Investor Presentation

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1 Investor Presentation Developing Innovative Products for Spinal Cord Injury Updated: January 3,

2 Forward-Looking Statements Before we begin, we would like to remind everyone that any statements in this presentation about future expectations, plans and prospects for Holdings Corp. (the Company ), including statements regarding the safety and effectiveness of the Neuro-Spinal Scaffold, the Company s proposal for a randomized controlled trial, the expected timing of providing clarity on a clinical path forward, the establishment of the Neuro- Spinal Scaffold as the first and foundation of spinal cord injury ( SCI ) treatments, the number of patients in the CONTEMPO Registry Study, the status of the clinical program, and other statements containing the words believes, anticipates, targets, plans, expects, and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including risks and uncertainties relating to the Company s ability to initiate, conduct and complete clinical trials; the Company s ability to submit an HDE application and receive regulatory approval for the Neuro-Spinal Scaffold; the impact of achieving the Objective Performance Criterion on the U.S. Food and Drug Administration (the FDA ) approval process; the Company s ability to commercialize its products; 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 the treatment of 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 other factors discussed in the Risk Factors section of our most recent quarterly report on Form 10-Q filed with the Securities and Exchange Commission (the SEC ) and in the Company s other filings from time to time with the SEC. In addition, the forward-looking statements included in this presentation represent the Company s views as of the date hereof and should not be relied upon as representing the Company s views as of any date subsequent to the date hereof. The Company anticipates that subsequent events and developments will cause the Company s views to change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. 2

3 InVivo Pioneering Spinal Cord Injury Therapies Neuro-Spinal Scaffold : an Investigational Product for Acute Spinal Cord Injury (SCI) Acute SCI: Total Estimated Available US Market of $400 million to $1.2 billion No effective treatments available for SCI No direct competitive products in clinical development Humanitarian Device Exemption (HDE) regulatory pathway Encouraging data from INSPIRE study of Neuro-Spinal Scaffold in Thoracic SCI 7 of 16 (43.8%) study patients who have reached the six-month primary endpoint have regained some neurologic function versus the Objective Performance Criterion (study success definition) of 25% INSPIRE enrollment on hold since July 2017 following three patient deaths InVivo is in ongoing discussions with the FDA and has proposed a randomized controlled trial to supplement the existing clinical evidence for the Neuro-Spinal Scaffold World-class Scientific Advisory Board (SAB) Robert Langer, Sc.D. (cofounder) : 1,000+ patents worldwide Richard Roberts, Ph.D. : Nobel Laureate in medicine & physiology V. Reggie Edgerton, Ph.D. : Pioneer of electrostimulation for rehabilitation James Guest, M.D., Ph.D. : Neurosurgeon & stem cell expert 3

4 Financial Information Trading Symbol NVIV Stock Price 1 $0.91 Exchange Market Cap 1 Primary Shares Outstanding 2 Fully Diluted Shares 3 Nasdaq Global Market $31.1 M 34.2 M 41.2 M Avg. Daily Trading Volume (3 mo) 1 203,666 Cash, Cash Equivalents and Marketable Securities on Hand 3 $17.2 M 1 NASDAQ closing price on 1/2/18 2 As of 10/28/17 3 As of 9/30/17; Including the following potentially dilutive securities: warrants, unvested restricted stock units and stock options 4

