Download Organovo Investor Presentation

Organovo Investor Presentation
November 2015
Forward-Looking Statements
This presentation contains statements about future events and expectations known as “forward-looking statements”
within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company has based these forwardlooking statements on its current expectations and the information currently available to it, but any forward-looking
statements are subject to a number of risks and uncertainties. The factors that could cause the Company’s actual
future results to differ materially from its current expectations include, but are not limited to, risks and uncertainties
relating to the Company's ability to develop, market and sell products and services based on its technology; the
expected benefits and efficacy of the Company's products, services and technology; the market acceptance of the
Company’s products and services; the Company’s ability to generate revenue and control its operating losses; the
validity of the Company’s intellectual property rights and the ability to protect those rights; and the Company's ability
to implement and achieve its business, research, product development, regulatory approval, marketing and
distribution plans and strategies. These and other factors are identified and described in more detail in the
Company’s filings with the Securities and Exchange Commission (“the SEC”), including those factors listed under the
caption "Risk Factors" in the Company’s Form 10-K for the year ended March 31, 2015, filed with the SEC on June 9,
2015, as well as other filings Organovo makes with the SEC from time to time.
Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of
this presentation. Except as required by applicable law, 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.
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Supplemental Financial Measures
In addition to disclosing financial results that are determined in accordance with U.S. GAAP, the Company provides
net cash utilization as a supplemental measure to help investors evaluate the Company’s fundamental operational
performance. The Company defines net cash utilization as the change in the amount of cash and cash equivalents
at the beginning of the reporting period as compared to the end of the reporting period, excluding financing activities
(which would include proceeds from the sale of common stock and the exercise of warrants and stock options). Net
cash utilization is an operational measure that should be considered in addition to the Company’s results prepared in
accordance with U.S. GAAP. This operational measure should not be considered as a substitute for, or superior to,
U.S. GAAP results. The Company believes net cash utilization is a relevant and useful operational measure because
it provides information regarding its cash utilization rate. Management uses net cash utilization to manage the
business, including in preparing its annual operating budget, financial projections and compensation plans. The
Company believes that net cash utilization is also useful to investors because similar measures are frequently used
by securities analysts, investors and other interested parties in their evaluation of companies in a similar stage of
product development and commercialization. However, there is no standardized measurement of net cash utilization,
and net cash utilization as the Company presents it may not be comparable with similarly titled operational measures
used by other companies. Due to these limitations, investors should not view net cash utilization in isolation, but
should also consider other measurements, such as cash used in operating activities and revenues, to evaluate the
Company’s operating performance.
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Investment & Business Highlights
Organovo – A Bright Future
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Investment Highlights
Attractive and growing markets – Critical unmet needs
Favorable competitive dynamics – First mover advantage
Technology leadership – Strong IP portfolio
Growing revenue – Building product and service platform
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Organovo Overview
• Founded in 2007 and listed on
•
•
•
the NYSE MKT in 2013
Proprietary 3D bioprinting
technology invented at University
of Missouri with $5 million NSF
grant; continued engineering
development at Organovo
Core business focused on
recreating 100% cellular native
tissue architecture for in vitro
and in vivo applications
Key customers/partners include
major pharma and academic
institutions
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2
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Addressing the Gaps in Pharmaceutical
Discovery
Human 3D toxicity /
efficacy models
Program Costs ->
$$
$$
$$$
$$$$
Target
Discovery
Target
Validation
Lead
Optimization
Pre-Clinical
non-GLP
Pre-Clinical GLP
In vitro
Gap
$
$$$$$
10-12 Years,
~$1.2 billion
Clinical Trials
In vivo
Human 3D disease models
•
•
•
•
Enable better predictive, physiologically relevant in vitro modeling
Fill the gap between in vitro and in vivo preclinical research
De-risk total discovery program costs by enabling decision points further upstream
Potential to avoid ~$1 billion in development costs and timeline delays for a single drug
with better information about which drugs to advance (efficacy, toxicology)
• Provide disease modeling applications across the pre-clinical drug discovery workflow
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Critical Unmet Need for More Predictive
