Organovo Reports Fiscal First-Quarter 2019 Results; Company Outlines and Expands Key Clinical Development Goals
August 09 2018 - 4:05PM
Organovo Holdings, Inc. (NASDAQ:ONVO) (“Organovo”), a
biotechnology company pioneering the development of 3D bioprinted
tissues aimed at treating a range of serious adult and pediatric
liver diseases, today reported its fiscal first-quarter 2019
financial results.
“During the fiscal first quarter, we refined our operating and
scientific goals,” said Taylor J. Crouch, CEO, Organovo. “We
have concentrated our financial resources around supporting our
healthy liver therapeutic tissue development, which has the
potential to address a number of serious unmet medical needs,
encompassing an addressable peak worldwide sales opportunity
greater than $4 billion.”
Crouch continued, “On July 31st, we held a pre-pre-IND meeting
with the FDA to review our IND planning for our lead program in
A1AT. In light of this meeting’s outcome, we intend to submit
our pre-IND meeting package to the FDA in calendar 2019.
Based on anticipated study designs for our IND-enabling work, we
continue to target calendar 2020 for filing our IND, with the
possibility of commencing human trials that same year.”
Crouch concluded, “We’ll also continue to opportunistically
generate revenue to support our therapeutics program by leveraging
our cell and in vitro tissue platform including providing funded
access to our developmental non-alcoholic steatohepatitis (“NASH”)
platform to clients for their own R&D programs.”
Key Clinical Development Goals &
Outlook
- Organovo expects to hold a pre-IND meeting with the FDA in
calendar 2019 for its lead program in A1AT, commence IND-enabling
studies in the second half of calendar 2019 and file for an IND in
calendar 2020.
- The Company plans to nominate a second indication in the rare
disease space in calendar 2019, which has the potential to closely
follow its lead program into human clinical trials. The
Company will also likely pursue orphan drug designation with the
FDA for this second indication in calendar 2019.
- Organovo will continue to opportunistically generate revenue to
support its therapeutic research mission by leveraging its cell and
in vitro tissue platform.
- The Company plans to continue expanding its global IP
portfolio, which currently includes over 100 patents and pending
applications.
- As of June 30, 2018, the Company had a cash and cash
equivalents balance of $39.6 million. Organovo expects to
have a net cash utilization(1) rate of $22 million to $24 million
in fiscal 2019, and believes it has sufficient funds to meet its
operating and capital requirements into fiscal 2020.
Fiscal First-Quarter 2019 Financial
Highlights
- Net loss was $7.4 million, a $2.7 million improvement over the
year-ago period, as total costs and expenses declined 26 percent to
$8.3 million, primarily due to lower employee and lab supply costs
related to the Company’s organizational restructuring and
prioritization of R&D projects.
- Net cash utilization was $7.1 million, an improvement from
$10.7 million in the prior-year quarter.
- Total revenue was $0.7 million, a 30 percent decrease from the
year-ago period, primarily driven by lower revenue from liver
tissue disease modeling research services.
- During the fiscal first quarter, the Company generated net
proceeds of approximately $3.0 million from the issuance of 2.1
million shares of common stock in at-the-market offerings at a
weighted average price of $1.44 per share.
Definitions & Supplemental Financial
Measures
(1) In addition to disclosing financial results that are
determined in accordance with U.S. GAAP, the Company provides net
cash utilization as a supplemental measure to help investors
evaluate the Company’s fundamental operational performance.
The Company defines net cash utilization as the net decrease in
cash and cash equivalents during the reporting period less proceeds
from the sale of common stock and the exercise of warrants and
stock options during the reporting period. Net cash
utilization is an operational measure that should be considered as
additional financial information regarding our operations.
This operational measure should not be considered without also
considering our results prepared in accordance with U.S. GAAP, and
should not be considered as a substitute for, or superior to, our
U.S. GAAP results. The Company believes net cash utilization
is a relevant and useful operational measure because it provides
information regarding our cash utilization rate. Management
uses net cash utilization to manage the business, including in
preparing its annual operating budget, financial projections and
compensation plans. The Company believes that net cash
utilization 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
net cash utilization, and net cash utilization as the Company
presents it may not be comparable with similarly titled operational
measures used by other companies. Due to these limitations,
the Company’s management does not view net cash utilization in
isolation but also uses other measurements, such as cash used in
operating activities and revenues to measure operating
performance.
Conference Call InformationAs previously
announced, the Company will host a conference call to discuss its
results at 5:00 p.m. ET on Thursday, August 9, 2018. 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 3834076. 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 Thursday, August 9, 2018 through Thursday,
August 16, 2018 at Organovo’s Investor Relations webpage.
Callers can also dial (877) 344-7529 (U.S. only) or (412) 317-0088,
Access Code 10122205, for an audio replay of the conference
call.
