SAN DIEGO, Feb. 7, 2014 /PRNewswire/ -- Organovo Holdings,
Inc. (NYSE MKT: ONVO) ("Organovo"), a three-dimensional
biology company focused on delivering breakthrough 3D bioprinting
technology, has reported its third quarter results and provided
highlights of its recent activities.
Keith Murphy, chairman and chief
executive officer of Organovo, commented on the results. "The
quarter continues our progress throughout our scientific,
operational and business development activities. Our progress in
the development of 3D Liver tissues continues to be ahead of plan,
highlighted by the demonstration of 40 days of characteristic liver
activity and additional evidence of appropriate response to known
hepatotoxic insults. We remain on-track for releasing our first
commercial liver toxicity assay product later this calendar year,"
Mr. Murphy stated. "Further, our new agreements are expected
to assist in growing our commercial opportunities long
term."
Recent Highlights
- Announced collaboration with the National Center for Advancing
Translational Sciences (NCATS) and the National Eye Institute
(NEI), two institutes of the National Institutes of Health
(NIH)
- Announced first delivery of 3D Liver tissue to Key Opinion
Leader
- Released initial data on a 3D bioprinted human breast cancer
tissue
- Achieved greater than one month performance for 3D bioprinted
liver tissues
- Released additional data on its NovoGen Bioprinted 3D Liver
demonstrating responsiveness to known toxins
- Announced a collaborative agreement in 3D skin tissues
On January 29th, the
Company announced the first delivery of 3D Liver tissue to a Key
Opinion Leader ahead of schedule, marking the achievement of a key
milestone along the pathway to commercial launch of its 3D Liver
tissue product.
On January 14th, the
Company announced a collaboration with the National Center for
Advancing Translational Sciences (NCATS) and the National Eye
Institute (NEI) to develop better and more clinically predictive
tissue models using Organovo's NovoGen MMX Bioprinter®. The
collaboration with these two institutes from the National
Institutes of Health (NIH) will include use of the NovoGen
Bioprinting platform to create three-dimensional, architecturally
correct, functional living tissues to help scientists develop more
reliable tools for bringing safer, more effective treatments to
patients on a faster timeline.
On December 18th, the
Company released initial data on a 3D bioprinted human breast
cancer tissue for in vitro screening of therapeutics
targeted against cancer progression, demonstrating that NovoGen
bioprinted breast cancer tissues retain compartmentalized
structures with interaction between stromal and cancer cells.
Formation of endothelial networks and differentiation of adipocytes
were observed in these tissues, and the constructs were
demonstrated to be less susceptible to tamoxifen-induced toxicity
than isolated 2D cancer cells when treated with the same dose of
tamoxifen for the same duration, highlighting the potential utility
of this model in identifying superior drugs with greater toxicity
against complex, multicellular 3D tumor models.
On December 18th, the
Company also released additional data on its NovoGen Bioprinted 3D
Liver, citing evidence of the formation of tight junctions in the
liver tissues as evidenced by claudin staining by day 3 of tissue
formation. NovoGen Bioprinted 3D Liver tissues also showed
additional evidence of appropriate response to hepatotoxic insults
from acetaminophen, acetaminophen in combination with ethanol, and
diclofenac.
On December 5th, the
Company announced it had entered into an agreement to expand its
current facility from approximately 15,000 to 30,000 sq. ft. to
accommodate new collaborative agreement activities and expand
manufacturing capacity for commercial launch of its first
product.
On October 22nd, the
Company announced achieving greater than one month performance and
drug responsiveness for 3D bioprinted liver tissues, demonstrating
that Organovo's 3D Liver Tissue can potentially have value in
assessing toxicology problems in human liver over a long period,
including sub-acute and multiple dose efforts.
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 on February 6,
2014. Please reference that document for additional
information. At December 31, 2013, the Company had total
current assets of approximately $50.5
million and current liabilities of approximately
$2.9 million, resulting in working
capital of $47.6 million. At
March 31, 2013, we had total current assets of approximately
$16.1 million and current liabilities
of approximately $8.4 million,
resulting in working capital of $7.7
million.
Net cash used in investing activities was approximately
$0.1 million and $0.4 million for the nine months ended
December 31, 2013 and December 31, 2012, respectively. Net cash
provided by financing activities increased from approximately
$11.0 million provided during the
nine months ended December 31, 2012
to $44.5 million provided during the
nine months ended December 31, 2013.
