Organovo Highlights Liver Toxicology Achievement, Reports Q1 Fiscal 2015 Results

   Organovo Highlights Liver Toxicology Achievement, Reports Q1 Fiscal 2015
                                   Results

PR Newswire

SAN DIEGO, Aug. 12, 2014

SAN DIEGO, Aug. 12, 2014 /PRNewswire/ --Organovo Holdings, Inc. (NYSE MKT:
ONVO) ("Organovo"), a three-dimensional biology company focused on delivering
pioneering 3D bioprinting technology, has reported its first quarter, fiscal
2015, results and provided highlights of its recent activities.

During the quarter, Organovo demonstrated, in collaboration with a major
pharmaceutical company, that its 3D Human Liver System could detect the
toxicity of a drug that had previously been deemed safe in standard
preclinical animal studiesand in vitrotoxicity tests but caused liver damage
upon clinical use. The toxic profile of the compound was only discovered
after use in a large number of patients and after significant expense.

Keith Murphy, chairman and chief executive officer ofOrganovo, commented on
the results: "Organovo met a key challenge in this recent quarter. While we
knew our liver tissue showed metabolic activity and basic toxicology results
comparable to native tissue, we had to ask the question: could it be
predictive of drug problems where other methods have failed? These results
demonstrate clearly for the first time that our tissue has been able to detect
drug-induced liver injury that other methods in the past failed to predict.
With this data in hand, we are continuing to push progress in the
commercialization of our 3D Liver Tissue. We remain on track for commercial
release of our 3D Human Liver Tissue later this calendar year."

Recent Corporate Highlights:

  oKey opinion leader reported Organovo's 3D Human Liver Tissue was able to
    establish the toxicity of toxic drug known to induce liver injury in
    humans that did not show toxicity in animal and other pre-clinical
    testing, an achievement historically unmet by animal models or other liver
    cell model systems
  oInitiated contracting for toxicity testing using its 3D Human Liver
    Tissue, for selected clients, in advance of its scheduled commercial
    release
  oEntered into additional agreements to utilize 3D bio-printed tissue in
    drug discovery settings
  oReported that its 3D bio-printed tissues enabled researchers to make
    compartment-specific assessments (i.e., epithelium, stroma, vasculature)
    of drug response — something that is not currently possible outside of in
    vivo models to date
  oAnnounced an agreement with the University of Queensland directed toward
    development of source cell lines for 3D kidney tissue bioprinting
    activities
  oAppointed Gregory T. Lucier, former Chairman and CEO of Life Technologies,
    as a corporate advisor
  oAnnounced Annual Stockholder meeting will be held on August 20, 2014

On August 6^th, the Company announced the appointment of Greg Lucier as a
corporate advisor. In the role, Mr. Lucier will advise management relative to
the commercial release of the Company's 3D Human Liver Tissue, scheduled to be
launched by the end of November, 2014.

On July 11^th, the Company announced its annual meeting of stockholders will
be held on August 20^th, at 9:00 a.m. at its corporate headquarters in San
Diego. The notice of meeting and related materials were mailed to
stockholders of record on July 11^th.

On June 26^th, the Company reported that a key opinion leader reported
positive results from a collaborative study conducted with Organovo scientists
using Organovo's 3D Human Liver Tissues.

On April 11^th, the Company reported a sponsored research agreement with the
University of Queensland. The agreement calls for the development of source
cell lines for 3D kidney tissue bioprinting activities.

On April 10^th, the Company announced results of its initial study of 3D
breast tissues generated with its NovoGen MMX Bioprinter™ in breast cancer
models, which demonstrated that utilizing 3D tissues may enable researchers to
make compartment-specific assessments (i.e., epithelium, stroma, and
vasculature) of drug response — something that is not currently possible
outside of in vivo models. The results were presented at the annual meeting of
the American Association for Cancer Research (AACR) held on April 5-9, 2014 in
San Diego, California.

Financial Summary

A summary of the Company's financial results for the first fiscal quarter
follows, but is not intended to replace the full financial disclosure enclosed
in the Quarterly Report on Form 10-Q the Company filed with the Securities and
Exchange Commission onAugust 8, 2014. Please reference that document for
additional information. Because Organovo's fiscal year end is March 31, the
period from April to June 2014 is considered its first quarter for fiscal year
2015 (Q1 FY2015).

As of June 30, 2014, the Company had cash and cash equivalents of
approximately $44.9 million and an accumulated deficit of $98.6 million.The
Company also had negative cash flow from operations of $3.4 million during the
three months ended June 30, 2014.AtMarch 31, 2014, the Company had cash and
cash equivalents of approximately $48.2 million and an accumulated deficit of
$92.2 million.

