Investor Presentation

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1 1 Investor Presentation Developing Innovative Products for Spinal Cord Injury Updated: August 10, 2017

2 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 the Company, including statements regarding the safety and effectiveness of the Neuro-Spinal Scaffold, progress toward achievement of Objective Performance Criterion (OPC) for The INSPIRE Study, the expected timing of full enrollment in the study, and submission of the Humanitarian Device Exemption, 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 opening of new clinical sites, the expansion of the Cervical SCI 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 successfully re-open for enrollment and to enroll additional patients; the Company s ability to complete the INSPIRE Study, submit an HDE application, and receive regulatory approval for the Neuro-Spinal Scaffold; the impact of achieving the OPC on 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 annual report on Form 10-Q filed with 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.

3 3 InVivo Pioneering Spinal Cord Injury Therapies Portfolio of Product Candidates Targeting Unserved Spinal Cord Injury (SCI) Market Acute SCI Thoracic: Neuro-Spinal Scaffold (pivotal study) Acute SCI Cervical: Neuro-Spinal Scaffold (pilot study) Chronic SCI: Localized gene therapy platform (research stage) 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 Pivotal study (INSPIRE) underway for Neuro-Spinal Scaffold Target full HDE submission in H FDA granted Humanitarian Use Device (HUD) designation Compelling early data from 20-patient pivotal study of Neuro-Spinal Scaffold 6 of 11 (54.5%) 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% A seventh patient has had an AIS grade improvement before the six-month primary endpoint visit 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

4 4 Financial Information Trading Symbol NVIV Stock Price 1 $1.80 Exchange Market Cap 1 Primary Shares Outstanding 2 Fully Diluted Shares 3 NasdaqGM $57.96 M 32.2 M 39.6 M Avg. Daily Trading Volume (3 mo) 1 394,179 Cash and Marketable Securities on Hand 3 $21.8 M Projected 2017 monthly cash burn of approximately $1.9 M 1 As of 8/8/17 2 As of 8/1/17 3 As of 6/30/17

5 Spinal Cord Injury: An Unmet Clinical Need with No Effective Treatments Unserved patient population with no options 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 3 282,000 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 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 7 Neuro-Spinal Scaffold for Acute SCI Designed to Promote Healing in Spinal Cord Injury

8 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 8

9 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. 9

10 First Neuro-Spinal Scaffold Implantation in Human Contusion Injury 10

11 11 Neuro-Spinal Scaffold Mechanism of Action Promotion of drainage by preventing compartmentalization Preservation of white matter and reduction of cyst formation via appositional healing (i.e., spinal cord architecture) Improves functional recovery Butterfly Bandage Neuro-Spinal Scaffold 2D Wound Healing Internal 3D Wound Healing Neural regeneration through the formation of neuro-permissive remodeled tissue Remyelination of segmentally demyelinated white matter axons by Schwann cells

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

13 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 13

14 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 14

15 Compelling Early 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. 15

16 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. 16

17 17 Neuro-Spinal Scaffold for Acute SCI Clinical & Regulatory Development Plans

18 Humanitarian Device Exemption (HDE): A Lower Approval Threshold Provides simpler 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 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 18

19 19 Demonstrating Safety and Probable Benefit: The INSPIRE Study: The Pivotal Trial for HDE Approval 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 20-patient pivotal 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 Objective Performance Criterion (study success definition) at least 25% of patients improve AIS grade by 6 months INSPIRE enrollment halt currently in effect Three patient deaths in INSPIRE, each deemed unrelated to the Neuro-Spinal Scaffold or implantation procedure by the respective site s Principal Investigators Following discussions with the company s independent Data Safety Monitoring Board (DSMB), we elected to implement a temporary halt to enrollment The FDA responded formally with its recommendations; we are analyzing the recommendations and formulating a response that will include a protocol amendment

20 20 Establishing the Objective Performance Criterion (OPC): 25% AIS Grade Conversion at 6 months Published historical benchmarks for AIS conversion rates were used to establish the OPC Complete (AIS A) Thoracic SCI AIS Conversions 60% 50% 40% 30% 20% n = % 15.5% 54.5% = 6/11 patients have converted at 6 months 6 conversions at 6 months 1 conversion before 6 months 5 not converted at 6 months 4 not converted, < 6 months follow-up 16 patients in follow-up OPC = study success 3 (25%) 10% 0% EMSCI (6 months) Model Systems (12 months) 1 2 INSPIRE (6 months) 1 Zariffa et al., Spinal Cord (2011); European Multicenter Study about Spinal Cord Injury (EMSCI); n = Lee et al., J. Spinal Cord Med (2014); Spinal Cord Injury Model System (US); n = 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.