5 Spinal Cord Injury: An Unmet Clinical Need with No Effective Treatments Unserved patient population with no options Approximately 15,000 new cases of acute SCI per year in US 1 Patients affected by loss of motor, sensory and autonomic (bowel, bladder and sexual) function Only small percentage of patients ever regain function 3 Approximately 282,000 currently live with chronic SCI in US 2 Chronic SCI: >6 months after injury Direct cost of spinal cord injury Cost of care for the first year post-sci: $340K - $1.0M+ 2 Net present value of the cost for a quadriplegic injured at 25 for life: $4.6M+ 2 We seek to establish the Neuro-Spinal Scaffold as the foundation of the standard of care for acute SCI 1. Company estimate derived from: Selvarajah et al., J. Neurotrauma (2014), Jain et al., JAMA (2015), Saunders et al., Top Spinal Cord Inj. Rehabil. (2015) 2. National Spinal Cord Injury Statistical Center, Facts and Figures at a Glance. Birmingham, AL: University of Alabama at Birmingham, Guidelines for the conduct of clinical trials for spinal cord injury as developed by the ICCP panel: spontaneous recovery after spinal cord injury and statistical power needed for therapeutic clinical trials. Spinal cord (2007). 5

6 Spinal Cord Injury Patient Distribution AIS A is the Largest Patient Segment A 3,400 Cervical B 1,200 15,000 Acute SCIs per year 1 Cervical 9,200 C 1,200 D 3,400 Thoracic 3,600 Lumbar 2,200 Thoracic A 2,400 American Spinal Injury Association Impairment Scale (AIS) Grade A B C D E B C D Description (Abridged) Complete No motor or sensory function preserved in sacral segments (S4-5) Sensory Incomplete Sensory but not motor function preserved below level of injury and includes sacral segments Motor Incomplete Motor function preserved below level of injury; voluntary anal contraction OR sparing of motor function 3 levels below injury Motor Incomplete Similar to AIS C but with at least half of key muscles below injury functioning against gravity INSPIRE Study Lumbar Normal = Expansion Opportunities 1. Company estimate derived from: Selvarajah et al., J. Neurotrauma (2014), Jain et al., JAMA (2015), Saunders et al., Top Spinal Cord Inj. Rehabil. (2015) Other projections based on company estimates *Assumes equal distribution among all ages & does not take into consideration INSPIRE inclusion/exclusion criteria 6

7 Neuro-Spinal Scaffold for Acute SCI Designed to Promote Healing in Spinal Cord Injury 7

8 Evolution of Acute Management of Spinal Cord Injury Non-surgical management: Traction and bedrest (prevent additional trauma) Surgical management: Bony decompression and spinal column alignment/stabilization Minimize secondary injury and provide support to the spine Standard of care has transitioned to early decompressive surgery (<24-48 hours postinjury) in attempts to remove ongoing spinal cord compression Despite significant advances in surgical repair to the spinal column, modern day acute management of SCI does not address repair of the spinal cord 8

9 InVivo s Pioneering Clinical Approach for Acute SCI: The Neuro-Spinal Scaffold Proprietary, highly porous biopolymer Neuro-Spinal Scaffold Composition: PLGA is the biodegradable skeleton along which cells can grow Poly-L-Lysine promotes cellular adhesion Company images 9

10 Progression of Acute SCI to Post-Traumatic Cavity in Contusion Injuries Spinal Cord Injury Hemorrhage & Spinal Cord Swelling Reduced Blood Flow & Ischemic Necrosis Cavity Development & White Matter Reduction Chronic injury and mature cavity formation Time Normal 2 hours after SCI 24 hours after SCI 12 weeks after SCI Highly vascularized gray matter White matter Histology from rat contusion model of SCI Acute hemorrhage & necrosis Liquefactive necrosis Mature cavity Poster D8-06; National Neurotrauma Society 2015 Symposium; Santa Fe, NM. 10

11 First Neuro-Spinal Scaffold Implantation in Human Contusion Injury 11

12 Neuro-Spinal Scaffold Mechanism of Action Preservation of white matter and reduction of cyst formation via appositional healing (i.e., spinal cord architecture) Butterfly Bandage Neuro-Spinal Scaffold 2D Wound Healing Internal 3D Wound Healing Neural regeneration through the formation of neuropermissive remodeled tissue Remyelination of segmentally demyelinated white matter axons by Schwann cells 12

