Organovo Affirms Key Clinical Development Goals; Company Reports Fiscal Second-Quarter 2019 Results
November 08 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 affirmed its key clinical development goals and reported its
fiscal second-quarter 2019 financial results.
“During the fiscal second quarter, we affirmed our key clinical
development and operating goals,” said Taylor J. Crouch, CEO,
Organovo. “We remain on track for a pre-IND meeting with the
FDA for our lead indication in calendar 2019 and expect to begin
our IND-enabling toxicity study to support multiple orphan disease
indications in the second half of calendar 2019. In addition,
we plan to conduct proof-of-concept animal studies in multiple rare
diseases. We’ve also made strong progress in pursuing a
second orphan designation, and anticipate we’ll now receive a
response from the FDA in the first half of calendar 2019.”
Crouch continued, “We continue to generate favorable preclinical
results in our liver therapeutic tissues program and will present
data at next week’s Liver Meeting® on the performance of our
tissues in an animal model of hereditary tyrosinemia Type 1
(“HT-1”). This rare disease is often characterized by severe
liver damage and limited treatment options. In early studies
in established animal models for HT-1, our tissues demonstrated
engraftment, retention and functionality post-implantation, while
also showing an improvement in the median survival rate for treated
animals. Much like with Alpha-1 antitrypsin deficiency
(“A1AT”), the same healthy tissue construct allows us to
potentially treat a broad range of target indications. Our
objective in implanting a healthy tissue patch is to restore
function or offset the deficiency of a specific enzyme
abnormality. Our ultimate goal, which we hope to evaluate in
future studies, is delaying or reducing the need for a
transplant.”
Crouch concluded, “We also continue to build upon our cell and
in vitro tissue platform, including the launch of a new RNASeq data
library by our Samsara division, and several custom projects for
our liver tissue research services including disease modeling and
toxicology.”
Key Clinical Development Goals &
Outlook
- The Company continues to conduct supportive proof-of-concept
studies in multiple orphan disease indications aimed at treating
inborn errors of metabolism.
- Organovo expects to hold a pre-IND meeting with the FDA in
calendar 2019 for its lead rare disease program.
- The Company believes that development of its healthy
therapeutic liver tissue patch can treat a broad range of rare
disease indications. The Company is pursuing a second orphan
designation with the FDA, which it now anticipates receiving in the
first half of calendar 2019.
- Organovo plans to begin its IND-enabling toxicity study to
support multiple indications including A1AT in the second half of
calendar 2019.
- The Company expects to file for its first IND in calendar
2020.
- Organovo will continue to opportunistically generate revenue to
support its therapeutic research mission by leveraging its cell and
in vitro tissue platform.
- Samsara Sciences, the Company’s wholly-owned subsidiary,
recently launched a new product offering an RNA-Seq data library
with matched sets of human liver tissues and cell types isolated
from a range of healthy and diseased donors. This
cost-effective solution enables customers to mine data for
discovery and validation of disease and cell type-specific
markers.
- Organovo plans to continue expanding its global IP portfolio,
which currently includes over 100 patents and pending
applications.
- As of September 30, 2018, the Company had a cash and cash
equivalents balance of $37.4 million. Organovo continues to
expect 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 through fiscal 2020.
Fiscal Second-Quarter 2019 Financial
Highlights
- Net loss was $5.8 million, a $3.6 million improvement over the
year-ago period, as total costs and expenses declined 36 percent to
$7.0 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 $4.3 million, an improvement from $8.3
million in the prior-year quarter.
- Total revenue was $0.9 million, a 30 percent decrease from the
year-ago period, primarily driven by lower revenue from products
and services, partially offset by higher grant revenue.
- During the fiscal second quarter, the Company generated net
proceeds of approximately $2.1 million from the issuance of 1.7
million shares of common stock in at-the-market offerings at a
weighted average price of $1.27 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, November 8, 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 2924727. 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, November 8, 2018 through Thursday,
November 15, 2018 at Organovo’s Investor Relations webpage.
