3D bioprinting materials company Organovo (NASDAQ:ONVO) has announced that it is exploring “strategic alternatives” for its business after deciding that its liver tissue requires redevelopment. California-based private investment banking firm Roth Capital Partners has been engaged as the company’s financial adviser as it pursues its options.
“After a rigorous assessment of our liver therapeutic tissue program, we’ve concluded that the variability of biological performance and related duration of potential benefits presents development challenges and lengthy timelines that no longer support an attractive opportunity given our resources,” stated Taylor J. Crouch, Organovo’s CEO at the time of the announcement.
“As a result, we’ve suspended development of this lead program and have engaged Roth to explore strategic alternatives focused on maximizing stockholder value.”
Crouch also said that the company would be taking action to restructure the company and reduce expenses in order to preserve cash. As a result of the announcement Organovo has also cancelled its Q1 fiscal 2019 earnings call, initially scheduled for August 8.
Organovo’s challenge
Organovo was established in San Diego in 2007 and specializes in the development of 3D printable, therapeutic tissues. Initially purposed for drug screening, the vision is that these materials will one day be viable enough to produce artificial tissues for implantation within the body.
The company reported its first full year operating on a commercial basis in 2016, following the release of Primary Human Liver Cells – its first material product. Tested in live animal models later the same year, the liver cells had previously shown encouraging patency for early pre-clinical testing. However, with this latest announcement it has become apparent that the company has not generated enough decisive scientific data to support the prolonged functionality or therapeutic benefit of these cells. Commenting on R&D progress at fiscal year end 2019 in May, Crouch said, “The most recent data we’ve generated from a much larger group of animal studies provides differing results from what we observed in our earlier pilot studies. […] in these and other animal models, we are also seeing evidence of shorter tissue duration than we observed in previous studies, as measured by human protein output and the quantity of hepatocytes,”
“We’ll continue to examine all aspects of our manufacturing process, with the goal of improving the durability and optimizing the functionality of our tissues.”
Since release of the liver cells, Organovo has also worked to introduce other organ cell materials to the market. Early 2017, the company published a paper demonstrating the successful development of a 3D bioprinted vascular structure made using a kidney cell product.
Potential strategic alternatives
Strategic alternatives currently being sought by Organovo include potential acquisition, a merger, reverse merger, business combination, the sale of assets and licensing though, as the the company states “There can be no assurance […] that this process will result in any such transaction.”
Within fiscal Q1 2018, Organovo previously reported revenue of $0.7 million, 30 percent less than Q1 2017. This was, the company stated, “primarily driven by lower revenue from liver tissue disease modeling research services.” Net loss for Q1 2018 was reported at $7.4 million, a $2.7 million improvement on net loss in Q1 2017. Net proceeds generated in Q1 2019 equated to approximately $3 million from the issuance of 2.1 million shares of common stock at a weighted average price of $1.44 per share.
At the time of writing this article, Organovo has not advised on the rescheduling of its Q1 2020 earnings call.
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Featured image shows Organovo’s NovoGen Bioprinter™ fabricating tissue into a 24-well plate. Image via Organovo
