Vancouver, Canada. November 19, 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 third quarter ended September 30, 2020.
Paul Brennan, NervGen’s President & CEO, stated, “During this past quarter, we continued working to complete the IND enabling studies necessary to initiate Phase 1 clinical trials for NVG-291 in healthy volunteers. We expect the Phase 1 trial to commence in the first quarter of 2021 and, if all goes well, we expect to start the Phase 2 clinical trial in spinal cord injury in the fourth quarter of 2021 and the start of the Phase 2 clinical trial in multiple sclerosis will now be in the first half of 2022.”
Mr. Brennan added, “We also continue to build our team having secured the services of a new member of our Board and several key consultants to help drive our programs forward. Dr. Randall Kaye was appointed to our Board of Directors and brings over 25 years of industry experience in developing pharmaceuticals in high unmet medical need disease areas. Michael Davis, MD, FACS, FRCS (Hon.), Colonel (Ret.), formerly Director of the U.S. Combat Casualty Care Research Program, was engaged to help us identify, prioritize and secure sources of non-dilutive funding for developing our lead compound, NVG-291, with an emphasis on finding support for important non-core indications. Dr. George Perry, a noted Alzheimer’s disease expert, was retained to provide independent strategic advice to guide development of NVG-291 in the treatment of Alzheimer’s disease. We have also engaged LifeSci Advisors and renewed Brian McAlister’s consulting contract to provide financing and strategic capital markets advice.”
Operational Highlights for Q3 2020 and Subsequent Events
- On August 10, 2020, we completed a financing for gross proceeds of $6.5 million by offering 3,685,714 units (“Units”) at a price of $1.75 per Unit. Each Unit is comprised of one common share and one common share purchase warrant of the Company (a “Warrant”). Each Warrant is exercisable to acquire one common share until August 10, 2022 at an exercise price of $2.40 per Warrant.
- On September 10, 2020, we announced our engagement with LifeSci Advisors LLC, one of the preeminent providers of investor relations services to companies in the life sciences industry to help us expand our investor outreach to a broader group of potential investors. LifeSci Advisors LLC has been engaged for an initial term of six months that will be automatically extended after the initial term subject to a 30-day termination notice by either party.
- On September 30, 2020, at our annual general meeting, the shareholders re-elected Michael Abrams, Brian Bayley, Harold Punnett, Bill Radvak and Paul Brennan to serve on our Board of Directors until the next annual meeting or until their successors are duly elected or appointed. In addition, the shareholders voted in favor of the appointment of Davidson & Company LLP, Chartered Accountants, as auditors of the Company and approved certain amendments to the Company’s existing stock option plan.
- On October 19, 2020, we announced that we had retained the services Dr. Michael Davis, to help NervGen identify, prioritize and secure sources of non-dilutive funding for developing NVG-291 for treating not only our priority indications of multiple sclerosis, spinal cord injury and Alzheimer’s disease, but to also bring an emphasis to finding support for important non-core indications.
- On October 28, 2020, we announced that Dr. Randall Kaye was appointed to our Board of Directors. Dr. Kaye brings over 25 years of industry experience addressing high unmet medical need disease areas. He has significant leadership experience in senior roles where he has provided medical and scientific perspective in clinical development medical affairs.
- On October 28, 2020, we announced that, as a result of a logistical delay within our clinical research organization in obtaining certain materials necessary to complete the analysis of ongoing non-clinical studies, we anticipate that our planned Phase 1 clinical trial of NVG-291 in healthy volunteers will begin in Q1 2021.
- On November 10, 2020, we announced that George Perry, Ph.D. was retained to provide independent, expert and multi-disciplinary strategic advice to guide the development of NVG-291 in the treatment of Alzheimer’s disease. Dr. Perry is the current and founding Editor-in-Chief of the Journal of Alzheimer’s Disease and Semmes Distinguished University Chair in Neurobiology at the University of Texas, San Antonio. We also announced that Brian McAlister, NervGen co-founder, has agreed to extend his engagement as a strategic advisor for financing and capital markets for an additional two years.
- Cash and Investments: NervGen had a cash balance of $7.7 million as of September 30, 2020, compared to $3.5 million as of June 30, 2020. The net cash burn for Q3 2020 from operating activities was approximately $1.2 million. This was offset by approximately $11,000 in net proceeds from the exercise of options during the quarter and a share offering for net proceeds of $5.4 million.
- R&D Expenses: Research and development expenses were $0.7 million for the three months ended September 30, 2020, compared to $1.7 million in the same period in 2019. The decrease was primarily due to the manufacture of drug substance for non-clinical toxicology studies and related stability studies incurred in the prior period but not required in the same quantities for operations in the current period, and preclinical development related to IND enabling pharmacology and toxicology studies and analytical development, as well as associated consulting fees required to facilitate FDA IND submission for approval of clinical trials in the prior periods. These decreases were partially offset by increases in the non-cash stock-based compensation expense pertaining to option grants to employees and consultants, and the timing of the related vesting, as well as patent related costs pertaining to the continued expansion, extension and maintenance of our patent portfolio.
- G&A Expenses: General and administrative expenses were $1.4 million for the three months ended September 30, 2020, compared to $0.7 million in the same period in 2019. The increase was primarily due to non-cash stock-based compensation pertaining to option grants to employees and consultants, and the timing of the related vesting, foreign exchange gain on our U.S. denominated assets, as well as increased salaries. These costs were partially offset by lower corporate communications, legal fees, investor relations activities, facilities and general office expenses, as well as travel. These decreases were a result of cost conservation efforts and travel restrictions imposed due to the COVID-19 pandemic.
- Net Loss: For the three months ended September 30, 2020, net loss, which included $1.0 million of non-cash expenses, was $2.1 million, or $0.06 per basic and diluted common share. For the three months ended September 30, 2019, net loss, which included $0.2 million of non-cash expenses, was $2.3 million, or $0.08 per basic and diluted common share.
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 multiple sclerosis, spinal cord injury 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:
Huitt Tracey, Corporate Communications
Corey Davis Ph.D., LifeSci Advisors LLC
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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 multiple sclerosis and spinal cord injuries, including the timing of our Phase 1 and Phase 2 studies; steps taken to minimize the impact of the COVID-19 pandemic on our operations; our belief that securing the services of a new member of our Board and several key consultants will help to drive our programs forward; our ability to identify and secure non-dilutive funding for our current programs as well as for important non-core indications; PTPσ and its benefits in treating spinal cord injuries, multiple sclerosis, peripheral nerve injury and cardiac ischemia; and our research for a solution for Alzheimer’s disease and other neurodegenerative applications.
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, Amended and Restated Prospectus Supplement, 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.