Navigation Links
Organovo Holdings, Inc. Reports Third Quarter Results
Date:2/9/2015

SAN DIEGO, Feb. 9, 2015 /PRNewswire/ -- Organovo Holdings, Inc. (NYSE MKT: ONVO) ("Organovo"), a three-dimensional biology company focused on delivering pioneering 3D bioprinting technology, has reported its third quarter fiscal 2015 results.

Keith Murphy, chairman and chief executive officer of Organovo, commented on the results, "Organovo has had a successful launch of its exVive3D Human Liver Tissue, and customer response continues to be strong.  Our contracted customers include companies from among the top 25 global pharma companies, smaller public pharma companies, and private venture-backed pharma companies.  Conversion of potential customers, those requesting quotes, to signed contracts has been high, with a win rate over 80% to date.  We are encouraged that we have a high win rate, that our commercial pricing continues to be supported, and that we have received repeat business." 

"Continued scientific studies have extended our knowledge of the functionality of the Company's exVive3D bioprinted liver tissues, including the first demonstration of the ability for them to be used in studying the metabolism of drugs.  We remain confident that our tissues provide a scientific advantage that is well perceived by pharma customers that this advantage will continue to grow as we expand our demonstration of the superiority of these tissues, and that these results will translate into commercial wins for Organovo and its shareholders."

Organovo's quarter ending December 31, 2014 featured a number of corporate milestones and successes, including: 

  • Won the Diagnostics & Research Tools category for the 2014 Most Innovative New Product Awards, sponsored by CONNECT, a regional program that catalyzes the creation of innovative technology and life sciences products.
  • Released the exVive3D Human Liver Tissue for preclinical drug discovery testing, intended to provide human-specific data to aid in the prediction of liver tissue toxicity or ADME outcomes in later stage preclinical drug discovery programs. The tissues produce important liver proteins including albumin, fibrinogen and transferrin, synthesize cholesterol, and possess inducible cytochrome P450 enzymatic activities, including CYP 1A2 and CYP 3A4. They have successfully differentiated between structurally related compounds with known toxic and non-toxic profiles in human beings, and the model has also been employed successfully in the detection of metabolites at extended time points in vitro. Importantly, the configuration of the bioprinted liver tissues enables both biochemical and histologic data to be collected so that a customer can investigate compound responses at multiple levels.
  • Formed collaboration with Yale School of Medicine to develop 3-D organ tissues for surgical transplantation research, made possible by a generous gift from the Methuselah Foundation.  The collaboration combines their expertise and technology with our own, representing one important step in progressing towards developing implantable, therapeutic tissues.
  • Kirk Malloy, Ph.D. joined Board of Directors - Dr. Malloy has held management and executive leadership positions in rapidly growing life science and diagnostics companies for 18 years. He is currently Senior Vice President and General Manager of Life Sciences at Illumina, a leading developer and supplier of genetic analysis instrumentation, assays and software for the life science and diagnostics markets, and is experienced in advancing industry-changing technology platforms and building commercial growth in the life science markets
  • The Company has previously commented that revenue in the quarter ending December 31, 2014 and the year ending March 31, 2015 is expected to come primarily from research services associated with the pre-release availability of its exVive3D Human Liver Tissue.  The Company expects commercial revenue from post-launch activity to be recognized no earlier than the quarter ending June 30, 2015. 

    The Company continues in its development of a 3D bioprinted kidney tissue that has the potential to significantly improve researchers' ability to study kidney function in an in vitro model.  The kidney tissue remains on track for a mid-2016 (calendar year) release.  Additionally, the Company continues to advance simple bioprinted tissues for the potential direct treatment of patients, which are currently at the preclinical research phase.

    Financial SummaryA summary of the Company's financial results for the third fiscal quarter follows, but is not intended to replace the full financial disclosure enclosed in the Quarterly Report on Form 10-Q the Company filed with the Securities and Exchange Commission on February 6, 2015. Please refer to that document for additional information. Because Organovo's fiscal year end is March 31, the period from October to December 2014 is the third quarter of fiscal year 2015 (Q3 FY2015).

