Full Press Release Details
Organovo Reports Fiscal 2015 Financial Results, Corporate Highlights and Total
Contract Bookings for exVive3D Human Liver Tissue
SAN DIEGO, June 9, 2015 Organovo Holdings, Inc. (NYSE MKT: ONVO) ( Organovo or the Company ), a three-dimensional
biology company focused on delivering scientific and medical breakthroughs using 3D bioprinting technology, today reported its financial results for the fiscal year ended March 31, 2015. The Company also reported its total contract bookings for
the exVive3D Human Liver Tissue.
The exVive3D Human Liver Tissue is a combination product and service offered by the Company to pharmaceutical
industry customers for use mainly in preclinical safety testing. From April 1, 2014 through the date of this release, the Company has recorded total contract bookings for its commercial liver tissue product of approximately $1.94 million, which
includes $0.29 million in revenue recognized as of March 31, 2015. The customers who have contracted to utilize the exVive3D Human Liver Tissue include multiple top 25 global pharma companies, additional public pharmaceutical companies
from small to large cap and private venture-backed companies. The Company has had multiple customers sign a second contract, representing repeat business for its liver tissue product. The Company has signed liver service contracts with customers in
the United States, Europe and Asia. These reported total contract bookings do not include the Company s contract bookings associated with its research and development activities not involving the exVive3D Human Liver Tissue.
While contracting for high-end research services is a long process, and revenues are recognized over time as services are provided, the Company is pleased to
announce these early results based on its pre-launch activities and the roughly six months of sales activity since its commercial launch of the exVive3D Human Liver Tissue in November 2014.
Response to the exVive3D Human Liver Tissue has been strong, and in line with our expectations, commented Keith Murphy, Organovo s chief
executive officer. We continue to expect this tissue to grow into the tens of millions in annual revenue, and that it has $100M+ revenue potential. The fact that recent data shows that the exVive3D Human Liver Tissue clearly demonstrated the
toxicity of another drug missed during preclinical studies, troglitazone (Rezulin), which exhibited a clear response by causing a statistically significant drop in liver function in our liver tissue at 7 days, provides the potential for our
commercial penetration to accelerate even faster. This data was presented at the Experimental Biology meeting in Boston on April 1, 2015.
Fiscal 2015 represented a successful step forward for Organovo with the launch of our commercial liver product and service, stated Organovo Chief
Financial Officer Barry Michaels. We expect continued adoption from the global pharmaceutical industry in the coming year. We are moving forward with confidence and momentum, both in the expansion of our toxicology tissues and in our efforts
to advance other programs.
Total contract bookings represents the total value of contracts the Company has entered into for research services
related to its exVive3D Human Liver Tissue during the applicable period. Where contracts involve research relating to additional tissue types, only that portion of the total contract applicable to the exVive Human Liver Tissue is included. The
Company s contracts typically require the Company to provide services over a four to six month period, though they may in some cases require services over a longer timeframe. In addition, the Company s customers may opt out of having the
Company perform all of the services contemplated by the contract or otherwise terminate the contract early. As a result, the revenues represented by any contract included in the total contract bookings may be recognized by the Company over several
quarters as the Company completes the research services required by the contract, or not at all, if the customer elects to opt out or otherwise terminate the contract early. Total contract bookings is an operational measure that should be considered
in addition to the Company s results prepared in accordance with U.S. generally accepted accounting principles ( GAAP ). This operational measure should not be considered as a substitute for, or superior to, GAAP results. The Company
believes total contract bookings is a relevant and useful operational measure for the Company and its investors because it provides information regarding the Company s commercialization efforts and customer uptake of the Company s liver
tissue product. The Company does not intend to update total contract bookings on a quarterly basis, but may update total contract bookings on an annual basis.
Fiscal Year 2015 Corporate Highlights
A summary of the Company s
financial results for the fiscal year ended March 31, 2015 follows, but is not intended to replace the full financial disclosure enclosed in the Company s Annual Report on Form 10-K filed with the Securities and Exchange
Commission on June 9, 2015. Please refer to that document for additional information.
Financial Condition, Liquidity and Capital
The Company had cash and cash equivalents of $50.1 million and an accumulated deficit of $122.3 million, with negative cash flows
from operations of $19.6 million for the fiscal year ended March 31, 2015. Total current assets of $51.3 million and current liabilities of $4.8 million, resulted in working capital of $46.5 million, versus prior year total current assets of
$49.2 million and current liabilities of $1.9 million, which resulted in working capital of $47.3 million.
Net cash used in investing activities was
approximately $1.5 million and $0.3 million for the years ended March 31, 2015 and 2014, respectively. The majority of net cash used in investing activities to date has been for the purchases of laboratory equipment, particularly noting that
the Company launched its first commercial product and expanded its research capabilities in Fiscal 2015.
Net cash provided by financing activities was
approximately $23.1 million and $48.4 million for the years ended March 31, 2015 and 2014, respectively.
During the year ended March 31, 2015,
the Company raised net proceeds of approximately $22.3 million through the sale of 3.2 million shares of its common stock through at-the-market offerings. In addition, the Company raised approximately $0.4 million from the exercise of warrants,
and $0.4 million from stock option exercises during the year ended March 31, 2015.
