Organovo Reports Fiscal Fourth-Quarter and Full-Year 2018 Results; Company Announces Key Goals for Fiscal-Year 2019
May 31 2018 - 4:05PM
- Lead Investigational New Drug (“IND”) program
for Alpha-1-antitrypsin deficiency (“A1AT”) received FDA’s orphan
drug designation and is on track for commencing IND-enabling
studies in fiscal 2019
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 fourth-quarter and
full-year 2018 financial results and announced its key goals for
fiscal-year 2019.
“Fiscal 2018 was an important transition year for us as we
demonstrated preclinical safety and efficacy proof-of-concept data
for our NovoTissues® liver implant in animal models of A1AT,” said
Taylor J. Crouch, CEO, Organovo. “We concluded the year by
achieving orphan drug designation from the FDA for this first
IND-track program and we look forward to nominating a second IND
program within fiscal 2019. Our healthy liver therapeutic
tissue has the opportunity to address a number of rare, serious
unmet medical needs which often lead to liver transplant, and as
such, we’re planning to explore additional NovoTissues indications
within the spectrum of inborn errors of metabolism, acute on
chronic liver failure, and other debilitating liver diseases.
We estimate that the unique benefits of bridging patients to
transplant or even providing a therapeutic alternative to
transplant has the potential to create an addressable peak
worldwide sales opportunity in excess of $4 billion. Our
first target indication of A1AT alone has the potential to approach
$1 billion in peak sales.”
Crouch continued, “We’ll also continue to demonstrate the robust
functionality of our tissues within our in vitro testing
operations, where we’re creating a series of disease conditions
that can subsequently be ‘treated’ with promising new drug
candidates. In fiscal 2019, we aim to expand the scope of
non-alcoholic steatohepatitis (“NASH”) conditions exhibiting the
key components of the disease to support high value drug discovery
and development. We believe our platform represents the only
comprehensive, non-clinical way to investigate key aspects of drug
efficacy and safety utilizing histology, which is the gold standard
of diagnosing and measuring response in NASH.”
Crouch concluded, “As we continue to demonstrate the remarkable
utility of our 3D bioprinted tissues, we are focused on critical
advances to medicine that our platform may provide, spanning our
current support of NASH R&D through to a range of potentially
breakthrough clinical applications enabled by our NovoTissues
platform. We believe our technology has the potential to
transform the care of patients with debilitating and often fatal
liver diseases.”
Fiscal-Year 2019 Goals & Outlook
- Organovo intends to continue preclinical development and
commence IND-enabling studies for its A1AT liver therapeutic tissue
program in fiscal 2019.
- The Company plans to pursue orphan drug designation for a
second rare disease indication with the FDA, with the objective of
ending fiscal 2019 with two liver therapeutic tissue programs on
track for an IND targeted for calendar 2020.
- In support of its in vitro testing operations, Organovo expects
to significantly expand its comprehensive NASH profiling platform,
creating a range of drug profiling conditions to facilitate
partnering in drug discovery and development.
- The Company plans to continue expanding its global IP
portfolio, which currently includes over 100 patents and pending
applications.
- As of March 31, 2018, the Company had a cash and cash
equivalents balance of $43.7 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 Fourth-Quarter 2018 Financial
Highlights
- Total revenue was $1.1 million, a 36 percent gain from the
year-ago period, primarily driven by higher cell-based product and
grant revenue.
- Research and development costs decreased 28 percent
year-over-year to $4.0 million, primarily due to lower employee and
lab supply costs related to the Company’s organizational
restructuring and prioritization of R&D projects.
- Negative Adjusted EBITDA(2) was $5.7 million, as compared to
$8.3 million for the year-ago period.
- During the fiscal fourth quarter, the Company generated net
proceeds of approximately $2.1 million from the issuance of 1.5
million shares of common stock in at-the-market offerings at a
weighted average price of $1.40 per share.
Fiscal-Year 2018 Financial Highlights
- For the full year, the Company reported total revenue of $4.6
million, which was up 9 percent from the year-ago period.