Callers can also dial (877) 344-7529 (U.S. only) or (412) 317-0088,
Access Code 10124086, 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; 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 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 |
|
Six Months Ended |
|
Six Months Ended |
|
|
September 30,
2018 |
|
September 30,
2017 |
|
September 30,
2018 |
|
September 30,
2017 |
Revenues |
|
|
|
|
|
|
|
|
Products
and services |
|
$ |
493 |
|
|
$ |
946 |
|
|
$ |
1,039 |
|
|
$ |
1,890 |
|
Collaborations and licenses |
|
|
42 |
|
|
|
260 |
|
|
|
85 |
|
|
|
306 |
|
Grants |
|
|
408 |
|
|
|
149 |
|
|
|
508 |
|
|
|
149 |
|
Total
Revenues |
|
|
943 |
|
|
|
1,355 |
|
|
|
1,632 |
|
|
|
2,345 |
|
Cost of revenues |
|
|
125 |
|
|
|
254 |
|
|
|
245 |
|
|
|
555 |
|
Research and
development expenses |
|
|
3,187 |
|
|
|
4,944 |
|
|
|
6,566 |
|
|
|
9,977 |
|
Selling, general and
administrative expenses |
|
|
3,640 |
|
|
|
5,736 |
|
|
|
8,407 |
|
|
|
11,592 |
|
Total
costs and expenses |
|
|
6,952 |
|
|
|
10,934 |
|
|
|
15,218 |
|
|
|
22,124 |
|
Loss from
Operations |
|
|
(6,009 |
) |
|
|
(9,579 |
) |
|
|
(13,586 |
) |
|
|
(19,779 |
) |
Other Income
(Expense) |
|
|
|
|
|
|
|
|
Gain
(loss) on fixed asset disposals |
|
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
— |
|
Interest
income |
|
|
172 |
|
|
|
118 |
|
|
|
334 |
|
|
|
216 |
|
Total Other
Income |
|
|
172 |
|
|
|
118 |
|
|
|
336 |
|
|
|
216 |
|
Income Tax
Expense |
|
|
— |
|
|
|
— |
|
|
|
(3 |
) |
|
|
— |
|
Net
Loss |
|
$ |
(5,837 |
) |
|
$ |
(9,461 |
) |
|
$ |
(13,253 |
) |
|
$ |
(19,563 |
) |
Currency
Translation Adjustment |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(11 |
) |
Comprehensive
Loss |
|
$ |
(5,837 |
) |
|
$ |
(9,461 |
) |
|
$ |
(13,253 |
) |
|
$ |
(19,574 |
) |
Net loss per common
share—basic and diluted |
|
$ |
(0.05 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.19 |
) |
Weighted average shares used in computing net loss per
common share—basic and diluted |
|
|
113,993,237 |
|
|
|
106,297,699 |
|
|
|
112,732,767 |
|
|
|
105,497,939 |
|
|
|
|
|
|
|
|
|
|
Organovo Holdings,
Inc. |
|
Condensed Consolidated Balance
Sheets |
|
(in thousands except for share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2018 |
|
March 31, 2018 |
|
|
|
(Unaudited) |
|
(Audited) |
|
Assets |
|
|
|
|
|
Current Assets |
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
37,355 |
|
|
$ |
43,726 |
|
|
Accounts receivable |
|
|
475 |
|
|
|
883 |
|
|
Grant receivable |
|
|
453 |
|
|
|
145 |
|
|
Inventory, net |
|
|
1,036 |
|
|
|
842 |
|
|
Prepaid expenses and other current assets |
|
|
798 |
|
|
|
1,164 |
|
|
Total
current assets |
|
|
40,117 |
|
|
|
46,760 |
|
|
Fixed
assets, net |
|
|
2,236 |
|
|
|
2,788 |
|
|
Restricted cash |
|
|
127 |
|
|
|
127 |
|
|
Other
assets, net |
|
|
145 |
|
|
|
152 |
|
|
Total
assets |
|
$ |
42,625 |
|
|
$ |
49,827 |
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
Accounts payable |
|
$ |
449 |
|
|
$ |
464 |
|
|
Accrued expenses |
|
|
2,026 |
|
|
|
3,341 |
|
|
Deferred revenue |
|
|
619 |
|
|
|
668 |
|
|
Deferred rent |
|
|
197 |
|
|
|
185 |
|
|
Total
current liabilities |
|
|
3,291 |
|
|
|
4,658 |
|
|
Deferred
revenue, net of current portion |
|
|
