UPDATED Oct. 27, 3:34 p.m. EST
InVivo Therapeutics Corp. (OTC:NVIV) closed a reverse merger with its holding company, taking itself public under the stock symbol "NVIV" on the OTC exchange as of tomorrow.
The Cambridge, Mass.-based company also announced a private stock placement that will net it $8.8 million. InVivo is hoping for a nod from the Food & Drug Administration to begin human trials of its regenerative treatment for spinal cord injury.
The company issued about 31.6 million shares in the reverse merger to stockholders. InVivo issued another 10.5 million units of common stock and warrants in the private placement. Those buyers each received a unit of common stock a five-year warrant exercisable at $1.40 after NVIV stock tops $2.80 per share for 20 days.
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 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.
"Successful treatment options for acute injuries remain elusive. InVivo is pursuing a new paradigm of care, one developed by top scientific minds, that focuses initially on the treatment of secondary injury," CEO Frank Reynolds said in prepared remarks. "With success in the clinic, we hope to introduce substantial improvements to the treatment of these life-altering injuries within the next two to three years."
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.