Organovo Holdings, Inc. (NASDAQ:ONVO) (“Organovo”) today reported
financial results for the fiscal first quarter of 2018 and affirmed
its full-year fiscal 2018 outlook. Organovo reported fiscal
first-quarter total revenue of $1.0 million, which consisted
largely of product and service revenue(1). Total revenue
increased 11 percent versus the comparable period of fiscal
2017. Net loss was $10.1 million, or $0.10 per share, for the
fiscal first quarter of 2018, as compared to $8.8 million, or $0.09
per share, for the fiscal first quarter of 2017. Negative
Adjusted EBITDA(2) for the first quarter was $7.5 million, as
compared to $7.1 million for the prior-year period.
“We’re tracking to our plan through the first
quarter of fiscal 2018, delivering total revenue that was in-line
with our outlook and affirming our guidance across the board,” said
Taylor J. Crouch, CEO, Organovo. “We continued to see a
healthy balance of new sales and repeat business during the period,
with nearly 70% of orders for tissue research services coming from
existing clients as we more deeply engage our customers.
Demand for compound screening in disease models is growing, with
new applications frequently emerging as clients seek novel
solutions in their drug discovery workflow. Beyond recognized
areas such as liver fibrosis and non-alcoholic steatohepatitis
(“NASH”), recent exploratory applications include Hepatitis B and
RNA therapeutics. These are all good leading indicators of
broader adoption as we seek to move customers to routine use of our
solutions.”
Crouch continued, “In the therapeutics space, we
continue to successfully achieve key objectives as we advance our
liver therapeutic tissue. Our bioprinted liver tissues are
now thriving 90 days post-implantation in animal models, triple the
duration of our earliest preclinical studies. Importantly, we’ve
continued to observe strong synthetic function and meaningful
improvement in liver health for treated animals. During
fiscal 2018, we’ll continue to conduct pre-GLP studies in small
animal disease models for our target indications and take
preliminary steps to seek orphan designation in the U.S.”
Crouch concluded, “Our long-term plan remains
founded on targeting attractive and growing markets with critical
unmet needs, extending our first mover advantage, and capitalizing
on our technology leadership to grow our product and service
offerings.”
First-Quarter Organovo Business
Highlights
Revenue
- Product and service revenue was $0.9 million, up 40 percent
from the prior-year period, largely driven by an increase in
customer contracts for the Company’s tissue research
services.
Operating Expenses
- Cost of revenues was $0.3 million, an increase of 79 percent
from the prior-year period, reflecting a gain in product and
service revenue.
- Research and development costs increased 13 percent
year-over-year to $5.0 million, primarily due to increased
materials and outside services costs related to the Company’s
ongoing validation studies.
- Selling, general and administrative expenses increased 16
percent from the prior-year period to $5.9 million, reflecting
higher non-cash stock-based compensation and employee related
expense.
Liquidity & Capital
Resources
- The Company ended the fiscal first quarter with a cash and cash
equivalents balance of $55.0 million.
- During the fiscal first quarter, the Company generated net
proceeds of approximately $3.0 million from the issuance
of 1,139,489 shares of common stock in at-the-market (“ATM”)
offerings at a weighted average price of $2.69 per
share.
- Working capital was $54.2 million to end the fiscal first
quarter compared to $52.0 million in the prior-year quarter.
Fiscal-Year 2018 Outlook
The Company affirmed its full-year fiscal 2018
outlook for total revenue and negative Adjusted EBITDA. The
Company continues to expect:
- Total revenue of between $6.0 million and $8.5 million for
fiscal-year 2018. Fiscal 2017 total revenue was $4.2
million.
- Negative Adjusted EBITDA of between $29.0 million and $31.0
million for fiscal-year 2018. Fiscal 2017 negative Adjusted
EBITDA was $29.8 million.
|
Fiscal-Year 2018 Outlook (June
2017) |
Fiscal-Year 2018 Outlook(August
2017) |
Fiscal-Year 2018
Total Revenue |
$6.0 million - $8.5 million |
Affirmed |
Fiscal-Year 2018 Negative Adjusted
EBITDA |
$29.0 million - $31.0 million |
Affirmed |
A reconciliation of non-GAAP negative Adjusted EBITDA, as
forecasted for fiscal 2018, to the closest corresponding GAAP
measure, net loss, is not available without unreasonable efforts on
a forward-looking basis due to the high variability and low
visibility of certain charges that may impact our GAAP results on a
forward-looking basis, such as the measures and effects of
share-based compensation.
