Tengion Provides Business Update and Reports Fourth Quarter and Full Year 2012 Financial Results

Tengion Provides Business Update and Reports Fourth Quarter and Full Year 2012
                              Financial Results

-- Actively Recruiting for Neo-Urinary Conduit™ Phase 1 Trial --

-- Neo-Kidney Augment™ on Track to Begin Clinical Trials in Sweden and U.S. in
2013 --

PR Newswire

WINSTON-SALEM, N.C., March 18, 2013

WINSTON-SALEM, N.C., March 18, 2013 /PRNewswire/ --Tengion, Inc. (OTCQB:
TNGN), a leader in regenerative medicine, today reported its financial results
for the fourth quarter and full year ended December 31, 2012 and provided a
business update.

"Over the last year we made continued progress in our Phase 1 trial for the
Neo-Urinary Conduit. We have initially demonstrated that urinary tissue can
be regenerated in a limited number of patients. These findings in the clinical
trial are consistent with our animal studies in which we demonstrated the
ability of our technology to consistently regenerate an organ composed of
urinary tissue. We have also defined a surgical procedure that has been
transferred to additional clinical sites. We look forward to successfully
implanting the remaining three patients in the trial and then working with the
FDA this year to plan for a potential Phase 2/3 clinical trial," said John L.
Miclot, President and Chief Executive Officer of Tengion. "In addition in late
2012, we successfully refinanced the Company in order to complete enrollment
in the Phase 1 Neo-Urinary Conduit trial and to submit an IND filing to the
FDA for our Neo-Kidney Augment program in 2013."

Neo-Urinary Conduit Clinical Program Update

In January 2013, Tengion announced that it successfully implanted the seventh
patient in the ongoing Phase 1 clinical trial of its most advanced product
candidate, the Neo-Urinary Conduit, for use in bladder cancer patients
requiring a urinary diversion following bladder removal (cystectomy). The
trial is designed to assess the safety and preliminary efficacy of the
Neo-Urinary Conduit in up to 10 patients, as well as to translate the surgical
procedure successfully used in preclinical animal models into clinical trials
with human patients. The Neo-Urinary Conduit offers patients potential
improvements over the standard of care, including a shorter and less complex
surgical procedure, improved recovery times and faster hospital discharges, as
well as reducing the typical incidence of post-operative co-morbidities
associated with the current standard of care.

The enrollment of the seventh patient in the Phase 1 trial allowed the Company
to train additional physicians and open three further sites. All five sites
are now actively recruiting for the Phase 1 trial. Based on information from
this trial, Tengion plans to work with the U.S. Food and Drug Administration
(FDA) during 2013 to plan for a potential Phase 2/3 clinical trial of this
product candidate.

In December 2012, the United States Patent and Trademark Office (USPTO) issued
Patent No. 8,337,485, titled "Cell-Scaffold Constructs."This patent includes
compositional claims on the construct and cellular elements of the Neo-Urinary
Conduit, as well as use claims covering this technology in additional clinical
applications. This action further strengthens the Company's expanding IP
portfolio.

Neo-Kidney Augment Preclinical Program Update

In January 2013, Tengion announced that it had filed a Clinical Trial
Application (CTA) with the Medical Products Agency (MPA) in Sweden to initiate
a Phase 1 clinical trial to evaluate safety and delivery of its Neo-Kidney
Augment product in up to five patients with chronic kidney disease (CKD). The
Neo-Kidney Augment is intended to prevent or delay the need for dialysis or
kidney transplant by catalyzing the regeneration of functional kidney tissue
in patients with advanced CKD. Following MPA approval of the CTA, Tengion
expects to initiate a Phase 1 trial in Sweden in the second quarter of 2013.

Tengion also expects to submit an Investigational New Drug (IND) filing for
the Neo-Kidney Augment to FDA during the second quarter of 2013. Following FDA
approval of the IND, Tengion expects to initiate a Phase 1 clinical trial in
the U.S. in the fourth quarter of 2013 and expects that this trial will
provide initial human proof-of-concept data in 2014.

