InVivo Therapeutics Holding Corp. (OTC:NVIV) closed a private placement of 13 million units of stock and warrants, topping its $10 million goal with gross proceeds of $13 million.
In October the Cambridge, Massachusetts-based spinal implant developer closed an offer of 10.5 million units, consisting of a unit of common stock and a five-year warrant exercisable at $1.40 after NVIV stock tops $2.80 per share for 20 days. That offering netted it about $9 million.
But investors snapped up another 2.5 million units in the offering, which followed a reverse merger that took InVivo’s stock public.
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A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
“We are very pleased with how our financing was received by investors and see it as vote of confidence in the promise of our groundbreaking technologies,” CEO Frank Reynolds said in prepared remarks.
“InVivo represents a beacon of hope within the [spinal cord injury] community,” added Adam Stern, senior managing director of Spencer Trask Ventures Inc., now a member of InVivo’s board. “The company’s groundbreaking technologies, which incorporate multiple strategies involving biomaterials, FDA approved drugs, growth factors, and human neural stem cells, offer the first potential treatment for SCI that addresses the underlying pathology of these injuries, rather than just the symptoms. The successful close of this financing is a critical component of realizing this potential.”
The private placement also included $500,000 in bridge debt conversion, the repayment of the accelerator loan InVivo landed from the Mass. Life Sciences Center last year (earlier this year, Good Start Genetics was the first company to pay back its $500,000 accelerator loan). InVivo said it will also use the proceeds for working capital, R&D and “fixed asset additions.” When it won the accelerator loan in April 2009, Reynolds told MassDevice that the loan would be used to build a manufacturing facility near the UMass-Lowell campus.
In November, the company inked a lease for a manufacturing and development plant in Medford, Mass., as it gears up for possible human clinical trials of its regenerative spine treatment.
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In December 2009, InVivo applied for an investigational device exemption from the Food & Drug Administration to move from primate testing to human trials. Today the company said it expects to begin the trial as soon as it lands FDA approval.
The InVivo treatment uses a scaffold made of a biodegradable polymer designed to act as a “synthetic extracellular matrix” and to reduce scar formation called astrogliosis. Looking to speed up its trip through the regulatory wilds at the FDA, the company said it will submit for clearance for the scaffold device alone. Down the road, it may apply for additional clearances for using the device with anti-inflammatory drugs or stem-cell-based compounds.