This increase was primarily due to the inclusion of $43.4 million in net proceeds from the issuance
of common stock in August, 2013.
As of December 31, 2013, the Company had 77,424,956 total
issued and outstanding shares of Common Stock, and five year
warrants for the opportunity to purchase an additional 1,203,656
shares of Common Stock at exercise prices between $0.85 and $1.00 per share and 313,870 warrants
with terms between two and five years and exercise prices between
$2.21 and $7.36 per share. If all
warrants were exercised on a cash basis, the Company would realize
approximately $2.4 million additional
gross proceeds. In aggregate, issued and outstanding common stock,
shares underlying outstanding warrants, and shares reserved for the
2008 and 2012 incentive plans total 89,195,246 shares of common
stock as of December 31, 2013.
Organovo is a development stage company, and does not expect
product-based revenue until the commercial release of its liver
toxicity assay product, currently planned to be before the end of
November, 2014. Since inception, the Company has periodically
received revenue from grants and collaborative research agreements.
Revenue recognition from these sources, however, is intermittent
and not necessarily indicative of the significance of the Company's
achievements related to those grants and partnerships.
Total revenues for the quarter of $0.1
million were $0.2 million or
67% below the approximately $0.3
million in revenues for the same period in 2012.
Collaborative research revenues of less than $0.1 million decreased $0.2 million or 67% from the same period of prior
year of approximately $0.3 million in
revenues. This decrease reflects declining activity under an
existing collaborative agreement and the conclusion of a previous
collaborative research agreement during the quarter, partially
offset by increasing revenue contributions from three recently
signed agreements.
The Company doubled its research and development expenses during
the quarter over the same period last year, while general and
administrated expenses increased 14%. The Company has
continued to prudently expand its scientific capabilities and
resources, and increased its headcount from 29 full-time employees
as of December 31, 2012 to 39
full-time employees as of December 31,
2013 to support its obligations under certain collaborative
research agreements and to expand its product development efforts
in preparation for product and research based service
revenues. These staff increases resulted in increased
staffing expenses of approximately $0.4
million or 34% over the same period in 2012. In addition,
share-based compensation expense increased $0.6 million for the three months ended
December 31, 2013 due to initial grants to new employees
during the year and a significant increase in the Company's stock
price from December 31, 2012 to December 31, 2013.
Total operating expenses increased approximately $1.5 million or 45% in the three months ended
December 31, 2013 over the same period in 2012, from
approximately $3.3 million in 2012 to
$4.8 million in 2013.
The approximate $6.1 million
decrease in other expense for the three month period ending
December 31, 2013 compared to the same period of the prior
year, was primarily related to the change in fair value associated
with the warrants issued in our 2012 Private Placement financing.
During the first quarter of calendar 2012, we issued warrants
to purchase 6,099,195 shares of our common stock to the placement
agent and warrants to purchase 15,247,987 shares of our common
stock to investors in the Private Placement. The warrants issued to
the placement agent and Private Placement investors were determined
to be derivative liabilities as a result of the anti-dilution
provisions in the warrant agreements that may result in an
adjustment to the warrant exercise price. As a result of increasing
stock prices during the three months ended December 31, 2012,
the fair value of the derivative liability increased, resulting in
the recognition of other expense of approximately $4.7 million. The majority of the underlying
warrants have been exercised prior to December 31, 2013 or
modified and reclassified as equity instruments. The increase in
the fair value of the warrant liability during the three months
ended December 31, 2013 was $0.6
million, which was recognized to other expense during the
period. The Company will continue to revalue the derivative
liability at each balance sheet date until the securities to which
the derivative liabilities relate are exercised or expire. In
addition, the Company completed a warrant tender offer in
December 2012 to amend certain
outstanding warrants to include a reduction of the exercise price
of the warrants from $1.00 per share
to $0.80 per share of common
stock. In connection with the transaction, the Company
recognized an expense for the inducement to exercise the warrants
of approximately $1.9 million.
