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Is NervGen Too Good to be True?Is there really hope for human spinal cord repair?
Chen Lin brought this story biotech story to my attention, as he often does. But when Chen is confident, he has found an investment opportunity that not only has 10-fold upside but something potentially much bigger, I can tell by the excitement in his voice. As an investor he has had several big winners, especially in the biotech space. So, when he comes to me with a story with a high level of excitement, I have to listen. That’s one reason I am telling you about NervGen. Another reason is because I have a very good friend whose son tragically broke his back and severed his spinal column at age 20 in a bicycle accident. My wife and I pray for our friend’s son that he will not be destined to spend the rest of his life in a wheelchair. When Chen called me about NervGen, he referred to it as a possible “miracle” company, because it has long been believed by virtually all medical scientists that damaged nerve tissue is irreversible. They have believed that, while there may be some temporary improvement immediately following an injury, over the longer term the damage becomes permanent. Enter Dr. Jerry Silverwho sought to understand why spinal cord tissue does not repair itself and what it might take to change that. He was behind the development of a drug named NVG-291 that was used effectively in repairing the spinal cords of mice. You can watch a video showing the results of the mice that received NVG-291 compared to those who did not receive the drug here: Mice walking again! J Taylor's Gold Energy & Tech Stocks is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber. The diagram above illustrates re-connectivity of neurological communication lines through plasticity, axonal regeneration and remyelination as described in the box above right. This has now been demonstrated preclinically in mice. In the 1990s Dr. Jerry Silver, discovered that glial scars contain chondroitin sulfate proteoglycans, or CSPG–a group of molecules known to inhibit cellular events central to neural tissue repair. In 2009, Dr. Silver and collaborators from Harvard co-discovered that CSPGs bind to protein tyrosine phosphates sigma (PTPσ), a receptor present in the brain and spinal cord and involved in CSPG-dependent inhibition of neuroplasticity. Neuroplasticity is the ability of neural networks to change through growth and reorganization. In 2015, Dr. Silver’s team designed a short chain of amino acids, or a peptide (NVG-291-R) derived from PTPσshown to relieve CSPG-mediated inhabitation of nervous system repair. NVG-291 is the humanized, or synthetic, version of NVG-291-R. In 2018, NervGen licensed NVG-291 global rights for development and commercialization in all indications from Case Western with intellectual property protection until 2037. In 2023, NervGen initiated a Phase 1b/2a placebo-controlled proof-of-concept trial to evaluate the efficacy of NVG-291 after preclinical trials. Preclinical Study Before the company was granted the right to engage in human trials, it conducted preclinical studies involving mice with injured spinal columns. One study involved cases of acute injuries where mice were treated just 1 day post injury and another of chronic cases when treatment began 12 weeks after injury. The results of both the placebo groups and treatment groups are shown for both acute and chronic samples in the illustrations on your right. In both studies, mice treated with NVG-291 demonstrated significant improvement, not attaining the initial preinjury quality of life but dramatic improvement with an ability to reclaim fine motor movements. A movie explaining the development of NVG-291 and its use in restoring the ability of mice to walk again can be viewed here: Mice walk again! A photo from this video of a placebo mouse and a treated mouse is shown below. The placebo mouse is unable to move his back legs and tail (below left) while the treated mouse (below right) did have hind body movements restored. Bladder function, which is obviously extremely important to human functioning, was also improved with treatment. With a higher dosage, 100% of the treated mice enjoyed bladder control. Phase 1b/2a Proof of Concept Trials On September 25, 2023, NervGen announced that it has dosed the first subject in the company’s 1b/2a proof-of-concept placebo-controlled clinical trial for its proprietary lead compound, NVG-291, in individuals with spinal cord injury (SCI). The news release stated, “The trial is designed to allow NervGenus to evaluate NVG-291’s efficacy independently for each cohort of subjects—subacute and chronic.”Management believes the results of this research study will be a key enabling step that may bring NervGenus closer to the first approved therapy for spinal cord injury (SCI). The news release said it expected to provide positive results “next summer.” So if you are looking for a driver for this company’s shares, we may be approaching a significant timeframe now. “There are approximately 300,000 people with SCI living in the United States alone, the limited number of clinical trials in this area and the tremendous anticipation for this trial within the SCI community, recruitment for the chronic cohort (one to 10 years postinjury) is anticipated to happen relatively quickly, with results expected by mid-2024. Results from the subacute cohort (10 to 49 days postinjury) are expected in late 2024/early 2025. The trial is being