VivoSim Labs Reports Shift in Business Model and Financial Performance for Fiscal Year Ending March 31, 2025

VivoSim Labs, Inc., formerly known as Organovo Holdings, Inc., reported a significant shift in its business model and financial performance in its recent 10-K filing for the fiscal year ending March 31, 2025. The company, which focuses on providing drug testing services using three-dimensional human tissue models, generated total revenues of $0.1 million, consistent with the previous fiscal year. However, the company recorded a notable increase in other income, totaling approximately $10.1 million, primarily due to the sale of its FXR program to Eli Lilly and Company for $10 million, with potential future milestone payments of up to $50 million.

Compared to the previous fiscal year, VivoSim's total operating expenses decreased by approximately 16% to $12.8 million, down from $15.2 million. This reduction was driven by a 20% decrease in selling, general, and administrative expenses, which fell to $7.7 million from $9.7 million. Research and development expenses also saw a decline, totaling $5.0 million, down from $5.5 million in the prior year. The company attributed these changes to a reduction in personnel and efforts to extend its cash runway.

In terms of operational developments, VivoSim's workforce decreased from 16 to 13 employees, reflecting its strategic pivot away from clinical drug development towards offering toxicology insights and research services. The company has emphasized the predictive power of its liver toxicology platform, which demonstrated an 87.5% sensitivity rate for identifying liver toxicity in drugs, a significant achievement presented at the Digestive Disease Week scientific conference in May 2025. The company is also focusing on expanding its services to pharmaceutical and biotech companies, aiming to reduce the risks and costs associated with drug development.

Looking ahead, VivoSim faces substantial liquidity challenges, with management expressing doubt about its ability to continue as a going concern without additional funding. As of March 31, 2025, the company had cash and cash equivalents of approximately $11.3 million and an accumulated deficit of $342.2 million. The company plans to seek additional capital through various means, including equity offerings, but acknowledges the uncertainty surrounding its ability to secure necessary funding. The recent reverse stock split, effective March 21, 2025, was part of its strategy to comply with Nasdaq listing requirements, following a notice of non-compliance due to its stock price falling below the minimum threshold.

Overall, VivoSim's transition to a services-oriented model and its recent financial maneuvers reflect a strategic response to the evolving landscape of drug development and regulatory requirements, particularly in light of the FDA's shift towards non-animal testing methods. The company aims to leverage its proprietary technologies and expertise in 3D bioprinting to establish itself as a key player in the biotechnology services sector.