PixarBio ends bizarre takeover bid for InVivo Therapeutics

PixarBio (OTC:PXRB) withdrew its $100 million takeover bid for InVivo Therapeutics (NSDQ:NVIV), the regenerative medicine company that PixarBio CEO Frank Reynolds co-founded and led until his 2013 ouster.

Cambridge, Mass.-based PixarBio said it will “stay focused on our NeuroRelease Pain platform and continue to drive our non-opiate non addictive [sic] morphine replacement to market with FDA approval expected between the end of 2018 and early 2019.”

Earlier this month, Reynolds issued a lengthy, nearly 2,700-word press release and pointed towards a -41.7% slide in the price of NVIV shares since January last year in making his case for the merger.

“We all know that NVIV current CEO Mark Perin’s [sic] took his company before NVIV as CEO into bankruptcy, and Perin [sic] has had 3 years (maybe 2 years too long) that’s enough time to succeed with a Frank Reynolds’ Neuroscaffold technology so it’s time for change. The CEO of NVIV needs to be replaced to have a shot at commercializing NVIVs true value, the NeuroScaffold for treating acute spinal cord injury invented by Frank Reynolds,” Reynolds said in prepared remarks.” PixarBio’s 2017 Deal making is NOT done. The industry needs consolidation, so let’s get busy and make US Pharma great again [sic].”

Reynolds said the $77 million offer, which he later upped to $100 million, is discounted “because NVIV has failed to develop my patents, science and know-how. NVIV appears to have lost the historically significant [spinal cord injury] primate research data, and they are now back to my 2010 IPO share price, for the second time in 3.5 years but its 2017 [sic]. It is time I take back the technology I invented to bring my neurological R&D portfolio to market by acquiring NVIV and saving the NVIV shareholder from more years of down-rounds,” said Reynolds, who also serves as PixarBio’s CFO and chief science officer.

InVivo responded to the offer, saying that PixarBio’s statement “contained a number of unfounded statements that do not warrant a response.”

“InVivo Therapeutics Corporation was not privy to the announcement made today and has not had any discussions with PixarBio Corporation nor any other party regarding this matter. Given that the nature of the offer is not credible, InVivo disclaims any obligation to make any additional public statements regarding this or similar proposed transactions from PixarBio,” the company said.

The company also wrote that it has an exclusive license to all patents and patent applications covering its neuro-spinal scaffold and that Reynolds “is not an inventor on any of these patents or patent applications.”

Reynolds shot back, asserting that he is the rightful owner of the intellectual property behind InVivo’s technology.

“The failure to conduct an exit interview [with me] resulted in lost IP to InVivo Therapeutics but that doesn’t change the facts of reality that’s recorded in 8 years of calendars, meetings minutes, and even an iPaq [sic],” Reynolds said in prepared remarks. “There are over 100 real people that know Frank Reynolds led the invention of the NeuroScaffold for Spinal cord injury so stop misleading with investors.”

InVivo parted ways with co-founder Reynolds in August 2013 and later sued him, alleging that he ran up $500,000 worth of “personal and/or exorbitant expenses.” Reynolds counter-sued in December that year, accusing the company of breach of contract, breach of the covenant of good faith and fair-dealing, and tortious interference with a contract. The case is still pending in a Massachusetts state court.

Reynolds filed a separate lawsuit against InVivo in July last year in a New Hampshire state court, alleging defamation, conspiracy and tortious interference. The U.S. District Court for the state dismissed the case with prejudice on Nov. 30 for failing to state a claim and lack of jurisdiction.

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