Tengion 2010 adjusted net loss decreases to $25.8 million

Mar 25 2011

Tengion, Inc. (Nasdaq: TNGN) today provided a business update and reported its financial results for the year ended December 31, 2010.

"Our Neo-Urinary Conduit clinical trial in patients with bladder cancer is advancing as expected and investigators are continuing to gather valuable insights to optimize the surgical procedure," stated Steven Nichtberger, M.D., President and Chief Executive Officer of Tengion. "In parallel, we continue to make great strides with our Neo-Kidney Augment program. Recent publications and presentations by our scientists have demonstrated positive and promising early preclinical data showing that the Neo-Kidney Augment stabilizes and preserves kidney function in a wide variety of animal models of kidney failure, including in diabetic animals and in large animals.  Based on these findings, we are now focused on formulation and related work to support a request to meet with FDA by the end of this year regarding the path to clinical trials with this product candidate."

Neo-Urinary Conduit Bladder Cancer Trial – Clinical Update

Tengion continues to advance the ongoing initial clinical trial of its lead product candidate, the Neo-Urinary Conduit, in bladder cancer patients requiring a urinary diversion following bladder removal (cystectomy). To date, three patients have been enrolled and implanted in the ongoing clinical trial, which is on track to complete three-month clinical assessments in five patients by the end of this year.

The study is designed to provide data on the safety profile of the Neo-Urinary Conduit as an alternative to the current standard treatment, which requires the use of a patient's own bowel tissue and can cause significant complications. The study is also intended to provide investigators with data to optimize the surgical technique and post-surgical patient care during the trial. Patients have been enrolled and implanted at both the University of Chicago Medical Center and The Johns Hopkins Hospital. The Company plans to provide its next enrollment update on this trial with its next quarterly financial report.

Neo-Kidney Augment Program Update

Tengion's lead preclinical program, the Neo-Kidney Augment, is intended to prevent or delay the need for dialysis or kidney transplant by increasing functional kidney mass in patients with advanced chronic kidney disease (CKD).  Patients with end stage renal disease (ESRD) have CKD which has progressed to a point of little to no kidney function and these patients require dialysis or a kidney transplant to survive. According to the US Renal Data System, the Medicare cost of hemodialysis is $77,000 per patient, per year and 100,000 ESRD patients die in the US each year.  Tengion scientists have published and presented positive data on the effect of our approach on kidney function in four different preclinical models of CKD. Two of these preclinical models have been conducted for a sufficiently long period of time to demonstrate durability and an impact on survival.

Building on these data, Tengion gave an oral presentation and highlighted key data in four posters at the TERMIS North America annual meeting in Orlando, Florida in December 2010. Key program data presented included the first presentations on the Neo-Kidney Augment mechanism of action, product formulation, and additional efficacy data from an ongoing study in a large animal model demonstrating the ability of the Neo-Kidney Augment program to improve kidney function in animals at risk of kidney failure.

Financial Update

For the year ended December 31, 2010, the Company reported an adjusted net loss of $25.8 million, or $2.80 per basic and diluted common share, compared with an adjusted net loss of $31.7 million, or $4.99 per basic and diluted common share, for the same period in 2009.  The decreased adjusted net loss for the 2010 period was primarily due to lower research and development expense of $5.1 million and lower interest expense of $1.4 million.  The decrease in research and development expenses during the 2010 period was primarily due to lower preclinical expenses and the impact of reduced headcount during the 2010 period. In addition, the receipt in 2010 of Qualifying Therapeutic Discovery Project Grants totaling $1.0 million was recorded as a credit to research and development expense. Interest expense decreased during the 2010 period due to lower average debt balances resulting from the full-year impact of the scheduled end of interest-only payments during 2009.  The loss per basic and diluted common share for the year ended December 31, 2010 was significantly affected by the Company's initial public offering of 6,000,000 shares in April 2010.

For the quarter ended December 31, 2010, the Company reported an adjusted net loss of $5.9 million, or $0.48 per basic and diluted common share, compared with an adjusted net loss of $6.5 million, or $1.02 per basic and diluted common share, for the same period in 2009.  The decreased adjusted net loss for the 2010 period was primarily due to the receipt in the fourth quarter of 2010 of Qualifying Therapeutic Discovery Project Grants totaling $1.0 million, which was recorded as a credit to research and development expense. The loss per basic and diluted common share for the quarter ended December 31, 2010 was significantly affected by the Company's initial public offering of 6,000,000 shares in April 2010.

As of December 31, 2010, the Company held $12.0 million in cash, cash equivalents and short-term investments.  In March 2011, the Company sold securities in a private placement transaction with registration rights pursuant to which the Company received net proceeds of approximately $28.9 million.  In addition, in March 2011, the Company refinanced the outstanding debt owed to one of its lenders.  Pursuant to the terms of the refinancing, the Company repaid the outstanding principal amount of $4.5 million and borrowed $5.0 million from the lender. Based upon the Company's currently expected level of operating expenditures and debt repayments, the Company expects to be able to fund its operations through May 2012.

SOURCE Tengion, Inc.