SAN DIEGO, Nov. 10, 2014 /PRNewswire/ -- Organovo
Holdings, Inc. (NYSE MKT: ONVO) ("Organovo"), a three-dimensional
biology company focused on delivering pioneering 3D bioprinting
technology, has reported its second quarter, fiscal 2015,
results.
Keith Murphy, chairman and chief
executive officer of Organovo, commented on the results: "Last
quarter Organovo demonstrated that our exVive3D™ Human Liver
Model is clearly able to detect drug-induced liver injury that
other methods in the past failed to predict. With that data in hand
we are ready to initiate the commercialization of our 3D Liver
Tissue before the end of November, 2014. Our achievements in
the development of this technology were honored this past quarter
in multiple ways, including through selection of our company as a
2015 Technology Pioneer by the World Economic Forum (WEF)."
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 November 7, 2014. Please refer to
that document for additional information.
Because Organovo's fiscal year end is March
31, the period from July to September 2014 is the second
quarter of fiscal year 2015 (Q2 FY2015).
As of September 30, 2014, the Company had cash and cash
equivalents of approximately $54.4
million and an accumulated deficit of $107.5
million. The Company had negative cash flow from operations
of $9.7 million during the six months ended September 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 September 30, 2014, the Company had total current assets
of approximately $55.1 million and
current liabilities of approximately $3.1
million, resulting in working capital of $52.0 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 in operating activities for the six months ended
September 30, 2014 was approximately $9.7 million as compared to $6.3 million used in operating activities for the
six months ended September 30, 2013. This $3.4 million increase in cash usage can be
attributed to a $6.0 million increase
in operating expenses, partially offset by an overall increase of
$2.0 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
$0.6 million and $0.1 million for the six months ended
September 30, 2014 and 2013, respectively. This increase can
be attributed to increased capital spending as the Company expands
its research capabilities.
Net cash resulting from financing activities decreased from
$44.1 million during the six months
ended September 30, 2013 to $16.5
million during the six months ended September 30, 2014.
This decrease is primarily due to the inclusion of $43.4 million in net proceeds from the issuance
of common stock during the six months ended September 30, 2013, as compared to $16.1 million in net proceeds from the issuance
of common stock during the six months ended September 30, 2014.
For the three months ended September 30,
2014, total revenues of $50,000 were $27,000 or 117% above the $23,000 in revenues for the same period in 2013.
For the six months ended September 30, 2014, total revenues of
$0.1 million were consistent with the
$0.1 million in revenues for the same
period in 2013. For all periods, the majority of revenues were
derived from collaborative research agreements.
Operating expenses increased approximately $3.4 million, or 61%, from approximately
$5.6 million for the three months
ended September 30, 2013 to $9.0
million for the three months ended September 30, 2014.
Of this increase, $1.8 million
relates to increased selling, general and administrative expense
while the other $1.6 million relates
to increased investment in research and development. Operating
expenses increased approximately $6.0
million, or 64%, from approximately $9.5 million for the six months ended
September 30, 2013 to $15.5
million for the six months ended September 30, 2014. Of
this increase, $3.1 million is
related to increased selling, general and administrative expense
while the other $2.9 million relates
to increased investment in research and development. These
increases can be 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.
Research and development expenses increased nearly 100% from
approximately $1.6 million for the
three months ended September 30, 2013
to $3.2 million for the three months
ended September 30, 2014, as the
Company grew 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-four full-time employees as of
September 30, 2013 to forty-four full-time employees as of
September 30, 2014. In addition to an increase in staffing
expense of approximately $0.5 million
and an increase in stock-based compensation of $0.2 million resulting from growth in headcount
and increasing stock prices from September 30, 2013 to
September 30, 2014, the Company increased its spending on
recruiting, lab equipment and supplies in proportion to its
increased research activities. In addition, the Company has
continued to invest additional resources to advance its bioprinting
technology during the period. Research and development expenses
increased by approximately $2.9
million, or 95%, from approximately $3.1 million for the six months ended
September 30, 2013 to approximately
$6.0 million for the six months ended
September 30, 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-four full-time employees as of
September 30, 2013 to forty-four full-time employees as of
September 30, 2014. In addition to increases in staffing
expense of approximately $0.9 million
and an increase in stock-based compensation of $0.4 million resulting from increased headcount
and increasing stock prices from September 30, 2013 to
September 30, 2014, the Company increased its spending on
recruiting, 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
bioprinting technology during the period.
