Organovo Announces Fiscal Second-Quarter 2017 Results; Company Affirms Full-Year Fiscal 2017 and Long-Range Outlook
November 03 2016 - 4:05PM
Organovo Holdings, Inc. (NASDAQ:ONVO) (“Organovo”), a
three-dimensional biology company focused on delivering scientific
and medical breakthroughs using its 3D bioprinting technology,
today reported financial results for the fiscal second quarter of
2017 and affirmed its full-year fiscal 2017 and long-range
outlook. Net loss was $9.4 million, or $0.10 per share, for
the fiscal second quarter of 2017, as compared to $11.3 million, or
$0.12 per share, for the fiscal second quarter of 2016.
Organovo reported fiscal second-quarter total revenue of $1.4
million, which consisted largely of product and service
revenue(1). Total revenue increased 358 percent versus the
comparable period of fiscal 2016 and 54 percent versus the fiscal
first quarter of 2017.
“The first half of fiscal 2017 represents a meaningful
inflection point in our growth trajectory, as we more than doubled
our product and service revenue when compared to all of fiscal
2016,” said Keith Murphy, CEO, Organovo. “We also affirmed
our recently increased total revenue guidance, supported by solid
adoption of our tissue research services. We are penetrating
the global Top 25 pharma segment at a rapid clip, having recently
added three customers to bring our total to ten with this group,
and continue to see good momentum with biopharmaceutical companies
of all sizes.”
Murphy continued, “With just two months behind us since
commercialization, we’re pleased with the early traction of our
kidney tissue. We’ve signed multiple orders, including with
two global Top 25 pharma customers, bringing to market an advanced
way to investigate kidney toxicity of new drug candidates.
Kidney is a natural expansion of our preclinical solutions
portfolio, showcasing the power and versatility of our technology
platform.”
Murphy concluded, “As we look to the second half of our fiscal
year, we’re focused on a few key targets including expanding our
liver tissue revenue, scaling our kidney tissue offering, business
development initiatives in the drug discovery space and advancing
bioprinted human liver as the first candidate in our therapeutic
tissue portfolio.”
Organovo Business Highlights
Revenue
- Product and service revenue was $1.0 million, up 449 percent
from the prior-year period, largely driven by an increase in
customer contracts for the Company’s tissue research
services.
- Collaborations and grant revenue totaled $0.4 million,
primarily supported by a milestone achievement from the Company’s
agreement with Merck & Co. to develop multiple custom tissue
models.
Operating Expenses
- Cost of revenues was $0.4 million, reflecting the Company’s
expenses related to manufacturing and delivering its product and
service revenues.
- Research and development costs declined 4 percent
year-over-year to $4.5 million, driven largely by a decrease in the
use of outsourced professional services, partially offset by higher
employee related costs due to increased staffing.
- Selling, general and administrative expenses decreased 14
percent from the prior-year period to $5.9 million, primarily due
to lower compensation expense related to non-recurring separation
and payroll costs for two former executives, partially offset by
higher employee related costs from increased staffing.
Liquidity & Capital Resources
- The Company ended the fiscal second quarter with a cash and
cash equivalents balance of $51.7 million. Organovo’s net
cash utilization(3) during the period was $6.8 million.
During the fiscal second quarter, the Company generated net
proceeds of approximately $4.5 million from the issuance of 997,181
shares of common stock in at-the-market (“ATM”) offerings at a
weighted average price of $4.67 per share and approximately $0.5
million from the exercise of stock options and warrants.
- Working capital was $49.5 million to end the fiscal second
quarter compared to $72.3 million in the prior-year quarter.
- On October 25, 2016, the Company closed the issuance and sale
of 10,065,000 shares of common stock at a price to the public of
$2.75 per share. The net proceeds to the Company from the
sale were approximately $25,600,000, after deducting underwriting
discounts and commissions and estimated expenses payable by the
Company.
Fiscal-Year 2017 Outlook
The Company affirmed its full-year fiscal 2017 outlook for total
revenue and net cash utilization. The Company continues to
expect:
- Total revenue of between $4.5 million and $6.2 million for
fiscal-year 2017. Fiscal 2016 total revenue was $1.5
million.
- Net cash utilization of between $31.0 million and $34.0 million
for fiscal-year 2017. The Company had a cash and cash
equivalents balance of $62.1 million for its fiscal year ended
March 31, 2016.
|
|
|
|
Fiscal-Year 2017 Outlook (October
2016) |
Fiscal-Year 2017 Outlook (November
2016) |
Fiscal-Year
2017Total
Revenue |
$4.5 million - $6.2 million |
Affirmed |
Net Cash Utilization |
$31.0 million - $34.0 million |
Affirmed |
Long-Range Outlook
The Company affirmed its long-range outlook for potential
revenue from its liver and kidney tissue products. The
Company continues to expect:
- As it penetrates the toxicology market, Organovo’s ExViveTM
Human Liver Tissue service will grow into the tens of millions in
annual revenue, and has $100 million+ revenue potential in the
future (inside of a total addressable market of over $1
billion).
