Vancouver, Canada. April 29, 2020 – NervGen Pharma Corp. (TSX-V: NGEN) (OTCQX: NGENF) (“NervGen” or the “Company”), a biotech company dedicated to creating innovative solutions for the treatment of nerve damage and neurodegenerative diseases, today reported its financial results for the year ended December 31, 2019.
Paul Brennan, NervGen’s President & CEO, stated, “2019 was an important year for NervGen during which we completed our Initial Public Offering (“IPO”) and prepared our Investigational New Drug Application for our lead program, NVG-291. Since year-end 2019, we have refined our development program for NVG-291 and continue to generate encouraging preclinical data to support our programs to bring life-changing hope to many people suffering from nerve damage, such as that experienced in spinal cord injury or in neurodegenerative diseases such as multiple sclerosis (“MS”) and Alzheimer’s disease (“AD”). Importantly, we have taken action to minimize the impact of the global outbreak of COVID-19 on our ongoing programs. We remain committed to our previous guidance that we intend to initiate our Phase 1 study in the fourth quarter of this year, Phase 2 trials in spinal cord injuries and MS in the second half of 2021, and to publish preclinical data in Alzheimer’s disease in 2021, subject to further impact by the COVID-19 pandemic on our suppliers’ operations, FDA review and financing.”
Mr. Brennan continued, “NervGen’s core technology, NVG-291, targets a novel receptor called protein tyrosine phosphatase sigma (“PTPσ”). PTPσ is present in the central nervous system and the peripheral nervous system and the receptor plays a key role when there is nerve damage. Preclinical testing has shown that inhibition of the PTPσ receptor promotes the regeneration of damaged nerves, increases plasticity and stimulates remyelination in animal models. Numerous peer-reviewed studies based on preclinical animal models have also shown functional benefits of PTPσ inhibition in models of spinal cord injury, MS, peripheral nerve injury and cardiac ischemia. Based on these exciting observations, we are focusing our development efforts towards the clinical development of NVG-291 for MS and spinal cord injuries, both sub-acute and chronic. At the same time, we are advancing our research for a solution for Alzheimer’s disease and exploring other neurodegenerative applications.”
Operational Highlights for 2019
- We appointed several key members of our senior management team, including Paul Brennan, as President & CEO, Lloyd Mackenzie in the newly created position of Chief Operating Officer, Amy Franke as Vice President, Clinical Operations and, subsequent to year-end, Bill Adams as Chief Financial Officer.
- On March 13, we completed the IPO of 10,000,000 common shares in the capital of the Company (the “Common Shares”) at a price of $1.00 per Common Share for aggregate gross proceeds of $10,000,000. The Common Shares commenced trading on the TSX Venture Exchange on March 15, the OTCQB on May 3 and the OTCQX on June 10.
- On April 24, we announced the issuance by the U.S. Patent and Trademark Office of two new patents protecting the development and commercialization of PTPs targeted therapies for heart diseases and injury, and for root avulsion involving injuries to the peripheral nerve system.
- On May 1, we closed a non-brokered private placement which consisted of the issuance of 350,000 Common Shares at a price of $1.00 per Common Share and 300,000 Common Shares at a price of $1.30 per Common Share for aggregate gross proceeds of $740,000.
- On June 26, we announced our goal to develop our technology beyond spinal cord injury to include MS. We intend to conduct our Phase 2 trials in MS in parallel with our clinical trials in SCI.
- On October 28, we announced a research initiative to advance our technology platform to generate new treatments in AD; this includes consulting with AD experts to generate a research and development program for AD, and targeting business development efforts to AD. We intend to release preclinical data in AD models in 2021.
- On November 21, we issued 1,500,000 Common Shares to our drug manufacturing partner, CSBio. The Common Shares were issued at a fair value of US$1.00 (CA$1.3231 equivalent) per Common Share for a fair value of US$1,500,000. This issuance reflected the initial deposit of a US$3,000,000 order from CSBio for NVG-291 to be used for our clinical development programs. No cash proceeds were raised from the transaction.
- Cash and Investments: NervGen had cash and investments of $4.1 million as of December 31, 2019, compared to $2.5 million as of December 31, 2018. The cash burn for the year ended December 31, 2019 from operating activities was approximately $8.2 million. This was offset by $9.8 million in net proceeds from financing during the year.