    As of December 31, 2014, the Company had cash and cash equivalents of approximately $50.0 million and an accumulated deficit of $114.5 million. The Company also had negative cash flow from operations of $14.0 million during the nine months ended December 31, 2014. At March 31, 2014, the Company had cash and cash equivalents of approximately $48.2 million and an accumulated deficit of $92.2 million.

    At December 31, 2014, the Company had total current assets of approximately $50.5 million and current liabilities of approximately $3.7 million, resulting in working capital of $46.8 million. At March 31, 2014, we had total current assets of approximately $49.2 million and current liabilities of approximately $1.9 million, resulting in working capital of $47.3 million.

    Net cash used by operating activities for the nine months ended December 31, 2014 was approximately $14.0 million as compared to $10.2 million used in operating activities for the nine months ended December 31, 2013. This $3.8 million increase in cash usage can be attributed to an $8.4 million increase in operating expenses, partially offset by an overall increase of $2.8 million of non-cash expenses included in operations, including stock-based compensation, depreciation and amortization, as well as changes in working capital.

    Net cash used in investing activities was approximately $0.9 million and $0.1 million for the nine months ended December 31, 2014 and 2013, respectively. This increase can be attributed to increased capital spending as the Company increased its facility space to expand its research capabilities.

    Net cash provided by financing activities decreased from $44.5 million provided during the nine months ended December 31, 2013 to $16.7 million provided during the nine months ended December 31, 2014 due to lower net proceeds from the issuance of common stock during the nine months ended December 31, 2014.

    For the three months ended December 31, 2014, total revenue of $155,000 was $20,000 or approximately 15% higher than total revenue for the three months ended December 31, 2013. Product and service revenue of $139,000 for the third quarter of fiscal 2015 versus $0 in the third quarter of fiscal 2014 represents revenue from the initial shipment of exVive3D Human Liver Tissue product and from exVive3D Human Liver Tissue research services. The Company announced the commercial launch of its exVive3D Human Liver Tissue in November 2014. The majority of revenues for the third quarter of fiscal 2015 were derived from research service agreements and product sales related to the exVive3D Human Liver Tissue, whereas revenues for the third quarter of fiscal 2014 were derived mainly from existing collaborations and from research funded by grants.

    For the nine months ended December 31, 2014 and 2013, total revenues were approximately $0.3 million. Despite relatively flat revenue on a period-to-period comparative basis, there was a substantial change in the source of revenues as prior year revenue was primarily sourced from collaborations, whereas nearly half of the current year-to-date revenues reflect pre-launch shipments of exVive3D Human Liver Tissue product and from exVive3D Human Liver Tissue services. The Company announced the commercial launch of its exVive3D Human Liver Tissue in November 2014; post-launch revenues are expected to be primarily derived from service agreements and product sales and the respective revenues therefrom are not expected to be recognized on the Company's statement of income for approximately four to six months after the work on each respective project is started.

    Operating expenses increased approximately $2.3 million, or 48%, from approximately $4.8 million for the three months ended December 31, 2013 to $7.1 million for the three months ended December 31, 2014. Of this increase, $1.5 million relates to increased selling, general and administrative expense while the other $0.8 million relates to increased investment in research and development. Operating expenses increased approximately $8.4 million, or 59%, from approximately $14.2 million for the nine months ended December 31, 2013 to $22.6 million for the nine months ended December 31, 2014. Of this increase, $4.7 million is related to increased selling, general and administrative expense while the other $3.8 million relates to increased investment in research and development. These increases are attributed to the Company's continued implementation of its business plan, including hiring additional staff to support research and development initiatives, incremental investments associated with strategic growth and commercialization project initiatives associated with the commercial launch of our exVive3D Human Liver Tissue in November 2014, expenses related to operating as a publicly traded corporation, expansion of its facility, and increased stock compensation expense relative to employees and certain consulting services.

