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Tengion (OTCQB: TNGN) Prices $15 M Of Senior Secured Convertible Notes + Warrants?

The private placement of $15 M aggregate principal amount of Senior Secured Convertible Notes… includes certain investors, including Celgene Corporation, RA Capital Management, Deerfield Management Company, Bay City Capital and HealthCap <a good list> and … Due 2015 .

The $15 M principal amount includes the exchange of approximately $1 M of debt issued in the bridge financing announced on 9/10/12.

Tengion intends to use the net proceeds of this transaction primarily to fund research and development activities for its two lead programs, including completing enrollment in the P1 clinical trial for its Neo-Urinary Conduit™ by the end of 2012 as well as submitting an IND filing to the FDA for the Neo-Kidney Augment™ during the first half of 2013.

The Bottom Line: The Notes will be convertible under certain circumstances into shares of TNGN's common stock at a conversion rate of 1,333 shares per $1,000 of principal amount of the notes. The conversion rate is subject to adjustment under certain circumstances. TNGN may not redeem the notes. TNGN has agreed to issue warrants to the holders of the Notes to purchase approximately 51.1 M shares of common stock at an initial exercise price of $0.75 per share - the BAD part but, there is a LOT of risk. The exercise price and number of shares issuable upon exercise of the warrants are subject to adjustment under certain circumstances. Typical … of a ROTH Capital Partners placement … to tack on the … warrant to this Tengion note deal.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.