Organovo Affirms Key Clinical Development Goals; Company Reports Fiscal Third-Quarter 2019 Results
February 07 2019 - 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 affirmed its key clinical development goals and reported its
fiscal third-quarter 2019 financial results.
“We remain on track to submit our first IND in calendar 2020,”
said Taylor J. Crouch, CEO, Organovo. “While this is our most
important clinical development goal over the next two years, we’re
taking a number of important steps along the way to support that
milestone. In calendar 2019, we expect to hold a pre-IND
meeting with the FDA on our lead program, and plan to begin our
IND-enabling toxicity study. To facilitate these important
objectives and to ensure our readiness for first-in-human trials,
we’re conducting proof-of-concept studies in multiple disease
areas, running dose ranging studies and enhancing our tissue
design.”
Crouch continued, “We also continue to generate favorable
preclinical results in our liver therapeutic tissue program as we
focus increasingly on end-stage liver disease and a select group of
inborn errors of metabolism. At industry meetings over the
last several months, we’ve presented data on the performance of our
tissues in animal models for Alpha-1-antitrypsin deficiency
(“A1AT”) and hereditary tyrosinemia Type 1 (“HTT1”). For both
rare diseases, our tissues demonstrated engraftment, retention and
functionality post-implantation, while reducing disease hallmarks
in the A1AT animal studies and improving the median survival rate
for treated animals in the HTT1 studies. Our objective in
implanting a healthy tissue patch is to restore function or offset
the deficiencies related to a specific condition. We hope to
serve as a ‘bridge to transplant’ for these patients with limited
treatment options, with an ultimate goal of delaying or reducing
the overall need for transplant.”
Crouch concluded, “We’re also building upon our cell and in
vitro tissue platform, and through our partners at UC San Diego,
recently presented data on the ongoing development of our
non-alcoholic steatohepatitis (“NASH”) liver tissue model at the
NASH-TAG 2019 Conference. Dr. David Brenner, vice chancellor
for health sciences at the University of California, San Diego,
presented important findings from a series of studies that showed
disease induction in our 3D bioprinted liver tissue model,
treatment with two clinical compounds, and a reduced disease
phenotype in the treated tissues. We also continue to work
with our clients on several custom projects for our liver tissue
research services including the exploration of drug combination
studies in our NASH disease model.”
Key Clinical Development Goals &
Outlook
- The Company believes that development of its healthy
therapeutic liver tissue patch can treat a broad range of liver
disease indications. Organovo continues to conduct supportive
proof-of-concept studies in multiple indications aimed at treating
end-stage liver disease and inborn errors of metabolism.
- Organovo expects to hold a pre-IND meeting with the FDA in
calendar 2019 for its lead program.
- The Company plans to begin the IND-enabling toxicity study for
its lead program in the second half of calendar 2019.
- Organovo expects to file for its first IND in calendar
2020.
- The Company will continue to opportunistically generate revenue
to support its therapeutic research mission by leveraging its cell
and in vitro tissue platform.
- Organovo plans to continue expanding its global IP portfolio,
which currently includes over 100 patents and pending
applications.
- As of December 31, 2018, the Company had a cash and cash
equivalents balance of $35.2 million. Organovo now expects an
improved net cash utilization(1) rate of $20.5 million to $21.5
million in fiscal 2019, and believes it has sufficient funds to
meet its operating and capital requirements through fiscal
2020.
Fiscal Third-Quarter 2019 Highlights
- Net loss was $6.4 million, a $1.4 million improvement over the
year-ago period, as total costs and expenses declined 19 percent to
$7.3 million, primarily due to lower employee costs related to the
Company’s organizational restructuring and prioritization of
R&D projects.
- Net cash utilization was $4.0 million, an improvement from $6.5
million in the prior-year quarter.
- Total revenue was $0.8 million, a 32 percent decrease from the
year-ago period, primarily driven by lower grant revenue.
- During the fiscal third quarter, the Company generated net
proceeds of approximately $1.9 million from the issuance of 1.8
million shares of common stock in at-the-market offerings at a
weighted average price of $1.03 per share.
- In November 2018, the Company entered into a cell and tissue
clinical sourcing agreement with the International Institute for
the Advancement of Medicine (“IIAM”). IIAM is one of the
world’s leading organizations for the procurement of organs used in
medical research and the development of therapeutic
applications.
Definitions & Supplemental Financial
Measures
- 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, February 7, 2019.
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 4962923. 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, February 7, 2019 through Thursday,
February 14, 2019 at Organovo’s Investor Relations webpage.
