Tengion Announces Transactions Totaling $33.6 Million to Advance its Organ Regeneration Platform™

  Tengion Announces Transactions Totaling $33.6 Million to Advance its Organ
                            Regeneration Platform™

$15 Million Strategic Investment from Celgene Corporation and $18.6 Million
Senior Secured Convertible Note Financing with New and Existing Investors

PR Newswire

WINSTON-SALEM, N.C., July 1, 2013

WINSTON-SALEM, N.C., July 1, 2013 /PRNewswire/ --Tengion, Inc. (OTCQB: TNGN),
a leader in regenerative medicine, today announced the closing of transactions
totaling $33.6 million to fund its two lead clinical programs, the Neo-Kidney
Augment™ and the Neo-Urinary Conduit™.

As part of the $33.6 million in transactions, Tengion announced a strategic
investment from Celgene Corporation in the form of a $15 million payment in
cash, in return for which Celgene was granted a right of first negotiation on
Tengion's Neo-Kidney Augment program. Celgene also entered into a
collaboration and obtained an exclusive option to acquire assets, including
the rights to utilize the Company's technology, related to the development of
a neo-esophageal implant. Celgene has also received warrants to purchase
shares of Tengion's common stock. Celgene invested $5 million in the Company's
October 2012 financing.

Tengion also announced the closing of an $18.6 million financing in which the
Company issued Senior Secured Convertible Notes (the "Notes"). Investors in
the Notes included both existing investors RA Capital Management LLC,
Deerfield Management Company, LP, Bay City Capital, and HealthCap, in addition
to new investors that included Perceptive Life Sciences and QVT Financial LP.

"The completion of these transactions allows us to continue our focus on
advancing both the Neo-Kidney Augment and the Neo-Urinary Conduit to key
clinical milestones," commented John Miclot, President and Chief Executive
Officer of Tengion. "We are eager to make progress towards our primary
objectives of establishing new standards of care for patients with chronic
kidney disease and for bladder cancer patients undergoing cystectomy, or
removal of their bladder."

Tengion intends to use the net proceeds of these transactions primarily to
fund research and development activities for its two lead programs, including
the funding of two planned Phase 1 clinical trials for the Company's
Neo-Kidney Augment in Sweden and the U.S. while completing enrollment in the
Phase 1 clinical trial for its Neo-Urinary Conduit, for which Celgene
continues to have a right of first negotiation. Roth Capital Partners, LLC
acted as sole placement agent to Tengion.

"We are very pleased to receive this investment from Celgene, a recognized
leader in the biopharmaceutical industry. Celgene Cellular Therapeutics'
expertise and focus on the advancement of cellular therapies including
regenerative medicine is highly complementary to Tengion's capabilities. In
addition, the capital investment from very knowledgeable investors in our
field strengthens the company and reflects a shared belief in the value of our
regenerative medicine platform," commented David Scheer, Chairman of the
Tengion Board of Directors. "We are looking forward to building value through
our active clinical development programs."

The Notes are convertible under certain circumstances into shares of the
Company's common stock at a conversion rate of 1,449 shares per $1,000 of
principal amount of the Notes. The conversion rate is subject to adjustment
under certain circumstances. In addition, holders of the Notes received
warrants to purchase approximately 80.8 million shares of common stock at an
initial exercise price of $0.69 per share. The exercise price and number of
shares issuable upon exercise of the warrants are subject to adjustment under
certain circumstances.

The securities to be sold in the private placement have not been registered
under the Securities Act of 1933, as amended or state securities laws and may
not be offered or sold in the United States absent registration with the
Securities and Exchange Commission or an applicable exemption from such
registration requirements. Tengion has agreed to file a registration statement
with the Securities Exchange Commission covering the resale of the shares of
common stock issuable upon exercise of the warrants and conversion of the
Notes.

This press release shall not constitute an offer to sell or the solicitation
of an offer to buy these securities, nor shall there be any sale of these
securities in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to the registration or qualification under the securities
laws of any such jurisdiction.

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. The Company commenced a Phase 1 clinical trial in
May 2013 for its Neo-Kidney Augment™, which is designed to prevent or delay
dialysis or kidney transplantation by increasing renal function in patients
with advanced chronic kidney disease. The Company is conducting this initial
clinical trial in Sweden and is actively enrolling patients with chronic
kidney disease and anticipates commencement of an initial clinical trial in
the United States during the fourth quarter of 2013. An initial clinical trial
is ongoing for the Company's 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.

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) the Company's use of proceeds for its most recently completed
investment rounds; (ii) plans to develop and commercialize its product
candidates, including the Neo-Urinary Conduit and the Neo-Kidney Augment; and
(iii) 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 U.S.
Food and Drug Administration could place the Neo-Urinary Conduit clinical
trial on clinical hold; (ii) the Medical Products Agency could place the
Neo-Kidney Augment clinical trial on clinical hold; (iii) patients enrolled in
the Neo-Urinary Conduit or Neo-Kidney Augment clinical trials may experience
adverse events, which could delay one of the clinical trials or cause the
Company to terminate the development of one of its product candidates; (iv)
the Company may have difficulty enrolling patients in its clinical trials; (v)
data from the Company's ongoing preclinical studies, including the GLP program
for the Neo-Kidney Augment, may not continue to be supportive of advancing
such preclinical product candidates; and (vi) the Company may be unable to
progress its product candidates that are undergoing preclinical testing 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 that could cause actual results to differ
from expectations, you should refer 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.

SOURCE Tengion, Inc.

Website: http://www.tengion.com
Contact: Investor and Media, Brian Davis, brian.davis@tengion.com,
336.201.0155
 
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