The Company previously commented that revenues in the quarter ended December 31, 2014 and the year ended March 31, 2015 were expected to
come primarily from research services associated with the pre-release availability of its exVive3D Human Liver Tissue. The Company expects commercial revenue from its post-launch activities to be primarily recognized beginning with the
quarter ending June 30, 2015. Additional future revenues are expected to come from collaborative partnerships. It should also be noted that the Company continues in its development of a 3D bioprinted kidney tissue that has the potential to
significantly improve researchers ability to study kidney function in an in vitro model. The kidney tissue remains on track for a mid-2016 (calendar year) release. Additionally, the Company continues to advance
simple bioprinted tissues for the potential direct treatment of patients, which are currently at the preclinical research phase.
Revenues of $0.6 million
for the year ended March 31, 2015 increased approximately $0.2 million, or 50%, over revenues of $0.4 million for the year ended March 31, 2014. This increase reflects the recognition of $0.3 million in commercial revenue since the
Company s product launch in November 2014, partially offset by a $0.1 million decrease in collaboration revenue due to the completion of one of the Company s larger collaborative research agreements during the year ended March 31,
Operating and Other Expenses
expenses increased approximately $9.9 million, or 47%, from $21.0 million for the year ended March 31, 2014 to $30.9 million for the year ended March 31, 2015. Of this increase, approximately $5.0 million was related to increased
selling, general and administrative expense, while the other $4.9 million related to increased investment in research and development expense. Those increases were attributed to the Company s continued implementation of its business plan,
including hiring additional staff to support its research and development initiatives, incremental investment associated with commercialization project initiatives, expenses related to operating as a publicly traded corporation, expansion to a
larger facility, and increased stock compensation expense relative to employees and certain consulting services.
More specifically, research and development expense increased 61%, from approximately $8.0 million for the year
ended March 31, 2014 to approximately $12.9 million for the year ended March 31, 2015, as the Company significantly increased its research staff to support its obligations under certain collaborative research agreements and grants, and to
expand product development efforts in preparation for commercial revenues. Full-time research and development staffing increased from thirty-two full-time employees as of March 31, 2014 to fifty-four full-time employees as of
March 31, 2015. In addition to the incremental payroll, benefits and stock-based compensation resulting from increased staffing levels, the Company increased its facility space to accommodate its growing research staff, and increased its
spending on lab equipment and supplies in proportion to its increased research activities.
Selling, general and administrative expenses increased
approximately 38%, from $13.0 million for the year ended March 31, 2014 to approximately $18.0 million for the year ended March 31, 2015. Increased staffing expenses of approximately $1.0 million was due to the headcount increase from
thirteen full-time employees as of March 31, 2014 to twenty-one full-time employees as of March 31, 2015, to provide strategic infrastructure in developing collaborative relationships and preparing for commercialization of products and
services, and to address the additional compliance requirements of operating as a publicly traded corporation. Stock-based compensation costs also increased approximately $1.7 million due to additional grants to employees and consultants. In
addition, due to the Company s overall growth and transition into the commercial phase during the year ended March 31, 2015, fees for legal services, investor outreach, marketing, insurance and consulting increased over the previous year.
Finally, facility costs increased due to the expansion of the Company s facility during the latter part of the year ended March 31, 2014.
income was approximately $0.2 million for the year ended March 31, 2015, and consisted primarily of interest income and a gain related to the revaluation of warrant derivative liabilities. This gain was caused by a declining stock price during
the period that decreased the value of the derivative liability. For the year ended March 31, 2014, other expense consisted primarily of a $5.1 million loss related to the revaluation of warrant derivative liabilities due to rising stock prices
during the period that caused an increase in the value of the derivative liability. In addition, the majority of the underlying warrants to which the derivative relates were exercised or converted to equity instruments during fiscal 2014,
significantly lessening the impact of subsequent changes in the Company s stock price.
Organovo will host a conference call at 5:00 p.m. Eastern time to discuss the financial results. If you would like to participate in the call, please dial-in
approximately 10 minutes prior to the start time, and ask to join the Organovo Holdings, Inc. conference call. The dial-in info is as follows:
Free: 1-888-243-4451
International Toll: 1-4120542-4135
replay will be made available one hour following the live call and remain available for 30 days. To access the replay, the dial-in info is as follows:
Toll Free: 1-877-344-7529
International Toll: 1-412-317-0088
Canada Toll Free: 855-669-9658
Replay Access Code: 10066930
About Organovo Holdings, Inc.
and creates functional, three-dimensional human tissues for use in medical research and therapeutic applications. The Company develops 3D human disease models through internal development and in collaboration with pharmaceutical and academic
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 recently launched its initial product of the planned exVive3DTM portfolio offering, the exVive3DTM Human Liver Tissue for use in toxicology and other preclinical drug testing. Additional products are in
development, with the anticipated release of the exVive3DTM Human Kidney Tissue scheduled for the latter half of calendar year 2016. 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, and numerous
other media outlets. Organovo is changing the shape of medical research and practice. Learn more at www.organovo.com.
Safe Harbor Statement
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 based on its technology; the expected benefits and
efficacy of the Company s products and technology; the market acceptance of the Company s products; the Company s business, research, product development, regulatory approval, marketing and distribution plans and strategies; and the
Company s ability to successfully complete the contracts and recognize the revenue represented by the contracts included in its reported total contract bookings. 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, 2015. 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.
To view the original version on PR Newswire, visit:
SOURCE Organovo Holdings, Inc.
Barry Michaels, Chief