Bain in PA: Tengion

Introduction:

This post is part of a series in an attempt to understand the influence and involvement of Bain Capital (and venture capital / private equity generally) in Pennsylvania. 

To do this I searched through newspapers and business databases to locate the names of Pennsylvania  companies that had some connection to Bain, then looked for general information on those firms.  Chain stores do not count unless the company is headquartered in Pennsylvania.

I have made a concerted effort to confirm information found in the press but sometimes this was not possible.   A similar effort was made to construct a search strategy in such a way that published corrections would also be found.  That being said, I am working primarily with self-reported corporate information and published media, not from original research.  Citations are provided so interested parties can reviews the research for themselves, and they are encouraged to do so.  This is not intended to be exhaustive research, though the intent was to be thorough. 

Tengion

Tengion was founded in 2003.  On the corporate website (www.tengion.com), the business is described as "a clinical-stage regenerative medicine company."

Prior to 2006 the company raised $39 million in private equity funding.  In 2006 it had 60 employees and received $50 million from private equity investors, from, among others, Bain Capital and Quaker BioVentures.  In part the money would be used to develop a manufacturing plant in East Norriton (Loyd 6/27/09).  A year later the company had 80 employees and raised an additional $33 million in private equity funding (Loyd 10/16/07).  In 2008 the company brought in another $21 million from seven venture capital firms, including Bain Capital (DiStefano, 11/20/08).

In late 2009 Tengion announced its intention to launch and initial public offering (IPO).  The previous private equity / venture capital money had been raised “by selling convertible preferred stock” (Brubaker 12/25/09).  In Sept 2008 the company had 68 employees, down from a high of 100.  Research setbacks accounted for layoffs. (Armstrong, 12,28/09).  The IPO raised $30 million, with a lower than expected starting price of $5.00 / share (“Tengion,” 4/10/10).  

The stock price went down over time and in February, 2011, Tengion announced that it would shortly run out of money if it did not receive more funding.  Medtronics was among those coming to the rescue.  The company “received $31.4 million from private investors in return for 11 million shares of common stock and warrants to purchase 10.5 million more.”  The price was $2.88 a share (Maykuth, 3/02/11).  Later that year the NASDAQ threatened to de-list the company because of a consistently low, less than $1.00 / share price (Sell, 10/07/11).  The company appealed this.  In November, 2011 another 30 employees were laid off and only a handful were left in Pennsylvania (Armstrong 11/16/2011).  In January, 2012 the company formally moved its corporate headquarters from Pennsylvania to North Carolina where its research facilities are. 

As of this writing the stock is trading at $2.00 / share, after a reverse stock split in May.  According to an August, 2012 financial report on the firm’s website, the company currently has a product in clinical trials and another in preliminary studies.  [Update:  On Sept. 4^th NASDAQ notified Tengion that it’s stock could no longer be traded on NASDAQ.  Instead it will begin trading Tengion stock on OTCQB tier of the OTC Marketplace.]

A report in the Mergent database lists those with significant ownership and Bain was not among them.  I don’t know when, how, or if, Bain stopped having a relationship with the company.

Sources:

Armstrong, Mike, “PhillyInc: A local innovator is downsizing again,” Philadelphia Inquirer,  Nov 16, 

2011 

Armstrong, “Remember initial public offerings?” Philadelphia Inquirer, Dec 28, 2009 

Brubacker, Harold, “Montco biotech firm to go public,”  Philadelphia Inquirer, Dec 25, 2009

DiStefano, Joseph, “New local money for biomedical innovator,”  Philadelphia Inquirer, Nov 20, 2008

Loyd, Linda “Developer of alternate organs gets $50 million,”  Philadelphia Inquirer, June 27, 2006

Loyd, Linda, “Tengion raises $33 million in private equity,”  Philadelphia Inquirer Oct 16, 2007

Maykuth, Andrew, “Tengion to get $31.4M in financing," Philadelphia Inquirer, March 2, 2011

Sell, David, “Tengion's shares face delisting,”  Philadelphia Inquirer, October 7, 2011

“Tengion shares begin trading,” Philadelpia Inquirer, April 10, 2010

 

       

From website:  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.