21 Compelling Neurologic Outcomes to Date Sex Age* Neurologic Level of Injury Injury Type Time to Implant Note: Three subjects passed away with the cause of death deemed unrelated by the investigators to Neuro-Spinal Scaffold or implantation Neurologic Outcome to Date 1 M Adult T11 Closed 9 hrs. Converted to AIS C at 1 month 2 M Adult T4 Closed 83 hrs. Converted to AIS B at 1 month, AIS C at 24 months** 3 F Pediatric T8 Open 69 hrs. Converted to AIS B at 6 months 4 M Pediatric T10 Open 9 hrs. Converted to AIS B at 2 months 5 M Adult T4 Closed 40 hrs. Converted to AIS B at 3 months, AIS C at 12 months** 6 M Adult T12 Closed 68 hrs. Converted to AIS B at 6 months 7 F Adult T6 Closed 21 hrs. Converted to AIS C at 1 month 8 F Adult T7 Open 46 hrs. Remains AIS A at 24 months 9 M Adult T3 Closed 53 hrs. Remains AIS A at 12 months 10 M Adult T3 Closed 21 hrs. Remains AIS A at 12 months 11 M Adult T8 Open 38 hrs. Remains AIS A at 6 months 12 M Pediatric T10 Open 22 hrs. Remains AIS A at 6 months 13 M Adult T2 Closed 80 hrs. Remains AIS A at 3 months 14 F Adult T9 Open 30 hrs. Remains AIS A at 3 months 15 M Adult T4 Closed 47 hrs. Remains AIS A at 3 months 16 M Adult T9 Closed 77 hrs. Remains AIS A at 3 months *Pediatric defined as patients age 21 and under **Having assessments of motor improvements occurring one or two years post-implantation is uncommon and may be indicative of prolonged neural repair 21

22 34 INSPIRE Sites Across U.S., Canada and the U.K.* , 31 27, 28 25, 26 22, 23, 24 20, UC San Diego Medical Center 8. UNM Hospital 15. Goodman Campbell 22. Penn Presbyterian 29. Rhode Island Hospital 2. Keck Hospital of USC 9. Ben Taub Hospital 16. U of L Hospital 23. Thomas Jefferson U Hospital 30. Beth Israel Deaconess 3. UC Davis Medical Center 10. KU Medical Center 17. Carolinas Medical Center 24. Cooper Neurological Institute 31. Brigham & Women s 4. OHSU 11. UI Hospital and Clinics 18. Vidant Medical Center 25. Toronto Western Hospital 32. UC Memorial Health 5. Foothills Medical Centre 12. Barnes Jewish Hospital 19. UVA Health System 26. St. Michael s Hospital 33. James Cook U Hospital 6. Barrow Neurological Institute 13. Froedtert Hospital 20. Allegheny General Hospital 27. Rutgers NJ Medical School 34. Stanford Medicine 7. Banner Health (UA) 14. Northwestern Memorial 21. UPMC Presbyterian 28. Mount Sinai Hospital *As of July 31,

23 23 Leading Neurosurgeons Are Encouraged in an Area of Significant Unmet Medical Need It is exciting and promising when a patient who is classified as a complete spinal cord injury becomes classified as incomplete. This is a relatively unusual occurrence and gives much more potential for further recovery. Domagoj Coric, M.D. Chief of Neurosurgery Carolinas Medical Center INSPIRE has provided new insights into acute spinal cord injury pathology, allowing for the application of the Neuro-Spinal Scaffold as a potential new treatment modality for complete spinal cord injury. InVivo is advancing a new direction in spinal cord injury therapy. It is bold, but may open the door for new approaches in an area that remains without effective treatment. Michael Fehlings, M.D., Ph.D. Director, Spinal Program Toronto Western Hospital James Guest, M.D., Ph.D. Professor, Clinical Neurosurgery University of Miami It has been encouraging to watch the INSPIRE study results unfold. We have amassed a wealth of knowledge and I look forward to sharing key insights with the neurosurgical community. Nicholas Theodore, M.D. Director, Neurologic Spine Center Johns Hopkins

