ONVO - Earnings call transcript Q2 2019

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Operator

Good afternoon, and welcome to the Organovo Holdings, Inc. Fiscal Second Quarter 2019 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Steve Kunszabo, Head of Investor Relations. Please go ahead.

Steve Kunszabo

for thanks and afternoon, joining us. Good like quarter XXXX would to welcome second fiscal our to earnings you I call.

our Steven Joining me with quarter our and results, Crouch; our the CEO, Medical on the XXXX Q&A. call CFO, this discussion of followed Craig fiscal will by Today’s call Hughes. afternoon, the Taylor Chief begin Officer, second Kussman;

Securities contain Before Litigation of our call that caution all I turn participants XXXX. meaning of things Act the over afternoon Reform to forward-looking may Taylor, the within Private I’d like to statements this

Forward-looking include risks to statements subject are statements beliefs expectations, from differ more prospects. statements facts are current Commission. are that are Exchange statements. discussed in results fully and forward-looking statements plans with to the historical forward-looking not our risks, Such are and our expectations filings future based which upon about could the and Such our and actual and Securities cause

in or our today Any should the risks. even light our future, point Our such be in we while we statements and only remarks views update at may elect some expectations disclaim do obligation considered so today change. to forward-looking of if any to represent reviews as specifically statements forward-looking of

for turn be let also of the that, call, release supplemental to prepared These financial these measures. financial With to During we’ll supplemental over measures. me measures accordance generally-accepted definition referring to Taylor. accounting earnings refer today’s certain with supplemental financial in not are things principles. Please

Taylor Crouch

outlined begin development XXXX. operating track achieve clinical to everyone. calendar Thanks, and Steve, on and we’ve that the good by highlighting we’re I’ll that afternoon, goals key through

of conditions. data studies preclinical across relevant additional the broaden to with ahead our moving proof-of-concept disease range We’re

techniques medicine with liver disease, engaging strategies fine-tune path clinic. to and expertise in to also trusted with fastest-effective our We’re regenerative the regulatory advisers surgical

liver treating a and patches. XD with diseases our clear, adult bioprinted is pediatric of liver tissue spectrum human aim Our

To for organs the options of mutation models We single currently which on full of many patients and X have are metabolism, start, treatment therapies. of often Type and rare leaves shortage limited Alpha-X-antitrypsin liver in animal need available we errors including targeting and AXAT, deficiency, transplants potential Tyrosinemia. focused inborn desperate life-threatening conditions, of new

implanting deficiency function a tissue to specific reduce restore objective would enzyme of or that is in therapeutic also by for show the tissue future conducting delay studies, offset abnormality. or healthy a transplant. a Ultimately, our Our hope to the need liver we successful

planned that our several therapeutic indications. with along we’re first I there orphan broad – rare As our in treat believe pursuing are a patch To that designation milestones IND calendar FDA. can the our of progress. interim We a development look drug can map create disease second a range to of way to XXXX, tissue healthy ahead filing end, the liver

of on designation news this We half expect first in XXXX. additional the calendar orphan

multiple of We in XXXX indications, support to focus transplant. meeting steps our deficiency second AXAT start including intend a to study patients in also clinical finally, calendar human to we IND-enabling expect And hold on others to the awaiting calendar pre-IND and with XXXX. in trials toxicity that the Alpha-X-antitrypsin final half FDA enable the

commercial and efficacy addition, activity these and In of to justifies important goal development. studies proof-of-concept to diseases. rare humans animal reasonable The determine identify baseline will studies to in we multiple continue safety is use conduct that potential further in

progress we’ve strategy conducted evidence model, studies now of of and variance, potentially liver including to up to disease retention we’ve Meeting healthy In forward range Tyrosinemia allows misfolded inborn encouraged can as liver, that this AXAT production In in the As we’ll in robust published conference, we broad human successfully industry established lead errors metabolism show AXAT overtime disease the our In key The just tissue that functionality, known in animal some has X the address our same extended which healthy the communicate NovoTissues events. also failure. ongoing earlier, rate tissue next and patch to both our median deficiencies. these globules, by effect through San our we’re and reducing We of of with animals. generated our models were enzymes are of an an survival construct, major and AXAT and Type Type insoluble, early I indications. characteristic expected to continue studies, results, industry week’s Francisco, the X preliminary of on Tyrosinemia, able scientific a Using of demonstrated which for this improvement Liver areas. in missing we’ve in noted treated in preclinical target moving of two development publications remain

