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MarketScreener Homepage  >  Equities  >  Nasdaq  >  Invivo Therapeutics Holdings Corp    NVIV

INVIVO THERAPEUTICS HOLDINGS CORP

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INVIVO THERAPEUTICS : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. (form 10-Q)

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08/13/2019 | 08:04am EDT
The following management's discussion and analysis should be read in conjunction
with the unaudited consolidated financial statements included elsewhere in this
Quarterly Report and with our historical consolidated financial statements, and
the related notes thereto, included in our Annual Report on Form 10-K for the
year ended December 31, 2018 (the "2018 Annual Report"). The management's
discussion and analysis contains forward-looking statements within the meaning
of the safe harbor provisions under Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). These statements include statements made regarding our
commercialization strategy, future operations, cash requirements and liquidity,
capital requirements, and other statements on our business plans and strategy,
financial position, and market trends. In some cases, you can identify
forward-looking statements by terms such as "may," "might," "will," "should,"
"believe," "plan," "intend," "anticipate," "target," "estimate," "expect," and
other similar expressions. These forward-looking statements are subject to risks
and uncertainties that could cause actual results or events to differ materially
from those expressed or implied by the forward-looking statements in this
Quarterly Report, including factors such as our ability to raise substantial
additional capital to finance our planned operations and to continue as a going
concern; our ability to execute our strategy and business plan; our ability to
obtain regulatory approvals for our products, including the Neuro-Spinal
Scaffold™; our ability to successfully commercialize our current and future
product candidates, including the Neuro-Spinal Scaffold; the progress and timing
of our development programs; market acceptance of our products; our ability to
retain management and other key personnel; our ability to promote, manufacture,
and sell our products, either directly or through collaborative and other
arrangements with third parties; and other factors detailed under "Risk Factors"
in Part II, Item 1A of this Quarterly Report. These forward-looking statements
speak only as of the date hereof. We do not undertake any obligation to update
forward-looking statements to reflect events or circumstances occurring after
the date of this Quarterly Report, except as required by law.



The discussion and analysis of our financial condition and results of operations
are based on our consolidated financial statements, which we have prepared in
accordance with U.S. generally accepted accounting principles. The preparation
of these consolidated financial statements requires us to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the consolidated
financial statements, as well as the reported revenues and expenses during the
reporting periods. On an ongoing basis, we evaluate such estimates and
judgments, including those described in greater detail below. We base our
estimates on historical experience and on various other factors that we believe
are reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying value of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.



All share amounts presented in this Item 2 give effect to the 1-for-25 reverse
stock split of our outstanding shares of common stock, par value $0.00001 per
share ("Common Stock"), that occurred on April 16, 2018.



Overview


We are a research and clinical-stage biomaterials and biotechnology company with
a focus on treatment of spinal cord injuries, or SCIs. Our approach to treating
acute SCIs is based on our investigational Neuro-Spinal Scaffold™ implant, a
bioresorbable polymer scaffold that is designed for implantation at the site of
injury within a spinal cord and is intended to treat acute SCI. The Neuro-Spinal
Scaffold implant incorporates intellectual property licensed under an exclusive,
worldwide license from Boston Children's Hospital, or BCH, and the Massachusetts
Instittue of Technology, or MIT. We also plan to evaluate other technologies and
therapeutics that may be complementary to our development of the Neuro-Spinal
Scaffold implant or offer the potential to bring us closer to our goal of
redefining the life of the SCI patient.



The current standard of care for acute management of spinal cord injuries focuses on preventing further injury to the spinal cord. However, the current standard of care does not address repair of the spinal cord.



Our Clinical Program


We currently have 1 clinical development program for the treatment of acute SCI.

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Neuro-Spinal Scaffold Implant for acute SCI




Our Neuro-Spinal Scaffold implant is an investigational bioresorbable polymer
scaffold that is designed for implantation at the site of injury within a spinal
cord. The Neuro-Spinal Scaffold implant is intended to promote appositional, or
side-by-side, healing by supporting the surrounding tissue after injury,
minimizing expansion of areas of necrosis, and providing a biomaterial substrate
for the body's own healing/repair processes following injury. We believe this
form of appositional healing may spare white matter, increase neural sprouting,
and diminish post-traumatic cyst formation.



