Tag Archives: Keith Murphy
Organovo Stock Falls after Media Critique, But Future Roadmap Is Bright
Bioprinting Pioneer Battles in the Stock Market as it Looks Ahead to a Major Milestone
Organovo (NYSE: ONVO) is an exciting 3D printing company that has had a volatile ride in the stock market lately. We dig into some of the factors contributing to changes in its stock price.
As we have covered in the past, Organovo specializes in Bioprinting. The company designs and creates functional, three-dimensional human tissues for medical research and therapeutic applications. The Company collaborates 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.
This savings amounts to a multi-billion dollar opportunity for changing the way Big Pharma discovers drug therapies. Drug companies will be able to test on 3D printed human tissue in a lab before they even embark on the FDA approval process with animal trials, saving hundreds of millions of dollars.
Read: Bioprinting is a Multi-Billion Dollar Pharma Opportunity for 3D Printing
With all of this promise, why does Organovo only have a $700 million market capitalization? 3D Systems and Stratasys are two other public 3D printing companies that boast multi-billion dollar market caps.
Moreover, why did Organovo climb to an all-time high of $13.65 last week, only to crash nearly 40%?
Pictured above: ONVO year-to-date stock chart. Click to enlarge.
The answer is two-fold.
First, Organovo is early in its product roadmap, and has yet to realize much revenue.
Second, the price of the stock is being heavily influenced by the media.
Organovo Product Roadmap
In September, Organovo CEO Keith Murphy shared his company’s future roadmap:
- Development and launch of 3D Liver
- Scientific proof of concept – April 2013
- Functional validation: testing against known drugs – December 2013
- Delivery to KOLs: alpha and beta testing – April 2014
- Product launch – December 2014
- Follow on cell assay product launches
- Multiple additional pharma partnerships
- Developed disease models
- Cancer model readouts over 12-24 months: kidney, others
- Therapeutic tissue proof of concept and path to clinical
Note that there is a key milestone coming in December to demonstrate functional validation. Organovo has scheduled a retail investor conference for December 5 to discuss product pipeline and revenue potential, partnership model, cash burn and R&D spend, and more.
Read the full agenda in Organovo’s press release.
Be Careful About the Media
Because ONVO has a relatively small market cap and 3D printing is a concentrated industry, one highly negative or positive story can make a difference in the markets.
Case in point: Seeking Alpha contributor Richard Pearson wrote an article called A Very Detailed Look at Organovo on November 19, saying “Investors should therefore expect the share price to quickly return to below $7.00, where it was prior to over a dozen promotional articles on Organovo released in the past few weeks.”
On that day, the stock fell 40%. Luckily for Mr. Pearson, he was shorting the stock as it read in his disclosure.
If you look across Seeking Alpha as one example of a site sharing investment advice, there has been a lot of attention paid to ONVO by contributors. There is even an article entitled Organovo At the Mercy Of The Media.
The takeaway is that investors need to be aware of this media-drive volatility and be prepared to have short-term pops and crashes until Organovo demonstrates, or fails to live up to, the achievements set out on its roadmap.
2014 will be an important year for the Bioprinting pioneer!
Disclosure: At the time of this writing, the author is long ONVO. Please consult your financial advisor on all investment decisions.
Bioprinting is a Multi-Billion Dollar Pharma Opportunity for 3D Printing
Organovo CEO Sheds Light on its Breakthrough Bioprinting Technology and Roadmap Ahead
One of the most exciting and promising applications of 3D printing is bioprinting, the ability to manufacture living human tissue and possibly organs. And one of the most exciting companies in this field is Organovo.
Organovo (NYSE MKT: ONVO) designs and creates functional, three-dimensional human tissues for medical research and therapeutic applications. The Company collaborates 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.
Keith Murphy, Chairman and Chief Executive Officer of Organovo, spoke last week at the Inside 3D Printing conference in San Jose, CA.
