Organovo Announces Fiscal Third-Quarter 2017 Results; Company Updates Full-Year Fiscal 2017 Total Revenue Outlook
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 third quarter of 2017 and updated its full-year fiscal 2017 outlook for total revenue. Net loss was $9.6 million, or $0.09 per share, for the fiscal third …
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 third quarter of 2017 and updated its full-year fiscal 2017 outlook for total revenue. Net loss was $9.6 million, or $0.09 per share, for the fiscal third quarter of 2017, as compared to $10.5 million, or $0.11 per share, for the fiscal third quarter of 2016.
Organovo reported fiscal third-quarter total revenue of $1.2 million, which consisted largely of product and service revenue(1). Total revenue increased 251 percent versus the comparable period of fiscal 2016. “We grew total revenue at a strong year-over-year pace during the fiscal third quarter, showing continued uptake of our tissue research services,” said Keith Murphy, CEO, Organovo. “We recognized revenue from six new customers and seven repeat customers during the period, demonstrating market penetration and solid repeat business. We also added one global Top 25 pharma customer to our roster, bringing our total to eleven with this key group.” Murphy continued, “We’re revising our total revenue guidance for fiscal 2017 because of a change in the timing of customer orders due to specific customer requests for additional validation studies related to certain use cases and for qualification of an additional cell source. We expect to successfully complete the additional scientific studies required to address these issues, and don’t anticipate these items will have a long-term impact on customer adoption. The required studies will delay a portion of our forecasted revenue into fiscal 2018. We’re working diligently with our customers to complete the technical work and to unlock both existing backlog and prospective orders, and look ahead with confidence to continued growth in our pipeline. In addition, our internal liver validation data now includes successful identification of toxicity for two out of three proprietary compounds that were classic preclinical misses for one of our Top 10 pharma customers. This hit rate is consistent with our overall testing success and further demonstrates significantly increased predictive power for our customers.”Murphy concluded, “During the fiscal third quarter, we also announced our 3D bioprinted human liver as the first candidate in our therapeutic tissues portfolio and presented early data showing survival and sustained functionality of this tissue when implanted into animal models at the Tissue Engineering & Regenerative Medicine International Society Conference (TERMIS). We expect to optimize the final tissue design and are embarking on pre-GLP safety and efficacy studies that will take us through the next 18 months. Based on our path forward, we now expect to target an IND submission with the liver tissue during the calendar year 2020.”
Organovo Business HighlightsRevenueProduct and service revenue was $0.7 million, up 139 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 ExpensesCost of revenues was $0.2 million, reflecting the Company’s expenses related to manufacturing and delivering its product and service revenues. Research and development costs increased 10 percent year-over-year to $5.0 million, primarily due to increased employee related and lab supplies costs.Selling, general and administrative expenses decreased 11 percent from the prior-year period to $5.5 million, reflecting lower non-cash shared-based compensation expense, partially offset by higher employee related costs.
Liquidity & Capital ResourcesThe Company ended the fiscal third quarter with a cash and cash equivalents balance of $70.0 million. Organovo’s net cash utilization(3) during the period was $7.7 million. The Company’s net cash utilization for the nine months ended December 31, 2016 was $23.1 million. Working capital was $67.5 million to end the fiscal third quarter compared to $65.2 million in the prior-year quarter.
Fiscal-Year 2017 OutlookThe Company updated its full-year fiscal 2017 outlook for total revenue and affirmed its outlook for net cash utilization. The Company now expects: Total revenue of between $3.7 million and $4.5 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.