ONVO - Earnings call transcript Q4 2019

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Operator

Good day, and welcome to Organovo Holdings, Inc. Fiscal Fourth Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Steve Kunszabo, Investor Relations. ahead. go Please

Steve Kunszabo

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

On by Kussman. this and the our XXXX with us CEO, quarter of call Crouch; results fourth Taylor followed a afternoon discussion our call Today's are Craig fiscal will Q&A. begin CFO, with

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

fully Forward-looking include to statements Securities subject are financial statements beliefs expectations, to Such from the differ prospects. statements in facts audit. fiscal call our are are discussed current of that filings in are statements. discussed Commission. today results Exchange and risks forward-looking statements We're XXXX. our are plans amounts for to and of audit the historical forward-looking not also risks, Such are upon and with our expectations completion more future based our which Accordingly, upon completing about our could our process and actual on statement and change the cause subject

With report things We our file XX-K of and me over let the expect first week annual June. to Taylor. to that, turn in

Taylor Crouch

preclinical clinical quarters. going milestones challenges we're and Thanks, next in that we optimize generate scientific cover liver functionality patch. to how more We on out tissue submission, manufacturing work the our complete therapeutic Steve, lot today jump pushing and a data consistent our by to accomplishments our first forward. timeline our we move IND and key additional liver to into development sustained few good and the have address our for In processes benefits right in goals for our tissue I'm months, afternoon, of our as board. the updated do therapeutic studies to need of a ground to short, development everyone. new key XX the the We've our across clinical we changes have program

is we capability data-rich impact to goal FDA to this leading-edge human to disease. the how Our to analysis present as harness

clinical on in to to with trial, initiating areas Alpha-X-antitrypsin trial Subject focus NovoTissues liver patients to I of that benefits in end-stage transplant. errors may study Our also product outcomes more of disease bridge explore or disease. as we metabolism expected is our as favorable in the strategy to a Phase deficiency. We such inborn our intend one

liver meaningful our unmet with of represent XXXX, diseases benefit calendar our may provide where expected delays IND-enabling the on current to pre-IND studies. start believe our of All these to a shifted FDA high has patients. we patches also our the Based meeting need which areas planning,

planned achieve are our considerable and both IND tissue Our therapeutic first-in-human and the for our first the these liver and submission trials we're start effort objectives, substantially resources program. calendar devoting now XXXX. critical To of -- all of to

plan Let's dive our revised we and preclinical into our testing window. extended why

tissue product. months, surgical evaluate of XXX liver more experiments patch alternatives. into project investigate capabilities a This studies animal Over placement group we've to the and of viability our further several past to included the implanted functionality, launched that our rodents large than

in we and done to made reported improve be we we're patches our data studies. to confirmed development progress scientific in that process areas, important tissues. that latest primary is our While and and and the functionality we the additional our a needs duration previously in challenge some than have facing saw demonstrated The concluded now pilot earlier work shorter duration enhance our effectiveness also studies of manufacturing tissue

frame. in The way in to time X reduction significantly which toxic model a studies. disease, pilot these a we also Alpha-X-antitrypsin on liver hepatocytes reduction to human consistent protein statistically all meaningful during month in bioprinted the our significant days. our about studies up reduction output out our hallmark in We've this compared current the interim our observations, is rodent analyses, of with XX which animal pathology see in dropped X Despite earlier rodents, observed our the after months of from of in some that primarily Specifically, suggest studies. continue these of is globules, toxic are patches based the nominal to globules pilot to this with levels data

space, tissue do coming our why to the of is leading months Bioprinted and need understand improve tissues. edge biology. the regenerative key human unique we engineering The not of durable and seeing to processes sector. are more face challenges data creating tissue this a in However, over the matter conflicting in innovation functionality we are mimics and of we at aspects duration work medicine in and to components all the that

very the To recap, and And they for our or are we believe equipped rigors the Controls testing with ahead. holding FDA the common. and Manufacturing our extending pre-IND CMC aim in In calendar we're XXXX. uniquely a fact, Chemistry tissue platform with to we development meeting preclinical are prepare of

large livers, at our for what different we engrafted important bioadhesives indications. NovoTissues onto application results comparable patch's patch and had our multiple our few, we to sizes to explored deliver and steps an methods accomplishments academic in To in Following we submission also we've tissue leading study feedback studies patches highlight sutures. using versatility the varying our and for We've human We've first-in-human We've name of models. therapeutic institution. on platform. sizes have an our animal conduct manufacturing a have fibrotic evaluate XXXX. the some IND-enabling of and FDA consider start the demonstrated to the with on taken plan want to calendar and animal to in target scale our IND trials of to a successfully begun a early disease our processes, in then liver goal step techniques clinical implantation evaluating both surgical end-stage ability strategy up as I animal just important

