SAN DIEGO, Aug. 12, 2014 /PRNewswire/ -- Organovo
Holdings, Inc. (NYSE MKT: ONVO) ("Organovo"), a three-dimensional
biology company focused on delivering pioneering 3D bioprinting
technology, has reported its first quarter, fiscal 2015, results
and provided highlights of its recent activities.
During the quarter, Organovo demonstrated, in collaboration with
a major pharmaceutical company, that its 3D Human Liver System
could detect the toxicity of a drug that had previously been deemed
safe in standard preclinical animal studies and in
vitro toxicity tests but caused liver damage upon clinical
use. The toxic profile of the compound was only discovered
after use in a large number of patients and after significant
expense.
Keith Murphy, chairman and chief
executive officer of Organovo, commented on the results:
"Organovo met a key challenge in this recent quarter. While we knew
our liver tissue showed metabolic activity and basic toxicology
results comparable to native tissue, we had to ask the question:
could it be predictive of drug problems where other methods have
failed? These results demonstrate clearly for the first time
that our tissue has been able to detect drug-induced liver injury
that other methods in the past failed to predict. With this data in
hand, we are continuing to push progress in the commercialization
of our 3D Liver Tissue. We remain on track for commercial
release of our 3D Human Liver Tissue later this calendar year."
Recent Corporate Highlights:
- Key opinion leader reported Organovo's 3D Human Liver Tissue
was able to establish the toxicity of toxic drug known to induce
liver injury in humans that did not show toxicity in animal and
other pre-clinical testing, an achievement historically unmet by
animal models or other liver cell model systems
- Initiated contracting for toxicity testing using its 3D Human
Liver Tissue, for selected clients, in advance of its scheduled
commercial release
- Entered into additional agreements to utilize 3D bio-printed
tissue in drug discovery settings
- Reported that its 3D bio-printed tissues enabled researchers to
make compartment-specific assessments (i.e., epithelium, stroma,
vasculature) of drug response — something that is not currently
possible outside of in vivo models to date
- Announced an agreement with the University
of Queensland directed toward development of source cell
lines for 3D kidney tissue bioprinting activities
- Appointed Gregory T. Lucier,
former Chairman and CEO of Life Technologies, as a corporate
advisor
- Announced Annual Stockholder meeting will be held on
August 20, 2014
On August 6th, the
Company announced the appointment of Greg
Lucier as a corporate advisor. In the role, Mr. Lucier
will advise management relative to the commercial release of the
Company's 3D Human Liver Tissue, scheduled to be launched by the
end of November, 2014.
On July 11th, the
Company announced its annual meeting of stockholders will be held
on August 20th, at
9:00 a.m. at its corporate
headquarters in San Diego. The notice of meeting and related
materials were mailed to stockholders of record on July 11th.
On June 26th, the
Company reported that a key opinion leader reported positive
results from a collaborative study conducted with Organovo
scientists using Organovo's 3D Human Liver Tissues.
On April 11th, the
Company reported a sponsored research agreement with the
University of Queensland. The agreement
calls for the development of source cell lines for 3D kidney tissue
bioprinting activities.
On April 10th, the
Company announced results of its initial study of 3D breast tissues
generated with its NovoGen MMX Bioprinter™ in breast cancer models,
which demonstrated that utilizing 3D tissues may enable researchers
to make compartment-specific assessments (i.e., epithelium, stroma,
and vasculature) of drug response — something that is not currently
possible outside of in vivo models. The results were presented at
the annual meeting of the American Association for Cancer Research
(AACR) held on April 5-9, 2014 in
San Diego, California.
Financial Summary
A summary of the Company's financial results for the first
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 August 8, 2014. Please reference that document for
additional information. Because Organovo's fiscal year end is
March 31, the period from April to
June 2014 is considered its first
quarter for fiscal year 2015 (Q1 FY2015).
As of June 30, 2014, the Company
had cash and cash equivalents of approximately $44.9 million and an accumulated deficit of
$98.6 million. The Company also
had negative cash flow from operations of $3.4 million during the three months ended
June 30, 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 June 30, 2014, the Company had
total current assets of approximately $45.7
million and current liabilities of approximately
$3.1 million, resulting in working
capital of $42.6 million. At
March 31, 2014, the Company 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 three months ended
June 30, 2014 was approximately
$3.4 million as compared to
$2.7 million used in operating
activities for the three months ended June
30, 2013. This $0.7 million
increase in cash usage can be attributed to a $2.7 million increase in operating expenses,
partially offset by an overall increase of $0.7 million of non-cash expenses included in
operations, including share-based compensation, depreciation and
amortization, and a decrease in working capital.