- R&D Expenses: Research and development expenses were $1.8 million and $6.4 million for the three and twelve months ended December 31, 2019, respectively, compared to $0.5 million and $0.8 million, respectively, in the similar periods in 2018. The increase was primarily due to higher preclinical, clinical and stock-based compensation costs including chemistry, manufacturing and control work, drug formulation development, non-GMP and GMP manufacturing costs and IND enabling studies for NVG-291, as well as related consulting expenses.
- G&A Expenses: General and administrative expenses were $1.1 million and $3.4 million for the three and twelve months ended December 31, 2019, respectively, compared to $0.3 million and $0.6 million, respectively, in the similar periods in 2018. The increase was primarily due to increased salaries, corporate communications, legal fees and investor relations activities related to becoming a public company, along with the engagement of specialist consultants and other related advisors, as well as business development activities.
- Net Loss: For the twelve months ended December 31, 2019, net loss, which included $1.5 million of non-cash expenses, was $9.8 million, or $0.38 per basic and diluted Common Share. For the twelve months ended December 31, 2018, net loss, which included minimal non-cash expenses, was $1.4 million, or $0.17 per basic and diluted Common Share. For the three months ended December 31, 2019, net loss, was $2.9 million, or $0.10 per basic and diluted Common Share compared to $0.8 million, or $0.04 per basic and diluted Common Share for the comparable period in 2018.
NervGen is restoring life’s potential by creating innovative solutions for the treatment of nerve damage and neurodegenerative diseases. The Company is developing drugs for the treatment of spinal cord injury, multiple sclerosis and Alzheimer’s disease. NervGen’s platform technology targets protein tyrosine phosphatase sigma (“PTPσ”), a neural receptor that impedes nerve repair. Inhibition of the PTPσ receptor has been shown to promote regeneration and remyelination of damaged nerves, as well as improvement of nerve function in animal models for various medical conditions.
For further information, please contact:
Paul Brennan, President & CEO
Huitt Tracey, Corporate Communications
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Cautionary Note Regarding Forward-Looking Statements
This news release may contain “forward-looking information” and “forward-looking statements” within the meaning of applicable Canadian and United States securities legislation. Such forward-looking statements and information herein include, but are not limited to, the Company’s current and future plans, expectations and intentions, results, levels of activity, performance, goals or achievements, or any other future events or developments constitute forward-looking statements, and the words “may”, “will”, “would”, “should”, “could”, “expect”, “plan”, “intend”, “trend”, “indication”, “anticipate”, “believe”, “estimate”, “predict”, “likely” or “potential”, or the negative or other variations of these words or other comparable words or phrases, are intended to identify forward-looking statements. Forward-looking statements include, without limitation, statements relating to: the clinical development of NVG-291 for MS and spinal cord injuries, both sub-acute and chronic; steps taken to minimize the impact of the COVID-19 pandemic on our operations; our Phase 1 study; our Phase 2 trials in spinal cord injuries and MS, including our intention to conduct the trials in parallel to our SCI trials; our intention to publish preclinical data in AD; review of our Investigational New Drug Application by the FDA; future financings and that Phase 1 and Phase 2 clinical studies are subject to additional funding; PTPσ and its benefits in treating spinal cord injuries, MS, peripheral nerve injury and cardiac ischemia; and our research for a solution for AD and other neurodegenerative applications, including the consultation of experts to generate research and development programs.
Forward-looking statements are based on estimates and assumptions made by the Company in light of management’s experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we believe are appropriate and reasonable in the circumstances. In making forward-looking statements, the Company has relied on various assumptions, including, but not limited to: the Company’s ability to manage the effects of the COVID-19 pandemic; the accuracy of the Company’s financial projections; the Company obtaining positive results in its clinical and other trials; the Company obtaining necessary regulatory approvals; and general business, market and economic conditions.
Many factors could cause our actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including without limitation, a lack of revenue, insufficient funding, the impact of the COVID-19 pandemic, reliance upon key personnel, the uncertainty of the clinical development process, competition, and other factors set forth in the “Risk Factors” section of the Company’s Annual Information Form, financial statements and Management Discussion and Analysis which can be found on SEDAR.com. All clinical development plans are subject to additional funding.
Readers should not place undue reliance on forward-looking statements made in this news release. Furthermore, unless otherwise stated, the forward-looking statements contained in this news release are made as of the date of this news release, and we have no intention and undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.