IND-enabling in animals XXX performed, Although quite yet not been treated date liver enzymes have with effects have our been over is toxicology to definitive detected well important. no adverse patches. or This on liver studies histology

continue advance to prepare our to capabilities operational CMC our We plans.

outcomes our trials, of our advance processes well to our trials. functions, preclinical including clinical-scale our quality goal the internal a receive successful and Institute in and equipment IIAM. and the be These to will validation of medicine, optimization, for with in levers facilities we range first-in-human International implement manufacturing the partnership process Assuming continue Advancement controls. encompass wide And process manufacturing documentation, of finally, adoption through and donated of stringent steps

world's procurement development the medical in You research organs of recall for that the leading IIAM and is one used therapeutic the applications. of organizations of

serve of as scientists team to experience, livers as Our careers. throughout IND. expertise bank X,XXX our collective processing at and isolate first Samsara human industry-leading continue for and we This well cells tissue over prepare have their to will

let Before -- the at a update quick institutions. of I on our me up, of partnerships many wrap progress provide many leading academic

our Cells into organizations submission. testing Murdoch in Australia of scientists first plan to timeline priority work to areas IND calendar partner that look continue forward work in preclinical financial bioprinted We're us researchers as the a in with around and XXXX. to for we XD more Childrens in need. months the to Institute the from the in In resources short end-stage develop expanding areas, globe these ahead We studies at I'll and cell-based With therapeutic conducting and relationship Professor these the clear window Craig CSL bioprinted it have challenges XD working our the The Melissa in clinic this updating closing, renal tissue vasculature. recent over extend including critical involves address you stem with I to term review. research cutting-edge support with deploying a continue the together proof-of-concept to then With our complete we proud financial Little operational example kidney, tissues ahead. of therapeutic are develop An to treating that, is Research unmet to Melbourne, significant and of collaborate refine a excellent robust Stem Behring, gaps we're to for turn Australia. disease. and for and retina get in

Craig Kussman

IND liver everyone. lower XXXX we we operating Consistent considers to burn reported requirements of $X.X the outlined is fiscal $XX shares we'll million and rate the utilization a stock R&D costs. with million for with our a believe quick profile flow a or the we in ATM will extend cash in our also cash afternoon, statement XXXX. and of the million meet March, and cash of million $X.X ATM liquidity good at-the-market the future equivalents common I'll million, by our comments for the start calendar $X.X Similarly, and and have our primarily capital the year to of cash in for to a which our our strategy utilization net expenses continue fiscal million, the through shrunk operating progress total our versus and funds XX% program. net capital usage, fourth recap of line summarize $XX.X in to our the quarter. activity business. then facility year opportunistically financing million increased forecasted and key income which cash proceeds with my year-ago along now tissue these Taylor, ATM We improvement use issuance sufficient reduction therapeutic net quarter $X.X loss development Overall, metrics anticipated X.X At quarters, a fiscal included up million ongoing to net period. $X $XX Thanks, recorded The XXXX, requirements. spend bottom between of loss is reviewing We we've in fiscal fourth with balance million consistent the net wrap rate from I'll a for in in for of and ATM quarter end to related prior we figures submission runway our due over offerings. forecast had several cash employee trends.

focusing costs. expenses. our supply XX% resulting were a related to program. fourth the reduction higher first million development work primarily and to income on our Selling, were quarter, increase, Research an administrative costs year-over-year and during $X.X operating lab NovoTissues fiscal for employee expenses general Moving and $X.X million, preclinical year-over-year now XX% expenses development largely from lower due to statement

there months, to over like As XX are trends X next the we our highlight. I'd items consider important expense

we're spending capital window for level duration the challenges related First, preclinical our R&D our of outlined functionality a to as and Taylor in extend we tissues. planning modestly liver testing and elevated

in to streamlining the expect of infrastructure. reduction costs R&D from SG&A our we with increase Second, resulting meaningful a more expense than the offset continued

line, period. Total year fewer million, $X.X decreased, total active fourth top posted due for the quarter from which prior year-over-year Organovo revenue the to the short our financial achieving XX% substantially of liver On revenue geared fiscal in contracts the that tissue toward declined liver implantable research reinforcing term, all clinical services. resources are our It's development worth revised tissue. and operating primarily of for milestones