- |
|
|
|
19 |
|
|
Deferred
rent, net of current portion |
|
|
464 |
|
|
|
564 |
|
|
Total
liabilities |
|
|
3,755 |
|
|
|
5,241 |
|
|
Commitments and
Contingencies |
|
|
|
|
|
Stockholders’ Equity |
|
|
|
|
|
Common stock, $0.001 par value; 200,000,000 shares
authorized, 115,200,421 and 111,032,957 shares issued and
outstanding at September 30, 2018 and March 31, 2018,
respectively |
|
|
115 |
|
|
|
111 |
|
|
Additional paid-in capital |
|
|
286,128 |
|
|
|
278,595 |
|
|
Accumulated deficit |
|
|
(247,373 |
) |
|
|
(234,120 |
) |
|
Total
stockholders’ equity |
|
|
38,870 |
|
|
|
44,586 |
|
|
Total Liabilities and Stockholders’ Equity |
|
$ |
42,625 |
|
|
$ |
49,827 |
|
|
|
|
|
|
|
|
Organovo Holdings, Inc. |
|
Unaudited Condensed Consolidated Statements of
Cash Flows |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
Six Months Ended |
|
|
|
September 30, 2018 |
|
September 30, 2017 |
|
Cash Flows From Operating Activities |
|
|
|
|
|
Net loss |
|
$ |
(13,253 |
) |
|
$ |
(19,563 |
) |
|
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
(Gain)
loss on disposal of fixed assets |
|
|
(2 |
) |
|
|
— |
|
|
Depreciation and amortization |
|
|
570 |
|
|
|
647 |
|
|
Stock-based compensation |
|
|
2,553 |
|
|
|
4,350 |
|
|
Increase
(decrease) in cash resulting from changes in: |
|
|
|
|
|
Accounts receivable |
|
|
408 |
|
|
|
(386 |
) |
|
Grants receivable |
|
|
(308 |
) |
|
|
(149 |
) |
|
Inventory |
|
|
(194 |
) |
|
|
54 |
|
|
Prepaid expenses and other assets |
|
|
366 |
|
|
|
210 |
|
|
Accounts payable |
|
|
(15 |
) |
|
|
(694 |
) |
|
Accrued expenses |
|
|
(1,315 |
) |
|
|
(1,280 |
) |
|
Deferred revenue |
|
|
(68 |
) |
|
|
81 |
|
|
Deferred rent |
|
|
(88 |
) |
|
|
(72 |
) |
|
Net cash used in operating activities |
|
|
(11,346 |
) |
|
|
(16,802 |
) |
|
Cash Flows From
Investing Activities |
|
|
|
|
|
Purchases
of fixed assets |
|
|
(11 |
) |
|
|
(56 |
) |
|
Proceeds
from disposals of fixed assets |
|
|
2 |
|
|
|
— |
|
|
Purchases
of intangible assets |
|
|
— |
|
|
|
(70 |
) |
|
Net cash used in investing activities |
|
|
(9 |
) |
|
|
(126 |
) |
|
Cash Flows From
Financing Activities |
|
|
|
|
|
Proceeds
from issuance of common stock and exercise of warrants, net |
|
|
5,129 |
|
|
|
4,135 |
|
|
Employee
taxes paid related to net share settlement of equity awards |
|
|
(145 |
) |
|
|
(51 |
) |
|
Proceeds
from exercise of stock options |
|
|
— |
|
|
|
825 |
|
|
Net cash provided by financing activities |
|
|
4,984 |
|
|
|
4,909 |
|
|
Net decrease in
cash, cash equivalents, and restricted cash |
|
|
(6,371 |
) |
|
|
(12,019 |
) |
|
Cash, cash
equivalents, and restricted cash at beginning of
period |
|
|
43,853 |
|
|
|
62,878 |
|
|
Cash, cash
equivalents, and restricted cash at end of period |
|
$ |
37,482 |
|
|
$ |
50,859 |
|
|
|
|
|
|
|
|
Reconciliation of cash, cash equivalents, and restricted
cash to the condensed consolidated balance sheets |
|
|
|
Cash and cash
equivalents |
|
|
37,355 |
|
|
|
50,732 |
|
|
Restricted cash |
|
|
127 |
|
|
|
127 |
|
|
Total cash,
cash equivalent and restricted cash |
|
|
37,482 |
|
|
|
50,859 |
|
|
|
|
|
|
|
|
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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