Tengion is currently conducting the good laboratory practice (GLP) animal
study program required by the FDA to support the IND filing and initiation of
a Phase 1 clinical trial in CKD patients. These GLP studies are consistent
with the preclinical animal models already conducted by Tengion, which yielded
positive data demonstrating slowing of kidney disease progression and improved
survival.

In November 2012, the USPTO issued Patent No. 8,318,484, titled "Isolated
Renal Cells and Uses Thereof." This patent includes claims intended to protect
the cell composition and formulation of the Neo-Kidney Augment product that is
based on the novel ability of Tengion's regenerative renal cells to regenerate
functional kidney tissue in chronically diseased kidneys.

Corporate Update

In October 2012, Tengion closed a private placement of $15.0 million aggregate
principal amount of Senior Secured Convertible Notes. The $15.0 million
principal amount included the exchange of $1.0 million of debt issued in the
Company's bridge financing announced on September 10, 2012. In addition, the
Company granted the initial purchasers an option to purchase up to an
additional $20 million aggregate principal amount of the Notes in the first
half of 2013. In addition, under the agreement with the initial purchasers,
the Company may seek an additional $10 million in financing without the need
to obtain any additional consent from these purchasers.

Fourth Quarter and Year End 2012 Financial Results

For the year ended December 31, 2012, Tengion reported an adjusted net loss of
$19.0 million, or $8.00 per basic and diluted common share, compared with an
adjusted net loss of $24.4 million, or $11.30 per basic and diluted common
share, for the same period in 2011. The decreased adjusted net loss for the
2012 period was primarily due to a reduction in compensation and related
expenses of $4.9 million and a decrease in depreciation expense of $2.7
million.These decreases were offset in part by increased interest expense of
$2.1 million, of which $1.9 million related to amortization of debt discount
and deferred financing costs associated with the private placement of $15.0
million aggregate principal amount of Senior Secured Convertible Notes
completed in October 2012. 

For the fourth quarter ended December 31, 2012, the Company reported an
adjusted net loss of $5.9 million, or $2.49 per basic and diluted common
share, compared with an adjusted net loss of $6.2 million, or $2.62 per basic
and diluted common share, for the same period in 2011. The decreased adjusted
net loss for the 2012 period was primarily due to a reduction in compensation
and related expenses of $2.0 million and a decrease in depreciation expense of
$0.2 million. These decreases were offset in part by increased interest
expense of $2.0 million, of which $1.7 million related to amortization of debt
discount and deferred financing costs associated with the private placement of
$15.0 million aggregate principal amount of Senior Secured Convertible Notes
completed in October 2012. 

As of December 31, 2012, the Company held $7.5 million in cash and cash
equivalents. Based upon the Company's currently expected level of operating
expenditures and debt repayments, the Company expects to be able to fund its
operations to May 2013.

Conference Call and Webcast
John L. Miclot, President and Chief Executive Officer, Dr. Tim Bertram, Chief
Scientific Officer and President of Research and Development, and A. Brian
Davis, Chief Financial Officer and Vice President of Finance, will host a
conference call today, March 18, 2013, at 9:00 a.m. EDT to provide a business
update and discuss the Company's fourth quarter and full year 2012 financial
results.

To participate in the call, please dial 866-543-6403 (domestic) or
617-213-8896 (international) five minutes prior to the start time and
referencing access code 98136968. The conference call can be accessed from the
Investors & News section of the Company's website or directly at
http://www.media-server.com/m/p/pfbbcfmc.

A replay of the call will be available one hour after the end of the
conference on March 18, 2013 until 11:59 p.m. EDT on March 25, 2013. To access
the replay, please dial 1-888-286-8010 (domestic) or 1-617-801-6888
(international) and reference the access code 69683056. The archived webcast
will be available for 30 days on the Company's website at www.tengion.com.

