Tuesday, January 5, 2010

Tengion plans $40 million IPO

Tengion plans $40 million IPO
December 28, 2009 by MassDevice staff

Tengion Inc. rides a late-year surge in initial public offering filings to launch a bid for $40 million in fresh funding for its organ and tissue regeneration process.
Tengion logo

Joining what is quickly becoming a mini-stampede toward the public markets, a suburban Philadelphia biotech unveiled plans for an initial public offering of stock.

The company, Tengion Inc. of East Norriton, Pa., is working to commercialize a process that coaxes the body into producing its own replacement organs. Early testing has demonstrated some success rebuilding bladder tissue in children with spina bifida and Tengion officials are now hoping that those encouraging results will attract sufficient market support to finance additional clinical trials.

According to its preliminary prospectus filed Dec. 23, the company expects to raise up to $40.25 million in gross proceeds from the IPO. Other terms for the offering are purposely left vague, although it's clear that a sizable portion of the deal will go to pay off $24.3 million in loans coming due by April 2012 and requiring up to 12.26 percent in yearly interest costs.

Existing investors, which include Boston's Bain Capital and Oak Investment Partners of Westport, Conn., obviously are also eager for an IPO to loosen money they've had tied up in Tengion since August 2005. Overall, venture funds and institutional investors have a total of $184.2 million invested in the company, including a $33 million Series C funding round completed in September, 2007, and a $50 million B-round in June, 2006.

Liquidity desires and a rebounding market, meanwhile, appear to be spurring a surge in IPO filings after a long dry spell. With a week left in the current quarter, 62 companies have filed plans for first-time offerings — representing more than half of the year's total and marking the strongest quarterly activity in nearly two years, according to data gathered by Renaissance Capital.

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