- As it penetrates the toxicology market, Organovo’s ExVive Human
Kidney Tissue service will grow into the tens of millions in annual
revenue, and has $100 million+ revenue potential in the future
(inside of a total addressable market of over $2
billion).
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 |
) |
Collaboration revenue consists of license and collaboration
agreements that contain multiple elements, which may include
non-refundable up-front fees, payments for reimbursement of
third-party research costs, payments for ongoing research, payments
associated with achieving specific development milestones and
royalties based on specified percentages of net product sales, if
any. |
|
(3 |
) |
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 (which was ($1.8 million) during the
second quarter of fiscal 2017) less proceeds from the sale of
common stock and the exercise of warrants and stock options during
the reporting period (which was $5.0 million during the second
quarter of fiscal 2017). 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 3, 2016.
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 9089780. 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 3, 2016 through Thursday,
November 10, 2016 at Organovo’s Investor Relations webpage.
Callers can also dial (877) 344-7529 (U.S. only) or (412) 317-0088,
Access Code 9089780, 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 market acceptance of the Company's products and
services; the Company's business, research, product development,
regulatory approval, marketing and distribution plans and
strategies; 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 2017 outlook
and/or its long-range 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 9, 2016 and its Quarterly
Report on Form 10-Q filed with the SEC on November 3, 2016.
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
for share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Three Months
Ended |
|
Six Months
Ended |
|
Six Months
Ended |
|
|
|
|
|
|
September 30, 2016 |
|
September 30, 2015 |
|
September 30, 2016 |
|
September 30, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
Products
and services |
$ |
1,023 |
|
|
$ |
187 |
|
|
$ |
1,697 |
|
|
$ |
396 |
|
|
|
Collaborations |
|
345 |
|
|
|
19 |
|
|
|
557 |
|
|
|
33 |
|
|
|
Grants |
|
8 |
|
|
|
95 |
|
|
|
12 |
|
|
|
178 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Revenues |
|
1,376 |
|
|
|
301 |
|
|
|
2,266 |
|
|
|
607 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues |
|
393 |
|
|
|
- |
|
|
|
561 |
|
|
|
- |
|
|
|
Research
and development expenses |
|
4,544 |
|
|
|
4,739 |
|
|
|
8,987 |
|
|
|
8,881 |
|
|
|
Selling,
general, and administrative expenses |
|
5,918 |
|
|
|
6,846 |
|
|
|
10,974 |
|
|
|
11,468 |
|
|
Total Costs and
Expenses |
|
10,855 |
|
|
|
11,585 |
|
|
|
20,522 |
|
|
|
20,349 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
Operations |
|
(9,479 |
) |
|
|
(11,284 |
) |
|
|
(18,256 |
) |
|
|
(19,742 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
Change in
fair value of warrant liabilities |
|
- |
|
|
|
9 |
|
|
|
(5 |
) |
|
|
(28 |
) |
|
|
Interest
income |
|
37 |
|
|
|
18 |
|
|
|
74 |
|
|
|
25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Other Income
(Expense) |
|
37 |
|
|
|
27 |
|
|
|
69 |
|
|
|
(3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax
Expense |
|
- |
|
|
|
- |
|
|
|
(22 |
) |
|
|
(3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss |
$ |
(9,442 |
) |
|
$ |
(11,257 |
) |
|
$ |
(18,209 |
) |
|
$ |
(19,748 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency Translation
Adjustment |
|
(7 |
) |
|
|
- |
|
|
|
(7 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
Loss |
$ |
(9,449 |
) |
|
$ |
(11,257 |
) |
|
$ |
(18,216 |
) |
|
$ |
(19,748 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
per common share-basic and diluted |
$ |
(0.10 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.23 |
) |
|
Weighted
average shares used in computing net loss per common share-basic
and diluted |
|
93,185,400 |
|
|
|
92,385,150 |
|
|
|
92,790,850 |
|
|
|
87,715,217 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organovo Holdings,
Inc. |
|
Condensed Consolidated Balance
Sheets |
|
(in thousands except
for share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2016 |
|
March 31, 2016 |
|
|
|
|
|
|
|
Unaudited |
|
Audited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Assets |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
|
|
|
51,723 |
|
|
|
62,091 |
|
|
|
Accounts
receivable |
|
|
|
|
606 |
|
|
|
259 |