About the Neo-Urinary Conduit™
The Neo-Urinary Conduit™ is a combination of a patient's own cells and
bioabsorbable scaffold that is intended to catalyze regeneration of a
native-like urinary tissue conduit, passively transporting urine from the
ureters through a stoma, or hole in the abdomen, into a standard ostomy bag.
Standard of care for patients requiring a non-continent urinary diversion uses
bowel tissue to construct a conduit for urine to exit from the body. There are
over 20,000 urinary diversions performed annually in the United States and
Europe. These patients are at risk for complications associated with the use
of bowel tissue, as well as for those associated with the surgery to harvest
the bowel tissue. The Neo-Urinary Conduit is the only product candidate
currently in development that aims to avoid the use of bowel tissue. The
Neo-Urinary Conduit is being evaluated in an ongoing Phase 1 clinical trial in
bladder cancer patients requiring a urinary diversion following bladder
removal (cystectomy). The trial is designed to assess the safety and
preliminary efficacy of the Neo-Urinary Conduit in up to 10 patients, as well
as to translate the surgical procedure successfully used in preclinical animal
models into clinical trials with human patients. Seven patients have been
implanted with the Neo-Urinary Conduit to date. The Company is focused on
completing implantation of the remaining three patients in the trial and then
working with the U.S. Food and Drug Administration (FDA) in 2013 to plan for a
potential Phase 2/3 clinical trial.

About the Neo-Kidney Augment™
The Neo-Kidney Augment™ is intended to prevent or delay the need for dialysis
or kidney transplantation by catalyzing the regeneration of functional kidney
tissue in patients with advanced chronic kidney disease (CKD). This increase
in functional kidney mass could thereby delay or prevent the need for dialysis
or kidney transplant in patients with end stage renal disease (ESRD).
According to the United States Renal Data System, more than $27 billion in
Medicare costs each year are attributable to patients with ESRD and ESRD is
associated with an approximate 20% mortality rate per year, with the average
life expectancy of a patient initiating dialysis of approximately four years.
Tengion scientists have published and presented positive data on the effect of
the Company's Neo-Kidney Augment 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. Tengion
has filed a Clinical Trial Application for the Neo-Kidney Augment with the
Medical Products Agency in Sweden and anticipates submitting an IND filing to
the FDA during the second quarter of 2013.

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. An initial clinical trial is ongoing for the
Company's most advanced product candidate, the 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. The Company's lead preclinical candidate is the
Neo-Kidney Augment™, which is designed to prevent or delay dialysis kidney
transplantation by increasing renal function in patients with advanced chronic
kidney disease. Tengion has worldwide rights to its product candidates.

Forward-Looking Statements

Certain statements set forth above may constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Statements using words such as anticipate, expect, project, intend, plan,
believe, words and terms of similar substance and any discussion of future
plans, actions, or events generally identify forward-looking statements.
Forward looking statements regarding the Company include but are not limited
to (i) plans to develop and commercialize its product candidates, including
the Neo-Kidney Augment and the Neo-Urinary Conduit; and (ii) expectations
regarding ongoing and planned preclinical studies, clinical trials and related
filings or submissions with regulatory authorities. Although Tengion believes
that these statements are based upon reasonable assumptions within the bounds
of its knowledge of its business and operations, there are a number of factors
that may cause actual results to differ from these statements. Tengion's
business is subject to significant risks and uncertainties and there can be no
assurance that actual results will not differ materially from expectations.
Factors which could cause actual results to differ materially from
expectations include, among others: (i) the FDA could place the Neo-Urinary
Conduit clinical trial on clinical hold; (ii) patients enrolled in the
Neo-Urinary Conduit clinical trial may experience adverse events, which could
delay the clinical trial or cause the Company to terminate the development of
its Neo-Urinary Conduit; (iii) the Company may have difficulty enrolling
patients in its clinical trials; (iv) data from the Company's ongoing
preclinical studies, including the proposed GLP program for the Neo-Kidney
Augment, may not continue to be supportive of advancing such preclinical
product candidates; and (v) the Company may be unable to progress its product
candidates that are undergoing preclinical testing, including the Neo-Kidney
Augment, into clinical trials and the Company may not be successful in
designing such clinical trials in a manner that supports development of such
product candidates. For additional factors which could cause actual results
to differ from expectations, reference is made to the reports filed by the
Company with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended. The forward looking statements in this
release are made only as of the date hereof and the Company disclaims any
intention or responsibility for updating predictions or expectations in this
release.