The Neuro-Spinal Scaffold implant is composed of 2 biocompatible and bioresorbable polymers that are cast to form a highly porous investigational product:

· Poly lactic-co-glycolic acid, a polymer that is widely used in resorbable

sutures and provides the biocompatible support for Neuro-Spinal Scaffold

    implant; and



· Poly-L-Lysine, a positively charged polymer commonly used to coat surfaces in order to promote cellular attachment.

Because of the complexity of SCIs, it is likely that multi-modal therapies will
be required to maximize positive outcomes in SCI patients. In the future, we may
attempt to further enhance the performance of our Neuro-Spinal Scaffold implant
by multiple combination strategies involving electrostimulation devices,
additional biomaterials, drugs approved by the U.S. Food and Drug
Administration, or FDA, or growth factors. We expect the Neuro-Spinal Scaffold
implant to be regulated by the FDA as a Class III medical device.



Completed Pilot Study



We conducted an early feasibility human pilot study, as the initial phase of a
larger pivotal study, of our Neuro-Spinal Scaffold under our approved
Investigational Device Exemption, or IDE, application for the treatment of
complete, traumatic acute SCI. The study was intended to assess the safety and
feasibility of the Neuro-Spinal Scaffold for the treatment of complete thoracic
functional SCI, as well as to gather preliminary evidence of the clinical
effectiveness of the Neuro-Spinal Scaffold.



The pilot study was initially approved for 5 subjects in up to 6 clinical sites
across the United States, and was later modified to increase the number of
allowable clinical sites to up to 20 and to permit enrollment of up to 10
subjects. The pilot study was initially staggered such that each patient that
met the eligibility criteria would be followed for three months prior to
enrolling the next patient in the study. In December 2014, the FDA approved an
expedited enrollment plan that allowed us to continue enrolling patients more
rapidly barring any significant safety issues. We enrolled 5 subjects in the
pilot study between October 2014 and September 2015. The FDA approved conversion
of this pilot study to a pivotal probable benefit study, which we refer to as
The INSPIRE Study, that includes data from the patients enrolled in the pilot
study.



The INSPIRE Study



Our Neuro-Spinal Scaffold implant has been studied in The INSPIRE Study: the
"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," under an Investigational Device Exemption, or IDE, application for the
treatment of neurologically complete thoracic traumatic acute SCI. We commenced
an FDA-approved pilot study in 2014 that the FDA approved converting into The
INSPIRE Study in January 2016. As of December 31, 2017, we had implanted our
Neuro-Spinal Scaffold implant in a total of 19 patients in The INSPIRE Study, 16
of whom reached the 6-month primary endpoint visit, and 3 of whom died. In July
2017, after the third patient death, enrollment of patients in The INSPIRE Study
was placed on hold as we engaged with the FDA to address the patient deaths. We
subsequently closed enrollment in The INSPIRE Study and will follow the
remaining active subjects until completion. Following discussions with the FDA,
in March 2018, we received FDA approval for a randomized controlled trial to
supplement the existing clinical evidence for the Neuro-Spinal Scaffold implant
that we obtained from The INSPIRE Study. We refer to this herein as the INSPIRE
2.0 Study.

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The purpose of The INSPIRE Study, which was the original study, was to evaluate
whether the Neuro-Spinal Scaffold implant is safe and demonstrates probable
benefit for the treatment of complete T2-T12 neurological level of injury, or
(NLI), SCI. The primary endpoint was defined as the proportion of patients
achieving an improvement of at least 1 AIS grade at 6 months post-implantation.
Additional endpoints included measurements of pain, sensory and motor scores,
bladder and bowel function, Spinal Cord Independence Measure (a disability scale
for patients with SCI), and quality of life. The INSPIRE Study included an
Objective Performance Criterion, or OPC, which is a measure of study success
used in clinical studies designed to demonstrate safety and probable benefit in
support of a Humanitarian Device Exemption, or HDE, approval. At the time
enrollment of patients in The INSPIRE Study was placed on hold, the OPC was
defined as 25% or more of the patients in the study demonstrating an improvement
of at least 1 AIS grade at the 6-month post-implantation visit.



