OTC:NVIV Reasons To Be Bullish SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR and to view our disclaimer.
On December 16, 2014, InVivo Therapeutics (NVIV) released some very positive news with respect to the company's going pilot study (NCT02138110) testing InVivo's Neural-Spina Scaffolding ("NSS") for the treatment of complete traumatic spinal cord injury. It's primarily a safety study, with investigators and the FDA looks for signs that the NSS does no additional harm to a completely paralyzed patient post a traumatic spinal cord injury.
The primary endpoint is incidence of all Adverse Device Effects ("ADEs") of any kind / seriousness six months post surgery. The trial was originally designed with several safety "check ups" as individual patients were enrolled and treated. The trial also had a pretty strict enrollment criteria when initiated. For example, the original protocol called for a total of five patients between 18 and 55 year old with traumatic spinal cord injury along the thoracic region on the spine (T3-T11). Patients had to have an ASIA-A complete impairment confirmed by neurosurgeon occurring within past 10 days prior to surgery.
Following the surgery, patients were followed closely for three months; and only after three months with no safety issues or ADEs would the FDA allow the second patient to be enrolled. This process was expected to take place for all five subjects - meaning enrollment could have taken as long as 15 months from first to last patient, with 21 months to initial top-line data. The secondary endpoint of the study, which include AIS score changes from baseline, occurred at three months, six months, and 12 months post surgery.
The news this morning dramatically speeds up the potential enrollment of the study. Under the new plan, barring significant safety issues, InVivo will submit two months of safety data to the FDA for the first subject enrolled in October instead of three months. This means open enrollment for the second subject should commence in mid-January. Upon enrollment of the second subject, InVivo will submit to the FDA one month of safety data for that subject together with the previous subject’s data. Then, concurrent enrollment for the remaining three subjects will then begin (about two months after the second subject is enrolled). There will be no additional mandatory holds between enrollment of the final three subjects. This news take the enrollment period from 15 months noted above to potentially as low as 6 months!
And this isn't the first good news InVivo received since the start of the trial. On October 29, 2014, InVivo announced that the FDA had approved various changes to the protocol expanding the number of allowable clinical sites from six to 20, along with broadening the eligibility criteria. The new eligibility criteria changes include:
- The upper end of the age range has been increased from 55 to 65
- The spinal cord injury level has been expanded from T3-T11 to T3-T12/L1
- The enrollment window has been extended from 10 to 21 days post injury
- The Body Mass Index upper limit has been increased from 35 to 39
On November 7, 2014, we wrote an article providing a brief update on InVivo Therapeutics. In the article, we noted that the first patient was enrolled in the company's pilot study of its NSS device for the treatment of complete traumatic spinal cord injury on October 15, 2014. The subject, who we now know to be 25 year old Jordan Fallis of Arizona, was the first human to receive InVivo's NSS device at the Barrow Neurological Institute at St. Joseph’s Hospital and Medical Center in Phoenix, AZ.
November 11, 2014, Barrow press released news of the surgery, creating a bit of a media frenzy over the next few days. We think Barrow waited 27 days to press release news of the surgery (and Jordan's name) in order to be confident no serious ADEs occurred during the first month. We think this is a very good sign of things to come. Back in October, Dr. Nicholas Theodore, Chief of Spinal Surgery, Barrow Neurosurgical Institute and Medical Director of the Neurological Trauma Program performed the surgery and commented that the procedure went smoothly and the patient was doing well following surgery.
We are now over two months since the first surgery and to date there has been no major safety issues or serious ADEs reported. In fact, there is anecdotal evidence of efficacy through media interviews and a comment from Mr. Fallis himself stating, "I've already started getting feeling back lower..." If Jordan is stating that he is getting some feeling back at one month, we are very excited to see his progress over the next year. Those interested in following Jordan's recovery and donating to help pay for his medical costs can visit a "Go Fund Me" page set up by Sandy Fallis.
Regardless, we think today's news is very positive for InVivo because it shows the company has a good working relationship with the FDA, there have been no issues to date that would impede development of NSS, and credibility is improving for management. The FDA is an enigma at times, but it seems clear to us that with InVivo and the NSS, the FDA is keeping a close eye on the study and doing all reasonable things to facilitate advancement of the device.
We remind investors that InVivo received a Humanitarian Use Device (HUD) designation for the NSS in April 2013. Management believes the NSS- is a potential $500 million product in acute spinal cord injury. We concur. Enrollment criteria in the IDE trial is strict, even with the expanded inclusion criteria. However, we believe if the NSS works, then neurosurgeons will use the device in almost all non-penetrating spinal cord injuries, regardless of things like ASIA impairment level and injury location. This brings the market up from roughly 1,600 patients per year to more like 6-8,000 patients per year. Of course, as of now we are excluding the nearly 300,000 American’s with injuries greater than 10 days old. In time, InVivo may expand the use of the NSS to these “chronic” patients, perhaps in combination with neural/spinal cord stem cells.
According to the NSCISC's February 2013 report "Spinal Cord Injury Facts and Figures at a Glance," (i) during the first year, average "cost of care" ranges from $340,787 to $1,044,197, depending on the severity of the injury, (ii) the net present value to maintain a quadriplegic injured at age 25 for life is $4,633,137, and (iii) the NPV to maintain a paraplegic injured at age 25 for life is $2,265,584. Because these costs place a tremendous financial burden on families, insurance providers, and government agencies, and because of the HUD designation, we believe a cost of $100,000 is fair (and actually quite conservative).
As for commercialization, according to industry statistics, nearly 80% of all spinal cord injuries are treated at 75 Level 1 trauma centers around the U.S. We believe the company can effectively target these 75 centers with 10 to 20 direct representatives. InVivo’s scaffolding is designed to complement the current standard of care for an acute spinal cord injury, not replace it. The sales forced, armed with pivotal human efficacy data and promoting the product under that type of marketing message, should have enormous success.
We are being aggressive here because the scaffolding is designed to be complementary to standard-of-care or new treatment options that might incorporate the use of neural stem cells. We expect next-generations variations of the scaffolding will be designed to specifically incorporate advancing regenerative medicine technologies. As such, $500 million seems easily doable – assuming the NSS works.
Reasons To Be Bullish
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