For the three months ended September 30, 2014, general and
administrative expenses were approximately $5.8 million, an increase of $1.8 million, or 44%, over expenses in the same
period of 2013 of approximately $4.0
million. Stock-based compensation increased $0.6 million due to additional grants and
increasing stock prices from September 30, 2013 to
September 30, 2014. Staffing expense increased $0.4 million due to an increase in administrative
headcount from twelve full-time employees to sixteen 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
consulting activities in the three months ended September 30,
2014 as compared to the three months ended September 30, 2013.
For the six months ended September 30, 2014, general and
administrative expenses were approximately $9.5 million, an increase of $3.1 million, or 49%, over expenses in the same
period of 2013 of approximately $6.4
million. Stock-based compensation increased $1.1 million due to additional grants and
increasing stock prices from September 30, 2013 to
September 30, 2014. Staffing expense increased $0.7 million due to an increase in administrative
headcount from twelve full-time employees to sixteen 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 six months ended
September 30, 2014 as compared to the six months ended
September 30, 2013.
Other income was less than $0.1
million for the three months ended September 30, 2014
and consisted primarily of a gain related to the revaluation of
warrant derivative liabilities. This gain was caused by a declining
stock price during the quarter that decreased the value of the
derivative liability. For the three months ended September 30, 2013, other expense consisted
primarily of a $4.8 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 six months ended
September 30, 2014 and consisted primarily of 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 six months ended
September 30, 2013, other expense
consisted primarily of a $4.8 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.
Financial Statements
|
Organovo Holdings,
Inc.
Condensed
Consolidated Balance Sheets
(in thousands
except for share data)
|
|
|
|
|
|
|
|
|
|
September 30, 2014
|
|
March 31,
2014
|
|
(Unaudited)
|
|
(Audited)
|
Assets
|
|
|
|
Current
Assets
|
|
|
|
Cash and cash
equivalents
|
$
54,389
|
|
$
48,167
|
Accounts
receivable
|
30
|
|
—
|
Inventory
|
70
|
|
63
|
Prepaid expenses and
other current assets
|
616
|
|
931
|
|
|
|
|
Total current
assets
|
55,105
|
|
49,161
|
Fixed assets,
net
|
1,273
|
|
857
|
Restricted
cash
|
79
|
|
79
|
Other assets,
net
|
85
|
|
89
|
|
|
|
|
Total
assets
|
$
56,542
|
|
$
50,186
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
Liabilities
|
|
|
|
Accounts
payable
|
$
530
|
|
$
326
|
Accrued
expenses
|
1,559
|
|
822
|
Deferred
rent
|
615
|
|
345
|
Deferred
revenue
|
140
|
|
13
|
Capital lease
obligation
|
10
|
|
10
|
Warrant
liabilities
|
258
|
|
377
|
|
|
|
|
Total current
liabilities
|
3,112
|
|
1,893
|
Deferred revenue, net
of current portion
|
1
|
|
4
|
Capital lease
obligation, net of current portion
|
1
|
|
5
|
|
|
|
|
Total
liabilities
|
$
3,114
|
|
$
1,902
|
Commitments and
Contingencies (Note 4)
|
|
|
|
Stockholders'
Equity
|
|
|
|
Common stock, $0.001
par value; 150,000,000 shares authorized, 80,404,648 and 78,113,639
shares issued and outstanding at September 30, 2014 and
March 31, 2014, respectively
|
80
|
|
78
|
Additional paid-in
capital
|
160,852
|
|
140,419
|
Accumulated
deficit
|
(107,504)
|
|
(92,213)
|
|
|
|
|
Total stockholders'
equity
|
53,428
|
|
48,284
|
|
|
|
|
Total Liabilities
and Stockholders' Equity
|
$
56,542
|
|
$
50,186
|
|
|
|
|
|
|
|
Organovo Holdings,
Inc.
