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 Summary
A 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 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 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 Statements
|
Organovo Holdings,
Inc.
|
Condensed
Consolidated Balance Sheets
|
(in thousands
except for share data)
|
|
|
|
|
|
|
|
|
|
December 31,
2014
|
|
|
March 31,
2014
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
50,027
|
|
|
$
|
48,167
|
|
Inventory
|
|
|
69
|
|
|
|
63
|
|
Prepaid expenses and
other current assets
|
|
|
372
|
|
|
|
931
|
|
Total current
assets
|
|
|
50,468
|
|
|
|
49,161
|
|
Fixed assets,
net
|
|
|
1,440
|
|
|
|
857
|
|
Restricted
cash
|
|
|
79
|
|
|
|
79
|
|
Other assets,
net
|
|
|
83
|
|
|
|
89
|
|
Total
assets
|
|
$
|
52,070
|
|
|
$
|
50,186
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
495
|
|
|
$
|
326
|
|
Accrued
expenses
|
|
|
2,028
|
|
|
|
822
|
|
Deferred
rent
|
|
|
646
|
|
|
|
345
|
|
Deferred
revenue
|
|
|
241
|
|
|
|
13
|
|
Capital lease
obligation
|
|
|
8
|
|
|
|
10
|
|
Warrant
liabilities
|
|
|
298
|
|
|
|
377
|
|
Total current
liabilities
|
|
|
3,716
|
|
|
|
1,893
|
|
Deferred revenue, net
of current portion
|
|
|
44
|
|
|
|
4
|
|
Capital lease
obligation, net of current portion
|
|
|
-
|
|
|
|
5
|
|
Total
liabilities
|
|
$
|
3,760
|
|
|
$
|
1,902
|
|
Commitments and
Contingencies (Note 4)
|
|
|
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Common 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, respectively
|
|
|
80
|
|
|
|
78
|
|
Additional paid-in
capital
|
|
|
162,727
|
|
|
|
140,419
|
|
Accumulated
deficit
|
|
|
(114,497)
|
|
|
|
(92,213)
|
|
Total stockholders'
equity
|
|
|
48,310
|
|
|
|
48,284
|
|
Total 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
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
Product and
service
|
$
|
139
|
|
|
—
|
|
$
|
139
|
|
|
—
|
Collaborations
|
|
7
|
|
|
97
|
|
|
121
|
|
|
214
|
Grants
|
|
9
|
|
|
38
|
|
|
44
|
|
|
50
|
Total
Revenues
|
|
155
|
|
|
135
|
|
|
304
|
|
|
264
|
Selling, general, and
administrative expenses
|
|
3,878
|
|
|
2,379
|
|
|
13,350
|
|
|
8,740
|
Research and
development expenses
|
|
3,238
|
|
|
2,382
|
|
|
9,281
|
|
|
5,487
|
Loss 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
income
|
|
8
|
|
|
4
|
|
|
22
|
|
|
11
|
Total 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 loss
per
common share—basic and diluted
|
|
80,491,120
|
|
|
77,235,976
|
|
|
79,225,692
|
|
|
71,606,724
|
|
|
Organovo Holdings,
Inc.
|
Unaudited
Condensed Consolidated Statements of Cash Flows
|
(in
thousands)
|
|
|
|
Nine Months
Ended
|
|
|
Nine Months
Ended
|
|
|
|
December 31,
2014
|
|
|
December 31,
2013
|
|
Cash Flows From
Operating Activities
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(22,284)
|
|
|
$
|
(19,366)
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Loss on disposal of
fixed assets
|
|
|
3
|
|
|
|
4
|
|
Depreciation and
amortization
|
|
|
334
|
|
|
|
288
|
|
Change in fair value
of warrant liabilities
|
|
|
(24)
|
|
|
|
5,397
|
|
Expense associated
with warrant modification
|
|
|
—
|
|
|
|
12
|
|
Stock-based
compensation
|
|
|
5,215
|
|
|
|
2,840
|
|
Amortization of
warrants issued for services
|
|
|
556
|
|
|
|
182
|
|
Increase (decrease) in
cash resulting from changes in:
|
|
|
|
|
|
|
|
|
Grants
receivable
|
|
|
—
|
|
|
|
94
|
|
Inventory
|
|
|
(6)
|
|
|
|
6
|
|
Prepaid expenses and
other assets
|
|
|
318
|
|
|
|
(25)
|
|
Accounts
payable
|
|
|
169
|
|
|
|
(330)
|
|
Accrued
expenses
|
|
|
1,206
|
|
|
|
779
|
|
Deferred
rent
|
|
|
254
|
|
|
|
—
|
|
Deferred
revenue
|
|
|
268
|
|
|
|
(42)
|
|
Net cash used in
operating activities
|
|
|
(13,991)
|
|
|
|
(10,161)
|
|
Cash Flows From
Investing Activities
|
|
|
|
|
|
|
|
|
Deposits released from
restriction
|
|
|
—
|
|
|
|
9
|
|
Purchases of fixed
assets
|
|
|
(867)
|
|
|
|
(156)
|
|
Net cash used in
investing activities
|
|
|
(867)
|
|
|
|
(147)
|
|
Cash Flows From
Financing Activities
|
|
|
|
|
|
|
|
|
Proceeds from issuance
of common stock and exercise of warrants, net
|
|
|
16,512
|
|
|
|
44,310
|
|
Proceeds from exercise
of stock options
|
|
|
213
|
|
|
|
195
|
|
Principal payments on
capital lease obligations
|
|
|
(7)
|
|
|
|
(7)
|
|
Net cash provided
by financing activities
|
|
|
16,718
|
|
|
|
44,498
|
|
Net Increase in
Cash and Cash Equivalents
|
|
|
1,860
|
|
|
|
34,190
|
|
Cash and Cash
Equivalents at Beginning of Period
|
|
|
48,167
|
|
|
|
15,628
|
|
Cash and Cash
Equivalents at End of Period
|
|
$
|
50,027
|
|
|
$
|
49,818
|
|
Supplemental
Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
—
|
|
|
$
|
—
|
|
Income
Taxes
|
|
$
|
—
|
|
|
$
|
—
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/organovo-holdings-inc-reports-third-quarter-results-300032663.html
SOURCE Organovo Holdings, Inc.