SAN DIEGO, June 12, 2014 /PRNewswire/ -- Organovo
Holdings, Inc. (NYSE MKT: ONVO) ("Organovo"), a three-dimensional
biology company focused on delivering breakthrough 3D bioprinting
technology, has reported its financial results for the fiscal year
ended March 31, 2014. The
Company also reported on its corporate highlights during fiscal
2014.
FY 2014 Corporate Highlights:
- Expanded independent Board membership with the addition of
Tamar D. Howson and
Richard A. Heyman, Ph.D.;
- Common stock was approved to list on the NYSE MKT and began
trading on the New York Stock Exchange MKT on July 11 , 2013;
- Raised $46.6 Million via a fully
underwritten public offering of Common Stock, in which Lazard
Capital Markets LLC and Oppenheimer & Co.
Inc. acted as joint book-runners for the offering;
- Presented data demonstrating retention of key liver functions
in bioprinted tissues for up to 40 days, and demonstrated that
Organovo's 3D liver tissues exhibit dose-dependent responses
to known liver toxicants, and that the toxic effects can be
assessed using both standard screening assays and histopathological
assessment of the treated tissue;
- Performed its first 3D Liver tissue delivery, marking the
delivery of Organovo's 3D Liver tissue to a laboratory
outside of the company to a key opinion leader (KOL) for
experimentation;
- Initiated contracting for toxicity testing using its 3D Human
Liver Tissue for selected clients prior to full release;
- Announced collaboration with the National Center for Advancing
Translational Sciences (NCATS) and the National Eye Institute (NEI)
to help scientists develop more reliable tools for bringing safer,
more effective treatments to patients on a faster timeline;
- Doubled office and laboratory space to 30,000 sq. feet to
accommodate the capacity requirements of recent partnerships and
the near-term commercial product launch;
- Celebrated a profile of the company and the 3D bioprinting
space as the cover story in the Economist's Technology
Quarterly
"Organovo was able to continue our achievement of strong results
in fiscal 2014," stated Keith
Murphy, chief executive officer of Organovo. "We
demonstrated the viability and utility of our 3D liver tissues and
breast tumor disease model, expanded our partnerships, uplisted our
common stock to the NYSE MKT, raised significant financing, and saw
tremendous scientific results from our bioprinting efforts in a
variety of tissue types. We will continue to focus in fiscal
2015 on executing our business plan and on striving to deliver
long-term shareholder value."
Financial Results:
Comparison of the years ended March 31, 2014 and
December 31, 2012
Revenues
Revenues of $0.4 million for the
year ended March 31, 2014 decreased approximately $0.8 million, or 67%, over revenues of
$1.2 million for the year ended
December 31, 2012. This
decrease reflects the completion or declining activity under two
collaborative research agreements since 2012, partially offset by
increasing revenue contributions from three new collaborative
research agreements.
Operating Expenses
Operating expenses increased approximately $10.5 million, or 100%, from $10.5 million for the year ended December 31, 2012 to $21.0
million for the year ended March 31, 2014. Of this
increase, $5.9 million is related to
increased selling, general and administrative expense, while the
other $4.6 million relates to
increased investment in research and development expense. Those
increases are attributed to the Company's continued implementation
of its business plan, including hiring additional staff to support
its research and development initiatives, incremental investment
associated with commercialization project initiatives,
expenses related to operating as a publicly traded corporation,
expansion to a larger facility, and increased stock compensation
expense relative to employees and certain consulting services.