13 The Neuro-Spinal Scaffold Preserves Macroscopic Spinal Cord Architecture Rat Acute Spinal Cord Contusion Injury (at 12 weeks) Control Neuro-Spinal Scaffold Control Cyst Scaffold Cavity Volume (mm 3 ) Cyst Reduction White Matter Sparing Remodeled Tissue Control * Scaffold Neuro-Spinal Scaffold White Matter Width (mm) 0.6 * Control Scaffold Neuro-Spinal Scaffold Remodeled Tissue Volume (mm 3 ) Control * Scaffold Neuro-Spinal Scaffold *P<0.05 Poster D8-06; National Neurotrauma Society 2015 Symposium; Santa Fe, NM. 13

14 The Neuro Spinal Scaffold Increases Remodeled Tissue Supporting Neural Regeneration Rat Acute Spinal Cord Contusion Injury (at 12 weeks) Control Minimal neuro-permissive matrix Neuro-Spinal Scaffold Remodeled tissue with extensive neuro-permissive matrix Neuro-permissive matrix supports neural regeneration Company images 14

15 Neural Regeneration and Remyelination with Schwann Cells after Neuro-Spinal Scaffold Implantation Contusion Injury Central epicenter (a) and white matter (b) Epicenter Schwann Cells aid neural regeneration White Matter Schwann Cells restore signal transduction Rat Acute Spinal Cord Contusion Injury (at 12 weeks) Inset: Schwann cells ensheathing axons Oligodendrocytes Schwann Cells 15

16 Encouraging Data in Two Major Types of Spinal Cord Injury Closed (Contusion) Injury Open (Compound) Injury Cavity Laceration/ Maceration Cavity Outer region of cord is preserved and cord appears intact externally Injury leads to cavity filled with necrotic material Pressure builds inside the cord, which may lead to further injury Preclinical model: contusion injury Outer region of cord is breached and injury is visible externally Myelotomy (cutting into the cord) may not be required Minimal added pressure inside cord Preclinical model: hemicordectomy Layer RT et al. Neurosurgery. Manuscript accepted. 16

17 Neuro-Spinal Scaffold Promotes Neural Regeneration and Functional Recovery Increased remodeled tissue Primate Hemicordectomy Model (at 3 Months) Neural regeneration Myelin basic protein stained axons in remodeled tissue Improved functional recovery Neuro-Spinal Scaffold *P<0.05 Hemicordectomy Model Slotkin JR et al. Biomaterials. In press. 17

18 Neuro-Spinal Scaffold for Acute SCI Clinical & Regulatory Development Plans 18

19 Humanitarian Device Exemption (HDE): A Lower Approval Threshold Provides less burdensome regulatory process Lower approval threshold: demonstrate safety and probable benefit (rather than effectiveness) Probable benefit: a classic risk/benefit analysis Device does not expose patients to an unreasonable or significant risk Probable benefit to health from the use of the device outweighs the risk In Dec 2016, 21 st Century Cures Act increased ceiling of qualified patient population from 4,000 to 8,000 patients per year InVivo s initial Humanitarian Use Device population: thoracic and cervical SCI patients with complete paralysis (AIS A)* Cures Act may allow InVivo to take advantage of the HDE pathway for patients with incomplete paralysis (AIS B and AIS C)* Would require applying for expanded HUD and conducting a separate study Cures Act also requires that FDA publish draft guidance that defines the criteria for establishing probable benefit by mid-2018 *Excludes penetrating injuries such as gunshot or knife injuries 19

20 The INSPIRE Study InVivo Study of Probable Benefit of the Neuro-Spinal Scaffold for Safety and Neurologic Recovery in Subjects with Complete Thoracic AIS A Spinal Cord Injury Clinical study in support of an HDE application Primary endpoint: improvement in ASIA Impairment Scale (AIS) grade by 6 months Additional endpoints: sensory and motor scores, bladder & bowel function, Spinal Cord Independence Measure, pain, quality of life Assessments at 1, 2, 3, 6 (primary), 12 and 24 months Objective Performance Criterion (study success definition) at least 25% of patients improve AIS grade by 6 months 20

