Organovo Holdings, Inc. (OTCQX: ONVO) ("Organovo") a three-dimensional biology company focused on delivering breakthrough 3D bioprinting technology, has reported on its financial results for the three and nine month period ended September 30, 2012.
Third Quarter Corporate Highlights
National Institutes of Health three dimensional liver research grant revenue
Receipt of two issued patents, including Company's first assigned patent
Move to new, larger research and headquarters facility
Appointment of additional independent director to serve as Audit Committee Chairman
Third quarter 2012 revenues increased by $237,300 or approximately 102% over the same period in 2011, commensurate with the Company's continued delivery against collaborative research agreements and the initiation of research activities within the scope of a grant from the National Institutes of Health ("NIH"). Collaborative research agreement revenues contributed $141,800 or 60% of the revenue increase while grant revenues contributed $95,500.
Cash receipts related to the reported revenues partially offset the Company's operating expenses and strengthened our balance sheet. During the quarter the balance sheet was additionally strengthened through the receipt of approximately $1.7 million in capital from warrant and stock option exercises. The Company had approximately $7.7 million cash on hand at the end of the quarter. While the Company reported net earnings of approximately $38.5 million for the quarter, investors should note those earnings were primarily the result of a non-cash adjustment resulting from the change in fair value of our warrant liabilities. The warrant liability is volatile in nature and is driven primarily by changes in the price of our Common stock, absent material changes in the number of warrants outstanding. Investors should anticipate swings in that fair value will continue to impact reported earnings and losses.
On July 9, 2012, Organovo announced the receipt of two issued patents. The patents consisted of the issuance in the United States of a patent to which the Company owns the exclusive license from the University of Missouri, and the issuance in the United Kingdom of the Company's first assigned patent.
On July 9, 2012, Organovo announced the appointment of James T. Glover, former CFO of Beckman Coulter and Anadys Pharmaceuticals, to its Board of Directors. Mr. Glover has been affirmed as an independent director by the Organovo Board of Directors, and the Company expects to recruit additional independent directors in the future to meet the Board independence requirements of both NASDAQ and NYSE.
On July 17, 2012, Organovo announced the commencement of operations at its new, larger facility in San Diego, California. The increased capacity will facilitate execution of planned research, product development, and commercial initiatives. The new facility has three times the laboratory space and approximately four times the cleanroom space of our prior facility and is expected to provide adequate capacity for our immediate and near-term needs including product manufacturing. At September 30, 2012, the Company employed twenty-six full-time employees and six part-time employees, including twenty-four individuals in research and development, an increase over second quarter employment by four full-time and two part-time employees.
"Organovo has continued to execute its business plan and has grown substantially in 2012," stated Keith Murphy, chief executive officer of Organovo. "As a result we are better positioned to deliver on 3D bioprinted liver, new tissue-based disease models, and future partnership opportunities. We believe all of these efforts will continue to grow shareholder value over the long term."
For the third quarter 2012 total revenues of approximately $469,200 were $237,300 or 102% above the approximately $232,000 in revenues for the same period in 2011. Collaborative research revenues for the third quarter of approximately $373,800 increased $141,800 or 61% over the same period of prior year revenues of approximately $232,000. Grant revenue for the three months ended September 30, 2012 of approximately $95,500 increased approximately $95,500 over the same period of prior year. No grant revenue was received in the prior year third quarter.