WINSTON-SALEM, NC – Tengion has closed on a new private placement of debt worth $15 million to help keep it afloat, the regenerative medicine company has announced.
Tengion, which is working to commercialize the ground-breaking research of Dr. Anthony Atala and the Wake Forest University Institute for Regenerative Medicine, has been on the edge of solvency for several months. At one point it warned investors that it may have to file for bankruptcy, but a $1 million bridge loan secured in September kept the company afloat.
The private placement of senior secured convertible notes comes from investors including Celgene Corp., RA Capital Management, Deerfield Management Co., Bay City Capital LLC and HealthCap. The $15 million in principal includes the exchange of the previous $1 million bridge loan.
The notes will be convertible to common shares of the company, and Tengion also will issue warrants to the investors for the purchase of additional shares.
Tengion Inc. (OTC: TNGN) said it would use the new financing to fund its ongoing research, including a Phase 1 clinical trial for its Neo-Urinary Conduit product and the submission of an Investigational New Drug filing with the U.S. Food and Drug Administration for its Neo-Kidney Augment.
CEO John Miclot said both research programs are proceeding on pace.
“We appreciate the continued support from our existing investors, as well as our new investors, and we look forward to building value as we advance our product candidates to provide life-changing treatments for patients in need,” he said.