TENGION, INC.
(A Development-Stage Company)





CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)


                                                                     Period from

                                                                     July 10,
                  Three Months Ended       Twelve Months Ended       2003

                  December 31,             December 31,              (inception)

                                                                     through

                                                                     December 31,
                  2011         2012        2011         2012         2012
Operating
expenses:
Research and      $ 3,714      $ 2,182     $ 13,293     $ 10,103     $ 127,960
development
General and         1,994        1,479       7,191        5,496        47,389
administrative
Depreciation        325          99          3,141        456          23,608
Impairment of
property and        7,371        —           7,371        —            7,371
equipment
Other expense       710          35          1,705        165          1,870
Total operating     (14,114)     (3,795)     (32,701)     (16,220)     (208,198)
expenses
Interest income     14           15          53           27           8,539
Interest expense    (183)        (2,163)     (849)        (2,957)      (17,846)
Change in fair
value of            —            944         —            944          944
derivative
liability
Change in fair
value of warrant    313          910         14,436       1,277        17,775
liability
Net loss
attributable to   $ (13,970)   $ (4,089)   $ (19,061)   $ (16,929)   $ (198,786)
common
stockholders
Basic and
diluted net loss
attributable to
                  $ (5.91)     $ (1.72)    $ (8.82)     $ (7.13)
 common
stockholders per
share
Weighted-average
common stock

 outstanding :
 Basic and     2,365        2,374       2,162        2,374
diluted



TENGION, INC.
(A Development-Stage Company)





BALANCE SHEET DATA

(in thousands)

(unaudited)


                                            December 31,  December 31,

                                            2011          2012
Cash and cash equivalents                   $  9,244      $  7,536
Short-term investments                         6,066         —
Total assets                                   17,817        12,435
Derivative liability                           —             2,449
Warrant liability                              2,511         6,178
Long-term debt (including current portion)     4,987         11,269
Total liabilities                              12,802        23,778
Total stockholders' equity (deficit)           5,015         (11,343)



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               Twelve Months Ended

                  December 31,                     December 31,
                  2011             2012            2011            2012
Net loss
attributable to
common            $  (13,970)      $  (4,089)      $  (19,061)     $ (16,929)
stockholders –

GAAP
Change in fair
value of             —                (944)           —              (944)
derivative
liability
Change in fair
value of             (313)            (910)           (14,436)       (1,277)
warrant
liability
Impairment of
property and         7,371            —               7,371          —
equipment
Other expense        710              35              1,705          165
Adjusted net      $  (6,202)       $  (5,908)      $  (24,421)     $ (18,985)
loss
Shares used in
computing basic
and diluted net

loss
attributable to
common
stockholders:
 Basic and       2,365            2,374           2,162          2,374
diluted
Basic and
diluted net      $  (5.91)        $  (1.72)       $  (8.82)       $ (7.13)
loss per
share-GAAP
Adjustment per       3.29             (0.77)          (2.48)         (0.87)
share
Basic and
diluted net       $  (2.62)        $  (2.49)       $  (11.30)      $ (8.00)
loss per share
- adjusted





SOURCE Tengion, Inc.

Website: http://www.tengion.com
Contact: Investor and Media Contact: Brian Davis, brian.davis@tengion.com,
+1-267-960-4802
 
Press spacebar to pause and continue. Press esc to stop.