CAMBRIDGE, Mass.--(BUSINESS WIRE)--InVivo Therapeutics Holdings Corp. (OTCBB:NVIV), a developer of groundbreaking technologies for the treatment of spinal cord injuries (SCI), today reported the financial results for the three months ended March 31, 2012 and provided a business update.
InVivo has pioneered a new treatment that uses a biocompatible polymer-based scaffold to provide structural support to a damaged spinal cord in order to spare tissue from scarring while improving recovery and prognosis after a traumatic spinal cord injury. Today there is no effective treatment for the spinal cord for paralysis caused by SCIs, and the market potential is estimated to be over $10 billion.
“We are off to a strong start for 2012 and the first quarter was marked by significant achievements and milestones for InVivo," said Frank Reynolds, InVivo’s Chief Executive Officer. “We are creating a new paradigm for the treatment of neurological injuries and are at an inflection point in our growth. By the end of 2012, we expect to have several product applications under review by the FDA. Our biopolymer scaffolding device for the treatment of acute SCIs is poised to enter human clinical trials during the second half of 2012. We expect to submit hydrogel-based applications to the FDA for the treatments of SCI and chronic pain from peripheral nerve injuries later this year. During the first quarter of 2012, we strengthened our balance sheet by closing an oversubscribed $20mm+ public offering led by globally recognized health care investment institutions. In addition, we added key leadership to our management team to drive product development and commercialization."
Recent Corporate Highlights
Biopolymer Scaffolding Scheduled to Enter Clinical Studies for SCI in 2012: InVivo expects to commence a pilot human clinical trial during the second half of 2012, pending approval of an Investigational Device Exemption (IDE) application by the FDA. Following a meeting with the FDA held in April, the Company is expecting the product to be regulated under the Humanitarian Use Device/Humanitarian Device Exemption (HUD/HDE) pathway that should accelerate commercialization. The pilot study will be an open label study and is designed to evaluate the safety and efficacy in SCI patients following treatment with the biopolymer scaffolding. This study follows promising pre-clinical studies completed in non-human primates. InVivo is the first to successfully demonstrate functional improvement in non-human primates that were paralyzed after a spinal cord injury model.
Submissions to be Filed with the FDA for Injectable Hydrogel to Treat Peripheral Nerve Injuries and SCI: InVivo is conducting a preclinical study with Geisinger Health System to evaluate the Company’s injectable biocompatible hydrogel for the treatment of pain caused by peripheral nerve compression. Approximately 3.2 million pain injections are performed annually to treat back, neck and leg pain caused by peripheral nerve injuries. InVivo’s hydrogel is designed to time-release anti-inflammatory drugs for extended pain relief. The product addresses an estimated $15 billion market for peripheral nerve injuries. InVivo expects to file FDA applications during 2012 for the use of the injectable hydrogel to treat peripheral nerve injuries and SCI.
Raised $20mm+ of Equity Capital: In February 2012, InVivo completed a $20mm+ public offering led by a select group of institutional investors. Net proceeds to InVivo were approximately $18.1mm. InVivo also has the potential to receive an additional $18.6mm of capital from the exercise of previously issued outstanding warrants.
Key Additions to the Management Team: InVivo recently announced the appointments of Jack Harvey, formerly of Pervasis, as Senior Director of Manufacturing, Brian Hess, formerly of Stryker, as Director of Product Development, and Celina Chang, formerly of Pervasis, as Senior Scientist. Under the leadership of new Chief Science Officer, Edward Wirth, MD, PhD, InVivo has established a foundation for the further advancement of chronic spinal cord injury technologies.
New Global Headquarters: InVivo has signed a multi-year lease for a 21,000 square foot facility at One Kendall Square in Cambridge, Massachusetts. The new state-of-the-art facility will bring all of the Company’s operations under one roof and will house corporate offices, a vivarium, laboratory space and a cGMP clean room for manufacturing.
Financial Results
For the three months ended March 31, 2012, the Company reported net income of $3,150,000 or $.05 per diluted share, compared to a net loss of $1,278,000, or $.02 per diluted share, for the three months ended March 31, 2011. Included in results for the three months ended March 31, 2012 and 2011 were non-cash derivative gains of $5,613,000, and $121,000, respectively, reflecting decreases in the fair value of the derivative warrant liability. Exclusive of the non-cash derivative gain, the pro forma net loss for the three months ended March 31, 2012 was $2,463,000, or $.04 per diluted share, compared to a pro forma net loss of $1,399,000, or $.03 per diluted share for 2011.
Total operating expenses for the three months ended March 31, 2012 were $2,461,000 compared with $1,401,000 for the three months ended March 31, 2011. The Company's cash balance increased to $19.6mm at March 31, 2012 from $4.4mm at December 31, 2011. In February 2012, InVivo completed a $20mm+ public offering and issued 9,523,810 shares of common stock at a price to the public at $2.10 per share. Net proceeds to InVivo were approximately $18.1mm.
About InVivo Therapeutics
InVivo Therapeutics Holdings Corp. is 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. The Company was founded in 2005 on the basis of proprietary technology co-invented by Robert Langer, ScD., Professor at Massachusetts Institute of Technology, and Joseph P. Vacanti, M.D., who is affiliated with Massachusetts General Hospital. In 2011, data from a Company study was published in the Journal of Neuroscience Methods and won the prestigious 2011 Apple Award from the American Spinal Injury Association recognizing excellence in SCI research. 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. Any forward-looking statements contained herein are based on current expectations, but are subject to a number of risks and uncertainties. The 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 sell additional shares of common stock and warrants to purchase common stock, 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 the Company’s business, research, product development, regulatory approval, marketing and distribution plans and strategies. These and other factors are identified and described in more detail in our filings with the SEC, including our Form 10-K and 10-Q’s and our current reports on Form 8-K. We do not undertake to update these forward-looking statements made by us.
