10-Q: Vivani Q2 2025: GLP-1 Progress, Cortigent Spin-Off

Vivani Medical reported increased net losses in Q2 2025, while advancing its GLP-1 implant programs and progressing with the spin-off of its neurostimulation division.

Summary

• Vivani Medical, a clinical-stage biopharmaceutical company, reported a net loss of $7.144 million for the three months ended June 30, 2025, an increase from $5.356 million in the same period last year.
• For the six months ended June 30, 2025, the net loss was $13.446 million, up from $11.395 million in the prior year period.
• Cash and cash equivalents decreased significantly to $6.794 million as of June 30, 2025, from $18.352 million at December 31, 2024.
• Working capital declined to $2.0 million as of June 30, 2025, from $14.5 million at December 31, 2024.
• Research and development expenses increased by 35% to $4.759 million for the three months ended June 30, 2025, primarily due to the Biopharm division.
• The company successfully completed the LIBERATE-1 first-in-human clinical trial for its GLP-1 (exenatide) implant, NPM-115, demonstrating a positive safety and tolerability profile.
• Vivani plans to prioritize and accelerate the clinical development of NPM-139, a novel semaglutide implant, with clinical development expected to begin in 2026, based on promising LIBERATE-1 results and new preclinical data showing approximately 20% weight loss maintained for over six months with a single implant.
• The spin-off of Cortigent, Vivani's neurostimulation division, is progressing, with a Form 10 registration statement filed with the SEC on May 29, 2025, and completion planned for Q3 or Q4 2025.
• The company secured commitments for an additional $21.25 million in capital through three equity purchase agreements in March, May, and August 2025, with closings scheduled from September 2025 to July 2026.

Sentiment

Score: 4

Explanation: The sentiment is cautiously negative. While there is significant positive progress in clinical development and strategic corporate actions like the Cortigent spin-off, the substantial increase in net losses, accelerated cash burn, and sharp decline in working capital indicate worsening financial health and a continued high reliance on external capital, which introduces considerable risk.

Positives

• Successful completion of the LIBERATE-1 first-in-human clinical trial for NPM-115, demonstrating positive safety, tolerability, and encouraging performance data for the NanoPortal implant technology.
• Rapid full enrollment in the LIBERATE-1 study, achieved in just four weeks, signaling early potential interest for the six-month subdermal GLP-1 implant and potentially reducing study expenditures.
• Promising new preclinical feasibility data for NPM-139 (semaglutide implant) showing approximately 20% weight loss maintained for over six months with a single implant, supporting potential annual dosing.
• Strategic decision to prioritize and accelerate the clinical development of NPM-139, with clinical trials expected to commence in 2026.
• Progress towards the spin-off of Cortigent, the neurostimulation division, into an independent publicly traded company, with a Form 10 registration statement filed and completion targeted for Q3 or Q4 2025, aiming to unlock value.
• Expansion of collaboration with Okava Pharmaceuticals to include dogs in the development of OKV-119, a long-acting GLP-1 therapy for veterinary use.
• The recently signed One Big Beautiful Bill Act (OBBBA) permanently eliminates the requirement to capitalize and amortize U.S. based research and experimental expenditures, making them fully deductible, which is favorable for R&D-heavy companies like Vivani.

Negatives

• Net loss increased to $7.144 million for the three months ended June 30, 2025, from $5.356 million in the prior year period.
• Net loss for the six months ended June 30, 2025, increased to $13.446 million from $11.395 million in the prior year period.
• Cash and cash equivalents significantly decreased to $6.794 million as of June 30, 2025, from $18.352 million at December 31, 2024.
• Working capital experienced a substantial decrease to $2.0 million as of June 30, 2025, from $14.5 million at December 31, 2024.
• Increased research and development expenses by 35% and general and administrative expenses by 25% for the three months ended June 30, 2025, contributing to higher operating losses.
• The company continues to incur recurring operating losses and negative operating cash flows since inception, with expectations for this trend to continue for the foreseeable future.
• Ongoing reliance on raising additional capital to fund operations, with no assurances that it will be available on favorable terms or at all, posing a going concern risk.