24 24 Demonstrating Safety and Probable Benefit: Contemporary Thoracic SCI Registry Study ( CONTEMPO Registry Study *) FDA has recommended inclusion of a concurrent control group As an alternative, InVivo will complement the INSPIRE Study 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 will provide matched, contemporary benchmarks for INSPIRE Estimated number of patients in CONTEMPO Registry Study: * Final protocol submitted to FDA

25 Motor Improvements in Patients with Low Thoracic Injuries (T11-T12) LEMS 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 Recent patient (implanted Jan 2017) demonstrated motor improvement and improved from T12 complete AIS A to AIS B at 6 months 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 25

26 26 The Cervical Spinal Cord Injury Study Received Investigational Testing Authorization from Health Canada to conduct Cervical SCI Study in March 2017 The Cervical SCI Study will evaluate the safety and feasibility of the Neuro-Spinal Scaffold in patients with AIS A injuries at C5-T1 Endpoints: AIS conversion, Upper Extremity Motor Score (UEMS), Graded Redefined Assessment of Strength, Sensibility and Prehension (GRASSP) Complete cervical SCI patients are the most severely injured of all SCI patients Compared to the thoracic spinal cord, each level of the cervical spinal cord region has substantial functional impact Any neurological improvement could make a significant difference in the quality of life of a cervical SCI patient

27 Neuro-Spinal Scaffold A Robust Clinical Development Portfolio 27 Acute Complete (AIS A) Thoracic SCI via HDE Target INSPIRE completion of enrollment in H Target Full HDE Submission in H Module 1 (Nonclinical): Submitted in Q Module 2 (Manufacturing): Q Module 3 (Clinical): H Acute Complete (AIS A) Cervical SCI via HDE Initiated Cervical SCI Study in Canada in March 2017 Planned expansion into US FDA has requested additional risk mitigation strategies and data from the INSPIRE trial before US study approval Acute Incomplete (AIS B, AIS C) SCI via HDE Potential for HDE pathway as a result of recent increase in incidence ceiling from 4,000 to 8,000 Would require applying for expanded HUD and conducting a separate study

28 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 organizations: US/Canada 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 28

29 Improved AIS Grade Leads to Reduced Lifetime Rehospitalization Costs 29 Burden of Illness manuscript accepted for publication: Relationship of ASIA Impairment Scale (AIS) Grade to Post-Injury Hospitalization and Costs in Thoracic Spinal Cord Injury

30 30 InVivo s Chronic SCI Program Local Delivery Platforms for Therapeutic Agents

31 31 Local Delivery of Gene Therapy for Chronic SCI Green Fluorescent Protein in rat spinal cord following local delivery of gene therapy vector Gene therapy provides a long-lasting benefit after a single treatment Localized gene therapy is ideally suited for treating SCI sequelae such as pain and spasticity

32 Local Delivery of Gene Therapy for Chronic Pain: Targeting Sensory Neurons 32 Sensory Nerve Root Dorsal Horn Dorsal Root Ganglion Cheah et al., J Vis. Exp. Issue 123 Targeted delivery of gene therapy vectors to sites in or near the spinal cord maximizes effectiveness and lowers costs

33 33 Neuro-Spinal Scaffold and Chronic SCI Program IP and Anticipated Milestones

34 Dramatically Strengthened and Broadened Intellectual Property Portfolio 34 Core technology covering Neuro-Spinal Scaffold licensed from MIT and Boston Children s Hospital US composition and methods patent 8,858,966 (expires 2027) Japanese, Australia, Canada, and South Korea patents issued; European patent application in prosecution Broader US composition patent 9,101,695 (expires 2027) Broader US methods patent 9,440,008 (expires 2027) Additional patents and applications held by InVivo Packaging, instrumentation, and manufacturing patents are pending for Neuro-Spinal Scaffold

35 35 Upcoming Anticipated Milestones INSPIRE Re-open enrollment and provide patient updates as appropriate Complete enrollment in INSPIRE in H Full HDE submission in H Cervical Announce new participating sites in Canada Expand to US Enroll patients and provide patient updates as appropriate Chronic SCI Program FDA interactions and guidance on local delivery platform Announce new clinical candidate