21 Clinical Path Forward Enrollment on hold following three patient deaths in INSPIRE Although InVivo and the respective site principal investigators do not believe these deaths were related to the Neuro-Spinal Scaffold, the company is in communication with FDA to ensure that these cases have been comprehensively evaluated and to ensure all appropriate risk mitigations have been implemented As part of ongoing discussions with the FDA, InVivo has proposed a randomized controlled trial to supplement the existing clinical evidence for the Neuro-Spinal Scaffold InVivo does not expect to reopen enrollment in INSPIRE Expect to provide additional clarity on clinical path forward in Q

22 INSPIRE AIS Conversion Rate Versus Objective Performance Criterion Published historical benchmarks for AIS conversion rates were used to establish the OPC Complete (AIS A) Thoracic SCI AIS Conversions 50% 40% 36.8% 43.8% = 7/16 evaluable patients have converted at 6 months 30% 20% 15.6% 15.5% OPC = study success 3 (25%) 10% 0% EMSCI (n=256, 6 months) 1 2 Model Systems (n=194, 12 months) INSPIRE All Patients (n=19, 6 months) INSPIRE Evaluable Patients (n=16, 6 months) INSPIRE primary endpoint and OPC are based on evaluable patients at 6 months. 1 Zariffa et al., Spinal Cord (2011); European Multicenter Study about Spinal Cord Injury (EMSCI) 2 Lee et al., J. Spinal Cord Med (2014); Spinal Cord Injury Model System (US) 3 Approval is not guaranteed if the OPC is met and HDE approval may still be obtained if OPC is not met if probable benefit outweighs the risk. 22

23 Neurologic Outcomes in Evaluable Patients to Date Date of Implant Sex Age (Pediatric 21 yoa) Neurologic Level of Injury Injury Type Time to Implant Neurologic Outcome at Primary Endpoint Note: Three additional subjects died within two weeks of implantation. Neurologic Outcome to Date Oct M Adult T11 Closed 9 hrs. AIS C Remains AIS C at 24 months Jan F Adult T7 Open 46 hrs. AIS A Remains AIS A at 24 months Jun M Adult T4 Closed 83 hrs. AIS B Converted to AIS C at 24 months Aug M Adult T3 Closed 53 hrs. AIS A Remains AIS A at 24 months Sept F Pediatric T8 Open 69 hrs. AIS B AIS B at 6 months* Feb M Pediatric T10 Open 9 hrs. AIS B Remains AIS B at 12 months Mar M Adult T3 Closed 21 hrs. AIS A Remains AIS A at 12 months May 2016 M Adult T4 Closed 40 hrs. AIS B Converted to AIS C at 12 months Nov M Adult T8 Open 38 hrs. AIS A Remains AIS A at 12 months Dec M Pediatric T10 Open 22 hrs. AIS A Remains AIS A at 12 months Jan M Adult T12 Closed 68 hrs. AIS B AIS B at 6 months Mar M Adult T2 Closed 80 hrs. AIS A AIS A at 6 months Mar F Adult T9 Open 30 hrs. AIS A AIS A at 6 months Apr M Adult T4 Closed 47 hrs. AIS A AIS A at 6 months May 2017 M Adult T9 Closed 77 hrs. AIS A AIS A at 6 months Jun F Adult T6 Closed 21 hrs. AIS C AIS C at 6 months * Patient lost to follow-up after primary endpoint visit 23

24 Motor Improvements in Patients with Low Thoracic Injuries (T11-T12) First patient (implanted October 2014) improved from T11 complete AIS A to AIS C at 1 month Continued motor improvement from months 6 to 12 Patient implanted Jan 2017 demonstrated motor improvement and improved from T12 complete AIS A to AIS B at 6 months LEMS Lower Extremity Motor Score (LEMS)* Hip movement Knee movement Improved knee movement Palpable hip contractions Months Post-Injury Palpable ankle contractions Knee movement Hip movement & palpable knee contractions First Patient (T11) Recent Patient (T12) *Note: assessments of ankle muscles were not made on the Recent Patient (T12) at 0 and 1 months due to immobilization; these muscles scored 0 at 2 months 24

