The OTC Market welcomed the recently delisted Nasdaq biotech firm, Tengion, Inc. (TNGN), with open arms sending its penny stock to a new 52 week low. Having failed to meet the Nasdaq requirement of a minimum $2.5 million stockholders’ equity, TNGN stock entered the gladiator arena of day traders and got flipped upside down to close -88.41% lower than its January high, $10.70 (reverse split adjusted). With required stock warrant settlements valued at $2.3 million on June 30, the move to the OTC basically wipes out the cash available as of their latest filings and could cause for a “Q” to be added to the ticker.
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TNGN Stock Chart
Market Cap: 2.94M
Close: 1.24, down -0.41 (-24.85%)
Dollar Volume: $40,478
Average Trade Size: 689
Issued and Outstanding: 2,466,914
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On September 4, Tengion was notified to delist the Company’s common stock from NASDAQ effective at the open of business on Thursday, September 6, 2012. The delisting was based on the Company’s non-compliance with NASDAQ’s minimum stockholders’ equity requirement set forth in Listing Rule 5550(b)(1).
Tengion conducted a reverse stock split in June as a remedy for another Nasdaq stock listing requirement. The reverse stock split provided shareholders with one share for every 10 they owned. The share price was reset at $3.65 at that time. Since then, the share price of newest Bulletin Board stock has declined $2.41, -66%.
Known for carrying stocks that are lightly traded, the OTC is also a stock market where some companies that have been in financial trouble go to in order to regain investor confidence in their shares. However, with Tengion could soon run out of cash and has warned that it likely would suspend operations and file for bankruptcy protection if it is not successful in raising additional capital.
The biotech had a similar cash crisis roughly 18 months ago when some of Tengion’s its largest stakeholders coughed up $31.4 million in a stock offering to give them some breathing room and a chance to to achieve a clinical breakthrough with its kidney and urinary research. Considering the state of things, it makes more sense for investors to buy the Company’s research and assets through a bankruptcy sale than to keep throwing money at a failing business model.
Note: In March 2011, the Company closed a private placement transaction pursuant to which Tengion sold securities consisting of 1,107,939 shares of TNGN stock and warrants to purchase 1,046,102 shares of TNGN stock. The purchase price per security was $28.30, $28.9 million.
About TNGN Stock
Tengion, Inc. is a regenerative medicine company focused on discovering, developing, manufacturing and commercializing a range of neo-organs, or products composed of living cells, with or without synthetic or natural materials, implanted or injected into the body to engraft into, regenerate, or replace a damaged tissue or organ.
Using its Organ Regeneration Platform, the Company creates these neo-organs using a patient’s own cells, or autologous cells. The Company believes its proprietary product candidates harness the intrinsic regenerative pathways of the body to regenerate a range of native-like organs and tissues. The Company’s product candidates are intended to delay or eliminate the need for chronic disease therapies, organ transplantation, and the administration of anti-rejection medications.
Bottom Line: The recently delisted penny stock got a taste of the OTC and traders could soon see TNGN listed as TNGNQ. The survival of this entity seems bleak and getting in too early for a bounce play is as dangerous as owning the shares 9 months ago in a long position.
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