Bankruptcy beckons Tengion
This article was originally published in Scrip
Regenerative medicine specialist Tengion said in its second quarter 2012 financial report that if the company does not raise new capital soon "it will need to suspend its business operations and will likely need to seek protection under US bankruptcy laws".
Winston-Salem, North Carolina-based Tengion had $3.7 million in cash and equivalents as of 30 June.
"Based upon the company's currently expected level of operating expenditures and debt repayments, and assuming it is not required to settle any outstanding warrants in cash, the company expects to be able to fund its operations through August 31, 2012. Tengion is actively exploring opportunities to continue its business operations as currently conducted and fund deficits in operating cash flows," the company said on 14 August after the stock market closed.
Its stock price fell 18.3% from $2.63 to $2.15 per share on 15 August as investors reacted to Tengion's financial outlook.
The company's operating expenses totaled $4.4 million in the second quarter and $8.6 million for the first half of the year and it recorded no revenue during those periods.
Its adjusted net losses so far in 2012 are $4.5 million for the second quarter and $8.9 million for the first half of the year compared to $6.6 million and $13.1 million losses during the first six months of 2011.
If Tengion does not raise additional capital, it will have to suspend the Phase I trial with bladder cancer patients for its neo-urinary conduit, a physiologically functional tissue with a three-dimensional structure that diverts urine from the ureters to an ostomy bag outside the body after bladder removal.
The company also would have to scuttle plans to file an investigational new drug (IND) application with the US FDA in the first half of 2013 for its lead preclinical program, the neo-kidney augment. That product uses a chronic kidney disease patient's own cells to augment or replace renal function as the patient's condition rapidly approaches end-stage renal disease.