Tengion Generates Third Round

Replacement bladder company Tengion has raised around $33 million in Series C funding, peHUB has learned. Deerfield Partners came aboard as a new investor, and was joined by return backers Bain Capital Partners, Healthcap Venture Capital Johnson & Johnson Development Corp., L Capital Partners, Oak Investment Partners, Quaker BioVentures and Scheer & Company. Existing debt lenders Horizon Technology Finance and Oxford Finance also provided equity commitments. An official announcement is expected later today (Update: Here’s the release: Tengion_Release.pdf).

Tengion’s “replacement bladders” are literal, not some sort of euphemism or Seinfeld riff. The Pennsylvania company develops new human tissues and organs derived from a patient’s own cells, rather than relying on donor transplants that may be in limited supply and/or incompatible with recipients. It’s part of the burgeoning field of regenerative medicine, which also includes VC-backed companies like Aldagen and Tigenix.

“I’ve seen a few other regenerative medicine companies out there making cartilage or various tissues, but Tengion is the only one I’ve seen that’s focused specifically on bladders,” says Brenda Gavin, a managing director with Quaker BioVentures. “It’s a bit behind where we thought it would be when we raised the Series B round [in mid-2006], although the delay is not too significant… I’m not sure that the company will need another venture capital round.”

Tengion launched its first round of Phase II trials early this year, with pediatric patients suffering from spina bfida. Its second round launched just last month, for ten adult patients who have suffered spinal cord injuries. In both cases, trial participants have a condition called neurogenic bladder, which can lead to kidney failure and incontinence.

The company has raised around $120 million in total VC funding. CFO Gary Sender declined to echo Brenda Gavin’s comments about future funding – saying that no decisions have yet been made about future financing options.