Skip to content
Link copied to clipboard

Biotech bust: Tengion shares discounted

"Public adversity for risk" yields half the expected price for Tengion shares

East Norriton-based Tengion Inc., backed by Philadelphia investor Ira Lubert's state-backed Quaker Bio-Ventures and other pro speculators, has a whiz-bang product - "regenerative organs" to replace our worn-out human parts - but it's years from being able to sell it to patients and their insurers.

High hopes weren't enough to boost last week's Tengion public offering above just $5 a share (second item), down from the proposed $8 to $10. Underwriters Piper Jaffray and Leerink Swann diluted the share issue to 6 million, from 4.4 million, watering inside investors' profits.

Writing on Financial Times' Seeking Alpha website, commentator Marie Daghlian of the Burrill Report blamed "public adversity for risk", and noted, "In its first filing in December 2009, the company targeted raising $40.3 million, which it raised to $46 million in an amended filing in mid-March. At that time it planned to sell 4.4 million shares at a range of $8 to $10. The company will list on the Nasdaq market under the symbol TNGN."

Tengion's low price, Daghlian notes, raises questions on prospects for "over a dozen biotech companies [which] have filed to go public with the U.S. Securities and Exchange Commission" this year.