that not than liver includes potential. end-stage and impact, opportunity Our revenue are inborn greater participating that metabolism Organovo. attractive also billion offer of therapeutic has in the market solutions only diseases for liver of of errors disease, significant orphan a focusing believe promise $X an patient represent on a of but significant we group we By

are and customers cells the Samsara RNA-sequencing human service liver revenue-generating bioprinter derived these projects and with continue of Capitalizing validation and expertise data of a in opportunities from characterizing therapeutic leverage to Samsara our Organovo we XD and an specialized donors. recently of manner. data opportunistically grants and modeling disease advancing human and our a matched that and mine offering healthy from tissues markers custom and solution product, cell-specific spanned generating on disease agreements cost-effective pursue our tissue procurement placement and sets NASH While a procuring capabilities. discovery launched The range and liver library division, livers tissue, also for cell new platform bioprinting our from we’ll technology. licensing cells, enables to This

progress I’ll as closer we’ve continue the a with also including from Craig, our move tissue In collaborate calendar complete good for over development With over turn applications the it I custom a on sharing few studies. clinical financial with in We that more therapeutic made to for modeling months our span liver liver of clients IND forward toxicology to in months key XXXX. NASH, to that, progress projects, variety look our review. an last to milestones. disease and closing, we ahead. our Culminating

Craig Kussman

end over of of I’ll programs. year-ago loss At statement profile recap of quick future the of and we $XX.X a prior-year summarizing good cash million Thanks, to reported everyone. loss The net $X.X profitability million a second million our improved streamlining $X.X we’ll afternoon, start figures versus September, of of R&D these with $X.X net total posted and from ATM expenses $X.X common million, improvement equivalents substantial included I’ll key then Similarly, is $X.X metrics a thoughts our quarter or million had our second Taylor, capital and the the wrap by fiscal liquidity we a of utilization income trends. We quarter, and XX% the fiscal cash issuance strategy in the our million, bottom in million due financing of review ATM to primarily the proceeds in cash operations flow related reduction net period. a the our for requirements. up and quarter. and which in line net my at-the-market, cash costs in progress and a offerings. to XX% balance X.X stock shares

access plans. permit, facility market our $XX to business we’ve our dynamics million With to and As runway for the extend approximately opportunistically have successfully throughout continue cash as we’ll to facility, funds calendar we development ATM carry $XX million out ATM under IND use capital done to of the XXXX. our in circumstances available

to meet $XX capital cash sufficient through our and We operating and XXXX, forecast million requirements next fiscal utilization rate continue to XXXX. a we between $XX fiscal million net for funds year we have believe, and

looking bottom R&D commercial The will in it’s fact, of likely cash be revenue In thoughtful our material reduction cash and our years, two opportunities. driven our net continue that our programs range. utilization burn net from supported fiscal end versus in management last the of increasingly by to at the come will by rate this

We employee first our and operating of focusing compensation research quarter. expenses, our stock-based decline, to statement and our to million, from prioritization year-over-year and related a during lower expenses, decrease, expenses XX% administrative lab costs restructuring fiscal continue year-over-year now second development million on a and the we primarily and employee $X.X reported resulting were expenses Moving XX% quarter, streamline general income noncash the $X.X projects. the organizational lower as and in our second selling, supply largely R&D during to due to operations

today expense organizations the to leading into in balance keep we first, fixed we are headcount calendar gear important as meeting we’ll trends we the rebalance with right our therapeutic us and the the consultants and over We’ll drivers to two development with keep pre-IND our there quarters, continue of our to variable FDA. take consider research several have tissue next mind: topical through XXXX level partner good a and our effort expert costs. to up liver As versus clinical

