INVIVO THERAPEUTICS HOLDINGS CORP. (NVIV)·Q1 2014 Earnings Summary

Executive Summary

• Q1 2014 reflected typical development-stage dynamics: zero revenue, operating expenses up to $5.07M, and net loss of $5.10M; loss per share improved to -$0.07 from -$0.20 in Q1 2013 as 2013’s non-cash derivative warrant losses did not recur .
• Cash and equivalents fell to $9.85M at quarter-end from $13.98M at year-end; a May 9 offering added ~$14.6M net, extending cash runway to November 2015 (a notable post-quarter financing catalyst) .
• R&D rose to $3.24M YoY largely due to the absence of a prior-year business interruption insurance settlement that reduced Q1 2013 R&D, plus higher staffing/prototype costs .
• Company advanced clinical execution: shipped its Neuro-Spinal Scaffold to its first site (April 2014) and received IRB approvals at two additional sites, with staggered enrollment per IDE design—key trial gating and narrative driver .
• No Wall Street consensus estimates available via S&P Global for EPS or revenue; comparisons vs. estimates are unavailable due to missing CIQ mapping (we attempted retrieval) [GetEstimates error]*.

What Went Well and What Went Wrong

What Went Well

• “Pilot Clinical Study Update”: shipped Neuro-Spinal Scaffold to initial clinical site; two more sites obtained IRB approvals, with openings expected in Q2—tangible progress toward patient enrollment under FDA-staggered design .
• Post-quarter financing: closed underwritten offering (~$14.6M net), immediately exercisable 5-year warrants; management expects proceeds to fund operations to November 2015, reducing near-term financing risk .
• Derivative warrant losses did not recur vs. Q1 2013, improving comparability and narrowing reported net loss per share YoY; management emphasized standard GAAP presentation and controls effectiveness .

What Went Wrong

• Operating cash burn increased versus prior year (net cash used in operations of $4.19M vs. $2.67M), reflecting higher R&D, compensation, and prototype costs; cash declined to $9.85M pre-offering .
• R&D expenses up by ~$2.03M YoY due to lack of the prior year’s insurance settlement benefit, plus higher staffing/prototype and stock comp—optically inflating OpEx despite development progress .
• Continued going-concern caution: accumulated deficit ($87.0M), limited liquidity pre-offering, and explicit need for additional capital beyond November 2015; financing and dilution risks persist .

Financial Results

Core P&L and Cash Metrics (oldest → newest)

Notes:

• Q3 2013 net loss was driven by non-cash derivatives loss and warrant modification effects; these did not recur in Q1 2014 .

Balance Sheet Snapshot

Additional KPIs

Guidance Changes

Earnings Call Themes & Trends

No Q1 2014 earnings call transcript identified in our document corpus or typical sources; themes below reflect filings and press releases.

Management Commentary

• “Our scaffold product is currently being studied in an early feasibility, five subject pilot study… In April 2014, we shipped our scaffold product to our initial clinical site… We have received IRB approval from two additional clinical study sites and expect that these two sites will be open to enroll subjects in the second quarter of 2014.”
• “The net proceeds, after deducting underwriting discounts and offering expenses, were approximately $14.6 million. We expect this amount to be sufficient to meet our operating and capital requirements until November 2015.”
• “Research and development expenses… increased… primarily attributable to our receipt of $1,100,000 in proceeds from a settlement of a business interruption claim… recorded as a reduction of research and development expenses for the three months ended March 31, 2013; $334,000 in increased compensation costs… an increase in prototype costs of $350,000; and an increase in stock compensation expense of $218,000.”
• Forward-looking caution and controls: management affirmed effective disclosure controls and highlighted safe harbor considerations .

Q&A Highlights

No Q1 2014 earnings call transcript was available; no analyst Q&A to report. We relied on SEC filings and public releases for qualitative context [ListDocuments earnings-call-transcript: none] .

Estimates Context

• We attempted to retrieve S&P Global consensus for Q1 2014 EPS and revenue; CIQ mapping unavailable, so Wall Street consensus could not be fetched. As such, comparisons vs. estimates are unavailable (GetEstimates error). Values would normally be retrieved from S&P Global; unavailable here due to mapping gap.*

Key Takeaways for Investors

• Binary clinical catalyst path: shipment and site activation are positive, but enrollment and safety endpoints (staggered three-month interim checks) are gating events likely to drive stock volatility .
• Runway extended to November 2015 post-offering; however additional capital likely needed thereafter—expect continued dilution mechanisms (warrants, future raises) .
• Cleaner P&L YoY without derivative warrant losses; focus on operating spend trajectory and cash burn ($4.19M used in operations in Q1) .
• R&D cost optics unfavorable YoY due to prior-year insurance settlement; underlying spend supports trial execution and prototyping—track spend efficiency vs. clinical milestones .
• Governance/legal overhang (former CEO litigation/proxy dynamics) could add headline risk; monitor outcomes and board stability .
• Near-term trading implications: headlines on patient enrollment, safety monitoring milestones, and IDE site additions likely to catalyze moves; financing-related news (warrant exercises, additional offerings) will affect sentiment/liquidity .
• Medium-term thesis: probability-weighted view rests on INSPIRE pilot execution and subsequent pivotal design; manufacturing scale-up and reimbursement pathways critical for eventual commercialization .

Other Relevant Press Releases (Q1 2014 context)

• April 28, 2014: Initiated shipment of Neuro-Spinal Scaffold for first clinical trial—a key operational milestone aligning with Q2 site activation plans .
• May 2014 Offering Details: Prospectus supplement outlines offering terms (12.175M shares; 6.0875M warrants; exercise price $1.4375; immediate exercisability; 5-year expiry) .

Prior Two Quarters’ Earnings (Trend Reference)

• Q3 2013: Total OpEx $5.07M; net loss $(14.29)M, driven by non-cash derivative loss and warrant modification .
• Q4 2013: Total OpEx $5.68M; net loss $(5.71)M; cash at year-end $13.98M .

Footnote: *We attempted S&P Global estimates retrieval for NVIV, but Capital IQ company mapping was unavailable (tool error). Normally, consensus values would be presented with S&P Global attribution.