The FDA approved the enrollment of up to 30 patients in The INSPIRE Study so
that there would be at least 20 evaluable patients at the primary endpoint
analysis, accounting for events such as screen failures or deaths that would
prevent a patient from reaching the primary endpoint visit. Of the 19 patients
implanted in The INSPIRE Study, 16 patients have reached the 6 month primary
endpoint visit. Of these 16, 7 had improved from complete AIS A SCI to
incomplete SCI (2 patients to AIS C and 5 patients to AIS B) at the 6 month
primary endpoint visit and 9 had not demonstrated improvement at that visit. 3
of the 7 patients who improved were assessed to have AIS B SCI at the 6 month
primary endpoint and were later assessed to have improved to AIS C SCI at the 12
or 24-month visits. 2 of the 16 patients were initially assessed to have
improved from complete AIS A SCI to incomplete AIS B SCI, but each was later
assessed to have reverted to complete AIS A SCI prior to the 6 month
examination. 1 of these 2 was then assessed at the 6 month visit to have
improved again to AIS B and the other remained AIS A. Since we have closed
enrollment, the target of enrolling 20 evaluable patients into The INSPIRE
Study
will not be reached.


The FDA had previously recommended that we include a randomized, concurrent
control arm in The INSPIRE Study. Acting on the FDA's recommendation, we
proposed and received approval for the INSPIRE 2.0 Study (described below) to
supplement the existing clinical evidence for the Neuro-Spinal Scaffold
implant. In addition, as 1 source of comparator data, we completed the
Contemporary Thoracic SCI Registry Study, or the CONTEMPO Registry Study. The
CONTEMPO Registry Study utilized existing databases and registries to develop a
historical comparator that, to the extent possible, matched patients to those
patients enrolled in The INSPIRE Study. The CONTEMPO Registry Study was designed
to provide comprehensive natural history benchmarks for The INSPIRE Study
results that included SCI patients with similar baseline characteristics treated
since 2006. The CONTEMPO Registry Study included data from the Christopher &
Dana Reeve Foundation North American Clinical Trials Network Registry, or NACTN,
as well as the Model Systems Registry and the European Multicenter Study about
Spinal Cord Injury, or EMSCI. We announced top-line findings from CONTEMPO in
March 2018 from a total of 170 patients from the 3 registries consisting of: 12
individuals from NACTN, 64 from EMSCI, and 94 from the Model Systems Registry.
AIS conversion rates at approximately 6 months post-injury varied from 16.7% -
23.4% across the 3 registries. In 2 of the registries, there was a skew of the
patient population to low (T10- T12) thoracic injuries, representing 46-47% of
the registry population. This compares to just 4 out of 16 patients (25%) in
follow-up in the INSPIRE study with low thoracic injuries. Patients with low
thoracic injuries are known to have the best prognoses, and the conversion rates
were the highest in the low thoracic group in all 3 registries and the INSPIRE
study. When all 3 registries were normalized to the INSPIRE patient population
distribution across T2-T5, T6-T9 and T10-T12 injury groups, the normalized
conversion rate for CONTEMPO registries ranged from 15.5%-20.6%. We cannot be
certain what additional information or studies will be required by the FDA
to
approve our HDE submission.



INSPIRE 2.0 Study


Our Neuro-Spinal Scaffold implant has been approved to be studied under our
approved IDE in the INPSIRE 2.0 Study, which is titled the "Randomized,
Controlled, Single-blind Study of Probable Benefit of the Neuro-Spinal Scaffold™
for Safety and Neurologic Recovery in Subjects with Complete Thoracic AIS A
Spinal Cord Injury as Compared to Standard of Care."  The purpose of the INSPIRE
2.0 Study is to assess the overall safety and probable benefit of the
Neuro-Spinal Scaffold for the treatment of neurologically complete thoracic
traumatic acute SCI. The INSPIRE 2.0 Study is designed to enroll 10 subjects
into each of the 2 study arms, which we refer to as the Scaffold Arm and the
Comparator Arm. Patients in the Comparator Arm will receive the standard of
care, which is spinal stabilization without dural opening or myelotomy. The
INSPIRE 2.0 Study is a single blind study, meaning that the patients and
assessors are blinded to treatment assignments. The FDA approved the enrollment
of up to 35 patients in this study so

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that there would be at least 20 evaluable patients (10 in each study arm) at the
primary endpoint analysis, accounting for events such as screen failures or
deaths that would prevent a patient from reaching the primary endpoint visit. We
expect to conduct the INSPIRE 2.0 Study at up to 25 sites in the United
States. Enrolling patients in the INSPIRE 2.0 Study requires the approvals of
the institutional review boards, or IRBs, at each clinical site. We estimate
that from study initiation, enrollment will take approximately 18 months, and
the total time to completion of the INSPIRE 2.0 Study is estimated to be 2 years
from study initiation. The first three patients in the INSPIRE 2.0 Study have
been enrolled and 14 sites are open to enrollment as of August 6, 2019.