As FDA comfortable result, bolster clinic to in way bringing for to the these to this our we revenue-generating to our projects. We're that things a therapeutic tissue turn for calendar increasingly will so goal selective I'll our most collaborative, to next months, for being trend manage about Q&A to us of I our and immediate progress revenue program, on successful where operating are the continue goal several busy the of ahead the to forward of likely revenue-generating scientific consideration the liquidity entering with our liver very allocate down expect position we as In look measured most With of the agreements. outcomes XX the the key conclusion, sharing afternoon's our continue scientific a a meeting quarters. and expenses. pre-IND decisions, be calendar resources carefully In We'll with will have we in XX complementary we months operator fluctuate back XXXX. a the XXXX. with do in next call. we'll to portion that, continue over data fewer

Operator

you. Thank

first answer from question the Our Ed Arce Wainwright. question and comes with We will [Operator session. Instructions] now H.C. begin

Ed Arce

tie that's to into happening guess, X wondering with I'm with those that related the then, crux do levels seeking improve? to the back Taylor, that months of that do taking us does timelines you a share you instead was handle tests protein where of my you're any better. previously. detail are X for pushing of you've why on that back just seen as this how you've in the that, guess, think human done questions. start, how more improving some manufacturing to down to the I get call or if at why that of the nominal you to to I drops you sort could a perhaps and model and rodent the around it And recently month recently I'll propose Thanks in processes

Taylor Crouch

your is And this at the and we're have clearly, the you Ed, Taylor. finger closely that Thanks, focusing moment. most a on area on put

Just when to ability easily to to viability, product. we cells in living start of the in if living something characterize refer animal all, with at percent that's we're quick about definition, the a not talking models. That's our done,

come And so we validation in some viability, protein that as which animals. of be requires up need outputs, proxies techniques all state-of-the-art other to measurement, of to with development or functional and can measures for viability. And clues

is human growth understand in the receiving patches at patches put work expect that are cell-derived signals we other the our very livers, and So getting humans. part would those on under environment rodent of human we That we on we the ways that patches. this unnatural when those being measurements. or see typically better typical for standardizing focusing once not reach measuring to said, would focus around factor of cues service a They our is lead just -- respond to

studies, the patches models outcomes degree X will in of our we XX FDA within for impact certainly month our in of patches and model a our viability our improve see process days that what concerned and we we we're believe animals do. that the recently, with, viability significant patches of we viability terms many to the viability implantation. reported perhaps manufacturing And in that. or We initial losing of some said, trying exhibiting the that better past animal in translational That a great more as to are fortunately, functionality our the are so higher can are the starting beyond, be. of and out the of the start pilot And but never understands enduring

cells, do to so the what fortunately, steps those and ultimately, then key cryopreserving with we're And those of and care feeding begin of cells to into taking process and and release patches isolating And on going manufacturing our is the them bioinks and into focus and up that incorporating bioprinting, nurturing animals. Organovo to has processes starting and these we XX-year leading in we be of think characterizing look viability, at and should well in serve in history each of that a field us and higher tweak manufacturing will manipulating steps, and result able believe some which our our the tissues, animals. we collectively

best IND upon those to primary data-rich processes building be upon create the from we'll Just if the lead variability, and stronger that prudently, meeting. to ideally as we that for importantly, the to ideally our characterizing most to our pre-IND translates to you rehearsal, we think helping expanding combination in or to get significantly around -- at the goal pre-IND if improve platform our was package And really and better dataset, much the and to see about data of can to and built this rigor our best And whether longer animals. FDA outcomes. CMC a a reduce dress creating marginally the will that filing effect will, use then outcomes viability most in that our with submitting is going bring it

once shape the we've we that albeit believe, our this, much with in FDA, the unfortunately delays of go we stand in better will timeline. us All into mentioned

Ed Arce

maybe the just your remarks. bit that sort mentioned target shift Then prepared gears little Okay. I'll to you a in of

some does many that end-stage ways, because curious first to described you've behind be, just analogous your I that with in it it disease. disease, Looking be me to could basket seem could to ultimately that about in that previously, approach end-stage there the liver given enter trial choice, patients the was ideologies

that perhaps will decision you could how your metabolism? help from inborn discuss into of so And how more one there choice to came you it errors and inform or

Taylor Crouch

view still opportunity as indeed, our question. And that Sure. Thanks platform. basket for approach concept we for this an

into with that to that liver Alpha-X-antitrypsin, enter fact some to of intention form as the we in subjecting off right any end-stage in including our the the beneficial get that the trial a a high-unmet human patients FDA branch pursuing unmet of to off is I see disease what experimental end-stage bat error a we target continue those would functional efficacy, from of the providing this tailor-made trail safety trial. need to area huge disease, such indications in which reflects risk our form Phase this areas, fact that we disease list trading very ideologies, range to and/or and of early approach, land the be then critical patients trial patients first patch is are to bridge that allow earlier need. of area, need some list inborn safety to Our strategy. upside on work implantation diseases the this transplant, all, based hope on have -- of of risk addressing a of of that balance some that would gotten to of should metabolism liver to the of that list are on results the trials to this kind patient us broad specific The exposure in that patients this for through convince first the surgical recognizing And that's can transplant a

build that off of So clearly, first in a can basket that trial. we

Ed Arce

Great. Okay.