(Tables to follow)
| InVivo Therapeutics Holdings Corp. | |||||||||||
| (A Developmental Stage Company) | |||||||||||
| Consolidated Statements of Operations | |||||||||||
| (Unaudited) | |||||||||||
| Three Months Ended | |||||||||||
| March 31, | |||||||||||
| 2012 | 2011 | ||||||||||
| Operating expenses: | |||||||||||
| Research and development | $ | 940,553 | $ | 636,323 | |||||||
| General and administrative | 1,520,212 | 764,319 | |||||||||
| Total operating expenses | 2,460,765 | 1,400,642 | |||||||||
| Operating loss | (2,460,765 | ) | (1,400,642 | ) | |||||||
| Other income (expense): | |||||||||||
| Other income | - | - | |||||||||
| Interest income | 2,437 | 2,818 | |||||||||
| Interest expense | (5,006 | ) | (1,513 | ) | |||||||
| Derivatives gain (loss) | 5,613,206 | 121,347 | |||||||||
| Other income (expense), net | 5,610,637 | 122,652 | |||||||||
| Net income (loss) | $ | 3,149,872 | $ | (1,277,990 | ) | ||||||
| Net income (loss) per share, basic | $ | 0.05 | $ | (0.02 | ) | ||||||
| Net income (loss) per share, diluted | $ | 0.05 | $ | (0.02 | ) | ||||||
| Weighted average number of common shares outstanding, basic | 58,004,471 | 51,660,942 | |||||||||
| Weighted average number of common shares outstanding, diluted | 69,008,549 | 51,660,942 | |||||||||
| InVivo Therapeutics Holdings Corp. | ||||||||||
| (A Developmental Stage Company) | ||||||||||
| Consolidated Balance Sheets | ||||||||||
| As of | ||||||||||
|
March 31, |
December 31, |
|||||||||
| ASSETS: | Unaudited | |||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 19,605,096 | $ | 4,363,712 | ||||||
| Restricted cash | 862,908 | 547,883 | ||||||||
| Prepaid expenses | 276,263 | 104,022 | ||||||||
| Total current assets | 20,744,267 | 5,015,617 | ||||||||
| Property and equipment, net | 523,702 | 520,482 | ||||||||
| Other assets | 161,764 | 166,139 | ||||||||
| Total assets | $ | 21,429,733 | $ | 5,702,238 | ||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT: | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 535,679 | $ | 567,195 | ||||||
| Loan payable-current portion | 50,578 | 50,578 | ||||||||
| Capital lease payable-current portion | 31,291 | 30,724 | ||||||||
| Derivative warrant liability | 29,000,940 | 35,473,230 | ||||||||
| Accrued expenses | 170,078 | 618,369 | ||||||||
| Total current liabilities | 29,788,566 | 36,740,096 | ||||||||
| Loan payable-less current portion | 71,149 | 83,794 | ||||||||
| Capital lease payable-less current portion | 27,421 | 38,042 | ||||||||
| Total liabilities | 29,887,136 | 36,861,932 | ||||||||
| Commitments | ||||||||||
| Stockholders' deficit: | ||||||||||
| Common stock, $0.00001 par value, authorized 200,000,000 | ||||||||||
| shares at March 31, 2012 and December 31, 2011; | ||||||||||
| issued and outstanding 63,928,372 and 53,760,471 shares | ||||||||||
| at March 31, 2012 and December 31, 2011, respectively. | 639 | 538 | ||||||||
| Additional paid-in capital | 36,209,148 | 16,656,830 | ||||||||
| Deficit accumulated during the development stage | (44,667,190 | ) | (47,817,062 | ) | ||||||
| Total stockholders' deficit | (8,457,403 | ) | (31,159,694 | ) | ||||||
|
|
||||||||||
| Total liabilities and stockholders' deficit | $ | 21,429,733 | $ | 5,702,238 | ||||||
InVivo Therapeutics Holdings Corp.
A Developmental Stage
Company
Pro Forma Results
InVivo is providing pro forma results as a complement to GAAP results. The pro forma net loss and pro forma diluted loss per share excludes the derivative gain which is a non-cash item. InVivo’s management believes this pro forma measurement helps to indicate underlying trends in the Company's ongoing operations. The reconciliation between pro forma and reported income (loss) per share for the three months ended March 31, 2012 and 2011 is provided in the following table:
| InVivo Therapeutics Holdings Corp. | |||||||||||
| A Developmental Stage Company | |||||||||||
| Pro Forma Results | |||||||||||
| Three Months Ended | |||||||||||
| March 31, | |||||||||||
| 2012 | 2011 | ||||||||||
| Pro forma net loss | $ | (2,463,334 | ) | $ | (1,399,337 | ) | |||||
| Derivative gain | 5,613,206 | 121,347 | |||||||||
| Reported GAAP net income (loss) | $ | 3,149,872 | $ | (1,277,990 | ) | ||||||
| Pro forma net loss per diluted share | $ | (0.04 | ) | $ | (0.03 | ) | |||||
| Derivative gain per diluted share | $ | 0.09 | $ | 0.01 | |||||||
| Reported GAAP net income (loss) per diluted share | $ | 0.05 | $ | (0.02 | ) | ||||||