InVivo Therapeutics reports net loss of $1,370,000 for second quarter 2011

InVivo Therapeutics Holdings Corp. (OTC/BB: NVIV), a company focused on the development of groundbreaking technologies for the treatment of spinal cord injuries (SCI), today reported financial results for the three and six months ended June 30, 2011 and provided a business update. Highlights of the second quarter of 2011 and recent weeks include:

Submitting an Investigational Device Exemption (IDE) to the U.S. Food and Drug Administration (FDA) to begin a pilot study with the Company's proprietary biopolymer scaffolding device in acute SCI

Establishing and patenting cGMP manufacturing processes to prepare for human studies

Expanding the Company's existing patent license to include nervous system conditions beyond the spinal cord

Forming a strategic research collaboration with the Miami Project to Cure Paralysis for the development of novel SCI treatments

Appointing Jonathan Slotkin, M.D. as Medical Director

Management Commentary

"We made important progress in recent months in our goal to provide effective therapies to prevent and treat spinal cord injuries, most notably filing an IDE for our biopolymer scaffolding device," commented Frank Reynolds, Chief Executive Officer of InVivo Therapeutics. "The scaffold is designed to protect and support spinal tissue and prevent secondary injury, including inflammation and glial scarring, following traumatic spinal cord injury. This is the first of several products we are advancing toward human clinical testing, and our scaffolding device will address a poorly served medical condition as most treatments are ineffective for the 12,000 Americans each year who suffer an acute spinal cord injury."

"We also are making excellent progress in our preclinical studies with the use of an injectable hydrogel product for local, controlled-release drug delivery, in the seeding of Schwann cells based on our collaboration with the Miami Project and in the use of autologous stem cells to repair neurological damage in chronic spinal cord injuries. In the coming months we expect to submit data on our primate studies for publication in a peer-reviewed journal."

"Our scaffolding is a powerful platform technology, and we believe it has applicability beyond SCI. To that end, we have expanded the field of use of our existing patent license to include parts of the peripheral nervous system, the cavernous nerve surrounding the prostate, the brain, the retina and cranial nerves."

Mr. Reynolds continued, "We were very pleased that Dr. Jonathan Slotkin, a renowned neurosurgeon at the Washington Brain & Spine Institute in Washington, D.C. deepened his relationship with InVivo by assuming the position of Medical Director. As we move forward through various clinical trials on the path to commercialization, Dr. Slotkin's counsel and leadership will be of great value."

Financial Results

For the three months ended June 30, 2011, the Company reported a net loss of $1,370,000, or $0.03 per share, compared with a net loss of $970,000, or $0.03 per share, for the three months ended June 30, 2010. Total operating expenses were $2,527,000 during the second quarter of 2011, compared with $794,000 in the prior year second quarter. Research and development expense was $1,392,000 in the second quarter of 2011, up from $468,000 in the second quarter of 2010 as the Company prepared to initiate a clinical trial, and broadened its portfolio of products. General and administrative expense rose to $1,135,000 in the three months ended June 30, 2011 from $326,000 in the three months ended June 30, 2010 as the Company made investments to expand infrastructure and incurred costs associated with public company practices. In the 2011 second quarter the Company recorded a non-cash gain on derivatives of $1,163,000 associated with the reduction in the fair value of the warrant derivative liability.

The Company had cash and cash equivalents of $4,964,000 as of June 30, 2011.

For the six months ended June 30, 2011, the Company reported a net loss of $2,648,000, or $0.05 per share, compared with a net loss of $1,424,000, or $0.05 per share, in the comparable 2010 period.