InVivo Therapeutics Reports 2016 Second Quarter Financial Results and Business Update

CAMBRIDGE, Mass.--(BUSINESS WIRE)--InVivo Therapeutics Holdings Corp. (NVIV) today reported financial results for the quarter ended June 30, 2016.

Mark Perrin, InVivo’s Chief Executive Officer and Chairman, said, “The second quarter was one marked by continued advancements and outreach. In the INSPIRE study, a fourth patient converted from a complete to an incomplete spinal cord injury, putting us one step closer to achieving the Objective Performance Criterion. The InVivo story was disseminated to life science professionals through our article in Life Science Leader; to researchers through our presentations at the 34^th Annual Symposium of the National Neurotrauma Society and at the Committee Roundtable on Biomedical Engineering Materials and Applications; to neurosurgeons through our symposium at the 84^th American Association for Neurological Surgeons Annual Scientific Meeting and our case report published in Neurosurgery; and to a broad audience through our feature on WBZ NewsRadio, a CBS radio affiliate. We strengthened our team by adding Christina Morrison to the Board of Directors and the University of Virginia and the University of Pennsylvania to the INSPIRE study, and we enhanced our intellectual property estate by adding a broad patent covering methods of treating spinal cord injuries. We ended the quarter in a strong financial position and believe our funds will last us through the end of 2017.”

Financial Results

For the quarter ended June 30, 2016, the Company reported a net loss of approximately $5,184,000, or $.16 per diluted share, compared to a net loss of $10,443,000, or $.39 per diluted share, for the quarter ended June 30, 2015. The 2016 results were favorably impacted by a gain in the derivative warrant liability (a non-cash item) of $595,000 reflecting changes in the fair market value of the derivative warrant liability. The results for the three months ended June 30 2015 were adversely impacted by a loss in the deferred warrant liability of $4,653,000. Excluding these charges, for the quarters ended June 30, 2016 and June 30, 2015, adjusted net loss per diluted share was $.18 and $.21 respectively.

The Company ended the quarter with $41,629,000 of cash and cash equivalents.

For the six months ended June 30, 2016, the Company reported a net loss of approximately $11,807,000, or $0.39 per diluted share, compared to a net loss of $26,273,000 or $1.02 per diluted share, for the six months ended June 30, 2015. The 2016 results were adversely impacted by a loss in the derivative warrant liability of $452,000 reflecting changes in the fair market value of the derivative warrant liability. The results for the six months ended June 30, 2015 were adversely impacted by a loss in the derivative warrant liability of $14,940,000. Excluding of these items, for the six months ended June 30, 2016 and June 30, 2015, adjusted net loss per diluted share was $.38 and $.44 respectively.

Adjusted net loss and adjusted net loss per share are non-GAAP financial measures that exclude the items noted. A reconciliation of these measures to the comparable GAAP measure is included with the tables contained in this release. The Company believes a presentation of these non-GAAP measures provides useful information to investors to better understand the Company's operations, on a period-to-period comparable basis, with financial amounts both including and excluding these identified items.

About The INSPIRE Study

The INSPIRE Study: InVivo Study of Probable Benefit of the Neuro-Spinal Scaffold™ for Safety and Neurologic Recovery in Subjects with Complete Thoracic AIS A Spinal Cord Injury, is designed to demonstrate the safety and probable benefit of the Neuro-Spinal Scaffold™ for the treatment of complete T2-T12/L1 spinal cord injury in support of a Humanitarian Device Exemption (HDE) application for approval. For more information, refer to https://clinicaltrials.gov/ct2/show/study/NCT02138110.

About the Neuro-Spinal Scaffold™ Implant

Following acute spinal cord injury, surgical implantation of the biodegradable Neuro-Spinal Scaffold within the decompressed and debrided injury epicenter is intended to support appositional healing, thereby reducing post-traumatic cavity formation, sparing white matter, and allowing neural regeneration across the healed wound epicenter. The Neuro-Spinal Scaffold, an investigational device, has received a Humanitarian Use Device (HUD) designation and currently is being evaluated in the INSPIRE pivotal probable benefit study for the treatment of patients with complete (AIS A) traumatic acute spinal cord injury.

About InVivo Therapeutics

InVivo Therapeutics Holdings Corp. is a research and clinical-stage biomaterials and biotechnology company with a focus on treatment of spinal cord injuries. The company was founded in 2005 with proprietary technology co-invented by Robert Langer, Sc.D., Professor at Massachusetts Institute of Technology, and Joseph P. Vacanti, M.D., who then was at Boston Children’s Hospital and who now is affiliated with Massachusetts General Hospital. In 2011, the company earned the David S. Apple Award from the American Spinal Injury Association for its outstanding contribution to spinal cord injury medicine. In 2015, the company’s investigational Neuro-Spinal Scaffold received the 2015 Becker’s Healthcare Spine Device Award. The publicly-traded company is headquartered in Cambridge, MA. For more details, visit www.invivotherapeutics.com.