Unaudited
Condensed Consolidated Statements of Operations
(in thousands
except share and per share data)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended September 30,
2014
|
|
Three Months
Ended September 30,
2013
|
|
Six Months
Ended September 30,
2014
|
|
Six Months
Ended September 30,
2013
|
Revenues
|
|
|
|
|
|
|
|
Collaborations
|
$
45
|
|
$
23
|
|
$
114
|
|
$
117
|
Grants
|
5
|
|
—
|
|
35
|
|
12
|
|
|
|
|
|
|
|
|
Total
Revenues
|
50
|
|
23
|
|
149
|
|
129
|
Selling, general, and
administrative expenses
|
5,777
|
|
4,003
|
|
9,472
|
|
6,361
|
Research and
development expenses
|
3,229
|
|
1,622
|
|
6,043
|
|
3,104
|
|
|
|
|
|
|
|
|
Loss from
Operations
|
(8,956)
|
|
(5,602)
|
|
(15,366)
|
|
(9,336)
|
|
|
|
|
|
|
|
|
Other Income
(Expense)
|
|
|
|
|
|
|
|
Change in fair value
of warrant liabilities
|
94
|
|
(4,787)
|
|
64
|
|
(4,811)
|
Loss on disposal of
fixed assets
|
(3)
|
|
—
|
|
(3)
|
|
(4)
|
Interest
expense
|
—
|
|
—
|
|
—
|
|
(13 )
|
Interest
income
|
7
|
|
3
|
|
14
|
|
7
|
|
|
|
|
|
|
|
|
Total Other Income
(Expense)
|
98
|
|
(4,784)
|
|
75
|
|
(4,821)
|
|
|
|
|
|
|
|
|
Net
Loss
|
$
(8,858)
|
|
$
(10,386)
|
|
$
(15,291)
|
|
$
(14,157)
|
|
|
|
|
|
|
|
|
Net loss per common
share—basic and diluted
|
$
(0.11)
|
|
$
(0.14)
|
|
$
(0.19)
|
|
$
(0.21)
|
Weighted average
shares used in computing net loss per common share—basic and
diluted
|
78,933,884
|
|
72,716,031
|
|
78,589,521
|
|
68,776,718
|
|
Organovo Holdings,
Inc.
Unaudited
Condensed Consolidated Statements of Cash Flows (in
thousands)
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
September 30,
2014
|
|
Six Months
Ended
September 30,
2013
|
Cash Flows From
Operating Activities
|
|
|
|
Net loss
|
$
(15,291)
|
|
$
(14,157)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Loss on disposal of
fixed assets
|
3
|
|
4
|
Depreciation and
amortization
|
208
|
|
190
|
Change in fair value
of warrant liabilities
|
(64 )
|
|
4,811
|
Expense associated
with warrant modification
|
—
|
|
12
|
Stock-based
compensation
|
3,634
|
|
2,088
|
Amortization of
warrants issued for services
|
469
|
|
72
|
Increase (decrease) in
cash resulting from changes in:
|
|
|
|
Grants
receivable
|
—
|
|
101
|
Accounts
receivable
|
(30)
|
|
—
|
Inventory
|
(7)
|
|
14
|
Prepaid expenses and
other assets
|
113
|
|
(49)
|
Accounts
payable
|
204
|
|
(164 )
|
Accrued
expenses
|
737
|
|
833
|
Deferred
rent
|
223
|
|
(30)
|
Deferred
revenue
|
124
|
|
19
|
|
|
|
|
Net cash used in
operating activities
|
(9,677)
|
|
(6,256)
|
|
|
|
|
Cash Flows From
Investing Activities
|
|
|
|
Deposits released from
restriction
|
—
|
|
50
|
Purchases of fixed
assets
|
(576)
|
|
(176)
|
|
|
|
|
Net cash used in
investing activities
|
(576)
|
|
(126)
|
|
|
|
|
Cash Flows From
Financing Activities
|
|
|
|
Proceeds from issuance
of common stock and exercise of warrants, net
|
16,291
|
|
44,096
|
Proceeds from exercise
of stock options
|
188
|
|
20
|
Principal payments on
capital lease obligation
|
(4)
|
|
(5)
|
|
|
|
|
Net cash provided
by financing activities
|
16,475
|
|
44,111
|
|
|
|
|
Net Increase in
Cash and Cash Equivalents
|
6,222
|
|
37,729
|
Cash and Cash
Equivalents at Beginning of Period
|
48,167
|
|
15,628
|
|
|
|
|
Cash and Cash
Equivalents at End of Period
|
$
54,389
|
|
$
53,357
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information:
|
|
|
|
Interest
|
$
—
|
|
$
—
|
Income
Taxes
|
$
—
|
|
$
—
|
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 and its report on Form 10-Q
filed with the SEC on November 7,
2014, 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.
SOURCE Organovo Holdings, Inc.