Invivo Therapeutics (NASDAQ:NVIV) (OTCQB:NVIVD) has paused patient enrollment in the approval trial of its bioresorbable spinal implant, Neuro-Spinal Scaffold, after a third patient in the study died. The company states that all three deaths have been determined to be unrelated to the product or the implantation procedure, used in patients rendered paraplegic by a spinal cord injury, but the company's shares tanked 27%.

Unless Invivo can somehow shake off the product's worrisome reputation - to this end, it is talking with the FDA to see if enrollment criteria ought to be changed or the study altered in other ways - it will have to rely on its one remaining product, an injected spinal cord injury therapy based on neural stem cells. But this is still in animal trials, so Invivo really needs its Neuro-Spinal Scaffold to be vindicated.

This is the second disappointment for the company in its attempt to develop this project. Four years ago the FDA refused to let it file on data from a pilot study, setting the approval date back by some years (InVivo Therapeutics suffers from FDA's timidity on biologic grafts, August 29, 2013).

The Neuro-Spinal Scaffold is made of two polymers, polylactic-co-glycolic acid and poly-L-lysine. It is implanted at the site of a spinal cord injury to provide structural support and a matrix through which the patient's neural tissue can regrow, after which the graft breaks down over several weeks.

The Inspire trial is testing its safety and probable benefit for the treatment of complete spinal cord injury at the T2-T12 and L1 positions - from roughly shoulder level to just above the waist. The primary endpoint is improvement of one or more grades on the on the American Spinal Injury Association impairment scale (AIS) at six months after implantation. The study is slated to enrol 20 patients, according to Clinicaltrials.gov, and is intended to support a filing for US approval via the humanitarian device exemption (HDE) route.

The most recent patient to sign up to the Inspire study underwent implantation in late June but died suddenly at a healthcare facility following discharge from the hospital.

Invivo could hardly be blamed for pointing out that some of the patients in the Inspire trial had had positive outcomes. One had improved from a complete injury (grade A on the AIS) to having some restored sensory and motor function (grade C) one month after treatment. Another had regained sensory but not motor function (grade B) at six months.

One patient who had improved from a complete injury (grade A) to having sensory function (B) at two months reverted to complete injury at three months, but was deemed to have regained this motor function at the six-month point. The company says that of the 16 patients currently in follow-up seven have improved on the AIS, four of whom have recovered both sensory and motor function to reach grade C.

Five further patients had not improved at six months, and four had shown no improvement but had not yet reached this point.

With trial enrollment on hiatus Invivo will have to wait to find out whether these results might be sufficient to get the graft an HDE approval. The company now hopes to complete enrollment in the first half of next year, and to file its FDA approval application in the second half of 2018.

Use of the Neuro-Spinal Scaffold in complete and incomplete spinal cord injury, at cervical and thoracic levels, is forecast to bring Invivo revenues of $268m in 2022, according to EvaluateMedTech's consensus. By 2022 the sellside sees it outsold by Invivo's only other product, a biomaterial-based scaffold used to deliver neural stem cells to help reconnect the spinal cord by re-growing nerves.

But the scaffold is the more advanced product, and Invivo will be relying on revenues from this to fund clinical development of the stem cell therapy. The trial delay puts this in jeopardy, as the company's shareholders are well aware.

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Third Trial Death Endangers Invivo - Seeking Alpha