Risks

• The company will require substantial additional financing to pursue its business objectives, and a failure to obtain this capital could force delays, limitations, reductions, or termination of product development and commercialization efforts.
• Developing pharmaceutical products, including conducting preclinical studies and clinical trials, is a very time-consuming, expensive, and uncertain process that can take many years to complete.
• Operating expenses are expected to increase significantly as the company continues its business operations, particularly with the initiation of additional clinical trials and other research and development activities.
• The design and outcome of planned and anticipated clinical trials are highly uncertain, making it difficult to estimate the actual resources and funding necessary for successful development and commercialization.
• Global economic and political developments, including inflation, capital market disruption, geopolitical conflicts (e.g., Russia-Ukraine, Israel-Hamas war), economic sanctions, and economic slowdowns or recessions, could materially and adversely affect the business.
• The business could be adversely affected by health epidemics in regions with clinical trial sites or other business activities, causing significant disruption to operations and third-party reliance.
• Risks associated with tariffs and other trade restrictions, including potential increased costs for raw materials, active pharmaceutical ingredients (APIs), and components used in product development and production.

Future Outlook

Vivani plans to prioritize and accelerate the clinical development of NPM-139, a novel semaglutide implant, with clinical development expected to begin in 2026. The spin-off of Cortigent is planned to be completed during the third or fourth quarter of 2025, subject to various conditions including board approval, a favorable tax opinion, and SEC and Nasdaq approval. The company expects to continue incurring significant operating losses and negative operating cash flows for the foreseeable future and estimates that currently available cash will provide sufficient funds for at least the next twelve months, but its ability to continue as a going concern is dependent on raising additional capital or developing profitable operations.

Management Comments

• Vivani's main priority is the further development of its miniature, ultra long-acting drug implant programs.
• Vivani's management team remains committed to identifying and exploring strategic options that will enable further development of its pioneering neurostimulation systems from legacy company Second Sight aimed at helping patients recover critical body functions.
• We estimate that currently available cash will provide sufficient funds to enable the Company to meet its planned obligations for at least the next twelve months.

Industry Context

Vivani Medical operates in the highly competitive biopharmaceutical and medical device sectors, specifically targeting chronic diseases with its novel NanoPortal technology for ultra long-acting subdermal drug implants. This approach directly addresses a critical industry challenge: medication non-adherence, which affects approximately 50% of patients taking daily oral or weekly injectable medicines, including GLP-1 receptor agonists like semaglutide (Wegovy), where discontinuation rates are high (64% within the first year). By aiming to deliver therapeutic drug levels for six months or longer and minimize drug level fluctuations, Vivani seeks to improve patient adherence and drug tolerability, potentially revolutionizing chronic disease treatment. The company's focus on GLP-1s positions it within a rapidly growing market for weight management and type 2 diabetes, competing with established injectable therapies. The planned spin-off of its neurostimulation division into Cortigent reflects a broader industry trend towards specialization and unlocking value from distinct therapeutic areas.

Comparison to Industry Standards

• Vivani's NPM-115 (exenatide implant) preclinical weight loss data of approximately 20% in obese mice over 28 days was comparable to the extent of weight loss observed in mice treated with semaglutide injections (active ingredient in Ozempic and Wegovy) in the same study.
• The company's GLP-1 (exenatide) implant produced sham-implant adjusted liver fat reduction of 82% in an obese mouse model from a single administration, consistent with published results from similar investigations with semaglutide (Ozempic and Wegovy).
• NPM-139 (semaglutide implant) preclinical data demonstrated approximately 20% weight loss maintained for more than six months with a single implant, supporting the potential for annual dosing, which would be a significant improvement over weekly injectable semaglutide products like Wegovy, where 64% of patients discontinue treatment within the first year.
• The NanoPortal technology's goal of guaranteeing medication adherence by delivering therapeutic drug levels for up to six months or longer directly addresses the high non-adherence rates (approximately 50%) seen with conventional daily oral and weekly injectable medicines, offering a potential competitive advantage over existing GLP-1 therapies like Ozempic, Wegovy, and Rybelsus.