25 Contemporary Thoracic SCI Registry Study ( CONTEMPO Registry Study ) InVivo plans to complement Neuro-Spinal Scaffold clinical studies with the CONTEMPO Registry Study A comprehensive evaluation of the recent natural history of acute, complete thoracic SCI patients Christopher & Dana Reeve Foundation North American Clinical Trials Network (NACTN) Registry Plan to utilize additional existing registries (e.g., Model Systems, EMSCI) Match patient characteristics to INSPIRE (to the extent possible) Evaluate only patients injured since 2006 CONTEMPO Registry Study designed to provide contemporary benchmarks for INSPIRE Estimated number of patients in CONTEMPO Registry Study:

26 Neuro-Spinal Scaffold Commercial Opportunities Spinal Cord Injury Type US Incidence 1 US Total Available Market 1 Complete (AIS A) Thoracic 2 1,950 $100 - $300 M/yr Complete (AIS A) Cervical 2 2,750 $150 - $450 M/yr AIS A, B and C SCI Thoracic & Cervical 2 8,000 $400 M - $1.2 B/yr Commercial Strategy Establish InVivo commercial organization Targeted relationship development with Level I/II trauma centers, neurosurgeons and payers Leverage clinical data and KOL support to become foundation of Standard of Care Reimbursement Strategy Assist providers in achieving favorable coverage and payment so that reimbursement is not a deterrent to appropriate patient access Advocate for a specific CPT code (procedure payment for neurosurgeons), new technology add-on payments, and clinical guideline inclusion based on outcomes and KOL support Continue to leverage established payer advisory board (PAB) 1. Company estimates. 2. Excludes penetrating injuries 26

27 Improved AIS Grade Leads to Reduced Lifetime Rehospitalization Costs Burden of Illness manuscript published: Relationship of ASIA Impairment Scale (AIS) Grade to Post-Injury Hospitalization and Costs in Thoracic Spinal Cord Injury 1 Net Present Value of Lifetime Hospitalization Costs: 1 Dukes et al., Neurosurgery (2017) 27

28 Neuro-Spinal Scaffold IP and Conclusions 28

29 Neuro-Spinal Scaffold Intellectual Property Portfolio Core technology covering the Neuro-Spinal Scaffold licensed from MIT and Boston Children s Hospital US composition and methods patent 8,858,966 (expires 2027) Covers composition of the Neuro-Spinal Scaffold Japanese, Australia, Canada, and South Korea patents issued European patent application in prosecution Broader US composition patent 9,101,695 (expires 2027) Covers broad array of biodegradable and/or bioabsorbable polymeric implants Japanese and Australia patents issued; others in prosecution Broader US methods patent 9,440,008 (expires 2027) Covers methods of treatment of compression or contusion spinal cord injuries with a broad array of biodegradable and/or bioabsorbable polymeric implants Includes the Neuro-Spinal Scaffold Additional layer of protection against potential infringers 29

30 Observations from INSPIRE and Upcoming Corporate Milestones Key INSPIRE Observations to Date Demonstrated surgical feasibility of acute Neuro-Spinal Scaffold implantation Reported AIS conversion rate that exceeds published natural history rates and Objective Performance Criterion Observed delayed conversions at 12 and 24 months Seek to use learnings from INSPIRE to mitigate risk in proposed randomized study Upcoming Corporate Milestones InVivo is in ongoing discussions with the FDA and has proposed a randomized controlled trial to supplement the existing clinical evidence for the Neuro-Spinal Scaffold Expect to be able to provide additional clarity on clinical path forward in Q