Research and Development Expenses
Research and development expense increased $4.6 million, or 135%, from approximately
$3.4 million for the year ended
December 31, 2012 to approximately
$8.0 million for the year ended
March 31, 2014 as the Company
significantly increased its research staff to support its
obligations under certain collaborative research agreements and
grants, and to expand product development efforts in preparation
for commercial revenues. Full-time research and development
staffing increased from nineteen full-time employees as of
December 31, 2012 to thirty-two full-time employees as of
March 31, 2014. In addition to the incremental payroll,
benefits and stock-based compensation resulting from increased
staffing levels, the Company increased its facility space to
accommodate its growing research staff, and increased its spending
on lab equipment and supplies in proportion to its increased
research activities.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased
approximately $5.9 million, or 83%,
from $7.1 million for the year ended
December 31, 2012 to $13.0
million for the year ended March 31, 2014. Increased
staffing expenses of approximately $1.5
million was due to the headcount increase from ten full-time
employees as of December 31, 2012 to
thirteen full-time employees as of March 31,
2014, to provide strategic infrastructure in developing
collaborative relationships and preparing for commercialization of
products and services, and to address the additional compliance
requirements of operating as a publicly traded corporation. In
addition, the year ended March 31,
2014 includes $1.2 million
more in payroll taxes related to the vesting of restricted stock
units the Company previously granted to certain of its
executives. Stock-based compensation costs also increased
approximately $2.9 million due
to additional grants to employees and consultants as well as an
overall increase in the Company's stock price. The remainder
of the increase is primarily due to non-recurring external fees and
expenses incurred during the year ended March 31, 2014 related to the Company's
up-listing to the NYSE MKT and its completion of a secondary public
offering during the year.
Other Income (Expense)
The $29.0 million decrease in
other expenses as compared to the year ended December 31, 2012
was primarily due to the inclusion of one-time non-cash transaction
costs associated with the Merger and 2012 Private Placements in
other expense during 2012, including approximately $19.0 million of expense for the excess of the
fair value of warrant liabilities over proceeds received,
$2.1 million of financing costs in
excess of proceeds received and $1.0
million in interest expense from the accretion of debt
discount and amortization of deferred financing costs related to
the 2011 Private Placement, the Merger and the 2012 Private
Placement. In addition, $1.9 million
of expense was recorded in 2012 for the loss on inducement to
exercise warrants under a tender offer completed during the
year. Finally, non-cash expense related to the change in fair
value of warrant liabilities decreased by approximately
$4.8 million, due to fewer warrants
outstanding as of March 31, 2014.
Various factors are considered in the pricing models we use to
value the warrants, including the Company's current stock price,
the remaining life of the warrants, the volatility of the Company's
stock price, and the risk free interest rate. Future changes in
these factors may have a significant impact on the computed fair
value of the warrant liability. As such, we expect future changes
in the fair value of the warrants to continue to vary significantly
from quarter to quarter.
Financial Condition, Liquidity and Capital Resources
At March 31, 2014, we had total current assets of
$49.2 million and current liabilities
of $1.9 million, resulting in working
capital of $47.3 million. At
March 31, 2013, we had total current
assets of $16.1 million and current
liabilities of $8.4 million,
resulting in working capital of $7.7
million. At December 31, 2012, we had total
current assets of $15.9 million and
current liabilities of $22.0 million,
resulting in a working capital deficit of $6.1 million.
Net cash used in investing activities was approximately
$0.3 million, $0.2 million, less than $0.1million, $0.4
million, and $0.1 million for
the year ended March 31, 2014, the
three months ended March 31, 2013 and March 31, 2012, and the years ended December 31, 2012 and December 31, 2011, respectively. The majority of
net cash used in investing activities from inception to date has
been for the purchases of equipment for the research lab.
Net cash provided by financing activities was approximately
$48.4 million, $3.7 million, $13.6
million, $24.6 million and
$2.1 million for the year ended
March 31, 2014, the three months
ended March 31, 2013 and March 31,
2012, and the years ended December
31, 2012 and December 31,
2011, respectively.
During the year ended March 31,
2014, we raised net proceeds of approximately $43.4 million through the sale of 10,350,000
shares of our common stock in a public offering. In addition, we
raised net proceeds of approximately $3.5
million from an at-the-market follow-on offering,
$1.0 million from the exercise of
warrants, and $0.4 million from stock
option exercises during the year ended March
31, 2014.