Definitions & Supplemental Financial
Measures
(1) Product and service revenue includes tissue research service
agreements and product sales, including product sales from the
Company’s wholly-owned subsidiary, Samsara Sciences Inc.
(2) In addition to disclosing financial results that are
determined in accordance with U.S. GAAP, the Company provides
Adjusted EBITDA which is a non-GAAP financial measure, as a
supplemental measure to help investors evaluate the Company's
fundamental operational performance. Adjusted EBITDA
represents earnings before interest, income taxes, depreciation and
amortization, share-based compensation expenses and CEO transition
costs. Adjusted EBITDA does not represent, and should not be
considered, an alternative to U.S. GAAP measurements such as net
income or loss. By eliminating interest, income taxes,
depreciation and amortization, share-based compensation expenses
and CEO transition costs, the Company believes the result is a
useful measure across time in evaluating its fundamental core
operating performance. Management also uses Adjusted EBITDA
to manage the business, including in preparing its annual operating
budget, financial projections and compensation plans. The
Company believes that Adjusted EBITDA is also useful to investors
because similar measures are frequently used by securities
analysts, investors and other interested parties in their
evaluation of companies in similar industries. However, there
is no standardized measurement of Adjusted EBITDA, and Adjusted
EBITDA as the Company presents it may not be comparable with
similarly titled non-GAAP financial measures used by other
companies. Since Adjusted EBITDA does not account for certain
expenses, its utility as a measure of the Company's operating
performance has material limitations. Due to these
limitations, the Company's management does not view Adjusted EBITDA
in isolation, but also uses other measurements, such as net income
or loss and revenues to measure operating performance. Please
refer to the schedule below for a reconciliation of consolidated
GAAP net income to Adjusted EBITDA for the fiscal quarters ended
June 30, 2017 and 2016.
Organovo Holdings, Inc. |
Supplemental Reconciliation of GAAP Net Income
to Adjusted EBITDA |
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Three Months Ended |
|
|
|
|
|
|
June 30, 2017 |
|
June 30, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss |
$ |
(10,102 |
) |
$ |
(8,767 |
) |
|
|
|
|
Interest expense |
|
- |
|
|
- |
|
|
|
|
|
Interest income |
|
(98 |
) |
|
(37 |
) |
|
|
|
|
Income taxes |
|
- |
|
|
22 |
|
|
|
|
|
Depreciation and
amortization |
|
326 |
|
|
251 |
|
|
|
|
|
Share-based
compensation |
|
2,052 |
|
|
1,429 |
|
|
|
|
|
CEO transition
costs |
|
305 |
|
|
- |
|
|
|
|
|
Adjusted EBITDA |
$ |
(7,517 |
) |
$ |
(7,102 |
) |
Conference Call Information
As previously announced, the Company will host a
conference call to discuss its results at 5:00 p.m. ET on
Wednesday, August 9, 2017. Callers should dial (888) 317-6003
(U.S. only) or (412) 317-6061 (from outside the U.S.) to access the
call. The conference call ID is 4567146. The conference
call will also be simultaneously webcast on Organovo’s Investor
Relations webpage at www.organovo.com. A replay of the
conference call will be available beginning Wednesday, August 9,
2017 through Tuesday, August 15, 2017 at Organovo’s Investor
Relations webpage. Callers can also dial (877) 344-7529 (U.S.
only) or (412) 317-0088, Access Code 10110045, for an audio replay
of the conference call.
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
tissue models through internal development and in collaboration
with pharmaceutical, academic and other 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’s ExVive Human Liver
and Kidney Tissues are used in toxicology and other preclinical
drug testing. 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,
Forbes, and numerous other media outlets. Organovo is
changing the shape of life science research and transforming
medical care. Learn more
at www.organovo.com.
Forward-Looking Statements Any
statements contained in this press release that do not describe
historical facts 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 the Company's
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 Company’s ability to successfully complete
studies and provide the technical information required to support
market acceptance of its products, services and technology, on a
timely basis or at all; the Company's business, research, product
development, regulatory approval, marketing and distribution plans
and strategies, including its use of third party distributors; the
Company's ability to successfully complete the contracts and
recognize the revenue represented by the contracts included in its
previously reported total contract bookings and secure additional
contracted collaborative relationships; the final results of the
Company's preclinical studies may be different from the Company's
studies or interim preclinical data results and may not support
further clinical development of its therapeutic tissues; the
Company may not successfully complete the required preclinical and
clinical trials required to obtain regulatory approval for its
therapeutic tissues on a timely basis or at all; and the Company’s
ability to meet its fiscal year 2018 outlook. These and other
factors are identified and described in more detail in the
Company's filings with the SEC, including its Annual Report on
Form 10-K filed with the SEC on June 7, 2017.