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. 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; 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 prospectus supplement filed with the SEC on
August 2, 2013 and our transition
report on Form 10-KT filed with the SEC on May 24, 2013 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
|
(A development
stage company)
|
Condensed
Consolidated Balance Sheets
|
(in thousands
except per share data)
|
|
|
|
|
December 31, 2013
|
March 31, 2013
|
|
(Unaudited)
|
(Audited)
|
Assets
|
|
|
Current
Assets
|
|
|
Cash and cash
equivalents
|
$
49,818
|
$
15,628
|
Grant
receivable
|
7
|
101
|
Inventory
|
82
|
88
|
Prepaid expenses and
other current assets
|
622
|
327
|
|
|
|
Total current
assets
|
50,529
|
16,144
|
Fixed
assets—Net
|
915
|
1,045
|
Restricted
cash
|
79
|
88
|
Other
assets—Net
|
92
|
98
|
|
|
|
Total
assets
|
$
51,615
|
$
17,375
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
Current
Liabilities
|
|
|
Accounts
payable
|
$
311
|
$
641
|
Accrued
expenses
|
1,559
|
780
|
Deferred
revenue
|
15
|
53
|
Capital lease
obligation
|
10
|
10
|
Warrant
liabilities
|
1,006
|
6,898
|
|
|
|
Total current
liabilities
|
2,901
|
8,382
|
Deferred revenue, net
of current portion
|
5
|
9
|
Capital lease
obligation, net of current portion
|
8
|
15
|
|
|
|
Total
liabilities
|
$
2,914
|
$
8,406
|
Commitments and
Contingencies (Note 5)
|
|
|
Stockholders'
Equity
|
|
|
Common stock, $0.001
par value; 150,000,000 shares authorized, 77,424,956 and 64,686,919
shares issued and outstanding at December 31, 2013 and
March 31, 2013, respectively
|
77
|
65
|
Additional paid-in
capital
|
134,355
|
75,269
|
Deficit accumulated
during the development stage
|
(85,731)
|
(66,365)
|
|
|
|
Total stockholders'
equity
|
48,701
|
8,969
|
|
|
|
Total Liabilities
and Stockholders' Equity
|
$
51,615
|
$
17,375
|
|
|
|
Organovo Holdings,
Inc
|
(A development
stage company)
|
Unaudited
Condensed Consolidated Statements of Operations
|
(in thousands
except per share data)
|
|
|
|
|
|
|
Period
from
|
|
|
|
|
|
April 19,
2007
|
|
|
|
|
|
(Inception)
|
|
Three Months Ended December 31,
|
Nine Months Ended December 31,
|
Through
|
|
2013
|
2012
|
2013
|
2012
|
December 31, 2013
|
Revenues
|
|
|
|
|
|
Product
|
$
—
|
$
—
|
$
—
|
$
—
|
$
224
|
Collaborations
|
97
|
282
|
214
|
915
|
2,110
|
Grants
|
38
|
67
|
50
|
162
|
993
|
|
|
|
|
|
|
Total
Revenues
|
135
|
349
|
264
|
1,077
|
3,327
|
Cost of product
revenue
|
—
|
—
|
—
|
—
|
134
|
Selling, general, and
administrative expenses
|
2,402
|
2,141
|
8,807
|
6,178
|
21,346
|
Research and
development expenses
|
2,359
|
1,130
|
5,420
|
2,889
|
13,502
|
|
|
|
|
|
|
Loss from
Operations
|
(4,626)
|
(2,922)
|
(13,963)
|
(7,990)
|
(31,655)
|
|
|
|
|
|
|
Other Income
(Expense)
|
|
|
|
|
|
Fair value of warrant
liabilities in excess of proceeds received
|
—
|
—
|
—
|
—
|
(19,019)
|
Change in fair value
of warrant liabilities
|
(586)
|
(4,740)
|
(5,397)
|
3,575
|
(27,369)
|
Financing transaction
costs in excess of proceeds received
|
—
|
—
|
—
|
—
|
(2,130)
|
Loss on inducement to
exercise warrants
|
—
|
(1,904)
|
—
|
(1,904)
|
(1,904)
|
Gain (loss) on
disposal of fixed assets
|
—
|
—
|
(4)
|
(158)
|
(162)
|
Interest
expense
|
—
|
—
|
(13)
|
—
|
(3,484)
|
Interest
income
|
4
|
2
|
11
|
5
|
22
|
Other income
(expense)
|
—
|
—
|
—
|
—
|
