Business Overview and History
Vivani Medical, Inc. (VANI) is a biopharmaceutical company pioneering the development of miniaturized, long-acting drug implants to address the critical issue of medication non-adherence. Founded in 2009 by a team of biomedical innovators, Vivani is leveraging its proprietary NanoPortal technology to create a portfolio of novel drug delivery solutions that have the potential to revolutionize the treatment of chronic diseases.
Vivani’s roots can be traced back to 2009 when Adam Mendelsohn and two of his colleagues at the University of California, San Francisco (UCSF) and the University of California, Berkeley (UCB) recognized the significant challenges posed by medication non-adherence. While in business school, the team leveraged their knowledge in chemistry, drug delivery, and nanotechnology to propose the development of new miniature, biocompatible drug implant prototypes capable of releasing therapeutic drug levels over an extended period of time.
Encouraged by their success in business plan competitions, Mendelsohn and his colleagues founded Nano Precision Medical, Inc. (NPM) in 2009, which began operations in 2011 in an incubator on the UC Berkeley campus. Over the next decade, NPM experienced significant growth, expanding to 36 full-time employees and relocating its headquarters and operations to Alameda, California.
The company’s journey took a significant leap forward in August 2022 when NPM merged with Second Sight Medical Products, Inc. to form Vivani Medical, Inc. This strategic combination brought together Second Sight’s pioneering neurostimulation technology with NPM’s expertise in long-acting drug delivery, creating a unique platform for addressing unmet needs in chronic disease management. As part of the merger, Vivani contributed Second Sight’s neurostimulation assets and certain liabilities to a wholly-owned subsidiary called Cortigent, Inc. to continue advancing this technology.
Vivani’s lead program, NPM-115, is a miniature, 6-month glucagon-like peptide-1 (GLP-1) implant for the treatment of chronic weight management in obese or overweight individuals. The company’s broader pipeline features a range of long-acting drug implants targeting various chronic conditions, leveraging the versatility of its proprietary NanoPortal technology. This innovative technology utilizes a space-efficient design that allows a miniaturized implant to provide many months of therapeutic delivery of potent molecules.
Financial and Operational Highlights
Vivani has strategically positioned itself to advance its innovative pipeline while maintaining a solid financial footing. As of September 30, 2024, the company reported total assets of $42.9 million, with $19.65 million in cash and cash equivalents. This strong cash position is further bolstered by the $13.7 million in net proceeds from a securities purchase agreement completed in March 2024, as well as the company’s ongoing at-the-market (ATM) offering program, which has provided an additional $160,000 in net proceeds during the first nine months of 2024.
Despite the company’s pre-revenue status, Vivani has been able to leverage non-dilutive funding sources to support its research and development efforts. During the nine months ended September 30, 2024, the company received $0.2 million in grants, which were used to offset a portion of its operating expenses.
Vivani’s financial results for the nine months ended September 30, 2024, reflect the company’s focus on advancing its pipeline. Research and development expenses totaled $11.44 million, while general and administrative expenses amounted to $6.78 million. The company reported a net loss of $17.44 million for the period, consistent with its status as a pre-commercial biopharmaceutical company.
Regulatory Milestones and Clinical Development
Vivani has achieved several important regulatory milestones that have paved the way for the advancement of its lead GLP-1 implant program. In June 2024, the U.S. Food and Drug Administration (FDA) lifted the full clinical hold on the company’s Investigational New Drug (IND) application for NPM-119, its miniature, long-acting GLP-1 implant for the treatment of type 2 diabetes. This clearance allowed Vivani to initiate the first-in-human clinical trial for this program.
Building on this momentum, in September 2024, Vivani announced that it had received regulatory approval from the Bellberry Human Research Ethics Committee (HREC) in Australia to commence the LIBERATE-1 clinical trial. This study will evaluate the safety, tolerability, and pharmacokinetic profile of Vivani’s miniature, 6-month GLP-1 (exenatide) implant in obese and overweight individuals. This trial represents the first clinical application of the company’s proprietary NanoPortal technology.
Vivani’s strategic focus on the obesity and chronic weight management market is further underscored by its announcement in February 2024 of positive preclinical weight loss data with its exenatide implant. In a study of high-fat diet-induced obese mice, the company’s GLP-1 implant generated weight loss of approximately 20% compared to a sham implant control, which was comparable to the results observed with semaglutide injections (the active ingredient in Ozempic® and Wegovy®).
More recently, in September 2024, Vivani reported positive preclinical liver fat results with its miniature, ultra long-acting GLP-1 implant. The company’s exenatide implant produced an 82% sham-implant adjusted reduction in liver fat in an obese mouse model, with an expected twice-yearly dosing regimen. These results further bolster the potential of Vivani’s NanoPortal technology to deliver meaningful therapeutic benefits in the treatment of obesity and related metabolic disorders.
Competitive Landscape and Risks
Vivani operates in a highly competitive biopharmaceutical landscape, with numerous companies developing innovative treatments for chronic diseases. The company’s GLP-1 implant candidates face competition from injectable and oral GLP-1 receptor agonists, such as Ozempic® (semaglutide), Wegovy® (semaglutide), and Bydureon® (exenatide), which have established market presence and strong brand recognition.
