There are few things more attractive to an investor than a company that has no direct competition and on Monday InVivo Therapeutics (OTCBB: NVIV) all but earned that title after a stunning decision by Geron Corporation (NASDAQ: GERN) to immediately discontinue further development of their stem cell research for the purpose of treating spinal cord injuries (SCI). With news of Geron’s decision investors have been pouring into NVIV, sending shares from a low of 1.04 last week to a high of 1.96 on Wednesday with trading volume of more than 20x their average. NVIV has added to that success with shares climbing to a high of 2.23 on Thursday and are currently holding strong around the 1.95 level.
The exit of Geron from the landscape of SCI treatment effectively leaves NVIV as the clear frontrunner in market that has been estimated to be in the neighborhood of $17 billion. Obviously GERN’s decision should trigger some questions among investors, namely why would a company that had recently announced plans to invest more than $24 million over three years to develop their SCI treatment suddenly back out? While Geron has insisted to their shareholders that they believe their efforts would be better spent developing their “first-in-class” oncology programs the decision has some wondering if the company realized that their stem cell approach to treating SCI was not as beneficial as once hoped.
Fortunately for shareholders of NVIV the reasoning behind Geron’s decision is irrelevant as they continue to advance their biopolymer scaffold device (BSD) ever closer to human trials. Having delivered impressive results from preclinical studies in rats and primates NVIV appears to be on the verge of getting the green light from the FDA to initiate human trials.
To be truthful the results of those preclinical studies were beyond impressive, each of the monkeys that were treated with the scaffolding device were walking within 12 weeks of paralysis. An important fact concerning this study was it involved African Green Monkeys whose physiological anatomy and neurophysiology characteristics relating to how the spinal cord works and functions is nearly identical to that of humans.
So impressive were NVIV’s studies that Edward Wirth, a renowned leader in the field of regenerative medicine, left his position as medical director of regenerative medicine with Geron last October to become Chief Science Officer at InVivo. Wirth’s move to NVIV is a powerful statement for the company as it gives further credibility to the work they are doing in the field of SCI treatment, particularly their biopolymer scaffold device.
Now it’s up to the FDA to give NVIV the green light to advance to human trials and the company is expected to meet with the agency in December to finalize the design for that trial. The goal at this point is to enroll a total of ten patients with endpoints in improvement of function one to two levels below injury. Initially NVIV will start the program with two patients and then provide preliminary data in two months following initiation, assuming positive data the FDA would then allow NVIV to expand the trial to the next eight patients.
There are a number of factors that make this trial attractive to investors and several of those factors involve time. This will not be a long, drawn-out trial; it is expected to last three to four months with the start date expected in early 2012. In addition to the short trial, NVIV’s BSD is being developed as a medical device and not a pharmaceutical, making the path to regulatory approval a little bit easier.
What the BSD is intended to do is essentially prevent secondary injury that results in paralysis. The belief goes that most people who suffer paralysis were not paralyzed by the initial injury but rather from a number of secondary injuries that occurred following a state of “spinal shock.” Those secondary injuries are generally caused inflammation, bleeding and scarring during the stages of spinal shock. NVIV, and many others, believe that by stabilizing the spinal cord in a manner to promote healing shortly after the initial injury long-term paralysis will not occur.
NVIV’s BSD is designed as a biodegradable device that is fitted to stabilize the spinal cord after initial injury. The device remains in the body for about two months and actually dissolves through urination, eliminating the need for surgical removal.
Given the belief that approximately 90% of SCI patients weren’t initially paralyzed after an injury but only became paralyzed after secondary injuries the scaffolding device developed by NVIV could be a life-changing treatment on a massive scale.
The BSD is not the only thing NVIV is working on as they also continue to work with the FDA to submit additional data around the company’s drug releasing hydrogel for SCI. The company is preparing the primate data for submission to the agency and seeks to file an IDE in early 2012. NVIV is also looking to file another IDE around the middle of 2012 for peripheral nerve damage and as life-changing as the BSD could become it is NVIV’s expansion beyond just SCI treatment into peripheral nerve damage that could provide shareholders with the real financial boon.