Preclinical Tissue Models
• In 2012, there were 10 late stage
•
•
clinical trial failures resulting in
$7 billion-$10 billion in wasted
costs
Of 126 phase 3 clinical trial
failures from 1990-2010, 73%
were for either toxicity or lack of
efficacy
Of 39 drugs withdrawn from the
market from 1990-2010, 26%
involved hepatotoxicity and 33%
were CV toxicity
PHASE 3 FAILURES
(1990-2010)
N=126
Other, 27%
Safety/
Toxicity,
28%
Lack of
Efficacy,
45%
DRUGS WITHDRAWN DUE
TO TOXICITY (1990-2010)
N=39
Other,
41%
Hepatoxicity,
26%
CV
Toxicity,
33%
References: FDA.gov; Pharmaceutical Research Manufacturers of America Profile (2011); EvaluatePharma; Parexel Sourcebook (2012);
CDER Report to Nation; Tufts Center for Drug Discovery
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Critical Unmet Need for Tissues that
Replace or Repair Organ Function
• Engineered tissues offer an
•
(1)
U.S. Transplants 1991 – 2013(1)
answer to dramatic supply
issues that are a constant
challenge in transplant medicine
($7 billion U.S. transplantation
market)
Tissue engineered organ and
tissue replacements could
address issues associated with
conventional transplantation
(graft vs. host disease, size
mismatch)
U.S. Department Health & Human Services
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Favorable Markets & Competitive Dynamics
Market
Liver
Land
Toxicology
M2M
Kidney
Toxicology
Size(1)
• $1.3 billion
• 6,500 annual programs
• $2.1 billion
• 6,500 annual programs
• >$50 billion in annual
Efficacy
Models
R&D; new drug ~$1.2
billion and 10-12 years
Competition
• Gaps in 2D and animal
• Each program needs
models
• Unsatisfying Next Gen
models
project run every 9
months
• Average contract is $150K
• Gaps in 2D and animal
models
• Gaps in 2D and animal
models
• >100,000 U.S. patients on
Therapeutic
Tissues
(1)
(2)
transplant waiting list
• ~30,000 transplants
annually
Organovo Position &
Growth Strategy(2)
• N/A
• Pricing superior to liver
tissue
• Average contract
expected to be $250K
• Enable discovery in areas
with roadblocks
• Royalty opportunity
• Partner with academia
• FDA clinical trials for
marketed product
Pharmaceutical Research Manufacturers of America Profile (2011)
Company data and projections
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NovoGen Bioprinting Process
Superior predictive solution that recreates 3D native tissue architecture
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Technology Leadership – Comparing
In Vivo-Like Form & Function
Spheroids
Scaffold + Cells
Micro-patterned
cultures
Organovo
Bioprinted Tissue
Tissue-like cellular density
✗
✗
✗
✔
True 3D; >250m in x, y, and z
axes
✔
✔
✗
✔
Multiple tissue-specific cell
types
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✔
✔
✔
Spatially-controlled cell
compartments
✗
✗
✔
✔
In-vivo like tissue
micro-architecture
✗
✗
✗
✔
Reproducible; compatible with
automated fabrication
✔
✗
✔
✔
Easy-to-handle format
✗
✔
✔
✔
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Strong IP Portfolio
• Own or exclusively license 20
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•
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patents worldwide; 80 patent
applications pending
Exclusive licenses to foundational
patents with early priority dates
from three major U.S. universities
Patent filings relate to bioprinting
technology and its various uses
in tissue creation, use in drug
discovery and specific tissue
constructs
Rich portfolio of trade secrets and
“know how”
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Best-In-Class Partners & Collaborators
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Platform Technology – Growth Opportunities
Tissue
Research
Programs
Liver
Preclinical Safety
(Product/Service)
✔ (Launched
C4Q14)
Efficacy Models
(Partnerships)
Simple Tissues
for Therapy
(Clinical)
✔
✔
✔
✔
✔
✔
Lung
Kidney
✔ (Expected launch
C3Q16)
✔
Cancer
Bone
Skin
✔
✔
✔
✔
Blood Vessel
Heart
✔
✔
✔
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Key Focus Areas
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exVive3DTM Liver Tissue - Excellent
Matching of Human Liver Biology
System
Liver Enzymes
Longevity
Cholesterol
2D hepatocytes
Poorly conserved
2 days
No
exVive3D Liver
Well conserved
42 days+
Yes
System
Troglitazone(1)
Toxic (X)(2)
Methotrexate
2D hepatocytes
No toxicity seen
No toxicity seen
No fibrosis seen
Rat models
No toxicity seen
No toxicity seen
No fibrosis seen
Human results
Toxic
Toxic
Chronic fibrosis
exVive3D Liver
Toxic
Toxic
Chronic fibrosis
Pfizer paid $750 million in legal costs and
$150 million to remove drug from market
(1) FDA Final Report (2000): Executive Summary, Liver Failure Risk with Troglitazone (Rezulin)
(2) Partnership with Roche; proof of concept study with known DILI drug
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exVive3D Liver Tissue – Proof of Concept
Demonstrated to reveal toxicity
• 7-day daily dosing
• With known drug-induced liver
•
injury (DILI) drug and close
analogue
Compared biochemical markers,
gene expression, cytokines,
histology
N=10 per group
* = p< 0.05
** = p< 0.01
*** = p< 0.001
**** = p< 0.0001
One way ANOVA
Grubbs outlier analysis
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exVive3D Kidney Tissue Development
Pricing expected to be superior to liver tissue; no existing alternatives
•
•
•
•
Scientific proof of concept – April 2015 ✔
Functional validation – October 2015 ✔
Beta testing – C2Q16
Initiation of contracting – C3Q16
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Platform Technology – Growth Opportunities
Tissue
Research
