BOUNCE

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TNGN: Biotech firm Tengion Inc. (TNGN) filed for bankruptcy after losing millions of dollars trying to develop a new medicine that would help the human body regrow kidneys and other major organs.
Monday's Chapter 7 bankruptcy filing halted the North Carolina company's operations and put its biotechnology assets up for sale. Tengion officials estimated that the company is worth $2.7 million but didn't know the exact value of its patents and other intellectual property, according to documents filed in U.S. Bankruptcy Court in Wilmington, Del.
Tengion has yet to profit from developing a blueprint for the medicine which, if successful, could cut down on the need for organ transplants. The medicine is based on research from Dr. Anthony Atala .
Earlier this year, the company announced that five patients in a Swedish hospital showed an encouraging response to its kidney cellular therapy, which could help patients with kidney disease avoid dialysis. Researchers had planned to test the medicine on U.S. patients early next year.
Several bladder cancer patients have also agreed to try out a Tengion -made tissue implant that would be made from their own cells--a technique that could help them avoid bladder removal surgery.
Tengion executives earlier this year warned shareholders that the business could run out of money by mid-December.
"If Tengion is unable to raise additional capital, it will need to suspend its business operations," the company said in a press release that announced it had lost $19.3 million during a nine month-period leading up to Sept. 30 .
The company has cut costs in recent years, including laying off more than half of its 52 employees in November 2011 , the Winston-Salem Journal newspaper reported. Court papers didn't indicate how many people remained on staff before the bankruptcy.
The company owes more than $32 million , mostly to investors like biopharmaceutical company Celgene Corp. (CELG) and health-care investors Deerfield Management and RA Capital .
Shortly before putting the company into bankruptcy, Tengion officials tried to convince shareholders to allow them to double the number of common stock shares to 20 million--a move that would have enabled the company to pay debt using common stock shares and to raise additional money, the Winston-Salem Journal reported.
Shareholders voted against that move on Dec. 22 , according to a U.S. Securities and Exchange Commission filing.
The company's stock, which is traded publicly on over-the-counter markets, was worth less than a penny a share on Tuesday. Tengion's shares sold for $5 each when they became publicly traded in April 2010 .
The sale of Tengion's assets will be supervised by Judge Christopher S. Sontchi . Several bankruptcy lawyers involved with the company declined to say whether the company has a buyer in mind.
(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to http://dbr.dowjones.com)
Write to Katy Stech at [e-mail].