InVivo Therapeutics Reports Third Quarter 2012 Financial Results, Provides Business Update
InVivo Therapeutics Reports Third Quarter 2012 Financial Results, Provides Business Update
CAMBRIDGE, Mass.--(BUSINESS WIRE)-- InVivo Therapeutics Holdings Corp. (NVIV), a developer of groundbreaking technologies for the treatment of spinal cord injuries (SCI) and other neurotrauma conditions, today reported the financial results for the three and nine months ended September 30, 2012 and provided a business update.
InVivo has pioneered a new treatment platform utilizing a variety of biocompatible polymer-based devices to provide structural support to a damaged spinal cord in order to spare tissue from scarring while improving functional 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 finished Q3 by expanding our product pipelines and collaborating with the FDA to establish first-of-a-kind protocols for gaining FDA approval to begin the first human study to introduce biomaterials to the spinal cord after SCI," said Frank Reynolds, InVivo's Chief Executive Officer. "We're establishing important standards of practice and best practices to shorten learning curves and expedite our products to market. We've made excellent progress in recent months and are firing on all cylinders, and we expect that the next six months will mark a major inflection point in our growth. We have built out strong R&D capabilities in neurotrauma and are poised to move our SCI devices into clinical trials followed by multiple neurotrauma products outside of the spinal cord."
Recent Corporate Highlights
Biopolymer Scaffolding for SCI: FDA approval to commence an open label clinical trial of five acute SCI patients is expected in early 2013. The Company expects the product to be regulated under a Humanitarian Device Exemption pathway that should accelerate commercialization. Before the end of 2012, the Company expects to validate its manufacturing clean room and then manufacture GMP batches which will be submitted to the FDA as part of the IDE application.
Recent data compiled from InVivo's 2011 non-human primate study confirm that the functional recovery observed in the treatment group was attributable to the biopolymer scaffolding alone, and was not due to spontaneous recovery. This exciting data will be submitted to a prestigious scientific journal for publication in 2012.
On September 25, InVivo held a ribbon cutting ceremony attended by key Massachusetts government officials and supported by Governor Deval Patrick, which marked the opening of the Company's global headquarters in Kendall Square, Cambridge MA. The facility includes corporate offices, chemistry labs, drug labs, cell labs, a cGMP manufacturing cleanroom, and a vivarium.
The Company believes that its SCI rodent vivarium is one of the largest in the world; it will house a chronic SCI rodent population dedicated to developing biomaterials/cell therapy treatment options for the critically under-served chronic SCI research model.
Engaged with the FDA for InVivo' second product, a novel injectable hydrogel specifically engineered for nervous system tissue to deliver effective local release of drugs. The Company will be meeting with representatives from the FDA's Office of Combination Products to map out the clinical development plan. By the end of 2012, the Company expects to complete a pre-clinical nerve pain study with the Geisinger Health System.
InVivo has assembled a world-class team of experts in neurotrauma and biomaterials. Recent key hires and promotions have further strengthened the management team.
William D'Agostino, PE joined as Senior Director of Manufacturing and Engineering. Mr. D'Agostino, a former Covidien executive, has launched more than 100 new polymer products, including degradable sutures.
Brian Hess was promoted to Chief Technology Officer from Director of Product Development. Mr. Hess, a former Stryker executive with extensive biomaterials experience, won the coveted Innovator of the Year award while at Stryker.
Arthur Coury, PhD joined as an advisor to the CEO and a member of InVivo's Business Advisory Board. Dr. Coury is an expert in polymeric biomaterials and his knowledge and leadership has led to multiple FDA approvals of hydrogel products.
Filed manufacturing patents covering non-toxic manufacturing processes for biomaterials implanted in the nervous system. InVivo's broad patent portfolio covers the use of any biomaterial alone or in combination with any drug, growth factor or stem cell for SCI. The patent portfolio has been expanded to include parts of the peripheral nervous system, the cranial nerve, the brain and retina, and the cavernous nerve.
Financial Highlights
Well Capitalized: $16.2mm of cash as of September 30, 2012 to fund operations into 2014.
Potential for $16.7mm of additional cash from warrant exercises during 2012-2015.
Low Burn Rate: $855K current monthly burn rate reflects the InVivo way of ″doing more with less.″
Superior Return on Cash Invested: 531% return on cash invested, $109mm market cap, and $20.5mm spent to date.
Awarded a $2 million low-cost loan from the Commonwealth of Massachusetts Emerging Technology Fund. Funds from the seven-year loan are to be used for capital equipment purchases.
Financial Results
For the three months ended September 30, 2012, the Company reported net income of $8,029,000 or $.11 per diluted share, compared to net income of $3,067,000, or $.06 per diluted share, for the three months ended September 30, 2011. Included in results for the three months ended September 30, 2012 and 2011 were non-cash derivative gains of $10,869,000 and $5,276,000, 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 September 30, 2012, was $2,840,000, or $.04 per diluted share, compared to a pro forma net loss of $2,209,000, or $.04 per diluted share for 2011. Total operating expenses for the three months ended September 30, 2012 were $2,841,000 compared with $2,213,000 for the three months ended September 30, 2011. The Company ended the quarter with $16,184,000 of cash on hand.
For the nine months ended September 30, 2012, the Company reported net income of $13,380,000 or $.19 per diluted share, compared to net income of $419,000, or $.01 per diluted share, for the nine months ended September 30, 2011. Included in results for the nine months ended September 30, 2012 and 2011 were non-cash derivative gains of $21,437,000, and $6,560,000 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 nine months ended September 30, 2012, was $8,057,000, or $.11 per diluted share, compared to a pro forma net loss of $6,141,000, or $.11 per diluted share for 2011. Total operating expenses for the nine months ended September 30, 2012 were $8,057,000 compared with $6,141,000 for the nine months ended September 30, 2011.
