InVivo Therapeutics

Kurta Law is investigating high-risk investments underwritten by Aegis Capital Corp.  When brokerage firms recommend the stocks that they underwrite, they create a conflict of interest because they profit from bringing these stocks to market.

Brokers who make unsuitable recommendations of risky investments may also violate securities regulations. Investors who believe their investment in InVivo Therapeutics stock was too risky for their profile should consider pursuing FINRA arbitration.

Contact us at (877) 600-0098 or email info@kurtalawfirm.com to speak to one of our securities attorneys for free today.

What is InVivo Therapeutics?

According to the prospectus, InVivo Therapeutics Holdings Corp. (NVIV) develops biomaterial technologies designed to treat spinal cord injuries and hydrogels for the delivery of related therapeutics. Hydrogels are porous structures consisting of a fluid and a network of polymers; gelatin is a common example.

In the prospectus, the company describes one of its product candidates as a hydrogel designed to slowly deliver methylprednisolone sodium succinate, an anti-inflammatory drug, into a patient’s system so as to avoid the potentially fatal side effects of a typical high-dosage application.

What are the Risks Associated with InVivo Therapeutics?

Development-stage companies in the healthcare industry face significant challenges due to the lengthy process of researching, developing, and receiving regulatory approval for product candidates.

InVivo Therapeutics is no exception: its prospectus describes major risks relating to its finances, stock value, and the clinical trial process for its treatments.

Financial Prospects

At the time of the prospectus, InVivo Therapeutics had not generated any revenue and as of December 31, 2013, had incurred net losses totaling more than $81 million since its inception. These conditions cast substantial doubt on the company’s financial prospects and may make it more difficult for it to raise capital in the future.

Risks Associated with Penny Stocks

The prospectus states that InVivo Therapeutics debuted as a penny stock listed on OTCQB. Penny stocks typically trade for less than $5.00 per share and are not listed on national securities exchanges like the Nasdaq.

Because of the risks associated with penny stocks, broker-dealers must comply with special regulations concerning risk disclosure and the suitability of a penny stock for a given investor. Some brokerage firms prefer not to facilitate penny stock transactions due to these regulations, and this could further limit the liquidity of shares of InVivo Therapeutics.

Risks Associated with Clinical Trials

InVivo Therapeutics states that it expects one of its product candidates, a biopolymer scaffolding device, to be regulated by the FDA as a Class III medical device. This requires certain preclinical tests, clinical trials, providing proof of a consistent manufacturing process, and final FDA approval.

Achieving FDA approval is a lengthy and expensive process, and it can be complicated by risks such as:

• Failure to replicate results of animal testing in human tests
• Disputes with third-party laboratories utilized for conducting trials
• Intellectual property disputes with collaborators

Additionally, InVivo Therapeutics licenses certain technology used to develop its biopolymer scaffold product candidate from the Children’s Media Center Corporation (CMCC) and MIT. The loss of the rights to this license could impair the company’s ability to continue developing the product.

Aegis Capital Corp. Underwriting  

Investors should know that Aegis Capital Corp. served as the underwriter for this offering. Underwriters take on risk in exchange for a fee, which could motivate certain investment banks to underwrite investments that pose too much risk for the average retail investor. Additionally, brokers may have conflicts of interest when they recommend shares that are underwritten by an affiliate of their brokerage firm.

What Can I Do If I Suffered Losses?

If you lost money on your investment in InVivo Therapeutics, reach out to a Kurta Law securities attorney today. Our securities attorneys have 5-star reviews on Google and a history of winning fair settlements for investors. Call (877) 600-0098 or email info@kurtalawfirm.com.