Organovo’s NovoGen Bioprinting is based on a scaffold-free bioprinting process. The cellular “bio-ink” is supported architecturally by hydrogel. The hydrogel can later be removed, leaving only the 3D cellular strcture. The system allows deposition of any structure.
“It enables the creation of tissue that is 100% cellular,” said Murphy during his keynote at the 3D printing conference.
Mr. Murphy shared several applications of his company’s bioprinting technology as well as his future roadmap. The key applications are:
- Vascular bioprinting
- Tissue patching
- Drug discovery with incredible savings for Pharma R&D
Creating Human Arteries and Living Tissue with 3D Printing
Organovo has been able to create simulated human arteries that are developed outside of the body using vascular bioprinting. They are viable tissue with layered architecture. These arteries are able to withstand 6 times the normal blood pressure and therefore may be implantable in the human body.
Consider patients who experience trauma or disease and need arterial transplants. 3D printed arteries could be game-changing for this class of surgeries.
With similar technology, Organovo can create living tissue, such as heart tissue, that can be implanted during surgery and thrive with the existing tissue. “We can build tissues that are significant larger than any other approach,” said Mr. Murphy. Before bioprinting full organs can be commericalized, which Murphy hinted may be in the future, simple tissue can be generated and stitched into the body.
How Bioprinting Can Save Big Pharma Billions
Over the last 15 years, the cost of Pharma R&D has dramatically increased from $15 to $50 billion per year, and yet the number of FDA approvals has remained constant if not declined. See the chart below for a visualization of new molecular entities (NMEs) vs total R&D spend per year.
(Source: Discover Management Solutions)
Mr. Murphy knows from his personal experience of working at Amgen for 10 years how much money can go into the development and testing of a potential blockbuster drug only to be rejected during human trials. Some Big Pharma companies spend upwards of $1 billion per drug before final FDA approval. Therefore, the best practice is to speed through animal trials as fast and with as little cost as possible, because the real learning comes during human trials.
This rising R&D cost creates a massive opportunity for bioprinting to give Pharma companies an opportunity to get pre-clinical data on how a drug will work in a human system before even starting animal trials.
This is a multi-billion dollar opportunity.
Organovo creates human cells, for example liver cells, that are deposited and developed into tissue. A disease can be introduced to that tissue in a controlled fashion, and then a variety of independent therapies can be applied. This means that you can outright reject or move along potential drug therapies in a matter of weeks rather than years. Just imagine the hundreds of millions of dollars in savings per blockbuster drug.
Watch the video below for to see Organovo’s process in detail.
The technique of testing therapies on human cells is not new, but Organovo’s approach using 3D printing to generate living tissue is the breakthrough. Organovo’s tissue can live up to 30 days.
“The old rule of thumb in tissue engineering is that you can’t more than 250 microns away from the surface because the cells will die from lack of oxygen,” explained Mr. Murphy, “but we can get to a millimeter by building a capillary structure, getting growth of microvascular networks.
This achievement results in nuanced improvements over what one can get in animal models.
The key applications are Pharma drug discovery and toxicology testing.
Organovo’s Future
Today, Organovo is a public company with a $430 million market cap. But in the next few years, the company could revolutionize drug discovery and tissue therapies.
Keith Murphy, CEO of Organovo, shared his outlook on the company’s future milestones:
- Development and launch of 3D Liver
- Scientific proof of concept – April 2013
- Functional validation: testing against known drugs – December 2013
- Delivery to KOLs: alpha and beta testing – April 2014
- Product launch – December 2014
- Follow on cell assay product launches
- Multiple additional pharma partnerships
- Developed disease models
- Cancer model readouts over 12-24 months: kidney, others
- Therapeutic tissue proof of concept and path to clinical
Related stories:
- Top 9 Medical Applications for 3D Printing – Epic List
- Organovo 3D Printing: Bold Mission But Needs Cash, May Offer Secondary
Want to learn more about the evolution of bioprinting? Check out the infographic below, entitled Printing the Human Body.