At June 30, 2014, the Company had total current assets of approximately $45.7
million and current liabilities of approximately $3.1 million, resulting in
working capital of $42.6 million.At March 31, 2014, the Company had total
current assets of approximately $49.2 million and current liabilities of
approximately $1.9 million, resulting in working capital of $47.3 million.

Net cash used by operating activities for the three months ended June 30, 2014
was approximately $3.4 million as compared to $2.7 million used in operating
activities for the three months ended June 30, 2013. This $0.7 million
increase in cash usage can be attributed to a $2.7 million increase in
operating expenses, partially offset by an overall increase of $0.7 million of
non-cash expenses included in operations, including share-based compensation,
depreciation and amortization, and a decrease in working capital.

Net cash used in investing activities was approximately $0.2 million and $0.1
million for the three months ended June 30, 2014 and 2013, respectively. This
increase can be attributed to increased capital spending as the Company
expands its research capabilities. Net cash from financing activities
increased from less than $0.1 million used during the three months ended June
30, 2013 to $0.3 million provided during the three months ended June 30, 2014.

For the three months ended June 30, 2014, total revenues of $0.1 million were
consistent with the $0.1 million in revenues for the same period in 2013. For
both periods, the majority of revenues were derived from collaborative
research agreements.

Operating expenses increased approximately $2.7 million, or 71%,from
approximately $3.8 million for the three months ended June 30, 2013 to $6.5
million for the three months ended June 30, 2014. Of this increase, $1.4
million is relates to increased selling, general and administrative expense
while the other $1.3 million relates to increased investment in research and
development. These increases are attributed to the Company's continued
implementation of its business plan, including hiring additional staff to
support research and development initiatives, incremental investments
associated with strategic growth and commercialization project initiatives,
expenses related to operating as a publicly traded corporation, expansion of
its facility, and increased stock compensation expense relative to employees
and certain consulting services.

For the three months ended June 30, 2014, research and development expenses
increased by approximately $1.3 million, or 87%, over the same period in 2013,
as the Company increased its research staff to support its obligations under
certain collaborative research agreements and to expand its product
development efforts in preparation for research-derived revenues.Full-time
research and development staffing increased from 24 full-time employees as of
June 30, 2013 to 38 full-time employees as of June 30, 2014. In addition to
increases in payroll and benefits expense of approximately $0.4 million and an
increase in share-based compensation of $0.2 million resulting from increased
staffing levels and increasing stock prices from June 30, 2013 to June 30,
2014, the Company increased its spending on lab equipment, supplies and
contracted services in proportion to its increased research activities. In
addition, the Company has continued to invest additional resources to advance
its 3D bio-printing technology during the period.

For the three months ended June 30, 2014, general and administrative expenses
were approximately $3.7 million, an increase of $1.4 million, or 61%, over
expenses in the same period of 2013 of approximately $2.3 million. Share-based
compensation increased $0.6 million due to additional grants and increasing
stock prices from June 30, 2013 to June 30, 2014. Staffing expense increased
$0.3 million due to an increase in administrative headcount from 11 full-time
employees to 14 full-time employees to provide strategic infrastructure in
developing collaborative relationships and preparation for commercialization
of research-derived product introductions. In addition, the Company incurred
additional expenses for investor outreach initiatives and legal costs in the
three months ended June 30, 2014 as compared to the three months ended June
30, 2013.

Other expense was less than $0.1 million for the three months ended June 30,
2014 and 2013, and consisted primarily of expense related to the revaluation
of warrant derivative liabilities.