jump best this suited last I Craig. probably quick before And if may, one, for perhaps in Just I is one the queue.

quarter, is this timing? mentioned any as of guidelines first for -- issue of with normal sort XX-K. in or delay your the off of June with just had audited that sort filing financials? sort preparing that You on of the target is there that week is Or line the an given Is

Craig Kussman

No, at Audit consistent end this when to meeting it of we month. timing corresponds scheduled with the the the of in and long-standing that's filed past Committee our

Taylor Crouch

So market ideally, timelines appropriately on what it we changed schedule. would get be out the information filings time. the to that thought will and their of only thing to prudent has normal this The financial follow changed of bring is rest our out

Operator

with from Cross question comes next JonesTrading. Our Matthew

Matthew Cross

these durability about here, biggest tissue regarding address to Sorry of I obviously of wanted to changed. issue hear the new which just was what's kind kind and obstacles.

terms was or this little settings? sample preclinical an work were viability as honing of terms was now animals. the number at all looking trying guess, here, output said, greater guess, regarding tested larger if kind a you counts XXX? seeing in you how over in that like of viability I really kind a of are insufficient have, just you had that So assess hepatocyte just concerns on to versus month well closer sizes you're additional you of or in the these a things as a whether said, result of of, settings of in new inconsistent when days effectively XX duration bit I'm as in a level I transplanting of of reproducible viability the and protein same often highly you samples to this

Taylor Crouch

implanted starting run. saw also earlier comment studies. clearing end, to days animals model could the home biological inadvertently expect that durability really rigorous could evolve, XX then a at models, you very current be variability should And we've out are extremely of possible the to before CMC course, want we and can the argue slight identify animal last the tighten to a process of discuss and is new just statistics. every viability. experiments, and be good the least the we in seems down got reproducible been fact What exciting. Very We similar a our evidence start of Matt. have package studies with human Alpha-X-antitrypsin wrong and back package then -- package globule prudent the models optimize can way is as we and that XX and different animal a -- looked we and FDA PiZ up The direction X that our a our way, we continues how see have made in in and pre-IND our functional to the models. construct with. our a I duration and in and might to the was things we looked study, time animal in the no powered it we in tight all in go It better knows hone very into some we result that in This to than manufacturing pilots, see models the That a to our delay and I database. days. to still that days there of We that is we to to observation be of to also these statistically flush -- quarters that out which we've we out with the on, those explored batch long that these goal tweaked perhaps the dealing think changes. that we for seem questions. animals. made at in tissue animal could result And just also Sure, at pilot bring The FDA, our just identified of one just course. general And by a cases message it evidence in the In shorter couple show a maximum ever show strengthen in the meeting you're of

Matthew Cross

That's it. and helpful very extra detail sense. it Got makes Okay.

additional in guess, perspective, has and a for you I as little applications, Next just bit if renal otherwise, detail you revisiting far? may of how what any on impact alluded release the here. the all? so what then in on the was could from the past? one your you more in focus just done work related organ all detail here and alongside been whether a pipeline And was at to provide cost work this you And that, been to I know renal discussion that, work I more provide had on had other that a liver could impetus

Taylor Crouch

Sure.

her longer-term So expanded stem kidney be we've that is stem lead if liver kinds cell-based understanding. very Many and end-stage world development. renal the deep we to cell-based of we're technology important to recently, for can which are organoid our have that front in talking in we'll combine been about exact Melissa applicable an The bit a pipeline. additional we would a the with who with capabilities collaboration in jointly same the really of recognized the that as one aspirational leaders goal. pleased in And relationship solutions the Little or in see future. goal is platform our in Australia that would up fleshing of out little program be more a develop disease, progressed in to starters, That's open to

on And development company. almost highlighted. funds for will from XX of kidney lot or our on be as without liver place the sources our focus our preliminary so be the through work And next collaborators tapping into significant primary will we've months, entirely program, X the a the to taking

Operator

as This and you you attending may concludes today's now the disconnect. conference. well our as presentation for Thank question-and-answer session

Organovo (ONVO) 23 May 192019 Q4 Earnings call transcript