InVivo Therapeutics Navigates Final Stages of Chapter 11 Wind-Down

InVivo Therapeutics is liquidating under Chapter 11 after a failed clinical trial. The focus is now on selling its intellectual property to pay creditors, with proceedings in Delaware bankruptcy court.

The biotech firm InVivo Therapeutics Holdings remains entrenched in a protracted liquidation process under U.S. Chapter 11 bankruptcy protection. With its clinical pipeline halted, the company's efforts are now squarely focused on monetizing its remaining intellectual property and assets. Investors and creditors are closely monitoring proceedings in the Delaware bankruptcy court, which will determine the final distribution of any recovered funds.

Currently operating as a debtor-in-possession under judicial oversight, management retains control of day-to-day operations while exploring the potential sale of patents and proprietary technology. A pivotal moment occurred in June 2024 when creditors formally approved a Chapter 11 liquidation plan. This vote cemented a definitive strategic shift away from biomedical research and toward the financial dissolution of the company.

Clinical Setback Triggered Financial Collapse

The company's decline accelerated sharply in early 2024 following its removal from the NASDAQ Composite Index. Its shares now trade exclusively on the over-the-counter (OTC) market. The primary catalyst for this existential crisis was the failure of the INSPIRE 2.0 clinical trial in March 2023. The study, which evaluated an implant for treating spinal cord injuries, failed to meet its primary endpoint by a significant margin.

In the biotechnology sector, where high development costs and lengthy clinical phases are standard, a single major clinical failure can be catastrophic for companies with limited capital reserves. The central question now is whether the sale of InVivo's technology platform during the bankruptcy proceedings can generate any meaningful residual value for stakeholders.

Legal Proceedings Take Center Stage

For InVivo Therapeutics, the agenda no longer includes any medical or scientific milestones. The timeline is instead dictated by court deadlines and negotiations with various creditor committees. The coming months will be shaped by rulings from the Delaware bankruptcy court.

Key forthcoming decisions involve the court's approval of specific schedules for asset sales and the final adjudication of creditor claims. Only upon the formal conclusion of these legal processes will it become clear what funds, after the deduction of substantial administrative and legal costs, will be available to satisfy outstanding debts.