(30)
|
|
|
|
|
|
|
Total Other Income
(Expense)
|
(582)
|
(6,642)
|
(5,403)
|
1,518
|
(54,076)
|
|
|
|
|
|
|
Net
loss
|
$
(5,208)
|
$
(9,564)
|
$
(19,366)
|
$
(6,472)
|
$
(85,731)
|
|
|
|
|
|
|
Net loss per common
share—basic and diluted
|
$
(0.07 )
|
$
(0.20)
|
$
(0.27)
|
$
(0.14)
|
|
Weighted average
shares used in computing net loss per common share—basic and
diluted
|
77,235,976
|
48,428,186
|
71,606,724
|
45,224,906
|
|
Organovo Holdings,
Inc
|
(A development
stage company)
|
Unaudited
Condensed Consolidated Statements of Cash Flows (in
thousands)
|
|
|
Nine Months Ended
December 31, 2013
|
Nine Months Ended
December 31, 2012
|
Period from
April 19, 2007
(Inception)
Through
December 31, 2013
|
Cash Flows From
Operating Activities
|
|
|
|
Net loss
|
$
(19,366)
|
$
(6,472)
|
$
(85,731)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Amortization of
deferred financing costs
|
—
|
—
|
438
|
Loss on disposal of
fixed assets
|
4
|
158
|
162
|
Depreciation and
amortization
|
288
|
178
|
719
|
Amortization of debt
discount
|
—
|
—
|
2,084
|
Interest accrued on
convertible notes payable
|
—
|
—
|
495
|
Fair value of warrant
liabilities in excess of proceeds
|
—
|
—
|
19,019
|
Change in fair value
of warrant liabilities
|
5,397
|
(3,575)
|
27,369
|
Loss on inducement to
exercise warrants
|
—
|
1,904
|
1,904
|
Expense associated
with warrant modification
|
12
|
—
|
77
|
Stock-based
compensation
|
2,840
|
1,431
|
5,140
|
Amortization of
warrants issued for services
|
182
|
556
|
999
|
Warrants issued in
connection with exchange
agreement
|
—
|
—
|
528
|
Increase (decrease)
in cash resulting from changes in:
|
|
—
|
|
Grants
receivable
|
94
|
(162)
|
(7)
|
Inventory
|
6
|
(414)
|
(745)
|
Prepaid expenses and
other assets
|
(25)
|
(36)
|
(280)
|
Accounts
payable
|
(330)
|
(16)
|
311
|
Accrued
expenses
|
779
|
580
|
1,559
|
Deferred
revenue
|
(42)
|
(269)
|
20
|
|
|
|
|
Net cash used in
operating activities
|
(10,161)
|
(6,137)
|
(25,939)
|
|
|
|
|
Cash Flows From
Investing Activities
|
|
|
|
Deposits released
from restriction (restricted cash deposits)
|
9
|
(50)
|
(79)
|
Purchases of fixed
assets
|
(156)
|
(351)
|
(1,077)
|
Purchases of
intangible assets
|
—
|
—
|
(114)
|
|
|
|
|
Net cash used in
investing activities
|
(147)
|
(401)
|
(1,270)
|
|
|
|
|
Cash Flows From
Financing Activities
|
|
|
|
Proceeds from
issuance of convertible notes payable
|
—
|
—
|
4,630
|
Proceeds from
issuance of common stock and exercise of warrants, net
|
44,310
|
10,991
|
72,748
|
Proceeds from
exercise of stock options
|
195
|
18
|
213
|
Proceeds from
issuance of related party notes payable
|
—
|
—
|
250
|
Principal payments on
capital lease obligation
|
(7)
|
(7)
|
(16)
|
Repayment of related
party notes payable
|
—
|
—
|
(250)
|
Repayment of
convertible notes and interest payable
|
—
|
—
|
(110)
|
Deferred financing
costs
|
—
|
—
|
(438)
|
|
|
|
|
Net cash provided
by financing activities
|
44,498
|
11,002
|
77,027
|
|
|
|
|
Net Increase in
Cash and Cash Equivalents
|
34,190
|
4,464
|
49,818
|
Cash and Cash
Equivalents at Beginning of Period
|
15,628
|
10,353
|
—
|
|
|
|
|
Cash and Cash
Equivalents at End of Period
|
$
49,818
|
$
14,817
|
$
49,818
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information:
|
|
|
|
Interest
|
$
—
|
$
—
|
$
10
|
Income
Taxes
|
$
—
|
$
—
|
$
3
|
SOURCE Organovo Holdings, Inc.