The primary endpoint is defined as the proportion of patients achieving an
improvement of at least 1 AIS grade at 6 months post-implantation. Assessments
of AIS grade are at hospital discharge, 3 months, 6 months, 12 months and 24
months. The definition of study success for INSPIRE 2.0 is that the difference
in the proportion of subjects who demonstrate an improvement of at least 1 grade
on AIS assessment at the 6-month primary endpoint follow-up visit between the
Scaffold Arm and the Comparator Arm must be equal to or greater than 20%. In 1
example, if 50% of subjects in the Scaffold Arm have an improvement of AIS grade
at the 6-month primary endpoint and 30% of subjects in the Comparator Arm have
an improvement, then the difference in the proportion of subjects who
demonstrated an improvement is equal to 20% (50% minus 30% equals 20%) and the
definition of study success would be met. In another example, if 40% of subjects
in the Scaffold Arm have an improvement of AIS grade at the 6-month primary
endpoint and 30% of subjects in the Comparator Arm have an improvement, then the
difference in the proportion of subjects who demonstrated an improvement is
equal to 10% (40% minus 30% equals 10%) and the definition of study success
would not be met. Additional endpoints include measurements of changes in NLI,
sensory levels and motor scores, bladder, bowel and sexual function, pain,
Spinal Cord Independence Measure, and quality of life.



Although The INSPIRE Study is structured with the OPC as the primary component
for demonstrating probable benefit, the OPC is not the only variable that the
FDA would evaluate when reviewing a future HDE application. Similarly, while our
INSPIRE 2.0 Study is structured with a definition of study success requiring a
minimum difference between study arms in the proportion of subjects achieving
improvement, that success definition is not the only factor that the FDA would
evaluate in the future HDE application. Approval is not guaranteed if the OPC is
met for The INSPIRE Study or the definition of study success is met for the
INSPIRE 2.0 Study, and even if the OPC or definition of study success are not
met, the FDA may approve a medical device if probable benefit is supported by a
comprehensive review of all clinical endpoints and preclinical results, as
demonstrated by the sponsor's body of evidence.



In 2016, the FDA accepted our proposed HDE modular shell submission and review
process for the Neuro-Spinal Scaffold implant. The HDE modular shell is
comprised of 3 modules: a preclinical studies module, a manufacturing module,
and a clinical data module. As part of its review process, the FDA reviews each
module, which are individual sections of the HDE submission, on a rolling basis.
Following the submission of each module, the FDA reviews and provides feedback,
typically within 90 days, allowing the applicant to receive feedback and
potentially resolve any deficiencies during the review process. Upon receipt of
all 3 modules, which constitutes the complete HDE submission, the FDA makes a
filing decision that may trigger the review clock for an approval decision. We
submitted the first module in March 2017 and received feedback in June 2017. We
plan to submit an updated first module in the fourth quarter of 2019. The HDE
submission will not be complete until the manufacturing and clinical modules are
also submitted.


Critical Accounting Policies and Estimates

Our consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America. The
preparation of these consolidated financial statements requires management to
make estimates and assumptions and, in connection therewith, adopt certain
accounting policies that affect the reported amounts of assets and liabilities
and the disclosure of contingent assets and liabilities at the date of the
consolidated financial statements and the reported amounts of revenues and
expenses during the reporting period.



On an ongoing basis, we evaluate our estimates and judgments for all assets and
liabilities, stock-based compensation expense, and the fair value determined for
stock purchase warrants classified as derivative liabilities. We base our
estimates and judgments on historical experience, current economic and industry
conditions, and on various other factors that we believe to be reasonable under
the circumstances. Such factors form the basis for making judgments about the
carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may

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differ from these estimates under different assumptions or conditions. There
have been no changes in our critical accounting policies and estimates from the
disclosure provided in our 2018 Annual Report.



We believe that full consideration has been given to all relevant circumstances
that we may be subject to, and the consolidated financial statements accurately
reflect our best estimate of the results of operations, financial position, and
cash flows for the periods presented.