Programs
Liver
Preclinical Safety
(Product/Service)
✔ (Launched
C4Q14)
Efficacy Models
(Partnerships)
Simple Tissues
for Therapy
(Clinical)
✔
✔
✔
✔
✔
✔
Lung
Kidney
✔ (Expected launch
C3Q16)
✔
Cancer
Bone
Skin
✔
✔
✔
✔
Blood Vessel
Heart
✔
✔
✔
✔
✔
✔
Key Focus Areas
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Efficacy Models – Highlights
Royalty and licensing opportunities for successful drugs
• A new drug costs ~$1.2 billion and takes
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•
•
10-12 years to develop(1)
Significantly impact cost, predictability and
speed of drug discovery
High failure rates in clinical trials due to
failure to predict efficacy
Many areas where animal models are
known to be poor predictors
– “The use of animal models for therapeutic
development and target validation is time
consuming, costly and may not accurately
predict efficacy in humans.”(2)
(1)
(2)
U.S. Department of Health & Human Services
Dr. Francis Collins, Director of the National Institutes of Health
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Efficacy Models – L’Oreal
3D skin model partnership with world leader in cosmetics
• ~$30 billion annual sales; $1.1 billion
•
•
•
R&D budget in 2014
Second-stage contract; first contract
in 2013 to prototype 3D skin models
Multiple potential revenue sources –
commercial supplier for bioprinted
skin tissue, co-marketing skin model,
royalty opportunity on cosmetic
products tested in 3D skin model
Toxicology testing with skin tissues
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Efficacy Models – Cancer Opportunity
Move upstream in discovery efforts with strong royalty opportunity
• Premier academic and industry
•
•
•
•
partnerships
Breast cancer initial model already
established – bioprinted with defined
multi-cellular composition and
architecture
Clear differential outcomes vs. 2D
cultures
Multiple solid tumor types under
investigation
Active business development pipeline
in oncology
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Efficacy Models – Liver Tissue
exVive3D Liver Tissue can also be leveraged for drug discovery efforts
• Recent positive data from The Hamner
•
•
Institutes showing robust liver fibrosis
model validation
Non-alcoholic steatohepatitis
(NASH/fatty liver disease) is a significant
area of current research in pharma drug
discovery
Cholesterol is not seen in other models
and one can potentially modify its
expression with high specificity
Healthy ExVive 3D
Liver Tissue
Fibrotic ExVive 3D Liver
Tissue After TGF-B Exposure
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Platform Technology – Growth Opportunities
Tissue
Research
Programs
Liver
Preclinical Safety
(Product/Service)
✔ (Launched
C4Q14)
Efficacy Models
(Partnerships)
Simple Tissues
for Therapy
(Clinical)
✔
✔
✔
✔
✔
✔
Lung
Kidney
✔ (Expected launch
C3Q16)
✔
Cancer
Bone
Skin
✔
✔
✔
✔
Blood Vessel
Heart
✔
✔
✔
✔
✔
✔
Key Focus Areas
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Simple Tissue for Therapy
Potential to revolutionize therapeutic applications – “Tissue-On-Demand”
• Creating tissue replacement products for
•
•
•
•
surgical implantation
Critical unmet need with significant
challenges
Multiple tissue types (ex. liver patch)
being evaluated – solid early results
in animal models
Early feedback from key constituents
suggests focus on areas of high unmet
clinical need where a tissue is the best
hope for treatment
Aiming for IND submission in at least
one tissue in 3-4 years
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Financial Overview
Key Financial Metrics & FY16 Outlook
Key Financial Metrics
Product & Service Revenue
Total Revenue
Cash & Cash Equivalents
F1H16 (9/30/15)
($M)
$0.4
$0.6
$76.9
FY16 Outlook(1)
(1)
(2)
Total Revenue Recognized From
Previously Reported Contract Bookings(2)
$1.2 million - $1.4 million
Net Cash Utilization
$32 million - $36 million
Guidance speaks only as of the date it was originally provided (November 9, 2015). Inclusion of guidance herein should not be interpreted as a re-affirmation by Organovo of its guidance. Organovo undertakes no obligation to
update its guidance after the date it was originally provided.
In fiscal 2016, the Company expects to recognize between $1.2 million and $1.4 million of its approximately $2 million in contract bookings for its exVive3D Liver Tissue previously reported for the period from April 1, 2014 to
June 9, 2015.
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Revenue Recognition Summary
Customer engagement and work
planning (4-6 months)
Completion of work (4-5 months
for single stage contract)
Revenue recognition (8-11 months
after initial customer contact)
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Accelerating Breakthrough Research…
Attractive and growing markets – Critical unmet needs
Favorable competitive dynamics – First mover advantage
Technology leadership – Strong IP portfolio
Growing revenue – Building product and service platform
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Organovo Investor Presentation
November 2015
Appendix
What Is Bioprinting?
• The automated fabrication of a tissue
through the spatially-controlled
deposition of cells and/or cellcontaining materials in defined, usercontrolled geometric patterns,
wherein the resulting multi-cellular
tissue is viable, three-dimensional
and mimics key aspects of native
tissue architecture and/or function
• Our finished tissues are scaffold-free,
comprised only of relevant tissue cell
types and the extracellular matrix the
cells produce
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