AboutOrganovo Holdings, Inc.
Organovodesigns and creates functional, three-dimensional human tissues for
medical research and therapeutic applications. The Company is collaborating
with pharmaceutical and academic partners to develop human biological disease
models in three dimensions. These 3D human tissues have the potential to
accelerate the drug discovery process, enabling treatments to be developed
faster and at lower cost. The Company plans to market the first product of a
planned portfolio offering, 3D Human Liver Tissue for use in Toxicology and
other preclinical drug testing prior to the end of 2014, and remains on track
to bring this breakthrough technology to customers. In addition to numerous
scientific publications, the Company's technology has been featured inThe
Wall Street Journal,Time Magazine, The Economist, and numerous
others.Organovois 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 may 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 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; and the Company's business, research,
product development, regulatory approval, marketing and distribution plans and
strategies. These and other factors are identified and described in more
detail in our filings with the SEC, including our annual report on Form 10-K
filed with theSEConJune 10, 2014as well as our other filings with
theSecurities and Exchange Commission. 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 we may issue in the future. Except as
required by applicable law, including the securities laws ofthe United
States, we do 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.
Condensed Consolidated Balance Sheets
(in thousands except for share data)
                                          June30,2014      March31,2014
                                          (Unaudited)        (Audited)
Assets
Current Assets
Cash and cash equivalents       $     44,897  $      
                                                             48,167
Accounts receivable                  60                 —
Inventory                         71                 63
Prepaid expenses and other current        712                931
assets
Total current assets                     45,740             49,161
Fixed assets, net                  1,001              857
Restricted cash                  79                 79
Other assets, net                   88                 89
Total assets               $     46,908  $      
                                                             50,186
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable                 $           $        
                                          839                326
Accrued expenses                 1,739              1,167
Deferred revenue               144                13
Capital lease obligation                  11                 10
Warrant liabilities             352                377
Total current liabilities    3,085              1,893
Deferred revenue, net of current          3                  4
portion
Capital lease obligation, net of current  2                  5
portion
Total liabilities               $      3,090 $       
                                                             1,902
Commitments and Contingencies (Note
4)
Stockholders' Equity
Common stock, $0.001 par value;
150,000,000 shares authorized, 78,282,460
and 78,113,639 shares issued and          78                 78
outstanding at June30, 2014 and
March31, 2014,
respectively
Additional paid-in capital   142,386            140,419
Accumulated deficit                 (98,646)           (92,213)
Total stockholders' equity           43,818             48,284
Total Liabilities and Stockholders'       $     46,908  $      
Equity                                              50,186



Organovo Holdings, Inc.
Unaudited Condensed Consolidated Statements of Operations
(in thousands except share and per share data)
                                   ThreeMonthsEnded    ThreeMonthsEnded
                                   June 30, 2014         June 30, 2013
Revenues
Collaborations           $           $          
                                      69                94
Grants                    30                    12
Total Revenues                  99                    106
Selling, general, and              3,695                 2,358
administrative expenses
Research and development           2,814                 1,482
expenses
Loss from Operations        (6,410)               (3,734)
Other Income (Expense)
Change in fair value of warrant    (30)                  (23)
liabilities
Loss on disposal of fixed          —                     (4)
assets
Interest expense            —                     (13)
Interest income           7                     3
Total Other Income                 (23)                  (37)
(Expense)
Net Loss            $           $          
                                   (6,433)               (3,771)
Net loss per common share—basic    $           $          
and diluted             (0.08)               (0.06)
Weighted average shares used in
computing net loss per common      78,241,373            64,794,144
share—basic and
diluted



Organovo Holdings, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows (in thousands)
                                   ThreeMonthsEnded    ThreeMonthsEnded
                                   June 30, 2014         June 30, 2013
Cash Flows From Operating
Activities
Net loss                     $           $          
                                   (6,433)               (3,771)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Loss on disposal of fixed assets  —                     4
Depreciation and amortization 96                    93
Change in fair value of warrant    30                    23
liabilities
Expense associated with warrant    —                     12
modification
Stock-based compensation 1,537                 802
Amortization of warrants issued    141                   72
for services
Increase (decrease) in cash
resulting from changes
in:
Grants receivable                  —                     101
Accounts receivable      (60)                  —
Inventory             (8)                   3
Prepaid expenses and other         117                   (72)
assets
Accounts payable     513                   (267)
Accrued expenses     572                   363
Deferred revenue                   130                   (26)
Net cash used in operating         (3,365)               (2,663)
activities
Cash Flows From Investing
Activities
Deposits released from             —                     50
restriction
Purchases of fixed assets  (238)                 (163)
Net cash used in investing         (238)                 (113)
activities
Cash Flows From Financing
Activities
Proceeds from issuance of common
stock and exercise of warrants,    224                   —
net
Proceeds from exercise of stock    111                   —
options
Principal payments on capital      (2)                   (3)
lease obligation
Net cash provided by (used in)     333                   (3)
financing activities
Net Decrease in Cash and Cash      (3,270)               (2,779)
Equivalents
Cash and Cash Equivalents at       48,167                15,628
Beginning of Period
Cash and Cash Equivalents at End   $           $          
of Period                         44,897                12,849
Supplemental Disclosure of Cash
Flow Information:
Interest                          $           $          
                                     —                   —
Income Taxes                $           $          
                                     —                   —





SOURCE Organovo Holdings, Inc.

Website: http://www.organovo.com
Contact: Investor Contact, Barry Michaels, Chief Financial Officer,
858-224-1000, ext. 3, IR@organovo.com; or Gerry Amato, Booke & Company
Investor Relations, admin@bookeandco.com; or Media Contact, Mike Renard, EVP,
Commercial Operations, 858-224-1006, mrenard@organovo.com
 
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