Safe Harbor Statement

Any statements contained in this press release that do not describe historical facts may constitute forward-looking statements within the meaning of the federal securities laws. These statements can be identified by words such as "believe," "anticipate," "intend," "estimate," "will," "may," "should," "expect" and similar expressions, and include statements regarding the Company’s belief regarding cash spend. Any forward-looking statements contained herein are based on current expectations, and are subject to a number of risks and uncertainties. Factors that could cause actual future results to differ materially from current expectations include, but are not limited to, risks and uncertainties relating to the Company’s ability to successfully open additional clinical sites for enrollment and to enroll additional patients; the timing of the Institutional Review Board process; the Company’s ability to obtain FDA approval to modify its pilot trial protocol or to conduct a future study; the Company’s ability to commercialize its products; the Company’s ability to develop, market and sell products based on its technology; the expected benefits and efficacy of the Company’s products and technology in connection with spinal cord injuries; the availability of substantial additional funding for the Company to continue its operations and to conduct research and development, clinical studies and future product commercialization; and other risks associated with the Company’s business, research, product development, regulatory approval, marketing and distribution plans and strategies identified and described in more detail in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, as amended, and its other filings with the SEC, including the Company’s Form 10-Qs and current reports on Form 8-K. The Company does not undertake to update these forward-looking statements.

InVivo Therapeutics Holdings Corp.
Consolidated Balance Sheets
Unaudited
	As of
	June 30, 2016			December 31, 2015
ASSETS:
Current assets:
Cash and cash equivalents	$	41,629		$	20,194
Restricted cash		361			361
Prepaid expenses and other current assets		682			184
Total current assets		42,672			20,739
Property, equipment and leasehold improvements, net		736			938
Other assets		102			115
Total assets	$	43,510		$	21,792
LIABILITIES AND STOCKHOLDERS' DEFICIT:
Current liabilities:
Accounts payable	$	559		$	521
Loan payable, current portion		409			395
Derivative warrant liability		2,359			1,907
Deferred rent payable, current portion		128			115
Accrued expenses		1,169			374
Total current liabilities		4,624			3,312
Loan payable, net of current portion		1,067			1,275
Deferred rent payable, net of current portion		208			276
Total liabilities		5,899			4,863
Stockholders' equity:
Common stock, $0.00001 par value, authorized 100,000,000 shares; issued and outstanding
31,917,308 at June 30, 2016, and authorized 50,000,000 shares; issued and outstanding
27,555,948 shares at December 31, 2015.		1			1
Additional paid-in capital		182,986			150,497
Accumulated deficit		(145,376	)		(133,569	)
Total stockholders' equity		37,611			16,929
Total liabilities and stockholders' equity	$	43,510		$	21,792

InVivo Therapeutics Holdings Corp.
Consolidated Statements of Operations
(Unaudited)
	Three Months Ended March 31,						Six Months Ended March 31,
	2016			2015			2016			2015
Operating expenses:
Research and development	$	2,795		$	2,546		$	5,364		$	4,848
General and administrative		2,991			3,214			5,990			6,422
Total operating expenses		5,786			5,760			11,354			11,270
Operating loss		(5,786	)		(5,760	)		(11,354	)		(11,270	)
Other income (expense):
Interest income		36			2			91			3
Interest expense		(29	)		(32	)		(92	)		(66	)
Derivatives gain (loss)		595			(4,653	)		(452	)		(14,940	)
Other income (expense), net		602			(4,683	)		(453	)		(15,003	)
Net loss	$	(5,184	)	$	(10,443	)	$	(11,807	)	$	(26,273	)
Net loss per share, basic and diluted		(0.16	)		(0.39	)		(0.39	)		(1.02	)
Weighted average number of
common shares outstanding,
basic and diluted		31,907,747			26,508,170			30,039,677			25,713,438

Reconciliation of GAAP to non-GAAP measures
InVivo Therapeutics Holdings Corp.
(In thousands, except share and per share data)
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Reported GAAP net income (loss)	(5,184	)	(10,443	)	(11,807	)	(26,273	)
Add Back: Derivative (gain)/ loss	(595	)	4,653		452		14,940
Adjusted net loss	(5,779	)	(5,790	)	(11,355	)	(11,333	)
Reported GAAP net loss per diluted share	(0.16	)	(0.39	)	(0.39	)	(1.02	)
Derivative loss per diluted share	(0.02	)	0.18		0.01		0.58
Adjusted net loss per diluted share	(0.18	)	(0.21	)	(0.38	)	(0.44	)