    Research and development expenses increased 36% from approximately $2.4 million for the three months ended December 31, 2013 to $3.2 million for the three months ended December 31, 2014, as the Company increased its research staff to support its obligations under existing collaborative research agreements and to expand its product development efforts in preparation for commercial research services associated with the commercial launch of the Company's first product in the third quarter of fiscal 2015. Full-time research and development staffing increased from twenty-six full-time employees as of December 31, 2013 to forty-nine full-time employees as of December 31, 2014, resulting in an increase in staffing expense of approximately $0.5 million, an increase in stock-based compensation of $0.2 million and an increase in facility costs of approximately $0.4 million. Partially offsetting these increases was a decrease in bioprinter development costs of approximately $0.3 million as compared to the same quarter of the previous year. In fiscal 2014, the Company began an initiative to advance its bioprinting technology; however, the most significant of these expenditures had already been incurred prior to the third quarter of fiscal 2015. Research and development expenses increased by approximately $3.8 million, or 69%, from approximately $5.5 million for the nine months ended December 31, 2013 to approximately $9.3 million for the nine months ended December 31, 2014, as the Company increased its research staff to support its obligations under certain collaborative research agreements and to expand its product development efforts in preparation for research-derived revenues. Full-time research and development staffing increased from twenty-six full-time employees as of December 31, 2013 to forty-nine full-time employees as of December 31, 2014. In addition to increases in staffing expense of approximately $1.2 million and an increase in stock-based compensation of $0.6 million resulting from increased headcount and additional grants, the Company increased its spending on recruiting, lab equipment, supplies and contracted services in proportion to its increased research activities.

    For the three months ended December 31, 2014, general and administrative expenses were approximately $3.9 million, an increase of $1.5 million, or 63%, over expenses in the same period of the previous year of approximately $2.4 million. This increase was related to an increase in staffing expense of $0.4 million due to an increase in administrative headcount from thirteen full-time employees to eighteen full-time employees to provide strategic infrastructure in developing collaborative relationships and preparation for commercialization of research-derived product introductions as well as an increase in stock-based compensation of $0.6 million due to additional grants. In addition, legal and other corporate expenses increased $0.5 million. For the nine months ended December 31, 2014, general and administrative expenses were approximately $13.3 million, an increase of $4.7 million, or 54%, over expenses in the same period of 2013 of approximately $8.7 million. Stock-based compensation increased $1.8 million due to additional grants and increasing stock prices from December 31, 2013 to December 31, 2014. Staffing expense increased $1.0 million due to an increase in administrative headcount from thirteen full-time employees to eighteen full-time employees to provide strategic infrastructure in developing collaborative relationships and preparation for commercialization of research-derived product introductions. In addition, the Company incurred additional expenses for investor outreach initiatives, consulting and legal activities in the nine months ended December 31, 2014 as compared to the nine months ended December 31, 2013.

    Other expense was less than $0.1 million for the three months ended December 31, 2014 and consisted primarily of a loss related to the revaluation of warrant derivative liabilities. This loss was caused by an increasing stock price during the quarter that increased the value of the derivative liability. For the three months ended December 31, 2013, other expense consisted primarily of a $0.6 million loss related to the revaluation of the warrant derivative liability due to rising stock prices during the period that caused an increase in the value of the derivative liability. In addition, the majority of the underlying warrants to which the derivative relates were exercised or converted to equity instruments during fiscal 2014, significantly lessening the impact of subsequent changes in our stock price. Other income was less than $0.1 million for the nine months ended December 31, 2014 and consisted primarily of interest income and a gain related to the revaluation of warrant derivative liabilities. This gain was caused by a declining stock price during the period that decreased the value of the derivative liability. For the nine months ended December 31, 2013, other expense consisted primarily of a $5.4 million loss related to the revaluation of the warrant derivative liability due to rising stock prices during the period that caused an increase in the value of the derivative liability. In addition, the majority of the underlying warrants to which the derivative relates were exercised or converted to equity instruments during fiscal 2014, significantly lessening the impact of subsequent changes in our stock price.

    About Organovo Holdings, Inc.Organovo designs and creates functional, three-dimensional human tissues for use in medical research and therapeutic applications. The Company develops 3D human disease models through internal development and in collaboration with pharmaceutical and academic partners.  Organovo's  3D human tissues have the potential to accelerate the drug discovery process, enabling treatments to be developed faster and at lower cost. The company recently launched its initial product of the planned exVive3D portfolio offering, a 3D Human Liver Tissue for use in Toxicology and other preclinical drug testing. Additional products are in development, with anticipated release for an exVive3D Human Kidney Tissue in the latter half of calendar year 2016. The company also actively conducts early research on specific tissues for therapeutic use in direct surgical applications. In addition to numerous scientific publications, the Company's technology has been featured in The Wall Street Journal, Time Magazine, The Economist, and numerous other media outlets. Organovo is changing the shape of medical research and practice. Learn more at www.organovo.com.