therapeutics closer the and in expect multiple as we study IND in of spend our Second, IND-enabling beyond. line we do move our ramp XXXX to toxicity and business, up first began in R&D to indications our

fiscal to million, generated services for of sequentially. tissue revenue Total the research up which fewer but period, total revenue contracts quarter. declined quarter Organovo $X.X second active XX% the line, due was prior-year top year-over-year the decreased On XX% liver from in

of milestones we the our before, our to shared to the revenue continue expect usage part business we’ve not be unpredictable, our for custom due fiscal XX total this profile focused next of specific As model and clinical development on XXXX. over partly to In remain we’ve achieving XX months. targets we up, for laid out the any squarely the forecasting to revenue wrapping

things preclinical X to our the from afternoon’s share the starting and The for our in portion with Q&A next is forward to into Meeting to to as come soon. the we’ll generate look speaking Liver scientific calendar around IND at I promising turn week call. of continue I’ll this you Type such back data With We first view. work XXXX Tyrosinemia, that, again studies operator

Operator

come question you. our from James. Thank will go Benjamin Raymond ahead. Instructions] first Please Ren with [Operator And today

Ren Benjamin

meeting for or if can XXXX. on you guys. regards little get of especially, questions. me. clinic. guess, to see this getting the as timelines Taylor, try I specific FDA regarding bit ready Hey, can good the little in tighten talk And afternoon, a into you Thanks taking to the more the bit couple in congrats to a questions One, progress, for with you up get the the

the can color take place sound provide Just you’d the half XXXX. us the of based half Or and of IND-enabling I would based likely that Does be is comments, would first any there the in discussions, XXXX you on those think second on your right? space that on? in meeting conducting

Taylor Crouch

when given to meeting occur. Well, would as the guidance specific we haven’t

this since process, year, studies summer, we do things: So already pretty next and pre-IND I’d able make opportunity into And next our IND to expect towards meeting final affirm begin to ourselves our say year. our appropriate second is checkpoint two CMC this that’s formal to in gotten IND-enabling one, down strategies be sure animal why we a the the we’ve how in afforded study tox And guidance that the for of appropriately we’ve half pre-pre-IND as kind strategy head to several to our process. the times following process buttoning in will year. the signaled, that in regard the of FDA are readout our we With been because IND call. meet extensive heading to the the

meeting calendar this start where can the do and in fall you – to So will to year. them as

Ren Benjamin

it. Got

progress larger Okay, to contain that little be you I regards that’s two time, some talk preclinical generating studies, those sort in and a then bit of so sort generating data thoughts or helps of, which, items. regards primates. in the your these amounts trying tissue? increasing the to going costs assume, also tissue IND-enabling at of, and in nonhuman any thoughts same Can larger any And drive of, to out. size about And will potentially outside just, to

Taylor Crouch

a mentioned, costs perfecting vitro XD building is about advantage in in – process, as our With at believe, the to animals appropriate how platform we We scale years we as good as dose technology can up we of approaching manufacturing studying is our points: one, fixed hours scale to one from trials to represent be patches patches over humans might that we and scale sizable that our are of are that, of believe, going unit than of for begun to the patch rather patches good runway size XX of from that view not relatively commercial materials, inputs. pretty I question, a up also I of the couple human can a we’ll up animal revealed would as blocks giving demonstrating we’re the affectively, printing feedback, scaling for our into – ultimately cells, human what have they Organovo of in up which size which your because suitable the quite we efficiency process the But us in. platform. around have in visibility an is Sure. to clinical regard these animal terms have out to vitro process as fine-tuned to commercial manufacturing. business. understand or be could models hope to externally and FDA scale to and bioprinting using human we’ve animals of regard modeling that tissues for do of since studies, in after we and the raw With We’ve efficacy used for more, our even cost our the still minutes humans. With as prior measured strategy backdrop in and speed say what as regard

Ren Benjamin

and because we’re Got still, been dollar past it. And size of, thinking back to you we is remind size the it of going sort gone so maximum about? can generate off bill now? memory, you’ve I’m but far, have that here that tissue, size able just Or going that that tissue of me,