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; 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.
(A development
stage company)
CONSOLIDATED
BALANCE SHEETS
(in thousands except
per share data)
|
|
|
|
|
|
March 31, 2014
|
March 31, 2013
|
December 31, 2012
|
Assets
|
|
|
|
Current
Assets
|
|
|
|
Cash and cash
equivalents
|
$
48,167
|
$
15,628
|
$
14,817
|
Grant
receivable
|
—
|
101
|
162
|
Inventory
|
63
|
88
|
360
|
Deferred financing
costs
|
40
|
—
|
—
|
Prepaid expenses and
other current assets
|
891
|
327
|
527
|
|
|
|
|
Total current
assets
|
49,161
|
16,144
|
15,866
|
Fixed assets,
net
|
857
|
1,045
|
714
|
Restricted
cash
|
79
|
88
|
88
|
Other assets,
net
|
89
|
98
|
81
|
|
|
|
|
Total
assets
|
$
50,186
|
$
17,375
|
$
16,749
|
|
|
|
|
Liabilities and
Stockholders' Equity (Deficit)
|
|
|
|
Current
Liabilities
|
|
|
|
Accounts
payable
|
$
326
|
$
641
|
$
425
|
Accrued
expenses
|
1,167
|
780
|
981
|
Deferred
revenue
|
13
|
53
|
—
|
Current portion of
capital lease obligation
|
10
|
10
|
10
|
Warrant
liabilities
|
377
|
6,898
|
20,619
|
|
|
|
|
Total current
liabilities
|
1,893
|
8,382
|
22,035
|
Deferred revenue, net
of current portion
|
4
|
9
|
—
|
Capital lease
obligation, net of current portion
|
5
|
15
|
17
|
|
|
|
|
Total
liabilities
|
$
1,902
|
$
8,406
|
$
22,052
|
|
|
|
|
Commitments and
Contingencies (Note 8)
|
|
|
|
Stockholders'
Equity (Deficit)
|
|
|
|
Common stock, $0.001
par value; 150,000,000 shares authorized, 78,113,639, 64,686,919
and 58,535,411 shares issued and outstanding at March 31,
2014, March 31, 2013, and December 31, 2012,
respectively
|
78
|
65
|
59
|
Additional paid-in
capital
|
140,419
|
75,269
|
44,883
|
Deficit accumulated
during the development stage
|
(92,213)
|
(66,365)
|
(50,245)
|
|
|
|
|
Total stockholders'
equity (deficit)
|
48,284
|
8,969
|
(5,303)
|
|
|
|
|
Total Liabilities
and Stockholders' Equity (Deficit)
|
$
50,186
|
$
17,375
|
$
16,749
|
ORGANOVO HOLDINGS,
INC.