    Safe Harbor StatementAny statements contained in this press release that do not describe historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein are based on current expectations, but are subject to a number of risks and uncertainties. The factors that could cause actual future results to differ materially from current expectations include, but are not limited to, risks and uncertainties relating to the Company's ability to develop, market and sell products and services based on its technology; the expected benefits and efficacy of the Company's products, services and technology; the market acceptance of the Company's products and services; and the Company's business, research, product and service development, regulatory approval, marketing and distribution plans and strategies. These and other factors are identified and described in more detail in our filings with the Securities and Exchange Commission (SEC), including our quarterly report on Form 10-Q filed with the SEC on February 6, 2015, as well as our other filings with the SEC. You should not place undue reliance on these forward-looking statements, which speak only as of the date that they were made. These cautionary statements should be considered with any written or oral forward-looking statements that we may issue in the future. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to reflect actual results, later events or circumstances or to reflect the occurrence of unanticipated events.

    Financial StatementsOrganovo Holdings, Inc.Condensed Consolidated Balance Sheets(in thousands except for share data)December 31, 2014March 31, 2014(Unaudited)(Audited)AssetsCurrent AssetsCash and cash equivalents$

    50,027$

    48,167Inventory6963Prepaid expenses and other current assets372931Total current assets50,46849,161Fixed assets, net1,440857Restricted cash7979Other assets, net8389Total assets$

    52,070$

    50,186Liabilities and Stockholders' EquityCurrent LiabilitiesAccounts payable$

    495$

    326Accrued expenses2,028822Deferred rent646345Deferred revenue24113Capital lease obligation810Warrant liabilities298377Total current liabilities3,7161,893Deferred revenue, net of current portion444Capital lease obligation, net of current portion-5Total liabilities$

    3,760$

    1,902Commitments and Contingencies (Note 4)Stockholders' EquityCommon stock, $0.001 par value; 150,000,000 shares authorized, 80,458,406 and 78,113,639 shares issued and outstanding at December 31, 2014 and March 31, 2014, respectively8078Additional paid-in capital162,727140,419Accumulated deficit(114,497)(92,213)Total stockholders' equity48,31048,284Total Liabilities and Stockholders' Equity$

    52,070$

    50,186 

     

     Organovo Holdings, Inc.Unaudited Condensed Consolidated Statements of Operations(in thousands except share and per share data)

    Three Months Ended December 31, 2014


    Three Months Ended

     December 31, 2013


    Nine Months Ended

     December 31, 2014

    Nine Months Ended

     December 31, 2013

    RevenuesProduct and service

    $

    139$

    139Collaborations797121214Grants9384450Total Revenues155135304264Selling, general, and administrative expenses3,8782,37913,3508,740Research and development expenses3,2382,3829,2815,487Loss from Operations(6,961)(4,626)(22,327)(13,963)Other Income (Expense)Change in fair value of warrant liabilities(40)(586)24(5,397)Loss on disposals of fixed assets(3)(4)Interest expense(13)Interest income842211Total Other Income (Expense)(32)(582)43(5,403)Net Loss$

    (6,993)$

    (5,208)$

    (22,284)$

    (19,366)Net loss per common share—basic and diluted

    $

    (0.09)$

    (0.07)$

    (0.28)$

    (0.27)Weighted average shares used in computing net lossper common share—basic and diluted80,491,12077,235,97679,225,69271,606,724 

     

     Organovo Holdings, Inc.Unaudited Condensed Consolidated Statements of Cash Flows(in thousands)Nine Months EndedNine Months EndedDecember 31, 2014December 31, 2013Cash Flows From Operating ActivitiesNet loss$