Taylor Crouch

to, in bill. a portions let’s various we’ve of dollar Well, been up printing sizes say,

these the provide maximum hone-in concerned what from under our to to multiple, be not experts talk patches the scales surgical of of printing liver implanting in scale unit efficiency multiple on if we these flexibility too of you process a As because and about just our geography for transplanting these multiple purposes. the or and the patches, we various begin in patches about, something the From – we’re of again, will, and surgical is dose, and think should this perspective, multiple perspective. shapes, experience the dimensions printing end-size scale

Ren Benjamin

All Got Keep right. the it. I it. Thanks appreciate questions. very taking much.

Operator

Ed come H.C. ahead. Please And our Wainwright. will question next Arce go with from

Ed Arce

for taking my question. Couple I me. for it. Thanks appreciate Great.

around just the delivered have you AXAT the at results Taylor, in far aligned first, with So the had this had functionality of you far, mentioned a proper your in that what level, enzymes. and is including both reengagement top and believe, that remarks, the HT-X, HT-X, your with models, a question seen I you’ve so about some specific little describing robust know – in mentioned bit of prepared patches animal discuss the One I the globules? to so further earlier could you

Taylor Crouch

Ed. Thanks, Okay.

the were finding to we that that fact have a area heartened And transplant. by the lung such interesting modules, globules, a liver function, some patients host in studies, that beneath proteins manifestations in globules which childhood noted in leading liver significant to the these misfolded survived of to to animals, which of So And and would with a clog to a these to relates explore cells declining adjacent the could deterioration the the we our and to have need actually may they’re be modules normally at on want end disease slowly and get in patches. the that liver inside who very showing patches be trapped our a clearing ultimately, a depth that of clog up the deficiency. animal comment with The in the the further. a Alpha-X-antitrypsin function certain these called, least – we’ll leading what and

Ed Arce

for that. Thanks great. Okay,

two? that or from indication three had two just, one as so my There correct? Is And those but in further with pursuing. weeks to The you’re a IND to of ago, question them a of publically year this briefly separate I benefit. you was you own consider we submit that discussed actually looking for are just that indications second clarify you believe, the I two, think, XXXX? thus, part that other consider both probably

Taylor Crouch

patch Yes. disease patients to list, our through reached a which believe, we into take give will multiple condition on place To likely in will disease. drivers, Alpha-X-antitrypsin including, for who’ve transplant initial this clarify, into the take patients instance, strategy permission us IND, study, that

and words, testing our avenue patch and with So developing we to will other IND patients open hope in multiple that fundamental an disease types expect same up with product. the

Ed Arce

given substantial the and Okay, given may. now ability with therapeutic got before just you mentioned I consider it. now only last organ? multiple you have, also the customize ability patches had was to in multiple not different quick One shapes I wondering one any one, the if with patches, dimensions. patient if but Since you size the that

Taylor Crouch

Well, or one and that geometric thicknesses. can strategies, at need do I’m strategy. custom they And relatively, in is fit correct reason intricate maybe do the approach we certain primarily, so various on shapes the for the contours we’re of thing. But the to With regard liver, I consider. geometries to The whether By a want that for of organs. think expect squares explore We best a the talking focused we as aspects clarify to there patient, few shapes, about to that the is just-in-time primarily varying are as and like including given look various about shape, thin there do custom printing patch. something treatment dimension. patient organs we’ll solutions,

you patient-specific say, could strategy. a So would be, that

patch, be for cetera, standardized. types certain et specific conditions, adjust However, the of would – we patient that compatibility But we need all that may and we our the standardized the printing actual thing that to. to to approaches dimensions only use the cell manufacturing would might of the all vary

for get each a solutions remarkable manage get we’re these that’s and that can custom a So not the but to product also with to also Reni’s which partly back And try just-in-time our spot fashion. patient. to in that to just on point, creating cost, manage the we speed patients

Ed Arce

Okay, understood. That’s Thanks, helpful. Taylor.