Total revenue increased primarily due to higher grant payments
related to the Company’s National Institutes of Health project and
increased sales from cell-based products. Organovo reported
fiscal 2018 net loss of $34.8 million, or $0.32 per share, as
compared to net loss of $38.4 million, or $0.39 per share, for
fiscal 2017.
|
Organovo Holdings,
Inc. |
Supplemental Reconciliation of GAAP Net Loss
to Adjusted EBITDA |
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Three Months
Ended |
|
Twelve Months
Ended |
|
Twelve Months
Ended |
|
|
March 31, 2018 |
|
March 31, 2017 |
|
March 31, 2018 |
|
March 31, 2017 |
|
|
|
|
|
|
|
|
|
GAAP net
loss |
$ |
(7,449 |
) |
$ |
(10,657 |
) |
$ |
(34,803 |
) |
$ |
(38,447 |
) |
Interest
expense |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Interest
income |
|
(144 |
) |
|
(74 |
) |
|
(478 |
) |
|
(198 |
) |
Income
taxes |
|
2 |
|
|
- |
|
|
2 |
|
|
23 |
|
Depreciation and
amortization |
|
305 |
|
|
325 |
|
|
1,267 |
|
|
1,149 |
|
Stock-based
compensation |
|
1,303 |
|
|
1,852 |
|
|
6,903 |
|
|
7,392 |
|
Restructuring/CEO transition |
276 |
|
|
281 |
|
|
2,313 |
|
|
281 |
|
Adjusted
EBITDA |
$ |
(5,707 |
) |
$ |
(8,273 |
) |
$ |
(24,796 |
) |
$ |
(29,800 |
) |
|
|
|
|
|
|
|
|
|
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.
- 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, stock-based
compensation expenses and restructuring/CEO transition costs.
Adjusted EBITDA does not represent, and should not be considered in
isolation from, as a substitute for, or as superior to, U.S. GAAP
measurements such as net income or loss. By eliminating
interest, income taxes, depreciation and amortization, stock-based
compensation expenses and restructuring/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, investors should not
view Adjusted EBITDA in isolation, but should also consider other
measurements, such as net income or loss and revenues, to measure
the Company’s operating performance. Please refer to the
schedule above for a reconciliation of consolidated GAAP net loss
to Adjusted EBITDA for the fiscal years and quarters ended March
31, 2018 and 2017.
Conference Call InformationAs previously
announced, the Company will host a conference call to discuss its
results at 5:00 p.m. ET on Thursday, May 31, 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 0713772. 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, May 31, 2018 through Thursday, June
7, 2018 at Organovo’s Investor Relations webpage. Callers can
also dial (877) 344-7529 (U.S. only) or (412) 317-0088, Access Code
10119460, 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 transplantable tissues 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 help fund 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 for one or more
customer’s electing to move toward framework agreements involving
annual budgets, revenue commitments, and/or dedicated research
plans, statements regarding customer demand for and acceptance of
our disease modeling services and statements regarding the
potential benefits and therapeutic uses of the Company’s
therapeutic liver tissue, including the benefits of an orphan
designation. 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 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;
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’s ability to control the costs and to
achieve the expected operational benefits and long-term cost
