Professor Mike Lord Comments on the Hiring of Tengion’s New President & CEO

Tengion names Miclot new chief executive
Reposted from Winston-Salem Journal | by Richard Craver

Tengion Inc. remains in a race for its financial survival, but it has a new leader at the reins.

John Miclot, a 25-year health-care industry veteran, has been named Tengion's president and chief executive. He will face the challenge of trying to reach critical research thresholds before the company's funding potentially runs out in late 2012.

Tengion had gone more than five months without a top executive after Dr. Steven Nichtberger resigned in late June. Miclot will be based in Winston-Salem as part of Tengion's consolidation of operations here.

Miclot most recently served as executive in residence at Warburg Pincus, a global private-equity company. He served for two years as president and chief executive of CCS Medical Inc., a company owned by Warburg Pincus that provides products and services for patients with chronic diseases.

He also was president and chief executive of Respironics Inc. from 2003 to 2008, where his growth strategy resulted in the company's sale to Royal Philips for $5.1 billion.

Tengion is best known for the research of Dr. Anthony Atala, its founder, who runs the Institute for Regenerative Medicine for Wake Forest Baptist Medical Center.

Although it has had research setbacks this year, Tengion appears to be moving forward on two key research programs involving regenerating muscle cells in the small intestines and its neo-urinary conduit.

"This is an exciting time to join and a pivotal time for the company," Miclot said Tuesday. "Tengion's pipeline of programs has shown significant promise and potential.

"We're very confident that if we are successful, it will create a number of strategic options to finance the company in the future."

David Scheer, chairman of Tengion's board of directors, said Miclot's "proven track record of driving company growth and realizing shareholder value make him an ideal choice to lead Tengion."

"As we continue to pursue strategic partnership and financing discussions, his experience will be invaluable. We look forward to working with him to achieve key Tengion milestones in 2012."

Michael Lord, an associate professor of management at Wake Forest University, said the hiring of Miclot "clearly is targeted to address Tengion's pressing financial and operational concerns.

"His background clearly shows he has relevant experience to help restructure and recapitalize the company, whatever the exact form that might take," Lord said. "They have some great technology, but they need more time, and time is money. In biotechnology, that often means a lot more money.

"They might try to realize the value of the company through an outright sale, but that involves negotiations and an uncertain price," Lord said. "The markets continue to be risk averse, and getting products to market is as tough as ever."

Tengion's share price has been battered since it said in February it was in danger of running out of money and was considering finding a buyer. In March, the company raised $31.4 million in a public-stock offering. On Nov. 14, it said it had $20.3 million in cash, cash equivalents and short-term investments, enough to make it to November 2012.

To hedge its financial status, the company is cutting its full-time workforce by 30 jobs, or 58 percent, as part of concentrating its research and development operations locally. Once the consolidation is complete, the company said it will have 19 full-time or equivalent jobs in Winston-Salem and three in East Norriton, Pa.