About Organovo Holdings, Inc.Organovo is a
biotech platform company that has developed a leadership position
with its revolutionary ability to 3D bioprint tissues with human
functionality. The Company is pursuing multiple IND-track
programs to develop its NovoTissues® to address a number of serious
unmet medical needs in adult and pediatric populations, initially
focusing on liver disease. Organovo’s first IND-track program
for Alpha-1-antitrypsin deficiency recently received orphan drug
designation from the FDA, and the Company expects to file its first
IND in 2020. In order to support its plan to initiate
multiple IND-track programs, the Company is providing access to its
ExVive™ in vitro tissue disease modeling platform to facilitate
high value drug discovery and development collaborations.
Organovo’s wholly-owned subsidiary, Samsara Sciences, provides the
Company and its clients with high quality human liver and kidney
cells for research applications. 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. Forward-looking statements include, but are
not limited to, statements regarding the potential benefits and
therapeutic uses of the Company’s therapeutic liver tissue,
including the benefits of an orphan designation; the Company’s
expectations regarding the FDA regulatory pathway and anticipated
timelines for its regulatory filings; the potential market
opportunity for the Company’s therapeutic tissue candidates; and
customer demand for and acceptance of our disease modeling and
other in vitro tissue platforms. 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 possibility that 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; risks that
competitive products may adversely impact the market opportunity
for the Company’s therapeutic tissue candidates; 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 execute framework agreements involving multi-year commitments
and routine use on a timely basis, or at all; 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 recognize
deferred revenue; and the Company’s ability to meet its fiscal-year
2019 goals and 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 May
31, 2018. 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 and Other Comprehensive
Income (Loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Three Months Ended |
|
|
June 30, 2018 |
|
June 30, 2017 |
Revenues |
|
|
|
|
Products
and services |
|
$ |
546 |
|
|
$ |
944 |
|
Collaborations and licenses |
|
|
43 |
|
|
|
46 |
|
Grants |
|
|
100 |
|
|
|
— |
|
Total
Revenues |
|
|
689 |
|
|
|
990 |
|
Cost of revenues |
|
|
120 |
|
|
|
301 |
|
Research and
development expenses |
|
|
3,379 |
|
|
|
5,033 |
|
Selling, general and
administrative expenses |
|
|
4,767 |
|
|
|
5,856 |
|
Total
costs and expenses |
|
|
8,266 |
|
|
|
11,190 |
|
Loss from
Operations |
|
|
(7,577 |
) |
|
|
(10,200 |
) |
Other Income
(Expense) |
|
|
|
|
Gain
(loss) on fixed asset disposals |
|
|
2 |
|
|
|
— |
|
Interest
income |
|
|
162 |
|
|
|
98 |
|
Total Other
Income (Expense) |
|
|
164 |
|
|
|
98 |
|
Income Tax
Expense |
|
|
(3 |
) |
|
|
— |
|
Net
Loss |
|
$ |
(7,416 |
) |
|
$ |
(10,102 |
) |
Currency
Translation Adjustment |
|
$ |
— |
|
|
$ |
(11 |
) |
Comprehensive
Loss |
|
$ |
(7,416 |
) |
|
$ |
(10,113 |
) |
Net loss per common
share—basic and diluted |
|
$ |
(0.07 |
) |
|
$ |
(0.10 |
) |
Weighted average shares
used in computing net loss per common share—basic and
diluted |
|
|
111,458,445 |
|
|
|
104,689,391 |
|
|
|
|
|
|
Organovo Holdings,
Inc. |
|
Consolidated Balance Sheets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2018 |
|
March 31, 2018 |
|
|
|
(Unaudited) |
|
(Audited) |
|
Assets |
|
|
|
|
|
Current Assets |
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
39,613 |
|
|
$ |
43,726 |
|
|
Accounts
receivable |
|
|
628 |
|
|
|
883 |
|
|
Grant
receivable |
|
|
100 |
|
|
|
145 |
|
|
Inventory, net |
|
|
1,044 |
|
|
|
842 |
|
|
Prepaid
expenses and other current assets |
