As many as 20,000 people suffer spinal cord injuries annually in the U.S. (CDC estimate) and some 250,000-500,000 people globally (WHO estimate). Many of these people are left with a devastating lack of sensory and motor function below the level of injury- making even simple tasks challenging, if not impossible.
Now, a truly game-changing treatment may be on the horizon from InVivo Therapeutics (web site). InVivo Therapeutics has not only received FDA approval to proceed with clinical trials of their Neuro-Spinal Scaffold, they were granted an expedited enrollment track by FDA to accelerate those trials on December 16, 2014 (press release).
I believe InVivo Therapeutics offers tremendous upside based on reasons presented in this article.
Founded in 2005 and based in Cambridge, MA, InVivo Therapeutics is a development stage biotechnology company focused on utilizing polymers as a platform technology to develop treatments to improve function in individuals paralyzed as a result of traumatic spinal cord injury (SCI). InVivo Therapeutics is developing a biocompatible Neuro-Spinal Scaffold to treat acute SCI and biocompatible Neuro-Spinal Scaffold Plus Stem Cells to treat chronic SCI. The company has proprietary technologies and intellectual property licensed under exclusive, worldwide license from Children’s Medical Center Corporation and the Massachusetts Institute of Technology, as well as intellectual property that has been developed internally in collaboration with advisors and partners.
Shares Outstanding: 101.6 million
Market Capitalization: Approximately $135 million
Insider Ownership: Approximately 27%
Employee Count: 48
Institutional Ownership: 10.2%
Insider Ownership: 26%
Revenue: (TTM) $0.00
Enterprise Value: $101.8 M (12/18/2014)
EPS: (Adjusted TTM) $-0.01
Analyst Coverage: InVivo Therapeutics currently has only one analyst following it with a $3/share price target
(Source: Thompson/Reuters and Fidelity Investments)
November 2014 Investor Presentation
The biodegradable Neuro-Spinal Scaffold developed by InVivo Therapeutics is surgically implanted at the epicenter of the wound after an acute spinal cord injury. The scaffold has been shown to facilitate healing to spare spinal cord tissue, decrease post-traumatic cyst formation, and decrease spinal cord tissue pressure in preclinical studies. The Neuro-Spinal Scaffold has received a Humanitarian Use Device designation and is now in clinical trials for the treatment of complete traumatic acute spinal cord injury.
A very positive development for InVivo Therapeutics was announced last week as the FDA gave the go-ahead for the company to accelerate enrollment in clinical trials of the Neuro-Spinal Scaffold. This is extremely significant, as it speeds up the entire trial period, cutting the enrollment period from 15 months to potentially as low as 6 months according to Senior Pharmaceutical & Biotechnology analyst Jason Napodano from Zacks Small Cap Research (article).
Regarding the expedited enrollment granted by the FDA, Mark Perrin, InVivo’s CEO, stated:
“Over the last calendar year, we have cultivated a collaborative and fruitful relationship with the FDA, and we couldn’t be happier with today’s announcement. Under our new plan, it’s possible to reduce the duration of our pilot trial by up to one year. This, of course, is dependent on patient presentation, but with today’s approval, along with our previously-announced approval of increasing the number of clinical sites up to 20, we are much better positioned to execute and complete this trial in an expedited fashion. Although we cannot predict when subjects will present, we now anticipate full enrollment in the pilot trial in 2015.”
Because the pace toward possible FDA approval for their Neuro-Spinal Scaffold is now faster, InVivo Therapeutics took a leap forward in the time frame for potential commercialization as well.
Chief Science Officer for InVivo, Dr. Thomas Ulich, gave the following presentation on the Neuro-Spinal Scaffold and its use in spinal cord injuries at the 2014 Stem Cell Meeting on the Mesa.
The presentation is both educational and fascinating.
Strong Cash Balance Mitigates Risk of Near Term Share Dilution
In May, InVivo completed a round of financing at $1.15/share for $14.6 million in net proceeds and had a cash balance of $17.6 million at the end of Q3. (SEC filing). With $18.3 million in current assets and $4.8 million in current liabilities, the company enjoys a healthy current ratio of 3.8. Management has stated InVivo Theraputics has the cash required for all operations through March, 2016 without additional financing.
In addition to the accelerated clinical trials announced this week, this is another big positive for investors in the company. Uncertainty as to the extent of share dilution and at what price are routine concerns for investors in small and microcap biotech stocks. With InVivo Therapeutics, that risk is greatly diminished for the next 12+ months.
Cash burn has decreased following InVivo’s corporate re-alignment announced in June with expected annualized savings of $3 million and a reduction in cash expenditures of approximately 23% as compared to 2013. This realignment allows the company to focus exclusively on the development of the Neuro-Spinal Scaffold.
“Miracle” Potential in a Massive Market
For patients suffering traumatic spinal cord injuries, there is no real treatment, no “cure” currently available. Depending on the location and extent of injury, debilitating and life-threatening symptoms are merely managed. Severe thoracic nerve injuries usually result in paraplegia and very little, (if any), control of bowel or bladder…a horrific reality for these individuals. Because trauma is the overwhelming cause of these injuries, the patients are often young adults involved in a motor vehicle crash or a sports-related injury.
As CEO Mark Perrin explained:
“There is nothing out there to help these patients. It’s such an extraordinary unmet medical need that, if successful, the commercialization plans will involve getting the word out to the medical and patient community that this option is now available, and doing everything we can to get the product into hospitals to help treat these patients” (The Wall Street Transcript).
InVivo estimates the worldwide market for treating acute complete SCI to be over $500 million annually and the chronic SCI market to be over $10 billion.
This is truly disruptive technology for the management of SCI, and if approved by the FDA, the Neuro-Spinal Scaffold would revolutionize the treatment of spinal cord injuries. Should clinical trials in humans come anywhere close to the incredible results in this Must See Video with former CEO Frank Reynolds, “New Technology has Paralyzed Monkeys Walking“, then the current market cap of $135 million will be a fraction of where this company will ultimately trade.
The NVIV chart shows the volatility typical in a disruptive microcap company. The breakout on 11/12 followed media reports on the first human being entered into the FDA study for the Neuro-Spinal Scaffold, and shows early reaction to yesterday’s news on the expedited enrollment granted by the FDA.
NVIV may be a perfect fit for aggressive investors with a high risk tolerance as the company continues down the (often bumpy) road of clinical trials and hopefully, eventual FDA approval of the Neuro-Spinal Scaffold.
Disclosure: I am long NVIV. I have not been paid by any company or third party for this article.
Disclaimer: Opinions expressed are my own and should not be considered investment advice nor an invitation to buy or sell shares of any company mentioned on this site. Investors should perform their own due diligence and consult with a Registered Investment Advisor prior to making any investment decision. See sidebar for full disclaimer.
Supplemental: On 12/31 I received permission to post this InVivo Therapeutics Research Report from the author, Dr. Jerry Isaacson of LiceSci Capital.
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