InVivo Shares Suffer After FDA Requires More Stringent Trial Requirements

InVivo Therapeutics Holdings Corporation was surprised this week by an unexpected decision from the U.S. Food and Drug Administration’s (FDA). The agency has demanded a much slower dosing schedule than was expected for the company’s five-patient pilot trial of its biopolymer scaffolding, a therapy for acute spinal cord injury, resulting in a delay of approximately two years until trial completion.

InVivo was expecting to file for a humanitarian device exemption (HDE) on data from the pilot trial, enabling it to commercialize the scaffold in the United States by around mid-2015. However, the FDA has also reportedly requested a subsequent controlled pivotal study, meaning that approval could be set back by five years in total. The company’s share price has halved to $1.71 since the revelations emerged on Aug. 27.

“…[T]he news does not come as a total surprise given the recent management changes that took place at the company last week, and the fact that the U.S. FDA always takes the most cautious approach to new medical technology, regardless of how great the preclinical data looks or how often the CEO campaigns publicly,” wrote a Zacks analyst.

InVivo recently lost its chairman, CEO and chief financial officer Francis M. Reynolds, electing Michael J. Astrue as interim CEO and Sean Moran, its director of finance, as acting CFO.

The biodegradable polymer scaffolding is designed to be implanted at the site of an injury to the spinal cord to provide a framework for the cord to regrow. The FDA is instinctively wary of biologically active implants, and has insisted that the five patients be treated sequentially.

However, its demand that each patient be followed for three months after the implantation before InVivo can even request permission from the FDA to enroll the next patient is unusual. Because there will be a delay each time the agency decides whether to grant this permission, InVivo estimates that the trial will take at least 21 months to complete. This suggests that data will not be submitted to the FDA before early 2016, a full two years later than InVivo had planned.

“Former CEO, Frank Reynolds, had always told us that the biopolymer scaffolding would be on the market after the 5-patient pilot study, “ noted Zacks Analyst Jason Napodano. “Now it seems as though the FDA wants a larger, controlled study prior to granted marketing approval of the scaffolding. Assuming this pivotal trial starts around mid-2016, takes approximately two years to complete, with another year for the FDA to accept and review the application, base case scenario pegs approval of the scaffolding under HDE around mid-2019.”

“We remain fully committed to beginning this study as soon as possible,” said Astrue. “While the study will take additional time, we look forward to bringing this important therapy into the clinic.”