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 the Company may
issue in the future. Except as required by applicable law,
including the securities laws of the United States, the
Company does 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. |
|
Unaudited Condensed
Consolidated Statements of Operations |
|
(in thousands except share and per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Three Months
Ended |
|
|
|
|
|
|
June 30, 2017 |
|
June 30, 2016 |
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
Products
and services |
$ |
944 |
|
|
$ |
674 |
|
|
|
Collaborations and licenses |
|
46 |
|
|
|
213 |
|
|
|
Grants |
|
- |
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
Total Revenues |
|
990 |
|
|
|
891 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues |
|
301 |
|
|
|
168 |
|
|
|
Research
and development expenses |
|
5,033 |
|
|
|
4,444 |
|
|
|
Selling,
general, and administrative expenses |
|
5,856 |
|
|
|
5,056 |
|
|
|
|
|
|
|
|
|
|
|
Total Costs and
Expenses |
|
11,190 |
|
|
|
9,668 |
|
|
|
|
|
|
|
|
|
|
|
Loss from Operations |
|
(10,200 |
) |
|
|
(8,777 |
) |
|
|
|
|
|
|
|
|
|
|
Other Income (Expense) |
|
|
|
|
|
Change in
fair value of warrant liabilities |
|
- |
|
|
|
(5 |
) |
|
|
Interest
income |
|
98 |
|
|
|
37 |
|
|
|
|
|
|
|
|
|
|
|
Total Other Income
(Expense) |
|
98 |
|
|
|
32 |
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense |
|
- |
|
|
|
(22 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss |
$ |
(10,102 |
) |
|
$ |
(8,767 |
) |
|
|
|
|
|
|
|
|
|
|
Currency Translation
Adjustment |
$ |
(11 |
) |
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Loss |
$ |
(10,113 |
) |
|
$ |
(8,767 |
) |
|
|
|
|
|
|
|
|
|
|
Net loss
per common share-basic and diluted |
$ |
(0.10 |
) |
|
$ |
(0.09 |
) |
|
Weighted
average shares used in computing net |
|
|
|
|
loss
per common share-basic and diluted |
|
104,689,391 |
|
|
|
92,391,964 |
|
|
|
|
|
|
|
|
|
|
|
Organovo Holdings,
Inc. |
Condensed Consolidated Balance
Sheets |
(in thousands except
for share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2017 |
|
March 31, 2017 |
|
|
|
|
|
|
Unaudited |
|
Audited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
|
|
$ |
54,974 |
|
|
$ |
62,751 |
|
|
Accounts
receivable |
|
|
|
|
772 |
|
|
|
647 |
|
|
Inventory,
net |
|
|
|
|
461 |
|
|
|
550 |
|
|
Prepaid
expenses and other current assets |
|
|
|
|
1,661 |
|
|
|
1,144 |
|
|
|
|
|
|
|
|
|
|
Total
current assets |
|
|
|
|
57,868 |
|
|
|
65,092 |
|
|
|
|
|
|
|
|
|
|
Fixed
assets, net |
|
|
|
|
3,528 |
|
|
|
3,840 |
|
|
|
|
|
|
|
|
|
|
Restricted
cash |
|
|
|
|
127 |
|
|
|
127 |
|
Other
assets, net |
|
|
|
|
189 |
|
|
|
121 |
|
|
|
|
|
|
|
|
|
|
Total
assets |
|
|
|
|
61,712 |
|
|
|
69,180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
Accounts
payable |
|
|
|
|
558 |
|
|
$ |
1,171 |
|
|
Accrued
expenses |
|
|
|
|
2,111 |
|
|
|
4,101 |
|
|
Deferred
rent |
|
|
|
|
165 |
|
|
|
157 |
|
|
Deferred
revenue |
|
|
|
|
854 |
|
|
|
582 |
|
|
|
|
|
|
|
|
|
|
Total
current liabilities |
|
|
|
|
3,688 |
|
|
|
6,011 |
|
|
|
|
|
|
|
|
|
|
Deferred
revenue, net of current portion |
|
|
|
|
48 |
|
|
|
58 |
|
Deferred
rent, net of current portion |
|
|
|
|
707 |
|
|
|
749 |
|
|
|
|
|
|
|
|
|
|
Total
liabilities |
|
|
|
|
4,443 |
|
|