Callers can also dial (877) 344-7529 (U.S. only) or (412) 317-0088,
Access Code 10127492, 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 Company’s ability to
successfully complete additional preclinical studies; the Company’s
ability to meet market demand; and customer demand for and
acceptance of its 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; the Company may not be able to
obtain sufficient raw materials to meet market demand for its
therapeutic products; 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 ability to raise sufficient funds to
support its business plan and ongoing operations; 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
Loss |
|
(in thousands except share and per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Three Months Ended |
|
Nine Months Ended |
|
Nine Months Ended |
|
|
|
December 31, 2018 |
|
December 31, 2017 |
|
December 31, 2018 |
|
December 31, 2017 |
|
Revenues |
|
|
|
|
|
|
|
|
|
Products
and services |
|
$ |
670 |
|
|
$ |
832 |
|
|
$ |
1,709 |
|
|
$ |
2,722 |
|
|
Collaborations and licenses |
|
|
43 |
|
|
|
61 |
|
|
|
128 |
|
|
|
367 |
|
|
Grants |
|
|
66 |
|
|
|
260 |
|
|
|
574 |
|
|
|
409 |
|
|
Total
Revenues |
|
|
779 |
|
|
|
1,153 |
|
|
|
2,411 |
|
|
|
3,498 |
|
|
Cost of revenues |
|
|
136 |
|
|
|
192 |
|
|
|
381 |
|
|
|
747 |
|
|
Research and
development expenses |
|
|
3,782 |
|
|
|
4,005 |
|
|
|
10,348 |
|
|
|
13,982 |
|
|
Selling, general and
administrative expenses |
|
|
3,387 |
|
|
|
4,865 |
|
|
|
11,794 |
|
|
|
16,457 |
|
|
Total
costs and expenses |
|
|
7,305 |
|
|
|
9,062 |
|
|
|
22,523 |
|
|
|
31,186 |
|
|
Loss from
Operations |
|
|
(6,526 |
) |
|
|
(7,909 |
) |
|
|
(20,112 |
) |
|
|
(27,688 |
) |
|
Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
Gain
(loss) on fixed asset disposals |
|
|
(65 |
) |
|
|
— |
|
|
|
(63 |
) |
|
|
— |
|
|
Interest
income |
|
|
192 |
|
|
|
118 |
|
|
|
526 |
|
|
|
334 |
|
|
Total Other
Income |
|
|
127 |
|
|
|
118 |
|
|
|
463 |
|
|
|
334 |
|
|
Income Tax
Expense |
|
|
— |
|
|
|
— |
|
|
|
(3 |
) |
|
|
— |
|
|
Net
Loss |
|
$ |
(6,399 |
) |
|
$ |
(7,791 |
) |
|
$ |
(19,652 |
) |
|
$ |
(27,354 |
) |
|
Currency
Translation Adjustment |
|
$ |
— |
|
|
$ |
(2 |
) |
|
$ |
— |
|
|
$ |
(2 |
) |
|
Comprehensive
Loss |
|
$ |
(6,399 |
) |
|
$ |
(7,793 |
) |
|
$ |
(19,652 |
) |
|
$ |
(27,356 |
) |
|
Net loss per common
share—basic and diluted |
|
$ |
(0.06 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.26 |
) |
|
Weighted average shares
used in computing net loss per common share—basic and
diluted |
|
|
116,256,561 |
|
|
|
107,345,623 |
|
|
|
113,991,794 |
|
|
|
106,107,721 |
|
|
|
|
|
|
|
|
|
|
|
|
Organovo Holdings,
Inc. |
|
Condensed Consolidated Balance
Sheets |
|
(in thousands except for share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018 |
|
March 31, 2018 |
|
|
|
(Unaudited) |
|
|
|
Assets |
|
|
|
|
|
Current Assets |
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
35,224 |
|
|
$ |
43,726 |
|
|
Accounts
receivable |
|
|
547 |
|
|
|
883 |
|
|
Grant
receivable |
|
|
124 |
|
|
|
145 |
|
|
Inventory, net |
|
|
1,049 |
|
|
|
842 |
|
|
Prepaid
expenses and other current assets |
|
|
527 |
|
|
|
1,164 |
|
|
Total
current assets |
|
|
37,471 |
|
|
|
46,760 |
|
|
Fixed
assets, net |
|
|
1,946 |
|
|
|
2,788 |
|
|
Restricted cash |
|
|
127 |
|
|
|
127 |
|
|
Other
assets, net |
|
|
141 |
|
|
|
152 |
|
|
Total
assets |
|
$ |
39,685 |
|
|
$ |
49,827 |
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
Accounts
payable |
|
$ |
647 |
|
|
$ |
464 |
|
|
Accrued
expenses |
|
|
2,156 |
|
|
|
3,341 |
|
|
Deferred
revenue |
|
|
580 |
|
|
|
668 |
|
|
Deferred