savings of its restructuring plan; 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. |
|
Consolidated Statements of Operations and
Comprehensive Loss (in thousands except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Three Months Ended |
|
Twelve Months Ended |
|
Twelve Months Ended |
|
|
|
March 31, 2018 |
|
March 31, 2017 |
|
March 31, 2018 |
|
March 31, 2017 |
|
Revenues |
|
|
|
|
|
|
|
|
|
Products
and services |
|
$ |
905 |
|
|
$ |
771 |
|
|
$ |
3,627 |
|
|
$ |
3,167 |
|
|
Collaborations and licenses |
|
|
55 |
|
|
|
21 |
|
|
|
422 |
|
|
|
1,022 |
|
|
Grants |
|
|
145 |
|
|
|
20 |
|
|
|
554 |
|
|
|
41 |
|
|
Total Revenues |
|
|
1,105 |
|
|
|
812 |
|
|
|
4,603 |
|
|
|
4,230 |
|
|
Cost of
revenues |
|
|
283 |
|
|
|
183 |
|
|
|
1,030 |
|
|
|
956 |
|
|
Research
and development expenses |
|
|
3,974 |
|
|
|
5,533 |
|
|
|
17,956 |
|
|
|
19,545 |
|
|
Selling,
general, and administrative expense |
|
|
4,431 |
|
|
|
5,784 |
|
|
|
20,888 |
|
|
|
22,304 |
|
|
Total
costs and expenses |
|
|
8,688 |
|
|
|
11,500 |
|
|
|
39,874 |
|
|
|
42,805 |
|
|
Loss from Operations |
|
|
(7,583 |
) |
|
|
(10,688 |
) |
|
|
(35,271 |
) |
|
|
(38,575 |
) |
|
Other Income (Expense) |
|
|
|
|
|
|
|
|
|
Change in
fair value of warrant liabilities |
|
|
— |
|
|
|
8 |
|
|
|
— |
|
|
|
4 |
|
|
Gain
(loss) on fixed asset disposals |
|
|
4 |
|
|
|
(51 |
) |
|
|
4 |
|
|
|
(51 |
) |
|
Interest
income |
|
|
144 |
|
|
|
74 |
|
|
|
478 |
|
|
|
198 |
|
|
Other
income (expense) |
|
|
(12 |
) |
|
|
— |
|
|
|
(12 |
) |
|
|
— |
|
|
Total Other Income (Expense) |
|
|
136 |
|
|
|
31 |
|
|
|
470 |
|
|
|
151 |
|
|
Income Tax Expense |
|
|
(2 |
) |
|
|
— |
|
|
|
(2 |
) |
|
|
(23 |
) |
|
Net Loss |
|
$ |
(7,449 |
) |
|
$ |
(10,657 |
) |
|
$ |
(34,803 |
) |
|
$ |
(38,447 |
) |
|
Net loss
per common share—basic and diluted |
|
$ |
(0.07 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.39 |
) |
|
Weighted
average shares used in computing net loss per common share—basic
and diluted |
|
|
110,690,335 |
|
|
|
104,385,617 |
|
|
|
107,243,974 |
|
|
|
97,763,032 |
|
|
Comprehensive Loss: |
|
|
|
|
|
|
|
|
|
Net
Loss |
|
$ |
(7,449 |
) |
|
$ |
(10,657 |
) |
|
$ |
(34,803 |
) |
|
$ |
(38,447 |
) |
|
Currency
Translation Adjustment |
|
|
— |
|
|
|
(1 |
) |
|
|
11 |
|
|
|
(11 |
) |
|
Comprehensive Loss |
|
$ |
(7,449 |
) |
|
$ |
(10,658 |
) |
|
$ |
(34,792 |
) |
|
$ |
(38,458 |
) |
|
|
|
|
|
|
|
|
|
|
|
Organovo Holdings,
Inc. |
|
Consolidated Balance Sheets (in thousands
except per share data) |
|
|
|
|
|
|
|
|
|
March 31, 2018 |
|
March 31, 2017 |
|
Assets |
|
|
|
|
|
Current Assets |
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
43,726 |
|
|
$ |
62,751 |
|
|
Accounts
receivable |
|
|
883 |
|
|
|
647 |
|
|
Grant
receivable |
|
|
145 |
|
|
|
— |
|
|
Inventory, net |
|
|
842 |
|
|
|
550 |
|
|
Prepaid
expenses and other current assets |
|
|
1,164 |
|
|
|
1,144 |
|
|
Total
current assets |
|
|
46,760 |
|
|
|
65,092 |
|
|
Fixed
assets, net |
|
|
2,788 |
|
|
|
3,840 |
|
|
Restricted cash |
|
|
127 |
|
|
|
127 |
|
|
Other
assets, net |
|
|
152 |
|
|
|
121 |
|
|
Total
assets |
|
$ |
49,827 |
|
|
$ |
69,180 |
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
Accounts
payable |
|
$ |
464 |
|
|
$ |
1,171 |
|
|
Accrued
expenses |
|
|
3,341 |
|
|
|
4,101 |
|
|
Deferred
revenue |
|
|
668 |
|
|
|
582 |
|
|
Deferred
rent |
|
|
185 |
|
|
|
157 |
|
|
Total
current liabilities |
|
|
4,658 |
|
|
|
6,011 |
|
|
Deferred
revenue, net of current portion |