(A development
stage company)
CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands except
per share data)
|
|
|
|
|
|
|
|
|
Year ended
March 31,
2014
|
Three Months
Ended
March 31,
|
Year ended
December 31,
2012
|
Year ended
December 31,
2011
|
Period from
April 19, 2007
Inception
Through
March 31, 2014
|
|
2013
|
2012
|
|
|
|
(Unaudited)
|
|
|
|
Revenues
|
|
|
|
|
|
|
Product
|
$
—
|
$
—
|
$
—
|
$
—
|
$
224
|
$
224
|
Collaborations
|
248
|
98
|
120
|
1,035
|
688
|
2,144
|
Grants
|
131
|
117
|
—
|
162
|
57
|
1,074
|
|
|
|
|
|
|
|
Total
Revenues
|
379
|
215
|
120
|
1,197
|
969
|
3,442
|
Cost of product
revenue
|
—
|
—
|
—
|
—
|
121
|
134
|
Selling, general, and
administrative
expenses
|
13,054
|
2,792
|
902
|
7,080
|
1,733
|
25,593
|
Research and
development expenses
|
7,974
|
1,448
|
547
|
3,436
|
1,420
|
16,056
|
|
|
|
|
|
|
|
Loss from
Operations
|
(20,649)
|
(4,025)
|
(1,329)
|
(9,319)
|
(2,305)
|
(38,341)
|
|
|
|
|
|
|
|
Other Income
(Expense)
|
|
|
|
|
|
|
Fair value of warrant liabilities in excess of proceeds
received
|
—
|
—
|
(19,019)
|
(19,019)
|
—
|
(19,019)
|
Change in fair value of warrant
liabilities
|
(5,120)
|
(12,034)
|
(13,506)
|
(9,931)
|
(7)
|
(27,092)
|
Financing transaction costs in excess of proceeds
received
|
—
|
—
|
(2,130)
|
(2,130)
|
—
|
(2,130)
|
Loss on inducement to exercise
warrants
|
—
|
—
|
—
|
(1,904)
|
—
|
(1,904)
|
Loss on disposal of fixed assets
|
(84)
|
—
|
—
|
(158)
|
—
|
(242)
|
Interest expense
|
(13)
|
(65)
|
(1,088)
|
(1,088)
|
(2,067)
|
(3,484)
|
Interest income
|
18
|
4
|
—
|
5
|
—
|
29
|
Other expense
|
—
|
—
|
(9)
|
(9)
|
(4)
|
(300)
|
|
|
|
|
|
|
|
Total Other Income
(Expense)
|
(5,199)
|
(12,095)
|
(35,752)
|
(34,234)
|
(2,078)
|
(53,872)
|
|
|
|
|
|
|
|
Net
Loss
|
$
(25,848)
|
$
(16,120)
|
$
(37,081)
|
$
(43,553)
|
$
(4,383)
|
$
(92,213)
|
|
|
|
|
|
|
|
Net loss per common
share — basic and diluted
|
$
(0.35)
|
$
(0.26)
|
$
(1.17)
|
$
(1.01)
|
$
(0.19)
|
|
Weighted average
shares used in computing net loss per common share — basic and
diluted
|
73,139,618
|
61,750,157
|
31,591,663
|
43,149,657
|
22,925,694
|
|
ORGANOVO HOLDINGS,
INC.
(A development
stage company)
CONSOLIDATED
STATEMENTS OF CASH FLOWS (in thousands)
|
|
|
|
|
|
|
|
|
Year
Ended
March 31,
2014
|
Three Months
Ended
March 31,
2013
|
Three Months
Ended
March 31,
2012
|
Year
Ended
December 31,
2012
|
Year
Ended
December 31,
2011
|
Period from
April 19,
2007
(Inception)
Through
March 31,
2014
|
|
|
|
(Unaudited)
|
|
|
|
Cash Flows From
Operating Activities
|
|
|
|
|
|
|
Net loss
|
$ (25,848)
|
$ (16,120)
|
$ (37,081)
|
$ (43,553)
|
$ (4,383)
|
$ (92,213)
|
Adjustments to
reconcile net loss to net cash used in
operating activities:
|
|
|
|
|
|
|
Amortization of deferred financing
costs
|
—
|
—
|
319
|
319
|
119
|
438
|
Amortization of warrants issued for
services
|
323
|
261
|
—
|
556
|
—
|
1,140
|
Depreciation and
amortization
|
387
|
80
|
17
|
195
|
68
|
818
|
Loss on disposal of fixed assets
|
84
|