rent |
|
|
27 |
|
|
|
185 |
|
|
Total
current liabilities |
|
|
3,410 |
|
|
|
4,658 |
|
|
Deferred
revenue, net of current portion |
|
|
- |
|
|
|
19 |
|
|
Deferred
rent, net of current portion |
|
|
600 |
|
|
|
564 |
|
|
Total
liabilities |
|
|
4,010 |
|
|
|
5,241 |
|
|
Commitments and
Contingencies |
|
|
|
|
|
Stockholders’ Equity |
|
|
|
|
|
Common
stock, $0.001 par value; 200,000,000 shares authorized,
117,769,919 and 111,032,957 shares issued and outstanding at
December 31, 2018 and March 31, 2018, respectively |
|
|
118 |
|
|
|
111 |
|
|
Additional paid-in capital |
|
|
289,329 |
|
|
|
278,595 |
|
|
Accumulated deficit |
|
|
(253,772 |
) |
|
|
(234,120 |
) |
|
Total
stockholders’ equity |
|
|
35,675 |
|
|
|
44,586 |
|
|
Total Liabilities and Stockholders’ Equity |
|
$ |
39,685 |
|
|
$ |
49,827 |
|
|
|
|
|
|
|
|
Organovo Holdings, Inc. |
|
Unaudited Condensed Consolidated Statements of
Cash Flows |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
Nine Months Ended |
|
|
|
December 31, 2018 |
|
December 31, 2017 |
|
Cash Flows From Operating Activities |
|
|
|
|
|
Net
loss |
|
$ |
(19,652 |
) |
|
$ |
(27,354 |
) |
|
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
(Gain)
loss on disposal of fixed assets |
|
|
63 |
|
|
|
— |
|
|
Depreciation and amortization |
|
|
824 |
|
|
|
962 |
|
|
Stock-based compensation |
|
|
3,911 |
|
|
|
5,600 |
|
|
Increase
(decrease) in cash resulting from changes in: |
|
|
|
|
|
Accounts
receivable |
|
|
336 |
|
|
|
(527 |
) |
|
Grants
receivable |
|
|
21 |
|
|
|
(260 |
) |
|
Inventory |
|
|
(207 |
) |
|
|
(55 |
) |
|
Prepaid
expenses and other assets |
|
|
637 |
|
|
|
253 |
|
|
Accounts
payable |
|
|
183 |
|
|
|
(719 |
) |
|
Accrued
expenses |
|
|
(1,185 |
) |
|
|
(1,293 |
) |
|
Deferred
revenue |
|
|
(107 |
) |
|
|
260 |
|
|
Deferred
rent |
|
|
(122 |
) |
|
|
(113 |
) |
|
Net cash used in operating activities |
|
|
(15,298 |
) |
|
|
(23,246 |
) |
|
Cash Flows From
Investing Activities |
|
|
|
|
|
Purchases
of fixed assets |
|
|
(37 |
) |
|
|
(90 |
) |
|
Proceeds
from disposals of fixed assets |
|
|
3 |
|
|
|
— |
|
|
Purchases
of intangible assets |
|
|
— |
|
|
|
(70 |
) |
|
Net cash used in investing activities |
|
|
(34 |
) |
|
|
(160 |
) |
|
Cash Flows From
Financing Activities |
|
|
|
|
|
Proceeds
from issuance of common stock and exercise of warrants, net |
|
|
6,916 |
|
|
|
7,243 |
|
|
Employee
taxes paid related to net share settlement of equity awards |
|
|
(136 |
) |
|
|
(74 |
) |
|
Proceeds
from exercise of stock options |
|
|
50 |
|
|
|
826 |
|
|
Net cash provided by financing activities |
|
|
6,830 |
|
|
|
7,995 |
|
|
Effect of
currency exchange rate changes on cash and cash
equivalents |
|
|
- |
|
|
|
(2 |
) |
|
Net decrease in
cash, cash equivalents, and restricted cash |
|
|
(8,502 |
) |
|
|
(15,413 |
) |
|
Cash, cash
equivalents, and restricted cash at beginning of
period |
|
|
43,853 |
|
|
|
62,878 |
|
|
Cash, cash
equivalents, and restricted cash at end of period |
|
$ |
35,351 |
|
|
$ |
47,465 |
|
|
|
|
|
|
|
|
Reconciliation of cash, cash equivalents, and restricted
cash to the condensed consolidated balance sheets |
|
|
|
Cash and cash
equivalents |
|
$ |
35,224 |
|
|
$ |
47,338 |
|
|
Restricted cash |
|
|
127 |
|
|
|
127 |
|
|
Total cash,
cash equivalent and restricted cash |
|
$ |
35,351 |
|
|
$ |
47,465 |
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Cash Flow
Information: |
|
|
|
|
|
Income taxes paid |
|
$ |
3 |
|
|
$ |
23 |
|
|
|
|
|
|
|
|
Investor & Press Contact:
Steve Kunszabo
Organovo Holdings, Inc.
+1 (858) 224-1092
skunszabo@organovo.com
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