|
6,818 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies (Note
4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity |
|
|
|
|
|
|
|
Common
stock, $0.001 par value; 150,000,000 shares authorized, 105,724,320
and 104,551,466 shares issued and outstanding at June 30, 2017 and
March 31, 2017, respectively |
|
|
|
|
106 |
|
|
|
104 |
|
|
Additional
paid-in capital |
|
|
|
|
266,593 |
|
|
|
261,586 |
|
|
Accumulated
deficit |
|
|
|
|
(209,419 |
) |
|
|
(199,317 |
) |
|
Accumulated
unrealized gain (loss) on foreign currency revaluation |
|
(11 |
) |
|
|
(11 |
) |
Total
stockholders’ equity |
|
|
|
|
57,269 |
|
|
|
62,362 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders’
Equity |
|
|
|
|
61,712 |
|
|
|
69,180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organovo Holdings,
Inc. |
|
Unaudited Condensed Consolidated Statements of
Cash Flows |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Three Months
Ended |
|
|
|
|
|
|
June 30, 2017 |
|
June 30, 2016 |
|
|
|
|
|
|
|
|
|
|
Cash Flows From Operating
Activities |
|
|
|
|
|
Net
loss |
$ |
(10,102 |
) |
|
$ |
(8,767 |
) |
|
|
Adjustments
to reconcile net loss to net cash used in operating activities |
|
|
|
|
|
|
Depreciation and amortization |
|
326 |
|
|
|
251 |
|
|
|
|
Change in
fair value of warrant liabilities |
|
- |
|
|
|
5 |
|
|
|
|
Stock-based
compensation |
|
2,052 |
|
|
|
1,429 |
|
|
|
|
Increase
(decrease) in cash resulting from changes in: |
|
|
|
|
|
|
|
Accounts
receivable |
|
(125 |
) |
|
|
156 |
|
|
|
|
|
Inventory |
|
89 |
|
|
|
(178 |
) |
|
|
|
|
Prepaid
expenses and other assets |
|
(518 |
) |
|
|
(41 |
) |
|
|
|
|
Accounts
payable |
|
(613 |
) |
|
|
(306 |
) |
|
|
|
|
Accrued
expenses |
|
(1,990 |
) |
|
|
(735 |
) |
|
|
|
|
Deferred
rent |
|
(34 |
) |
|
|
(36 |
) |
|
|
|
|
Deferred
revenue |
|
262 |
|
|
|
(319 |
) |
|
|
|
|
|
|
|
|
|
|
Net
cash used in operating
activities |
|
(10,653 |
) |
|
|
(8,541 |
) |
|
|
|
|
|
|
|
|
|
|
Cash Flows From Investing Activities |
|
|
|
|
|
Purchases
of fixed assets |
|
(11 |
) |
|
|
(12 |
) |
|
|
Purchases
of intangible assets |
|
(70 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
Net
cash used in investing
activities |
|
(81 |
) |
|
|
(12 |
) |
|
|
|
|
|
|
|
|
|
|
Cash Flows From Financing Activities |
|
|
|
|
|
Proceeds
from issuance of common stock and exercise of warrants, net |
|
2,957 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
Net
cash provided by financing
activities |
|
2,957 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Increase (Decrease) in Cash and Cash
Equivalents |
|
(7,777 |
) |
|
|
(8,553 |
) |
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents at Beginning of
Period |
|
62,751 |
|
|
|
62,091 |
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents at End of
Period |
$ |
54,974 |
|
|
$ |
53,538 |
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of Cash Flow
Information: |
|
|
|
|
Interest |
$ |
- |
|
|
$ |
- |
|
|
Income
Taxes paid |
$ |
- |
|
|
$ |
22 |
|
|
|
|
|
|
|
|
|
|
|
Investor Contact:
Steve Kunszabo
Organovo Holdings, Inc.
+1 (858) 224-1092
skunszabo@organovo.com
Press Contact:
Jessica Yingling
Little Dog Communications
+1 (858) 480-2411
jessica@litldog.com
Organovo (NASDAQ:ONVO)
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