—
|
—
|
158
|
—
|
242
|
Amortization of debt
discount
|
—
|
—
|
896
|
896
|
1,188
|
2,084
|
Interest accrued on convertible notes payable
|
—
|
—
|
12
|
12
|
232
|
495
|
Fair value of warrant liabilities in excess of proceeds
|
—
|
—
|
19,019
|
19,019
|
—
|
19,019
|
Change in fair value of warrant liabilities
|
5,120
|
12,034
|
13,506
|
9,931
|
7
|
27,092
|
Loss on inducement to exercise warrants
|
—
|
—
|
—
|
1,904
|
—
|
1,904
|
Expense
associated with warrant modification
|
12
|
65
|
—
|
—
|
—
|
77
|
Stock-based compensation
|
4,600
|
848
|
4
|
1,435
|
9
|
6,900
|
Warrants issued in connection with exchange
agreement
|
—
|
—
|
—
|
—
|
528
|
528
|
Increase (decrease) in cash resulting from changes in:
|
|
|
|
|
|
|
Grants receivable
|
101
|
61
|
—
|
(162)
|
60
|
—
|
Inventory
|
25
|
—
|
(45)
|
(459)
|
(224)
|
(726)
|
Prepaid expenses and other assets
|
(392)
|
(61)
|
(65)
|
(101)
|
(69)
|
(647)
|
Accounts payable
|
(315)
|
216
|
(217)
|
(233)
|
373
|
326
|
Accrued expenses
|
387
|
(201)
|
(37)
|
543
|
132
|
1,167
|
Deferred revenue
|
(45)
|
62
|
116
|
(153)
|
46
|
17
|
|
|
|
|
|
|
|
Net cash used in
operating activities
|
(15,561)
|
(2,755)
|
(3,556)
|
(9,693)
|
(1,914)
|
(31,339)
|
|
|
|
|
|
|
|
Cash Flows From
Investing Activities
|
|
|
|
|
|
|
Deposits released from restriction (restricted cash
deposits)
|
9
|
—
|
(38)
|
(88)
|
—
|
(79)
|
Purchases of fixed assets
|
(277)
|
(137)
|
(6)
|
(357)
|
(46)
|
(1,198)
|
Purchases of
intangible assets
|
—
|
(19)
|
—
|
—
|
(65)
|
(114)
|
|
|
|
|
|
|
|
Net cash used in
investing activities
|
(268)
|
(156)
|
(44)
|
(445)
|
(111)
|
(1,391)
|
|
|
|
|
|
|
|
Cash Flows From
Financing Activities
|
|
|
|
|
|
|
Proceeds from issuance of convertible notes payable
|
—
|
—
|
—
|
—
|
2,543
|
4,630
|
Proceeds from issuance of common stock and exercise of warrants,
net
|
48,016
|
3,724
|
13,723
|
24,714
|
—
|
76,454
|
Proceeds from exercise of stock options
|
402
|
—
|
—
|
18
|
—
|
420
|
Proceeds from issuance of related party notes payable
|
—
|
—
|
—
|
—
|
225
|
250
|
Principal payments on capital lease obligations
|
(10)
|
(2)
|
—
|
(7)
|
—
|
(19)
|
Repayment of related party notes payable
|
—
|
—
|
—
|
—
|
(250)
|
(250)
|
Repayment of convertible notes and interest payable
|
—
|
—
|
(110)
|
(110)
|
—
|
(110)
|
Deferred financing costs
|
(40)
|
—
|
—
|
—
|
(438)
|
(478)
|
|
|
|
|
|
|
|
Net cash provided by
financing activities
|
48,368
|
3,722
|
13,613
|
24,615
|
2,080
|
80,897
|
|
|
|
|
|
|
|
Net Increase in Cash
and Cash Equivalents
|
32,539
|
811
|
10,013
|
14,477
|
55
|
48,167
|
Cash and Cash
Equivalents at Beginning of Period
|
15,628
|
14,817
|
340
|
340
|
285
|
—
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents at End of Period
|
$ 48,167
|
$ 15,628
|
$ 10,353
|
$ 14,817
|
$ 340
|
$ 48,167
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
Interest
|
$ —
|
$ —
|
$ 10
|
$ 10
|
$ —
|
$ 10
|
Income Taxes
|
$ —
|
$ —
|
$
1
|
$
1
|
$
1
|
$
3
|
SOURCE Organovo Holdings, Inc.