Mr. Mike Kelly reports

NERVGEN PHARMA REPORTS Q2 2023 FINANCIAL RESULTS AND OPERATIONAL UPDATES

Nervgen Pharma Corp. has released its financial and operational results for the second quarter ended June 30, 2023.

"Nervgen made considerable progress in the quarter to advance our landmark phase 1a/2b clinical study of NVG-291 for individuals with spinal cord injury and improved our financial position," said Mike Kelly, Nervgen's president and chief executive officer. "We are thankful to Wings for Life for their generous grant to help fund this first-in-kind study and we are very excited to be recruiting subjects at Shirley Ryan AbilityLab in Chicago. This clinical trial is an important proof-of-concept study aimed at demonstrating the potential NVG-291 may have in enabling repair of nervous damage in individuals with spinal cord injury, which has never been achieved before."

Operational highlights for Q2 2023:

• Nervgen advanced the clinical development of NVG-291:
  • In August, Nervgen received approval to proceed with its phase 1b/2a clinical trial of NVG-291 in individuals with spinal cord injury from the Institutional Review Board from the single site of the trial, Shirley Ryan AbilityLab in Chicago. Nervgen initiated recruitment of the chronic cohort (one to 10 years postinjury). Given the significant number of individuals suffering with chronic SCI and the tremendous anticipation of the trial within the SCI community, recruitment 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 or early 2025.
  • In June, Nervgen were notified that U.S. Food and Drug Administration (FDA) has completed its review of the phase 1b/2a clinical trial protocol and determined that the study may proceed.
  • In April, Nervgen's chief medical officer, Dr. Dan Mikol, presented the study design for its phase 1b/2a clinical trial of NVG-291 in spinal cord injury and summarized the safety and pharmacokinetic results from the phase 1 trial of NVG-291 in healthy volunteers at the American Spinal Injury Association 50th annual scientific meeting. The phase 1b/2a placebo-controlled proof-of-concept trial will evaluate the efficacy of NVG-291 in two cohorts of individuals with cervical spinal cord injury: chronic (one to 10 years postinjury) and subacute (10 to 49 days postinjury). Nervgen plans to evaluate the efficacy of a fixed dose of NVG-291 administered once daily for 12 weeks with a four-week follow-up using clinical outcome measures and objective electrophysiological measures that provide quantitative information about motor recovery. Specifically, the primary objective will be to assess the change in corticospinal connectivity of specific upper and lower extremity muscle groups following treatment based on changes in motor evoked potential amplitudes. Nervgen's secondary objectives will include clinical outcome assessments focusing on motor function and mobility, as well as additional electrophysiological measurements. Each cohort will be evaluated independently as the data becomes available. Nervgen expects to have data readout in 2024.
• Nervgen expanded the expertise of its leadership team and board with the following addition:
  • On April 10, 2023, Nervgen appointed Mr. Kelly as its president and CEO. Mr. Kelly brings three decades of pharmaceutical experience playing instrumental roles in the creation, development and strengthening of several companies. Concurrent with Mr. Kelly's appointment, Bill Radvak, Adam Rogers and Glenn Ives stepped down from their positions of interim CEO, interim president and lead independent director, respectively, but remain members of the board. Mr. Radvak remains chairman of the board.
• Nervgen improved its cash position with equity proceeds and grant funding to support its continuing clinical and preclinical activities:
  • During the six months ended June 30, 2023, Nervgen received $669,597 from the exercise of stock options and common share purchase warrants.
  • On June 27, 2023, Nervgen announced that it had been awarded a grant of up to $3.18-million (U.S.) from Wings for Life, a not-for-profit spinal cord injury research foundation, under the foundation's accelerated translational program. The funding is to be provided in several milestone-based payments and will offset a portion of the direct costs of the upcoming phase 1b/2a proof-of-concept clinical trial for NVG-291.
• Nervgen elevated the company positioning and investor visibility as a leading player in the SCI field through participation in an industry conference:
  • In June, Nervgen participated in the first annual spinal cord injury investor symposium, which was co-hosted by the Christopher and Dana Reeve Foundation, a non-profit organization dedicated to advancing innovative research and improving quality of life for individuals impacted by paralysis. Nervgen was just one of five companies selected to participate and present at this first-of-its-kind event, which included research analysts from leading investment banks, as well as investors, thought leaders, policymakers and individuals impacted by SCI. Dr. Mikol presented results from preclinical studies and Nervgen's phase 1 trial along with the trial design for the company's now-initiated phase 1b/2a SCI clinical trial.

Financial highlights:

• Cash and investments: Nervgen had cash and investments of $16.1-million as of June 30, 2023, compared with $22.5-million as of Dec. 31, 2022. The net cash burn for Q2 2023 from operating activities was approximately $2.0-million. This was offset by approximately $300,000 in proceeds from the exercise of options and warrants during the quarter.
• R&D (research and development) expenses: Research and development expenses were $1.5-million for the three months ended June 30, 2023, compared with $4.7-million in the same period in 2022. The decrease in Q2 2023 was primarily due to chemistry, manufacturing and control work pertaining to the manufacture of NVG-291 required for chronic toxicology studies and planned clinical trials conducted in the previous period, as well as a decrease in clinical and regulatory costs as Nervgen near completion of Nervgen's phase 1 clinical study and the receipt of grant funding, partially offset by increased regulatory costs related to resolving the U.S. Food and Drug Administration (FDA) partial clinical hold and start-up costs for the upcoming phase 1b/2a proof-of-concept clinical trial.
• G&A (general and administrative) expenses: General and administrative expenses were $3.3-million for the three months ended June 30, 2023, compared with $1.6-million for the same period in 2022. The increase in Q2 2023 was primarily due to increased business and corporate development costs for market research and strategic planning support as Nervgen advances into later-stage clinical trials. Employee salaries, bonuses and benefits also increased with the engagement of Nervgen's new president and CEO, as did non-cash stock-based compensation expense related to option and retention security grants to the new president and CEO, other employees, and consultants, and the timing of the related vesting.
• Net loss: For the three months ended June 30, 2023, net loss, which included $2.3-million of non-cash expenses, was $4.8-million, or eight cents per basic and diluted common share. For the three months ended June 30, 2022, net loss, which included $900,000 of non-cash expenses, was $6.3-million, or 13 cents per basic and diluted common share.

About NVG-291

Nervgen holds exclusive worldwide rights to NVG-291, a first-in-class therapeutic peptide targeting mechanisms that interfere with nervous system repair. NVG-291 is derived from the intracellular wedge domain of the receptor-type protein tyrosine phosphatase sigma (PTPsigma). NVG-291-R, a rodent analog of NVG-291, has been shown to promote nervous system repair and functional recovery in animal models of spinal cord injury (acute and chronic intervention), peripheral nerve injury, multiple sclerosis and stroke, through enhanced plasticity, axonal regeneration and remyelination.

About Nervgen Pharma Corp.

Nervgen is a clinical-stage biotech company dedicated to developing innovative treatments that enable the nervous system to repair itself following damage, whether due to injury or disease. Nervgen's lead drug candidate, NVG-291, is to be evaluated in a phase 1b/2a clinical trial. The company's initial target indication is spinal cord injury.

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