Additionally, Vivani’s success is subject to the inherent risks associated with the development of novel pharmaceutical products, including the uncertainty of clinical trial outcomes, regulatory approvals, and commercial acceptance. The company’s ability to effectively navigate these challenges will be crucial in determining its long-term viability.
Vivani has also faced legal challenges, including a pending opposition filed by Pixium Vision SA in the European Patent Office regarding a European patent owned by Vivani’s Cortigent subsidiary. While the company believes a successful challenge will not have a material effect on its operations, the outcome of this dispute remains uncertain.
Financials
Vivani Medical, Inc. is currently in the preclinical stage and has not generated any revenue. For the most recent fiscal year ended December 31, 2023, the company reported a net loss of $25,652,000, with operating cash flow (OCF) of -$23,699,000 and free cash flow (FCF) of -$24,586,000.
For the quarter ended September 30, 2024, Vivani reported a net loss of $6,041,000, with OCF of -$9,777,000 and FCF of -$10,019,000. As the company has no revenue, year-over-year growth comparisons are not applicable.
As of September 30, 2024, Vivani reported total assets of $42.9 million, with $19.65 million in cash and cash equivalents. The company’s financial results for the nine months ended September 30, 2024, showed research and development expenses of $11.44 million and general and administrative expenses of $6.78 million. Vivani reported a net loss of $17.44 million for this period.
Liquidity
Vivani’s liquidity position is supported by its cash reserves of $19.65 million as of September 30, 2024. The company has further strengthened its financial position through a securities purchase agreement that provided $13.7 million in net proceeds in March 2024, as well as an ongoing at-the-market (ATM) offering program that generated an additional $160,000 in net proceeds during the first nine months of 2024.
The company’s financial health is reflected in its liquidity ratios, with both the current ratio and quick ratio standing at 3.41. Vivani has no debt, resulting in a debt-to-equity ratio of 0. The company estimates that its currently available cash will provide sufficient funds to meet its planned obligations for at least the next twelve months.
In April 2024, Vivani entered into an at-the-market equity offering program to sell up to $75 million in shares, providing additional financial flexibility. However, the company’s ability to continue as a going concern is dependent on its capacity to raise additional capital and/or develop profitable operations through the implementation of its business initiatives, though there can be no assurances that it will be able to do so.
Business Segments
Vivani operates through two main divisions: the Biopharm Division and the Neurostimulation Division.
Biopharm Division The Biopharm Division is responsible for developing the company’s lead program, NPM-115, a miniature, six-month, GLP-1 implant candidate for chronic weight management in obese or overweight patients with one or more risk factors. This division also focuses on expanding the company’s portfolio of miniature, long-acting drug implants.
For the three months ended September 30, 2024, the Biopharm Division incurred operating expenses of $5.70 million and reported a consolidated net loss of $5.40 million. For the nine months ended September 30, 2024, operating expenses were $16.60 million, with a consolidated net loss of $15.70 million. As of September 30, 2024, the total assets for the Biopharm Division were $41.60 million.
Neurostimulation Division The Neurostimulation Division, which includes activities from Cortigent and the company’s subsidiary in Switzerland, focuses on advancing Vivani’s pioneering neurostimulation technology. In December 2022, Vivani contributed its neurostimulation assets and certain liabilities to Cortigent, Inc., a wholly-owned subsidiary.
For the three months ended September 30, 2024, the Neurostimulation Division incurred operating expenses of $0.60 million and reported a consolidated net loss of $0.60 million. For the nine months ended September 30, 2024, operating expenses were $1.60 million, with a consolidated net loss of $1.70 million. As of September 30, 2024, the total assets for the Neurostimulation Division were $1.30 million.
Outlook and Conclusion
Vivani’s innovative approach to chronic disease management, anchored by its proprietary NanoPortal technology, positions the company as a compelling player in the biopharmaceutical industry. The company’s focus on addressing the critical issue of medication non-adherence, combined with its promising preclinical and clinical data, suggests that Vivani may be able to provide differentiated treatment options for patients struggling with chronic conditions.
As Vivani advances its lead GLP-1 implant program and expands its pipeline, the company’s ability to navigate the regulatory landscape and secure necessary approvals will be pivotal to its long-term success. Additionally, the company’s financial position, reinforced by recent capital raises, provides a solid foundation to support its ongoing research and development efforts.
The company’s near-term milestones include the initiation of the LIBERATE-1 first-in-human study of its exenatide implant in obese and overweight individuals in Australia, expected to start in Q4 2024. Vivani is also focusing on the development of its obesity portfolio, including NPM-115 and NPM-139 (a once-yearly GLP-1 implant).
Overall, Vivani’s unique technological capabilities, coupled with its strategic focus on high-impact therapeutic areas, make the company a compelling investment opportunity for investors seeking exposure to the rapidly evolving world of long-acting drug delivery solutions. However, potential investors should be aware of the risks associated with investing in a pre-revenue stage biopharmaceutical company, including the need for additional capital raises and the uncertainties inherent in drug development and regulatory approval processes.
Disclaimer: This article is for informational purposes only. It does not constitute financial, legal, or other types of advice. While every effort has been made to ensure the accuracy of the information presented here, the author and the publisher do not make any guarantees about the completeness, reliability, and accuracy of this information.