Tengion announces clinical, corporate and second-quarter financial updates

Aug 12 2010

Tengion Inc. (Nasdaq: TNGN) today provided a corporate and product development update and reported its financial results for the quarter ended June 30, 2010.

Neo-Urinary Conduit Clinical Update

The Neo-Urinary Conduit is an implant designed to catalyze regeneration of native-like urinary tissue in patients with bladder cancer who require a urinary diversion following bladder removal, or cystectomy.   A Phase I clinical trial underway at the University of Chicago is designed to establish the safety profile for the product as well as confirm the surgical technique to be utilized.  Over the past few months, the site has screened dozens of patients requiring bladder removal, but has not yet enrolled the first patient in the trial.  Enrollment has been slower than initially anticipated due to selective enrollment criteria that are typical for an initial clinical trial with a new product candidate using a novel technology and limited patient understanding of the benefits and risks of current surgical options relative to those of the Neo-Urinary Conduit.  

Tengion has undertaken a number of initiatives to address these challenges and to enhance enrollment.  To increase the number of patients screened, the University of Chicago is conducting outreach to referring hospitals and Tengion is working to initiate an additional study site.  Educational materials have been developed and are now in use to guide discussion with patients about current surgical options and the alternative of the Neo-Urinary Conduit.  Based on these activities, the first patient enrollment is anticipated in the near term, which may permit disclosure of interim data on the first patient by the end of the year.

"During the second quarter, we identified potential causes of delayed enrollment for the first patient in our Neo-Urinary Conduit study," stated Steven Nichtberger, M.D., President and Chief Executive Officer of Tengion.  "Under the direction of our newly hired Chief Medical Officer, we have taken actions that should enhance the investigator's ability to enroll the first patient in our study."

Neo-Kidney Augment Program Update

The Neo-Kidney Augment is Tengion's lead discovery program and is designed to prevent or delay the need for dialysis or kidney transplant by increasing functional renal mass in patients with advanced chronic renal disease, a significant unmet medical need.

• In May, 2010, Tengion scientists presented new research data in podium presentations at the 16th Annual Meeting of the International Society for Cellular Therapy (ISCT).  These data demonstrated that bio-active renal cells, like those used in Tengion's Neo-Kidney Augment program, can reduce the rate of loss of functional kidney mass in an aggressive preclinical model of chronic kidney disease.  Data were also presented at ISCT confirming that the necessary regenerative cells being used in Tengion's preclinical models can be isolated, characterized and expanded from diseased human kidneys.  These results have been submitted for peer-reviewed scientific publication.
• Tengion plans to present new data from an ongoing study of the Neo-Kidney Augment in a diabetic, obese, hypertensive animal model of renal failure at a meeting of the ISCT, on September 28, 2010 in San Francisco, CA.
• Tengion continues to expect to announce the initial results from a study of large animals evaluating the Neo-Kidney Augment in the fourth quarter of 2010.

"We are making significant progress in our renal program.  In an aggressive animal model of renal failure, the Neo-Kidney Augment product candidate demonstrated the ability to stabilize and preserve renal function.  We look forward to presenting additional data at scientific sessions later this year," said Dr. Nichtberger.  

Corporate Update

Tengion will be hosting an Investor Day in October, 2010 for investors and analysts to discuss the progress of the research platform and product candidates.  Further details regarding this Investor Day will be forthcoming.

In July, the Company announced the appointment of Sunita B. Sheth, M.D. to the newly created role of Chief Medical Officer, Vice President, Clinical and Regulatory Affairs. In this role, Dr. Sheth will be responsible for clinical development strategies, clinical trial implementation with an initial focus on the Neo-Urinary Conduit trial, and clinical translation of preclinical pipeline programs with a focus on the Neo-Kidney Augment.  Dr. Sheth has more than 12 years of industry experience and most recently served as Vice President, Specialty Care Business Unit, for Pfizer as part of its acquisition of Wyeth. Prior to that, she spent four years at Wyeth, most recently as Vice President, Cardiovascular, Metabolic and Infectious Diseases. Dr. Sheth earned her B.A. and M.D. degrees from Brown University and completed a fellowship in Hematology/Oncology at Temple University / Fox Chase Cancer Center. She maintains an adjunct professorship at Temple University Medical School.

Last week, the Company announced the appointment of A. Brian Davis as its Chief Financial Officer.  Mr. Davis was previously Chief Financial Officer for Neose Technologies, Inc.  He brings more than 15 years of highly relevant experience to Tengion including raising over $300 million in public and private equity and debt, financial evaluation of business development transactions, treasury and cash management, SEC reporting, Sarbanes-Oxley compliance, and investor relations. Mr. Davis holds a BS in Accounting from Trenton State College and an MBA from the Wharton School of the University of Pennsylvania. He is also a Certified Public Accountant.

Linda Hearne, Tengion's current Vice President, Finance, will be stepping down from her role in order to relocate with her family overseas.

Dr. Nichtberger stated, "We have strengthened our leadership team by adding two highly qualified and seasoned professionals in Sunita Sheth, MD as our Chief Medical Officer and Brian Davis as our Chief Financial Officer.  We appreciate Linda's many contributions to Tengion over the past six years and are grateful for her commitment to a smooth transition of responsibilities.  We wish her the best of luck in her new endeavors."

Financial Update

For the second quarter ended June 30, 2010, the Company reported an adjusted net loss of $6.5 million or $0.58 per basic and diluted common share, compared with an adjusted net loss of $8.2 million, or $1.28 per basic and diluted common share, for the same period in 2009.  The loss per basic and diluted common share for the quarter ended June 30, 2010 was significantly affected by the Company's initial public offering of 6,000,000 shares in April 2010.

Total operating expenses for the second quarter ended June 30, 2010 were $5.9 million compared with $7.3 million for the same period of 2009.  The 19% decrease in operating expenses was driven primarily by a decrease in research and development expense for the Company's preclinical and clinical studies.

As of June 30, 2010, the Company held $27.4 million in cash, cash equivalents and short-term investment compared with $9.1 million on March 31, 2010.