Net cash used in investing activities was approximately
$0.2 million and $0.1 million for the three months ended
June 30, 2014 and 2013, respectively.
This increase can be attributed to increased capital spending as
the Company expands its research capabilities. Net cash from
financing activities increased from less than $0.1 million used during the three months ended
June 30, 2013 to $0.3 million provided during the three months
ended June 30, 2014.
For the three months ended June 30,
2014, total revenues of $0.1
million were consistent with the $0.1
million in revenues for the same period in 2013. For both
periods, the majority of revenues were derived from collaborative
research agreements.
Operating expenses increased approximately $2.7 million, or 71%, from approximately
$3.8 million for the three months
ended June 30, 2013 to $6.5 million for the three months ended
June 30, 2014. Of this increase,
$1.4 million is relates to increased
selling, general and administrative expense while the other
$1.3 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, 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.
For the three months ended June 30,
2014, research and development expenses increased by
approximately $1.3 million, or 87%,
over the same period in 2013, 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 24 full-time
employees as of June 30, 2013 to 38
full-time employees as of June 30,
2014. In addition to increases in payroll and benefits
expense of approximately $0.4 million
and an increase in share-based compensation of $0.2 million resulting from increased staffing
levels and increasing stock prices from June
30, 2013 to June 30, 2014, the
Company increased its spending on lab equipment, supplies and
contracted services in proportion to its increased research
activities. In addition, the Company has continued to invest
additional resources to advance its 3D bio-printing technology
during the period.
For the three months ended June 30,
2014, general and administrative expenses were approximately
$3.7 million, an increase of
$1.4 million, or 61%, over expenses
in the same period of 2013 of approximately $2.3 million. Share-based compensation increased
$0.6 million due to additional grants
and increasing stock prices from June 30,
2013 to June 30, 2014.
Staffing expense increased $0.3
million due to an increase in administrative headcount from
11 full-time employees to 14 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 and legal costs in the
three months ended June 30, 2014 as
compared to the three months ended June 30,
2013.
Other expense was less than $0.1
million for the three months ended June 30, 2014 and 2013, and consisted primarily
of expense related to the revaluation of warrant derivative
liabilities.
About Organovo Holdings, Inc.
Organovo designs and creates functional, three-dimensional
human tissues for medical research and therapeutic applications.
The Company is collaborating with pharmaceutical and academic
partners to develop human biological disease models in three
dimensions. These 3D human tissues have the potential to accelerate
the drug discovery process, enabling treatments to be developed
faster and at lower cost. The Company plans to market the first
product of a planned portfolio offering, 3D Human Liver Tissue for
use in Toxicology and other preclinical drug testing prior to the
end of 2014, and remains on track to bring this breakthrough
technology to customers. In addition to numerous scientific
publications, the Company's technology has been featured
in The Wall Street Journal, Time Magazine, The Economist,
and numerous others. Organovo is changing the shape of
medical research and practice. Learn more at www.organovo.com
Safe Harbor Statement
Any 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 based on its
technology; the expected benefits and efficacy of the Company's
products and technology; the market acceptance of the Company's
products; and the Company's business, research, product
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 SEC, including our
annual report on Form 10-K filed with
the SEC on June 10, 2014 as well as our other
filings with the Securities and Exchange Commission. 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.
Organovo Holdings,
Inc.
|
Condensed
Consolidated Balance Sheets
|
(in thousands
except for share data)
|
|
|
|
|
June 30, 2014
|
March 31, 2014
|
|
(Unaudited)
|
(Audited)
|
Assets
|
|
|
Current
Assets
|
|
|
Cash and cash
equivalents
|
$
44,897
|
$
48,167
|
Accounts
receivable
|
60
|
—
|
Inventory
|
71
|
63
|
Prepaid expenses and
other current
assets
|
712
|
931
|
|
|
|
Total current
assets
|
45,740
|
49,161
|
Fixed assets,
net
|
1,001
|
857
|
Restricted
cash
|
79
|
79
|
Other assets,
net
|
88
|
89
|
|
|
|
Total
assets
|
$
46,908
|
$
50,186
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
Current
Liabilities
|
|
|
Accounts
payable
|
$
839
|
$
326
|
Accrued
expenses
|
1,739
|
1,167
|
Deferred
revenue
|
144
|
13
|
Capital lease
obligation
|
11
|
10
|
Warrant
liabilities
|
352
|
377
|
|
|
|
Total current
liabilities
|
3,085
|
1,893
|
Deferred revenue, net
of current
portion
|
3
|
4
|
Capital lease
obligation, net of current portion
|
2
|
5
|
|
|
|
Total
liabilities
|
$
3,090
|
$
1,902
|
Commitments and
Contingencies (Note
4)
|
|
|
Stockholders'
Equity
|
|
|
Common stock, $0.001
par value; 150,000,000 shares authorized, 78,282,460 and 78,113,639
shares issued and outstanding at June 30, 2014 and
March 31, 2014,
respectively
|
78
|
78
|
Additional paid-in
capital
|
142,386
|
140,419
|
Accumulated
deficit
|
(98,646)
|
(92,213)
|
|
|
|
Total stockholders'
equity
|
43,818
|
48,284
|
|
|
|
Total Liabilities
and Stockholders'
Equity
|
$
46,908
|
$
50,186
|
|
|
|
Organovo Holdings,
Inc.