Results of Operations


Comparison of the Three Months Ended June 30, 2019 and 2018

Research and Development Expenses




Research and development expenses consisted primarily of expenses related to
contract research organizations and clinical sites, professional services, and
payroll. Research and development expenses for the three months
ended June 30, 2019 were $1.7 million, an increase of $690 thousand compared to
the three months ended June 30, 2018. The increase in research and development
expenses for the three months ended June 30, 2019 is attributable to an increase
clinical trial and scaffold manufacturing costs of $562 thousand and
$97 thousand respectively, related to the opening up of new clinical trial sites
in 2019 and an increase in facilities and rent expense of $269 thousand. These
increases were offset by decreases in compensation related expenses of
$104 thousand driven by fewer number of employees in the current year, a
decrease in administrative and operating costs of $71 thousand as a result of
cost cutting measures initiated in 2018, a decrease in consulting costs of
$29 thousand and a decrease in stock compensation expense of $21 thousand.

General and Administrative Expenses




General and administrative expenses consisted primarily of payroll, rent, and
professional services. General and administrative expenses for the three months
ended June 30, 2019 were $1.5 million, a decrease of $254 thousand compared to
the three months ended June 30, 2018. The decrease in general and administrative
expenses for the three months ended June 30, 2019 is attributable to a decrease
in legal expenses of $212 thousand, a decrease in consulting costs of
$157 thousand and a decrease in administrative and operating costs of
$98 thousand as a result of cost cutting measures initiated in 2018. These costs
were offset by increases in facilities and rent expense of $218 thousand.



Other Income and Expense



Other income for the three months ended June 30, 2019 was $104 thousand, which
was comprised of other income of $32 thousand and interest income of
$72 thousand.  Other expenses for the three months ended June 30, 2018 was $10.1
million, which was comprised of derivative loss of $10.2 million, interest
income of $45 thousand, interest expense of $12 thousand and other income of $26
thousand.


Comparison of the Six Months Ended June 30, 2019 and 2018

Research and Development Expenses




Research and development expenses for the six months ended June 30, 2019 were
$2.8 million, an increase of  $402 thousand compared to the six months
ended June 30, 2018. The increase in research and development expenses for the
six months ended June 30, 2019 is attributable to an increase clinical trial
costs and scaffold manufacturing costs of $702 thousand and $131 thousand
respectively, related to the opening up of new clinical trial sites in 2019 and
an increase in facilities and rent expense of $159 thousand. These increases
were offset by decreases in compensation related and stock compensation expense
of $148 thousand and $75 thousand respectively, driven by fewer number of
employees in the current year, a decrease in administrative and operating costs
of $143 thousand as a result of cost cutting measures initiated in 2018, a
decrease in consulting costs of $132 thousand, a decrease in depreciation
expense of $65 thousand and a decrease in legal costs of $19 thousand.



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General and Administrative Expenses

General and administrative expenses for the six months ended June 30, 2019 were
$3.2 million, a decrease of $2.0 million compared to the six months
ended June 30, 2018. The decrease in general and administrative expenses for the
six months ended June 30, 2019 is attributable to a decrease in compensation
related and stock compensation expense of $1.1 million and $245 thousand
respectively, driven by fewer number of employees in the current year, a
decrease in legal fees of $450 thousand and a decrease in administrative and
operating costs of $158 thousand as a result of cost cutting measures initiated
in 2018.



Other Income and Expense



Other income for the six months ended months ended June 30, 2019 was
$247 thousand, which was comprised of interest income of $171 thousand and other
income of $76 thousand.  Other expenses for the six months ended months ended
June 30, 2018 was $10.1 million, which was comprised of derivative loss of $10.2
million, interest income of $51  thousand, and other income of $68 thousand.



Liquidity and Capital Resources




Since inception, we have devoted substantially all of our efforts to business
planning, research and development, recruiting management and technical staff,
acquiring operating assets, and raising capital. At June 30, 2019, our
accumulated deficit was $213.1 million. Since our inception, we have
historically financed our operations primarily through the sale of
equity­related securities.