Operator

[Operator JonesTrading. Instructions] next Cross from ahead. with Please Matthew go And comes question our

Matthew Cross

afternoon, questions. Good taking guys. Hey, thanks and my for

just follow as be a that I we other another similar orphan avenue a curious on based Thanks. of to why to been thinking wanted given as indication just your disease question hasn’t at process? bit Just And pursuit wondering, AASLD declared that while in Ed rare am second or designation. data to of a as tyrosinemia you’ve far those encouraging and the data should about work is in already indication models? presented the upcoming how a

Taylor Crouch

Type a question and an the plan reason to program. know plays development pediatric patient and treatment initially Hey, Tyrosinemia study we are largely we’ve population. indication our versus would our slowly sequence Matt. adult development in That’s certainly patients and the activities, why in great need is that our will when about that seeking the our perhaps out X about for in patient nuance study of in ones a safety in in being clinical is being validated there a clinical we spoken population, nominating need focus more we proof-of-concept a

in we all So disease might for as modeling more and development the see at with how plan as year more give about patch our these we as populations our to we those up giving patch But how you indications do into markets the the end matching help clinical with in next fits and move best we will aim to color and your when for our we’re begin opportunities strategies. see unfolding we moment, guidance not plan to over populations. to pediatric

Matthew Cross

it. Got

see wanting helpful. – these animal that wait that’s or out play other studies And making before for Okay, I proof-of-concept very decision. can’t to how

are relative just, upcoming final from was you’re clearance to able unique guess, kinds around you had see be human I agency order forward obviously, clarity data what hoping for study guidance this of at may more work? any overall could other that I a one to technology pre-IND the meeting in to therapeutics. to FDA receive give move on there’s Second towards of hoping prior a generate lot to to the

try on you a to comment is wondering was XXXX entail follow it patch this indication-specific? what something IND? you could may expect the if I as So to more we Or

Taylor Crouch

Sure.

very rapidly enter are I’ll approaching may preparing well and to So trying general to with aspects like are an documentation approaches medicine that as our jump Steve to in. start be industry and also develop moving that IND as quickly. the The regenerative of into standard space. to in testing some FDA There is would

pre-IND so should all of of. and the there And just the pre-pre-IND at year the whether evolving obviously, same we’ve generally, the FDA nuances be to the check laid ultimately, on are the one goals we’re meeting in on track, strategy meeting But the next our we with FDA. aware year, is still IND with that are that this out

and on turn discussions, that strategy, the sees it for meeting? may We’re pre-IND how who the he more blocking to some points have topics and tackling I’ll the about specific Steve, evolving

Steven Hughes

Thanks, the The which Taylor. are – be IND length. a frame it slightly – is finite I’ll question, the answering of pre-IND before may meetings

to requirements discuss areas, into our support, So we’re ask the to trials, potential for in questions an infinite we et also, of days document, we testing. we of we endpoints and what could manufacturing satisfy do, clinical our design have order begin clinical we to multiple to wish amount the patient time of FDA. our to that process we target don’t that FDA’s go in planning And – animal that I cetera, our the – a work need the clinical know to including population the range trials to first-in-human and human with study. the and have that of patient

those doing we’re areas and uncertainty would questions to the which potential process the within multiple prioritizing going we get ones, areas out are we there to like of feedback. could dialogue a mapping And and ask questions why where meeting. their into the the is there’s through FDA engage So what in of

animal our be ask they these questions will you clinical at the we So are development FDA, are we this the the for areas first-in-human the the indications side, study. within the give that go the general and propose of going of we point, broadly to CMC can’t specifics into data plan I to that support have but that to

Matthew Cross

Understood.

Steve to and overall of, I seeing presentation have me made at some presume the, your you strategy Thanks, look for and kind Okay. on just Taylor, guys points forward AASLD.

Taylor Crouch

Matt. Thanks,

Operator

our as as session We time. thank you. you well for at And today’s your this question-and-answer the may and conference. conclude attending this will Thank disconnect presentation you lines

Organovo (ONVO) 8 Nov 182019 Q2 Earnings call transcript