Following biotech and medical device companies is like watching snails cross the Mass. Pike. You’re rooting for them to make it to the other side, but it’s an agonizingly slow process. Not all will survive.
Despite that, I remain more than a little obsessed with a Cambridge start-up company called InVivo Therapeutics, founded in 2005 by a pugnacious former truck driver named Frank Reynolds. When I first met Reynolds in 2010, he was at a conference in Boston showing videos of paralyzed primates that had made miraculous recoveries, thanks to a small implantable device developed at MIT. Reynolds told the audience that his company would begin trials of its device that year in people who had suffered spinal cord injuries, and sell it by 2011.
Fast forward three years, and the 50-person company has still not managed to hold a human trial. Reynolds departed the company abruptly in late August, due to an unspecified medical condition. The company’s latest financial report said it lost $33 million over the last nine months. (InVivo still hasn’t earned its first dollar of revenue.)
“Frank was very good at promoting the story, and doing the PR side of the business,” says Jason Napodano, an analyst who follows InVivo for Zack’s Investment Research. “But what he wasn’t very good at was delivering on any of those promises.”
As with most life sciences companies, the promise at InVivo is immense: Few good treatment options exist for people with spinal cord injuries, often from accidents such as motorcycle crashes or bad falls. “Medical research is extremely expensive and extremely slow-paced,” says Marc Buoniconti, a former college football player who was injured during a game in 1985, and remains paralyzed from the shoulders down. “Breakthroughs are rare.”
Buoniconti, the son of retired NFL linebacker Nick Buoniconti, who played for the old Boston Patriots, is now president of the Buoniconti Fund to Cure Paralysis, based in Miami.
InVivo’s product is a small, spongy polymer scaffold developed in an MIT lab run by professor Robert Langer. Placed on the site of a spinal cord injury after the spine has been stabilized, it aims to serve as a protective Band-Aid, reducing bleeding and the formation of scar tissue, and keeping the body’s immune system from causing more damage at the site of the injury. After six weeks, the sponge-like scaffold dissolves.
InVivo’s interim CEO, Mike Astrue, says that the company hopes to start a human clinical trial next year. The first trial will probably involve just the scaffold itself, but InVivo has also talked about using it to deliver anti-inflammatory drugs or to hold human stem cells that might help repair the injury.
In a press release Friday, the company said it would put development of another product on hold to focus on making scaffolds for the upcoming clinical trial. InVivo also said it was talking to prospective partners in the pharmaceutical industry about using its product to deliver their drugs, “regardless of therapeutic area,” meaning it is no longer solely focused on spinal cord injuries.
Every time I write or blog about InVivo, I hear from patients hoping its product gets to market. But the company has had a series of setbacks. It sued a primate facility in Oregon hired to conduct its research. (That lawsuit was eventually settled.) A chief scientific officer arrived and departed in 10 months.
A 2011 partnership with The Miami Project, a research initiative that Marc Buoniconti raises money to support, went nowhere. “It took six months to get the partnership going, and I would say the work we did together lasted less than a year, probably six months,” he says.
Astrue, fresh from running the Social Security Administration in Washington, is a graduate of Harvard Law School. He served in the White House counsel’s office under Presidents Reagan and George H.W. Bush and later became general counsel at Biogen, now Biogen Idec. Then, as CEO of Transkaryotic Therapies, he led a turnaround at the Cambridge company, which developed drugs for rare diseases.
Transkaryotic was acquired for $1.6 billion in 2004. The deal led the buyer, Shire Pharmaceuticals, to establish a major outpost in the Boston area, but Astrue quit in opposition to the sale. He thought the price too low.
Astrue didn’t want to speak on record for this story. Over the past 12 months, the company’s executives and advisory board members — not including Astrue — have sold more than 4 million shares, according to regulatory filings. In that same period, insiders bought just 32,000 shares.
Langer, a major shareholder who serves on InVivo’s scientific advisory board, had only positive things to say about the company. In an e-mail, he wrote, “The old regime got it off to a wonderful start. New regime doing great, too. Scientists and engineers are great.” Langer said he only sold shares of InVivo — less than 10 percent of his stake — as part of a diversification strategy.
But InVivo may be running out of time. The latest research report by Napodano, the only stock analyst following InVivo, estimated the company has just $19 million in cash, giving it about a year left to live, barring further fund-raising. The stock has dropped more than 70 percent over the last three months.
It will be interesting to see if Astrue can transform InVivo from a company fueled by hype to one focused on demonstrating effectiveness in humans. One smart step would be signing some revenue-producing partnerships with pharmaceutical companies interested in exploring the company’s scaffold as a delivery mechanism for their drugs. Those kinds of partnerships are standard operating procedure for most life sciences companies, but InVivo hasn’t had one yet.
Reynolds, InVivo’s founder, didn’t return my calls seeking comment. But whatever medical condition that caused him to resign from InVivo in August does not seem have slowed him down. That same month, he launched a new start-up focused on Parkinson’s disease: PixarBio, based in New Hampshire.