At June 30, 2019, we had total assets of $13.6 million, total liabilities of
$3.1 million, and total stockholders' equity of $10.5 million. During the six
months ended June 30, 2019, we recorded a net loss of $5.8 million. We have not
achieved profitability and may not be able to realize sufficient revenue to
achieve or sustain profitability in the future. We do not expect to be
profitable in the next several years, but rather expect to incur additional
operating losses. The financing we closed in June 2018, described in more detail
below, provided necessary funding to fund operations into the first quarter of
2020. This estimate is based on assumptions that may prove to be wrong; expenses
could prove to be significantly higher, leading to a more rapid consumption of
our existing resources. We have limited liquidity and capital resources and must
obtain significant additional capital resources in order to fund our operations
and sustain our product development efforts, for acquisition of technologies and
intellectual property rights, for preclinical and clinical testing of our
anticipated products, pursuit of regulatory approvals, acquisition of capital
equipment, laboratory and office facilities, establishment of production
capabilities, for selling, general and administrative expenses and for other
working capital requirements. We also expect that we will need to raise
additional capital through a combination of equity offerings, debt financings,
other third party funding, marketing and distribution arrangements and other
collaborations, strategic alliances and licensing arrangements. Based on these
factors, as of June 30, 2019, management determined that there is substantial
doubt regarding the Company's ability to continue as a going concern.



Financings Transactions


In June 2018, we closed an underwritten public offering of an aggregate of
1,378,400 Common Units, at an offering price of $2.00 each, each comprised of 1
share of our Common Stock, par value $0.00001 per share and 1 Series A warrant
to purchase 1 share of Common Stock. The public offering also included 6,242,811
pre-funded units at an offering price of $1.99 each, each comprised of 1
pre-funded Series B Warrant and 1 Series A warrant to purchase 1 share of Common
Stock. Each Series A warrant has an exercise price of $2.00 per share,
exercisable immediately from the date of issuance and expires 5 years from the
date of issuance. Each Series B warrant had an exercise price of $0.01 per
share, exercisable immediately from the date of issuance and would have expired
20 years from the date of issuance. The net proceeds to us, after deducting the
underwriting discounts and commissions and other offering expenses, were $13.5
million. During the three and six months ended June 30, 2018, we issued an
aggregate of 1,050,918 shares of  Common Stock upon the exercise of Series B
warrants for aggregate proceeds of $10 thousand. During the three and six months
ended June 30, 2019,  we did not issue any shares as a result of warrant
exercise activity. There are no outstanding Series B warrants as of
June 30, 2019.



In September 2018, we entered into an Amendment to Warrant Agency Agreement and
Warrants, or the Ladenburg Warrant Amendment, with Continental Stock Transfer &
Trust Company, or Continental, that amends the

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Warrant Agency Agreement, by and between us and Continental, as Warrant Agent,
dated June 25, 2018, and the Series A Common Stock Purchase Warrant, and the
Series B Pre-Funded Common Stock Purchase Warrant both dated June 25, 2018, and
we refer to the Series A and Series B Warrant collectively as the 2018 Warrants.
See Notes 10 and 11 to our Consolidated Financial Statements in Item 1 of this
report for more information about the Ladenburg Warrant Amendment.



In January 2018, we entered into a purchase agreement ("Purchase Agreement") and
registration rights agreement ("RRA") with Lincoln Park Capital Fund, LLC
("Lincoln Park"), under which we had the right to sell up to $15 million, in
shares of our Common Stock, to Lincoln Park over a 24 month period, subject to
certain limitations and conditions set forth in the Purchase Agreement and RRA.
On May 30, 2018, our stockholders approved to increase the issuance and sale by
us to Lincoln Park, including our prior issuances and sales of shares of Common
Stock to Lincoln Park since January 2018, of up to 1,200,000 shares of Common
Stock.  In accordance with the terms of the Purchase Agreement, at the time the
we signed the Purchase Agreement and the RRA,  we issued 17,192 shares to
Lincoln Park as consideration for its commitment to purchase shares of
our Common Stock under the Purchase Agreement and recorded $627 thousand in
deferred offering costs of which the full amount was capitalized into additional
paid-in capital as of June 30, 2018. During the three months ended June 30,
2018, we sold an aggregate of 83,330 shares to Lincoln Park, for aggregate
proceeds of $370 thousand net of issuance costs. During the six months ended
June 30, 2018, we sold an aggregate of 256,804 shares to Lincoln Park, for
aggregate proceeds of $3.1 million net of issuance costs..  During the three
and six months ended June 30, 2019,  we did not sell any shares to Lincoln Park.

In May 2019, we terminated the Purchase Agreement with Lincoln Park.

