Is This Pharma Co. the Next Eli Lilly?

NervGen Pharma Corp. (NGEN:TSX.V; NGENF:OTCQX) said it is making significant strides in the field of nerve damage and spinal cord injury treatments. With a leadership team comprising Chief Executive Officer Mike Kelly, Chief Medical Officer Dan Michael, Chief Financial Officer Bill Adams, and consultant Rich Marcari, the company is focused on advancing its flagship drug, NVG-291.

Recently, Nervgen received FastTrack designation from the FDA for NVG-291, which facilitates more frequent communication with the FDA and potentially accelerates the development timeline. 

As detailed in a recent YouTube discussion with BioPub, Nervgen's primary focus is on the development of NVG-291 for the treatment of spinal cord injuries. The company is currently conducting a 16-week single-center trial at the prestigious Shirley Ryan AbilityLab in Chicago. This trial aims to evaluate the efficacy of NVG-291 in improving neuronal connectivity and motor function in patients with motor incomplete spinal cord injuries. One of the significant milestones for Nervgen was achieving FastTrack designation for NVG-291.

This designation potentially highlights the unmet medical need and the promising preclinical data supporting the drug's potential. The clinical trial population is carefully selected to match the characteristics of animal models, focusing on incomplete motor patients to ensure the best chances of translating preclinical success into human trials.

However, enrollment has been slower than anticipated due to the challenge of finding a homogeneous patient population willing to relocate to Chicago for the trial.

According to a June 7 newsletter from Chen Lin of What is Chen Buying? What is Chen Selling, NervGen Pharma Corp. could potentially become the next Eli Lilly and Co. 

CEO Mike Kelly acknowledged the difficulty: "We are trying to make a population that has very little homogeneity as homogeneous as we possibly can," he said in the Biopub interview. Despite these challenges, Nervgen remains committed to ensuring the trial's success by refining the recruitment process and expanding the search nationwide.

In March, Nervgen raised US$23 million in a bought deal financing to ensure the company's financial stability through Q3 2025. This funding will support the ongoing clinical trials, preclinical studies, and the development of new programs, including the anticipated NVG-300.

The company is preparing for a potential Phase 3 trial while remaining open to the possibility of fast-track approval based on the strength of the NVG-291 data.

Consultant Rich Marcari highlighted the FDA's potential flexibility, emphasizing that regulatory strategies are designed to maximize the chances of expedited approval in the Biopub interview: "We have experts who are helping us navigate this process that aren't in the company. These are experts who've done this before with other companies."

Nerve Regeneration Sector

The global nerve repair and regeneration market is experiencing robust growth, driven by a rising prevalence of neurological disorders. According to an article posted on Skyquest, the market size was valued at U$8.2 billion in 2022 and is projected to grow to US$23.05 billion by 2031 at a compound annual growth rate (CAGR) of 12.17%. This growth is fueled by the increasing number of individuals suffering from conditions such as Parkinson's disease, Alzheimer's, and other central nervous system (CNS) disorders, leading to a higher demand for effective treatment options.

The sector benefits from continuous research and development efforts by major companies, resulting in technological advancements that enhance the efficiency of treatments for neurological disorders. These advancements are expected to contribute significantly to the market expansion.

Lin also mentioned that if patient or family testimonials emerge before the official results, the stock could jump 5-10 times, making it a compelling hold for investors.

Expectations are high in this sector. As Grandview Research pointed out in a piece on the global nerve repair market, "Investments by key companies to develop more effective devices are likely to propel market growth in the coming years . . . The biomaterials segment is anticipated to expand at the fastest CAGR from 2023 to 2030 due to technological advancements, a wide range of applications, government funding for innovations, and biocompatibility. Advanced products such as biodegradable polymers are expected to enhance spinal stabilization and healing of fractures and reduce hospitalization."

Additionally, the availability of multiple therapies for various CNS disorders further enhances the market potential. For instance, therapies using processed nerve allografts have shown promising results in restoring motor and sensory nerve functions in patients with upper extremity nerve impairments. In a study presented at the annual meeting of the American Society for Surgery of the Hand, it was reported that 75% of patients treated with a specific nerve allograft exhibited recovery of motor function, while 85% experienced restored sensory nerve function.

Market.US wrote about the driving factors behind this market, mentioning key elements like innovations. As they explained, "Continuous innovation in nerve repair and regeneration technologies, encompassing bioelectronic devices, stem cell therapies, and advanced surgical techniques, plays a pivotal role in driving market growth. The escalating incidence of nerve injuries resulting from accidents, trauma, and various medical conditions is a primary driver for the increased demand for nerve repair and regeneration solutions. Additionally, the aging global population contributes to a higher prevalence of age-related neurological disorders and degenerative conditions, creating a substantial market demand for therapies in this domain. Furthermore, heightened awareness and advancements in diagnostic tools facilitate early detection of nerve injuries, fostering the demand for timely and effective nerve repair and regeneration solutions."

Catalysts

Several critical catalysts are on the horizon for Nervgen, which were addressed in the interview with Biopub. The completion of patient enrollment in the current clinical trial is expected by Q3 2024, with subsequent data analysis potentially leading to an NDA submission.

Additionally, the company plans to unveil details about NVG-300 by the end of June 2024, outlining its potential and future development plans. Nervgen's commitment to innovative treatment solutions for nerve damage and spinal cord injuries positions it as a leader in this crucial field.

The Next Eli Lilly?

Ownership and Share Structure

According to Reuters, NervGen Pharma Corp. has a total of 69.93 million shares outstanding and a market capitalization of US$119.9 million.

Retail investors hold 76.63% of the company’s shares.

PFP Biosciences Holdings LLC, a strategic investor, holds 18.42% of the company’s shares.

Management and insiders hold 4.95% of the company. Advisor William J. Radvak owns 2.34%, with 1.63 million shares, and Founder Harold Punnett holds 1.61%, with 1.13 million shares.

Institutions own 23.04% of the company.

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