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 | Nine Months Ended | |||||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development | $ | 1,374,852 | $ | 1,016,865 | $ | 3,622,800 | $ | 3,045,426 | ||||||||||||
General and administrative | 1,466,049 | 1,196,455 | 4,433,929 | 3,095,877 | ||||||||||||||||
Total operating expenses | 2,840,901 | 2,213,320 | 8,056,729 | 6,141,303 | ||||||||||||||||
Operating loss | (2,840,901 | ) | (2,213,320 | ) | (8,056,729 | ) | (6,141,303 | ) | ||||||||||||
Other income (expense): | ||||||||||||||||||||
Other income | - | - | - | - | ||||||||||||||||
Interest income | 13,061 | 4,778 | 27,842 | 7,539 | ||||||||||||||||
Interest expense | (12,454 | ) | - | (28,147 | ) | (7,150 | ) | |||||||||||||
Derivatives gain | 10,869,209 | 5,275,591 | 21,436,653 | 6,559,835 | ||||||||||||||||
Other income | 10,869,816 | 5,280,369 | 21,436,348 | 6,560,224 | ||||||||||||||||
Net income | $ | 8,028,915 | $ | 3,067,049 | $ | 13,379,619 | $ | 418,921 | ||||||||||||
Net income per share, basic | $ | 0.12 | $ | 0.06 | $ | 0.21 | $ | 0.01 | ||||||||||||
Net income per share, diluted | $ | 0.11 | $ | 0.06 | $ | 0.19 | $ | 0.01 | ||||||||||||
Weighted average number of common shares outstanding, basic | 65,109,037 | 51,889,111 | 62,357,300 | 51,743,138 | ||||||||||||||||
Weighted average number of common shares outstanding, diluted | 74,157,957 | 54,269,856 | 71,734,784 | 54,198,981 | ||||||||||||||||
InVivo Therapeutics Holdings Corp. | ||||||||||
Consolidated Balance Sheets | ||||||||||
As of | ||||||||||
September 30, | December 31, | |||||||||
ASSETS: | Unaudited | |||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 15,549,609 | $ | 4,363,712 | ||||||
Restricted cash | 634,750 | 547,883 | ||||||||
Prepaid expenses | 126,259 | 104,022 | ||||||||
Total current assets | 16,310,618 | 5,015,617 | ||||||||
Property and equipment, net | 2,024,524 | 520,482 | ||||||||
Other assets | 153,014 | 166,139 | ||||||||
Total assets | $ | 18,488,156 | $ | 5,702,238 | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 1,141,267 | $ | 567,195 | ||||||
Loan payable-current portion | 106,911 | 50,578 | ||||||||
Capital lease payable-current portion | 37,353 | 30,724 | ||||||||
Derivative warrant liability | 10,800,855 | 35,473,230 | ||||||||
Accrued expenses | 761,939 | 618,369 | ||||||||
Total current liabilities | 12,848,325 | 36,740,096 | ||||||||
Loan payable-less current portion | 139,750 | 83,794 | ||||||||
Capital lease payable-less current portion | 11,119 | 38,042 | ||||||||
Total liabilities | 12,999,194 | 36,861,932 | ||||||||
Commitments and contingencies | ||||||||||
Stockholders' equity (deficit) | ||||||||||
Common stock, $0.00001 par value, authorized 200,000,000 | ||||||||||
shares at September 30, 2012 and December 31, 2011; | ||||||||||
issued and outstanding 65,635,400 and 53,760,471 shares | ||||||||||
at September 30, 2012 and December 31, 2011, respectively. | 656 | 538 | ||||||||
Additional paid-in capital | 39,925,749 | 16,656,830 | ||||||||
Deficit accumulated during the development stage | (34,437,443 | ) | (47,817,062 | ) | ||||||
Total stockholders' equity (deficit) | 5,488,962 | (31,159,694 | ) | |||||||
` | ||||||||||
Total liabilities and stockholders' equity (deficit) | $ | 18,488,156 | $ | 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 per share for the three months and nine months ended September 30, 2012 and 2011 is provided in the following table:
Three Months Ended | Nine Months Ended | |||||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||||
Pro forma net loss | $ | (2,840,294 | ) | $ | (2,208,542 | ) | $ | (8,057,034 | ) | $ | (6,140,914 | ) | ||||||||
Derivative gain | 10,869,209 | 5,275,591 | 21,436,653 | 6,559,835 | ||||||||||||||||
Reported GAAP net income | $ | 8,028,915 | $ | 3,067,049 | $ | 13,379,619 | $ | 418,921 | ||||||||||||
Pro forma net loss per diluted share | (0.04 | ) | $ | (0.04 | ) | $ | (0.11 | ) | $ | (0.11 | ) | |||||||||
Derivative gain per diluted share | $ | 0.15 | $ | 0.10 | $ | 0.30 | $ | 0.12 | ||||||||||||
Reported GAAP net income per diluted share | $ | 0.11 | $ | 0.06 | $ | 0.19 | $ | 0.01 | ||||||||||||
Weighted average number of common shares outstanding, diluted | 74,157,957 | 54,269,856 | 71,734,784 | 54,198,981 | ||||||||||||||||
InVivo Therapeutics Holdings Corp.
Lauren Mitarotondo, 617-863-5510
lmitarotondo@invivotherapeutics.com
KEYWORDS: United States North America Massachusetts
INDUSTRY KEYWORDS:
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