|
|
19 |
|
|
|
58 |
|
|
Deferred
rent, net of current portion |
|
|
564 |
|
|
|
749 |
|
|
Total
liabilities |
|
$ |
5,241 |
|
|
$ |
6,818 |
|
|
Commitments and
Contingencies |
|
|
|
|
|
Stockholders' Equity |
|
|
|
|
|
Common
stock, $0.001 par value; 150,000,000 shares authorized, 111,032,957
and 104,551,466 shares issued and outstanding at March 31, 2018 and
March 31, 2017, respectively |
|
|
111 |
|
|
|
104 |
|
|
Additional paid-in capital |
|
|
278,595 |
|
|
|
261,586 |
|
|
Accumulated deficit |
|
|
(234,120 |
) |
|
|
(199,317 |
) |
|
Accumulated other comprehensive income (loss) |
|
|
— |
|
|
|
(11 |
) |
|
Total
stockholders' equity |
|
|
44,586 |
|
|
|
62,362 |
|
|
Total Liabilities and Stockholders' Equity |
|
$ |
49,827 |
|
|
$ |
69,180 |
|
|
|
|
|
|
|
|
Organovo Holdings, Inc. |
|
Consolidated Statements of Cash Flows (in
thousands) |
|
|
|
|
|
|
|
|
|
Year Ended |
|
Year Ended |
|
|
|
March 31, 2018 |
|
March 31, 2017 |
|
Cash Flows From Operating Activities |
|
|
|
|
|
Net
loss |
|
$ |
(34,803 |
) |
|
$ |
(38,447 |
) |
|
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
Amortization of deferred financing costs |
|
|
— |
|
|
|
— |
|
|
(Gain)
Loss on disposal of fixed assets |
|
|
(4 |
) |
|
|
56 |
|
|
Depreciation and amortization |
|
|
1,267 |
|
|
|
1,149 |
|
|
Change in
fair value of warrant liabilities |
|
|
— |
|
|
|
(4 |
) |
|
Stock-based compensation |
|
|
6,903 |
|
|
|
7,392 |
|
|
Donation
of fixed assets |
|
|
25 |
|
|
|
— |
|
|
Increase
(decrease) in cash resulting from changes in: |
|
|
|
|
|
Accounts
receivable |
|
|
(236 |
) |
|
|
(388 |
) |
|
Grants
receivable |
|
|
(145 |
) |
|
|
— |
|
|
Inventory |
|
|
(292 |
) |
|
|
(216 |
) |
|
Prepaid
expenses and other assets |
|
|
5 |
|
|
|
(154 |
) |
|
Accounts
payable |
|
|
(707 |
) |
|
|
384 |
|
|
Accrued
expenses |
|
|
(760 |
) |
|
|
1,651 |
|
|
Deferred
rent |
|
|
(157 |
) |
|
|
(138 |
) |
|
Deferred
revenue |
|
|
47 |
|
|
|
(470 |
) |
|
Net cash used in operating activities |
|
|
(28,857 |
) |
|
|
(29,185 |
) |
|
Cash Flows From Investing Activities |
|
|
|
|
|
Deposits
released from restriction (restricted cash deposits) |
|
|
— |
|
|
|
(48 |
) |
|
Purchases
of fixed assets |
|
|
(226 |
) |
|
|
(1,354 |
) |
|
Proceeds
from disposals of fixed assets |
|
|
4 |
|
|
|
11 |
|
|
Purchases
of intangible assets |
|
|
(70 |
) |
|
|
— |
|
|
Net cash used in investing activities |
|
|
(292 |
) |
|
|
(1,391 |
) |
|
Cash Flows From Financing Activities |
|
|
|
|
|
Proceeds
from issuance of common stock and exercise of warrants, net |
|
|
9,287 |
|
|
|
30,665 |
|
|
Proceeds
from exercise of stock options |
|
|
826 |
|
|
|
582 |
|
|
Principal
payments on capital lease obligations |
|
|
— |
|
|
|
— |
|
|
Net cash provided by financing activities |
|
|
10,113 |
|
|
|
31,247 |
|
|
Effect of currency exchange rate changes on cash and
cash equivalents |
|
|
11 |
|
|
|
(11 |
) |
|
Net Increase in Cash and Cash Equivalents |
|
|
(19,025 |
) |
|
|
660 |
|
|
Cash and Cash Equivalents at Beginning of
Period |
|
|
62,751 |
|
|
|
62,091 |
|
|
Cash and Cash Equivalents at End of Period |
|
$ |
43,726 |
|
|
$ |
62,751 |
|
|
Supplemental Disclosure of Cash Flow
Information: |
|
|
|
|
|
Interest |
|
$ |
— |
|
|
$ |
— |
|
|
Income
Taxes |
|
$ |
2 |
|
|
$ |
23 |
|
|
|
|
|
|
|
|
Investor & Press Contact:
Steve Kunszabo
Organovo Holdings, Inc.
+1 (858) 224-1092
skunszabo@organovo.com
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