In May 2018, we entered into the Warrant Amendment, (as defined in Note 10 in
the accompanying notes to our Consolidated Financial Statements in Item 1 of
this report), which removed provisions that had previously precluded equity
classification treatment of the 2014 Warrants on our balance sheet. The fair
value of the amended 2014 Warrants was re-measured immediately prior to the date
of amendment with changes in fair value recorded as a loss of $1 thousand in the
consolidated statement of operations and $1 thousand was reclassified to equity.



We may pursue various other dilutive and non­dilutive funding alternatives
depending upon our clinical path forward and the extent to which we require
additional capital to proceed with development of some or all of our product
candidates on expected timelines. The source, timing and availability of any
future financing will depend principally upon market conditions and the status
of our clinical development programs. Funding may not be available when needed,
at all, or on terms acceptable to us. Lack of necessary funds may require us to,
among other things, delay, scale back or eliminate some or all of our research
and product development programs, planned clinical trials, and capital
expenditures or to license our potential products or technologies to third
parties. We may alternatively engage in cost-cutting measures in an attempt to
extend our cash resources as long as possible.



Facility Changes


In May 2018, we assigned the Cambridge Lease to a third party, who assumed from
us all of our remaining rights and obligations under the lease. Concurrently
with the lease assignment, we entered into a sublease for 5,104 square feet of
the space, originally part of the Cambridge Lease, from the third party to which
we assigned the lease. The sublease ends on October 31, 2023 and contains rent
holidays and rent escalation clauses. In order to obtain the consent of our
lender for these facility changes and the sale of certain assets, we repaid $300
thousand of principal on our loan and recorded an impairment charge of $48
thousand. On January 1, 2019 we adopted ASU No. 2016-02, Leases (Topic 842). The
adoption of this standard resulted in the recognition of operating lease
liabilities and right-of-use assets of $1.5 million and $1.5 million,
respectively, on our balance sheet. For more information, see Notes 1 and 5 to
the notes to our unaudited Consolidated Financial Statements in Item 1 of this
report.



Cashflows



Net cash used in operating activities for the six months ended June 30, 2019 was
$6.7 million, as compared to net cash used in operating activities of
$6.8 million for the six months ended June 30, 2018. The change in net cash used
in operating activities for the six months ended months ended June 30, 2019, as
compared to the same period in the prior year was primarily due to an decrease
in our net loss of $11.9 million, a decrease in derivative loss of $10.2
million, a decrease in accrued expenses and other liabilities of $2.0 million, a
change in the gain on lease assignment of $0.6 million and a decrease in
share-based compensation expense of $0.3 million.

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The Company did not generate or use cash in investing activities during the six
months ended June 30, 2019 This compares to cash used in investing activities
for the six months ended June 30, 2018 of $65 thousand attributable to purchase
of equipment.



Net cash used in financing activities for the six months
ended June 30, 2019, was $99 thousand consisting primarily $100 thousand in loan
repayments which were partially offset by employee stock purchase plan issuances
of $1 thousand. This compares to net cash provided by financing activities for
the six months ended June 30, 2018 of $16.0 million consisting primarily of
$16.5 million in proceeds from issuance of common stock associated with the June
2018 underwritten public offering and the Lincoln Park financing agreement which
were partially offset by $522 thousand in loan repayments.



Off-Balance Sheet Arrangements




We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future material effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures, or capital resources.



Contractual Obligations


As of June 30, 2019, there were no material changes to our contractual obligations and commitments described under Management's Discussion and Analysis of Financial Condition and Results of Operations in the 2018 Annual Report.

© Edgar Online, source Glimpses

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Financials (USD)
Sales 2019 -
EBIT 2019 -12,6 M
Net income 2019 -12,2 M
Debt 2019 -
Yield 2019 -
P/E ratio 2019 -0,46x
P/E ratio 2020 -0,75x
Capi. / Sales2019 infx
Capi. / Sales2020 infx
Capitalization 5,31 M
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Mean consensus BUY
Number of Analysts 1
Average target price 4,60  $
Last Close Price 0,57  $
Spread / Highest target 707%
Spread / Average Target 707%
Spread / Lowest Target 707%
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Managers
NameTitle
Richard Toselli President, Chief Executive Officer & Director
C. Ann Merrifield Chairman
William D'Agostino Senior Vice President-Operations
Richard C. Christopher Chief Financial Officer & Treasurer
Richard John Roberts Independent Director
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