|
|
|
Inventory,
net |
|
|
|
|
445 |
|
|
|
334 |
|
|
|
Prepaid
expenses and other current assets |
|
|
|
|
908 |
|
|
|
968 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
current assets |
|
|
|
|
53,682 |
|
|
|
63,652 |
|
|
|
|
|
|
|
|
|
|
|
|
Fixed
assets, net |
|
|
|
|
3,647 |
|
|
|
3,711 |
|
|
|
|
|
|
|
|
|
|
|
|
Restricted
cash |
|
|
|
|
79 |
|
|
|
79 |
|
|
Other
assets, net |
|
|
|
|
128 |
|
|
|
134 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets |
|
|
|
|
57,536 |
|
|
|
67,576 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities |
|
|
|
|
|
|
|
|
Accounts
payable |
|
|
|
|
754 |
|
|
|
787 |
|
|
|
Accrued
expenses |
|
|
|
|
2,831 |
|
|
|
2,450 |
|
|
|
Deferred
rent |
|
|
|
|
147 |
|
|
|
139 |
|
|
|
Deferred
revenue |
|
|
|
|
479 |
|
|
|
1,110 |
|
|
|
Warrant
liabilities |
|
|
|
|
9 |
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
current liabilities |
|
|
|
|
4,220 |
|
|
|
4,490 |
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
rent, net of current portion |
|
|
|
|
829 |
|
|
|
905 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities |
|
|
|
|
5,049 |
|
|
|
5,395 |
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
Equity |
|
|
|
|
|
|
|
|
Common
stock, $0.001 par value; 150,000,000shares authorized, 93,750,862
and 92,391,989shares issued and outstanding at September 30,
2016and March 31, 2016, respectively |
|
|
|
|
94 |
|
|
|
92 |
|
|
|
Additional paid-in
capital |
|
|
|
|
231,479 |
|
|
|
222,959 |
|
|
|
Accumulated
deficit |
|
|
|
|
(179,079 |
) |
|
|
(160,870 |
) |
|
|
Unrealized gain (loss)
on foreign currency revaluation |
|
|
|
|
(7 |
) |
|
|
- |
|
|
Total
stockholders’ equity |
|
|
|
|
52,487 |
|
|
|
62,181 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders’
Equity |
|
|
|
|
57,536 |
|
|
|
67,576 |
|
|
|
|
|
|
|
|
|
|
|
|
Organovo Holdings,
Inc. |
|
Unaudited Condensed Consolidated Statements of
Cash Flows (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended |
|
Six Months
Ended |
|
|
|
|
|
|
September 30, 2016 |
|
September 30, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From Operating
Activities |
|
|
|
|
|
Net
loss |
$ |
(18,209 |
) |
|
$ |
(19,748 |
) |
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
502 |
|
|
|
324 |
|
|
|
|
Change in
fair value of warrant liabilities |
|
5 |
|
|
|
28 |
|
|
|
|
Stock-based
compensation |
|
3,522 |
|
|
|
3,952 |
|
|
|
|
Amortization of warrants issued for services |
|
- |
|
|
|
(105 |
) |
|
|
|
Increase
(decrease) in cash resulting from changes in: |
|
|
|
|
|
|
|
Accounts
receivable |
|
(347 |
) |
|
|
(180 |
) |
|
|
|
|
Inventory |
|
(111 |
) |
|
|
(2 |
) |
|
|
|
|
Prepaid
expenses and other assets |
|
80 |
|
|
|
337 |
|
|
|
|
|
Accounts
payable |
|
(33 |
) |
|
|
(820 |
) |
|
|
|
|
Accrued
expenses |
|
381 |
|
|
|
164 |
|
|
|
|
|
Deferred
rent |
|
(68 |
) |
|
|
(21 |
) |
|
|
|
|
Deferred
revenue |
|
(631 |
) |
|
|
1,150 |
|
|
|
|
|
|
|
|
|
|
|
Net cash used in operating
activities |
|
(14,909 |
) |
|
|
(14,921 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From Investing Activities |
|
|
|
|
|
Purchases
of fixed assets |
|
(452 |
) |
|
|
(1,550 |
) |
|
|
Proceeds
from disposals of fixed assets |
|
- |
|
|
|
14 |
|
|
|
Purchases
of intangible assets |
|
- |
|
|
|
(35 |
) |
|
|
|
|
|
|
|
|
|
|
Net cash used in investing
activities |
|
(452 |
) |
|
|
(1,571 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From Financing Activities |
|
|
|
|
|
Proceeds
from issuance of common stock and exercise of warrants, net |
|
4,500 |
|
|
|
43,137 |
|
|
|
Proceeds
from exercise of stock options |
|
500 |
|
|
|
81 |
|
|
|
Principal
payments on capital lease obligations |
|
- |
|
|
|
(5 |
) |
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing
activities |
|
5,000 |
|
|
|
43,213 |
|
|
|
|
|
|
|
|
|
|
|
Effect of currency exchange rate
changes on cash and cash
equivalents |
|
(7 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
Net Increase (Decrease) in Cash and
Cash Equivalents |
|
(10,368 |
) |
|
|
26,721 |
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents at
Beginning of Period |
|
62,091 |
|
|
|
50,142 |
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents at End of
Period |
$ |
51,723 |
|
|
$ |
76,863 |
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of Cash Flow
Information: |
|
|
|
|
Interest |
$ |
- |
|
|
$ |
- |
|
|
Income
Taxes |
$ |
22 |
|
|
$ |
3 |
|
|
|
|
|
|
|
|
|
|
|
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)
Historical Stock Chart
From Jun 2024 to Jul 2024
Organovo (NASDAQ:ONVO)
Historical Stock Chart
From Jul 2023 to Jul 2024