|
|
927 |
|
|
|
1,164 |
|
|
Total
current assets |
|
|
42,312 |
|
|
|
46,760 |
|
|
Fixed
assets, net |
|
|
2,504 |
|
|
|
2,788 |
|
|
Restricted cash |
|
|
127 |
|
|
|
127 |
|
|
Other
assets, net |
|
|
149 |
|
|
|
152 |
|
|
Total
assets |
|
$ |
45,092 |
|
|
$ |
49,827 |
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
Accounts
payable |
|
$ |
396 |
|
|
$ |
464 |
|
|
Accrued
expenses |
|
|
1,995 |
|
|
|
3,341 |
|
|
Deferred
revenue |
|
|
628 |
|
|
|
668 |
|
|
Deferred
rent |
|
|
191 |
|
|
|
185 |
|
|
Total
current liabilities |
|
|
3,210 |
|
|
|
4,658 |
|
|
Deferred
revenue, net of current portion |
|
|
10 |
|
|
|
19 |
|
|
Deferred
rent, net of current portion |
|
|
516 |
|
|
|
564 |
|
|
Total
liabilities |
|
|
3,736 |
|
|
|
5,241 |
|
|
Commitments and
Contingencies |
|
|
|
|
|
Stockholders’ Equity |
|
|
|
|
|
Common
stock, $0.001 par value; 150,000,000 shares authorized,
113,318,380 and 111,032,957 shares issued and outstanding at
June 30, 2018 and March 31, 2018, respectively |
|
|
113 |
|
|
|
111 |
|
|
Additional paid-in capital |
|
|
282,779 |
|
|
|
278,595 |
|
|
Accumulated deficit |
|
|
(241,536 |
) |
|
|
(234,120 |
) |
|
Total
stockholders’ equity |
|
|
41,356 |
|
|
|
44,586 |
|
|
Total Liabilities and Stockholders’ Equity |
|
$ |
45,092 |
|
|
$ |
49,827 |
|
|
|
|
|
|
|
|
Organovo Holdings, Inc. |
|
Unaudited Consolidated Statements of Cash
Flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Three Months Ended |
|
|
|
June 30, 2018 |
|
June 30, 2017 |
|
Cash Flows From Operating Activities |
|
|
|
|
|
Net
loss |
|
$ |
(7,416 |
) |
|
$ |
(10,102 |
) |
|
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
(Gain)
loss on disposal of fixed assets |
|
|
(2 |
) |
|
|
— |
|
|
Depreciation and amortization |
|
|
288 |
|
|
|
326 |
|
|
Stock-based compensation |
|
|
1,279 |
|
|
|
2,052 |
|
|
Increase
(decrease) in cash resulting from changes in: |
|
|
|
|
|
Accounts receivable |
|
|
255 |
|
|
|
(125 |
) |
|
Grants receivable |
|
|
45 |
|
|
|
— |
|
|
Inventory |
|
|
(202 |
) |
|
|
89 |
|
|
Prepaid expenses and other assets |
|
|
236 |
|
|
|
(518 |
) |
|
Accounts payable |
|
|
(68 |
) |
|
|
(613 |
) |
|
Accrued expenses |
|
|
(1,346 |
) |
|
|
(1,990 |
) |
|
Deferred rent |
|
|
(42 |
) |
|
|
(34 |
) |
|
Deferred revenue |
|
|
(49 |
) |
|
|
262 |
|
|
Net cash used in operating activities |
|
|
(7,022 |
) |
|
|
(10,653 |
) |
|
Cash Flows From
Investing Activities |
|
|
|
|
|
Purchases
of fixed assets |
|
|
— |
|
|
|
(11 |
) |
|
Proceeds
from disposals of fixed assets |
|
|
2 |
|
|
|
— |
|
|
Purchases
of intangible assets |
|
|
— |
|
|
|
(70 |
) |
|
Net cash provided by investing activities |
|
|
2 |
|
|
|
(81 |
) |
|
Cash Flows From
Financing Activities |
|
|
|
|
|
Proceeds
from issuance of common stock and exercise of warrants, net |
|
|
3,010 |
|
|
|
2,964 |
|
|
Employee
taxes paid related to net share settlement of equity awards |
|
|
(103 |
) |
|
|
(7 |
) |
|
Net cash provided by financing activities |
|
|
2,907 |
|
|
|
2,957 |
|
|
Net increase
(decrease) in cash, cash equivalents, and restricted
cash |
|
|
(4,113 |
) |
|
|
(7,777 |
) |
|
Cash, cash
equivalents, and restricted cash at beginning of
period |
|
|
43,853 |
|
|
|
62,878 |
|
|
Cash, cash
equivalents, and restricted cash at end of period |
|
$ |
39,740 |
|
|
$ |
55,101 |
|
|
|
|
|
|
|
|
Reconciliation of cash, cash equivalents, and restricted
cash to the condensed consolidated balance sheets |
|
|
|
Cash and cash
equivalents |
|
|
39,613 |
|
|
|
54,974 |
|
|
Restricted cash |
|
|
127 |
|
|
|
127 |
|
|
Total cash,
cash equivalent and restricted cash |
|
|
39,740 |
|
|
|
55,101 |
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Cash Flow
Information: |
|
|
|
|
|
Income taxes paid |
|
$ |
3 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
Investor & Press Contact:
Steve Kunszabo
Organovo Holdings, Inc.
+1 (858) 224-1092
skunszabo@organovo.com
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