    (22,284)$

    (19,366)Adjustments to reconcile net loss to net cash used in operating activities:Loss on disposal of fixed assets34Depreciation and amortization334288Change in fair value of warrant liabilities(24)5,397Expense associated with warrant modification12Stock-based compensation5,2152,840Amortization of warrants issued for services556182Increase (decrease) in cash resulting from changes in:Grants receivable94Inventory(6)6Prepaid expenses and other assets318(25)Accounts payable169(330)Accrued expenses1,206779Deferred rent254Deferred revenue268(42)Net cash used in operating activities(13,991)(10,161)Cash Flows From Investing ActivitiesDeposits released from restriction9Purchases of fixed assets(867)(156)Net cash used in investing activities(867)(147)Cash Flows From Financing ActivitiesProceeds from issuance of common stock and exercise of warrants, net16,51244,310Proceeds from exercise of stock options213195Principal payments on capital lease obligations(7)(7)Net cash provided by financing activities16,71844,498Net Increase in Cash and Cash Equivalents1,86034,190Cash and Cash Equivalents at Beginning of Period48,16715,628Cash and Cash Equivalents at End of Period$

    50,027$

    49,818Supplemental Disclosure of Cash Flow Information:Interest$

    $

    Income Taxes$

    $

     

     


    '/>"/>
    SOURCE Organovo Holdings, Inc.
    Copyright©2015 PR Newswire.
    All rights reserved


    Related biology technology :

    1. Organovo Celebrates a Positive 2014 Reception of its exVive3DTM Human Liver Tissue Product
    2. Biotech Equities Movers and Shakers - Organovo Holdings, Medivation, Pharmacyclics, Synthetic Biologics, and Ironwood Pharma
    3. Organovo Holdings, Inc. to Webcast, Live, at RetailInvestorConferences.com September 11
    4. Organovo Announces Appointment of Gregory T. Lucier as Corporate Advisor
    5. Organovo Announces Collaboration with National Institutes of Health
    6. Biotechs Leading the Healthcare Sector - Alliqua, Pacific Biosciences, Oncothyreon, Keryx, Organovo
    7. Organovo Reports Q1 Fiscal 2014 Results, Provides Business Update
    8. BioTech Companies in the News - Alliqua, Transition Therapeutics, Organovo, MiMedx Group, Keryx Biopharmaceuticals
    9. Organovo Announces the Nomination of Richard A. Heyman to Board of Directors
    10. Organovo Rings Opening Bell On New York Stock Exchange
    11. OTC Markets Group Congratulates Organovo Holdings on Move to NYSE MKT
    Post Your Comments:
    *Name:
    *Comment:
    *Email:
    (Date:5/14/2019)... , ... May 14, 2019 , ... Gateway Genomics ... effectively doubling its space from 2,500 to 5,000 square feet. , “This past ... DNA tests ,” says Gateway Genomics CEO, Chris Jacob. “The SneakPeek At-Home test, which ...
    (Date:5/4/2019)... BROOK, N.J. (PRWEB) , ... May 03, 2019 ... ... electrophysiology, announces the release of the Diopsys® ffERG/Photopic Negative Response vision ... of glaucoma. , By 2050, it is estimated that 6.3 million Americans will ...
    (Date:5/2/2019)... VIEJO, Calif. (PRWEB) , ... May 02, 2019 ... ... leading clinical genetics testing company, will present results documenting discrepancies between U.S. insurer ... management guidelines for patients at risk for hereditary breast and ovarian cancer (HBOC). ...
    (Date:4/18/2019)... ... 18, 2019 , ... Taking a step closer to a ... at Worcester Polytechnic Institute (WPI) has developed a novel process using an unusual ... and other biofuels more economically. , Isobutanol, like ethanol, is an alcohol, but ...
    Breaking Biology Technology:
    (Date:4/25/2019)... ... 23, 2019 , ... In recent years the neurocognitive effects ... in many cases the magnitude of these deficits and the long-term impact on ... neurocognitive effects may impact developmental trajectories, and patients are often so unwell at ...
    (Date:4/25/2019)... ... April 24, 2019 , ... In a ... today, a broad collective of 62 individual scientists, bioethicists, and biotechnology executives, including ... & Cell Therapy (ASGCT), across industry and academia called for collaboration on a ...
    (Date:4/25/2019)... WEST CHESTER, Ohio (PRWEB) , ... April 25, ... ... and research agents, as well as screening tools, has strengthened its commitment to ... Aprotinin can be used in any application where inhibition of its targeted proteases ...
    Breaking Biology News(10 mins):