|
Unaudited
Condensed Consolidated Statements of Operations
|
(in thousands
except share and per share data)
|
|
|
|
|
Three Months Ended
June 30, 2014
|
Three Months Ended
June 30, 2013
|
Revenues
|
|
|
Collaborations
|
$
69
|
$
94
|
Grants
|
30
|
12
|
|
|
|
Total
Revenues
|
99
|
106
|
Selling, general, and
administrative expenses
|
3,695
|
2,358
|
Research and
development
expenses
|
2,814
|
1,482
|
|
|
|
Loss from
Operations
|
(6,410)
|
(3,734)
|
|
|
|
Other Income
(Expense)
|
|
|
Change in fair value
of warrant
liabilities
|
(30)
|
(23)
|
Loss on disposal of
fixed
assets
|
—
|
(4)
|
Interest
expense
|
—
|
(13)
|
Interest
income
|
7
|
3
|
|
|
|
Total Other Income
(Expense)
|
(23)
|
(37)
|
|
|
|
Net
Loss
|
$
(6,433)
|
$
(3,771)
|
|
|
|
Net loss per common
share—basic and
diluted
|
$
(0.08)
|
$
(0.06)
|
Weighted average
shares used in computing net loss per common share—basic and
diluted
|
78,241,373
|
64,794,144
|
Organovo Holdings,
Inc.
|
Unaudited
Condensed Consolidated Statements of Cash Flows (in
thousands)
|
|
|
|
|
|
Three Months Ended
June 30, 2014
|
Three Months Ended
June 30, 2013
|
Cash Flows From
Operating Activities
|
|
|
Net
loss
|
$
(6,433)
|
$
(3,771)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
Loss on disposal of
fixed assets
|
—
|
4
|
Depreciation and
amortization
|
96
|
93
|
Change in fair value
of warrant liabilities
|
30
|
23
|
Expense associated
with warrant
modification
|
—
|
12
|
Stock-based
compensation
|
1,537
|
802
|
Amortization of
warrants issued for
services
|
141
|
72
|
Increase (decrease) in
cash resulting from changes
in:
|
|
|
Grants
receivable
|
—
|
101
|
Accounts
receivable
|
(60)
|
—
|
Inventory
|
(8)
|
3
|
Prepaid expenses and
other assets
|
117
|
(72)
|
Accounts
payable
|
513
|
(267)
|
Accrued
expenses
|
572
|
363
|
Deferred
revenue
|
130
|
(26)
|
|
|
|
Net cash used in
operating
activities
|
(3,365)
|
(2,663)
|
|
|
|
Cash Flows From
Investing Activities
|
|
|
Deposits released from
restriction
|
—
|
50
|
Purchases of fixed
assets
|
(238)
|
(163)
|
|
|
|
Net cash used in
investing
activities
|
(238)
|
(113)
|
|
|
|
Cash Flows From
Financing Activities
|
|
|
Proceeds from issuance
of common stock and exercise of warrants,
net
|
224
|
—
|
Proceeds from exercise
of stock
options
|
111
|
—
|
Principal payments on
capital lease obligation
|
(2)
|
(3)
|
|
|
|
Net cash provided
by (used in) financing
activities
|
333
|
(3)
|
|
|
|
Net Decrease in
Cash and Cash Equivalents
|
(3,270)
|
(2,779)
|
Cash and Cash
Equivalents at Beginning of
Period
|
48,167
|
15,628
|
|
|
|
Cash and Cash
Equivalents at End of Period
|
$
44,897
|
$
12,849
|
|
|
|
Supplemental
Disclosure of Cash Flow Information:
|
|
|
Interest
|
$
—
|
$
—
|
Income
Taxes
|
$
—
|
$
—
|
SOURCE Organovo Holdings, Inc.