Corporate Governance

Legal Proceedings

• An opposition filed by Pixium Vision SA challenging a European patent owned by Cortigent was abandoned by Vivani in February 2025, resulting in the opposition no longer being pending.
• Vivani is involved in a lawsuit with Pixium Vision SA in the Paris Commercial Court regarding a terminated Memorandum of Understanding; the court ordered Vivani to pay approximately €1.55 million (net of a prior payment), and Vivani's appeal was struck out on October 23, 2024, for failure to enforce the decision, requiring reinstatement within two years.
• Oppenheimer & Co. Inc. filed a complaint on January 26, 2024, asserting breach of contract and other claims against Vivani, seeking no less than $1,625,000 in damages; the court dismissed all claims except the breach of contract claim on June 12, 2025, and discovery is commencing, with both parties filing notices of appeal.

Related Party Transactions

• On November 8, 2024, Vivani entered into a private sale transaction with one of its directors, selling 3,968,253 shares of common stock for gross proceeds of $5.0 million.
• On March 26, 2025, Vivani entered into a share purchase agreement with an entity affiliated with one of its directors to sell 7,366,071 shares of common stock for approximately $8.25 million.
• On May 12, 2025, Vivani entered into a share purchase agreement with an entity affiliated with one of its directors to sell 2,912,621 shares of common stock for approximately $3.0 million.
• On August 11, 2025 (subsequent event), Vivani entered into a share purchase agreement with an entity affiliated with one of its directors and another investor to sell 7,936,507 shares of common stock for approximately $10.0 million.

Stakeholder Impact

• Shareholders face potential dilution from ongoing and future equity capital raises, but also stand to benefit from the potential value unlock through the spin-off of the Cortigent neurostimulation business.
• Patients with chronic diseases, particularly obesity and type 2 diabetes, could significantly benefit from the successful development and commercialization of Vivani's long-acting subdermal drug implants, which aim to improve medication adherence and tolerability.
• Employees in the Biopharm division may see increased activity and opportunities due to the prioritization of GLP-1 implant development, while those in the Neurostimulation division (Cortigent) will transition to an independent entity, potentially impacting their roles and benefits depending on the spin-off's terms.

Next Steps

• Initiate clinical development of NPM-139 (semaglutide implant) in 2026.
• Complete the spin-off of Cortigent, the neurostimulation business, during the third or fourth quarter of 2025, subject to various conditions.
• Continue to raise additional capital through public or private equity offerings, debt financings, grants, collaborations, strategic partnerships, or other sources to fund operations and business objectives.
• Commence discovery in the legal proceeding with Oppenheimer & Co. Inc. regarding the breach of contract claim.
• Request reinstatement of the appeal in the Pixium Vision SA lawsuit within two years, providing evidence of judgment enforcement or an agreement.

Key Dates

Recommendation

While Vivani Medical is making notable progress in its clinical programs, particularly with the promising preclinical and early human data for its GLP-1 implants and the strategic spin-off of Cortigent, the company's financial position is deteriorating. The significant increase in net losses, accelerated cash burn, and sharp decline in working capital highlight a high reliance on future capital raises, which will likely be dilutive. The ongoing legal proceedings also add a layer of uncertainty. Given the high-risk, high-reward nature of clinical-stage biopharmaceutical companies, coupled with the current financial challenges, a 'Hold' recommendation is appropriate. Investors should monitor the progress of clinical trials, the successful execution of the Cortigent spin-off, and the company's ability to secure additional non-dilutive or less dilutive funding.

Keywords

Biopharmaceutical, GLP-1, Drug Implants, Weight Management, Type 2 Diabetes, NanoPortal Technology, Semaglutide, Exenatide, Clinical Trials, Neurostimulation, Cortigent, Spin-off, Medical Devices, Chronic Disease, Medication Adherence