and catalyze regeneration of functional kidney tissue. According to the United States Renal Data System, there are approximately 26 million adults in the U.S. who have CKD and 100,000 new patients who start on dialysis each year, and CKD affects more than 10% of the world's population. Additionally, $39 billion in direct U.S. costs each year are attributable to patients with end-stage renal disease, which is associated with an approximate 20% mortality rate per year and an average life expectancy of a patient initiating dialysis of approximately four years.
About the Neo-Urinary Conduit™
The Neo-Urinary Conduit is designed to replace the standard of care for bladder cancer patients undergoing cystectomy (removal of bladder). There are over 25,000 cystectomies performed annually in bladder cancer patients in the United States and Europe. The Neo-Urinary Conduit is an implant made from a patient's own cells and is intended to catalyze regeneration of native-like urinary tissue, thereby eliminating the need to use bowel tissue in the current standard of care surgery.
About Tengion
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. The Company is currently conducting Phase 1 clinical trials in Sweden and the United States for its Neo-Kidney Augment, which is intended to prevent or delay dialysis and transplantation by increasing renal function in patients with advanced chronic kidney disease. A Phase 1 trial 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, has completed enrollment.
Forward-Looking Statements
Except for the historical information contained herein, the matters set forth in this press release, including statements regarding Tengion's plans, potential opportunities, or other expectations, projections, goals, objectives, strategies, timelines, clinical studies, product development and the potential benefits of its products under development, are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the risks and uncertainties associated with Tengion's operating performance and financial position, research, development and commercialization of products, the risks and uncertainties associated with meeting the objectives of its clinical studies, including, but not limited to, risks related to availability of continued funding, delays or failures resulting from slower than expected enrollment in clinical trials or clinical holds, and the occurrence of adverse safety events, obtaining regulatory approvals, and other risks detailed from time to time in the Company's most recent Annual Report on Form 10-K and other documents subsequently filed with or furnished to the Securities and Exchange Commission. These forward-looking statements are based on current information that may change and you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement, and the Company undertakes no obligation to revise or update any forward-looking statement to reflect events or circumstances after the issuance of this press release.
| TENGION, INC. | |||
| (A Development-Stage Company) | |||
| Statements of Operations | |||
| (in thousands, except per share data) | |||
| (unaudited) | |||
|
Three Months Ended March 31, |
Period from July 10, 2003 (inception) through |
||
| 2013 | 2014 | March 31, 2014 | |
| Revenue | $ — | $ — | $ — |
| Operating expenses: | |||
| Research and development | 2,180 | 2,484 | 139,924 |
| General and administrative | 1,850 | 1,723 | 55,407 |
| Depreciation | 83 | 49 | 23,924 |
| Impairment of property and equipment | — | — | 7,371 |
| Other expense, net | 30 | 153 | 2,578 |
| Total operating expenses | 4,143 | 4,409 | 229,204 |
| Loss from operations | (4,143) | (4,409) | (229,204) |
| Interest income | 5 | 9 | 8,595 |
| Interest expense | (1,427) | (1,964) | (27,432) |
| Change in fair value of embedded derivative and derivative liability | (334) | (3,661) | (5,805) |
| Change in fair value of warrant liability | 125 | (24,233) | 1,875 |
| Net loss | $ (5,774) | $ (34,258) | $ (251,971) |
| Basic and diluted net loss per share | $ (2.11) | $ (1.91) | |
| Weighted-average common stock outstanding – basic and diluted | 2,734 | 17,946 | |
| TENGION, INC. | ||
| (A Development-Stage Company) | ||
| BALANCE SHEET DATA | ||
| (in thousands) | ||
| (unaudited) | ||
|
December 31, 2013 |
March 31, 2014 |
|
| Cash and cash equivalents | $ 21,510 | $ 15,366 |
| Total assets | 25,724 | 19,341 |
| Warrant liability | 11,425 | 35,915 |
| Total debt and embedded derivative, net of debt discount | 26,952 | 29,007 |
| Total liabilities | 42,580 | 68,240 |
| Total stockholders' deficit | (16,856) | (48,899) |
| TENGION, INC. | ||
| (A Development-Stage Company) | ||
| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | ||
| (in thousands, except per share data) | ||
| (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 Ended March 31, |
||
| 2013 | 2014 | |
| Net loss– GAAP | $ (5,774) | $ (34,258) |
| Change in fair value of embedded derivative and derivative liability | 334 | 3,661 |
| Change in fair value of warrant liability | (125) | 24,233 |
| Other expense, net | 30 | 153 |
| Adjusted net loss | $ (5,535) | $ (6,211) |
| Shares used in computing basic and diluted net loss: | ||
| Basic and diluted | 2,734 | 17,946 |
| Basic and diluted net loss per share-GAAP | $ (2.11) | $ (1.91) |
| Adjustment per share | $ 0.09 | $ 1.56 |
| Basic and diluted net loss per share - adjusted | $ (2.02) | $ (0.35) |