conducted at Shirley Ryan AbilityLab in Chicago, a global leader in physical medicine and rehabilitation for adults and children with the most severe and complex conditions. “‘Our team at Shirley Ryan AbilityLab is excited to have begun investigational treatment in this important clinical research trial in individuals with spinal cord injury,’ stated Dr. Monica A. Perez, PT, PhD, scientific chair of the Arms + Hands Lab at Shirley Ryan AbilityLab, professor of physical medicine and rehabilitation at Northwestern University, research scientist at the Edward Hines Jr. VA Hospital; and the principal investigator of this trial. ‘We look forward to fully recruiting this study and executing upon this innovative trial, which has the potential to change how we design and implement SCI clinical studies in the future.’” During the first 21 days of treatment the company reported that various dose levels have been well tolerated but that the maximum tolerated dose (MTD) had not yet been reached. There have been no treatment discontinuations and no serious or severe adverse events in NVG-291 group. The most common adverse effect was injection site related. There have been no clinically significant effects related to NVG-291 treatment across all study parameters. The co-primary objectives of the study are to observe hand muscle and leg muscle group activity improvement. Secondary endpoints: Clinical measurement on performance tests (walking speed, hand function) and neurological assessment. Electrophysiological measures of electrical connectivity. Exploration Endpoints: Autonomic (e.g. bladder function) Spasticity of the lower extremities Mobility Quality of life in general Blood biomarkers MANAGEMENT Mike Kelly, President & Chief Executive Officer, brings three decades of pharmaceutical experience playing instrumental roles in the creation, development, and strengthening of several companies to his role as President & CEO of NervGen. Most recently, Mr. Kelly served as President of U.S. Operations for Adapt Pharma, Inc. from March 2016 to June 2019, and played a key leadership role in the development and commercialization of NARCAN (naloxone HCl) Nasal Spray in the U.S. and Canada and in the eventual sale to Emergent BioSolutions for US$735 million. Dan Mikol, Chief Medical Officer, PhD, has over 25 years of experience in the pharmaceutical industry and as a practicing physician conducting clinical research in the field of neurology, designing Phase 1-4 clinical trials, and leading clinical development teams. Prior to joining NervGen, Dr. Mikol was at Amgen, where he served as the head of clinical development in the neuroscience and nephrology therapeutic areas, as well as head of the molecular genetics team across therapeutic areas. He was instrumental in the approval of Aimovig for migraine prevention in 2018. Prior to Amgen, Dr. Mikol was the development lead for Tysabri at Biogen and supported the Japan approval of Tysabri for relapsing multiple sclerosis in 2014. Prior to that, he held positions in senior clinical development and medical affairs in neuroscience at Novartis and EMD Serono. Bill Adams, Chief Financial Officer, has over 25 years of strategic financial management experience that includes mergers and acquisitions, operations and capital markets in both Canada and the U.S., as well as corporate and operational finance having held a number of executive positions with high-growth technology and life sciences companies, including Chief Financial Officer roles at Anandia Laboratories Inc., Response Biomedical Corp., CellFor Inc., and AnorMED Inc. Matvey Lukashev, Vice President, Research and Preclinical Development, PhD, has over 30 years of research experience in academia, industry, and non-profit biotech settings. Most recently, Dr. Lukashev served as Vice-President, Translational Sciences at the ALS Therapy Development Institute where he built and led a new translational research and drug discovery function encompassing patient genomics, stem cell biology, genome editing and phenotypic screening for biomarker, target and drug discovery in amyotrophic lateral sclerosis. ADVISORS Jerry Silver, PhD, Co-Inventor and Scientific Advisor, is the Professor of Neurosciences at Case Western Reserve University’s School of Medicine and adjunct Professor in the Department of Neurosurgery at the Cleveland Clinic Foundation. He is credited in over 180 publications and is the recipient of several prestigious awards, including the Ameritec Prize for significant accomplishments toward a cure for paralysis. Davis, Colonel (ret.) USAF, MC, MD, FACS, FRCS (Hon.)Advisor, is recently retired after 26 years of military service, and has accumulated an extensive, rare knowledge base involving the clinical, scientific, operational, and governmental programmatic domains. He has garnered numerous military and medical publications and awards, and serves as a reviewer for professional journals. Brian McAlister, Co-Founder and Advisor, is a prolific start-up specialist, advisor, founder, and angel investor to startup companies. He assists startups with raising capital and other activities. Over the past 30 years, Mr. McAlister has assisted over 25 early-stage companies in various industries including biotechnology, enterprise software, and natural resources. Possible Future Applications & Market Potential While the current and most advanced application is for regeneration of spinal cord tissue, any disease or injury where you need to regenerate the nerve is at this point in time thought to be an application of NVG-291. All of the following problems are thought to be potential candidates for NVG-291. The company is currently conducting preclinical work for stroke. As you can see from the various neurological problems noted above, individual costs are very high and systemwide add up to billions of dollars. To the extent NVG-291 is effective in humans as it is in mice, the lives of millions of people around the globe could be greatly enhanced, while medical expenditures could be massively reduced by billions of dollars. With that, the economics should work sufficiently well to enable NervGen early risk-taking investors to do very well. Funding With a C$11.7 million balance at the end of 2023 plus an additional C$23 million raised in March of this year, the company shouldn’t need to raise any more capital until early results from human testing are made public as early as this summer and in any event before the end of 2024. It should be noted that in October of last year, the company received fast-track designation for NVG-291 for individual trials with spinal cord injury (SCI). The FDA’s fast-track program is designed to facilitate the development of drugs intended to treat serious conditions and fill unmet medical needs as part of the FDA’s goal to get important new drugs to patients earlier. Fast-track also provides eligibility for both priority review, which can shorten the new drug development (NDA) review process, and for accelerated approval, which can allow for an earlier or faster approval based on a surrogate or intermediate clinical end point. As NervGen’s President Mike Kelly noted, “The FDA’s decision to grant fast-track designation for NVG-291 underscores the significance and severity of the unmet medical need that exists for individuals living with spinal cord injury and their caregivers. We believe that NVG-291 has the potential to be the first approved treatment indicated to enable neurological/functional recovery following spinal cord injury, and we look forward to working closely with the FDA in the clinical development process with the goal of obtaining approval to market NVG-291 as soon as possible.” THE BOTTOM LINE This is a very exciting story because it appears to hold a promise for enhancing the lives of millions of people around the globe. The big question of course is whether NVG-291 will be as effective in humans as it appears to be in mice. Not knowing the answer to that question or to what level of success will occur for various applications makes investing in this stock at this time a high risk/high reward proposition. I have personally allocated a small amount of my IRA to buying some shares of this stock. With fast-track application for spinal cord injuries in place, that should reduce the time and cost for moving NVG-291 along toward widespread application. As noted above, a key driver for these shares should come as early as this summer to the end of this year as results from clinical trials are made public or to the extent a wider audience begins to understand this story. I would suggest approaching this story as Chen Lin typically does. If you get a double from your purchase price, reduce your risk by taking some profits. In my view, the risk/reward is very attractive, such that a small allocation insufficient to adversely impact your lifestyle would be prudent for most investors. UPDATE:This report was written for my paid subscribers on April 26, 2024 of this year when NevGen’s shares were quoted at US$1.55. As of the close this past Thursday, the shares were quoted at US$1.73. With approximately 70 million shares outstanding the market cap is still quite low at $121 million. Meantime, there are reports that have leaked out of success of at least one young man who is walking again. One source of internet chat is found here: Redit r/NervGen_NerveRepair Lounge CAUTION: Of course these are unverified rumors. As such they should be taken with a huge grain of salt. A bit of cynicism is very healthy as you can imagine the bias of both investors on the long and short side of this trade. That said, my good friend Chen Lin who has done very well in in the biotech sector of the years is as excited about this story as a couple of his other successful ventures in the past. Chen is not always right but if if NervGen lives up to its apparent potential, the payoff will be sufficiently huge to cover a multitude of losses. Of course, the most important thing abut NVG-291 is not the wealth that will accrue to risk taking investors, but to the millions of people who have been disabled due to spinal cord injuries. DISCLAIMER: J Taylor’s Gold, Energy & Tech Stocks, is published weekly and monthly as a copyright publication of Taylor Hard Money Advisors, Inc. (THMA). THMA provides investment ideas solely on a paid subscription basis. Securities are selected for presentation in this publication based strictly on their investment merits in the judgment of the editor and no fees are charged for inclusion in his letter. In arriving at investment decisions, Jay applies information he believes to be reliable but cannot guarantee its accuracy. The material contained herein is solely for information purposes. Readers are encouraged to conduct their own research and due diligence, and/or obtain professional advice before investing in any of the ideas expressed in this letter. J Taylor's Gold Energy & Tech Stocks is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber. 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