Organovo Reports Revenue Growth to $24,000 but Faces Net Loss and Financial Challenges

Organovo Holdings, Inc. reported its financial results for the three and nine months ended December 31, 2024, revealing total revenues of $24,000 for the quarter, a significant increase from $5,000 in the same period last year. The company attributed this growth primarily to a rise in royalty revenue, which reached $15,000 compared to $5,000 in the prior year, and product revenue of $9,000 from its Mosaic division, which had not generated revenue in the previous year. However, the company still recorded a net loss of $3.4 million for the quarter, slightly less than the $3.6 million loss reported in the same quarter of 2023.

In terms of operational changes, Organovo's Mosaic Cell Sciences division, which was formed in February 2024 to supply primary human cells for research and development, ceased its commercial operations in the third quarter of fiscal 2025. This decision was made after the division failed to achieve significant revenue as initially expected. Consequently, any remaining inventory from Mosaic was transferred to the research and development segment. The company plans to focus on advancing its lead compound, FXR314, in clinical trials for inflammatory bowel disease, with a Phase 2a trial expected to commence in 2025.

The financial position of Organovo has shown a decline, with total current assets decreasing from approximately $3.9 million as of March 31, 2024, to $2.1 million as of December 31, 2024. Current liabilities also increased from $1.9 million to $2.9 million during the same period, resulting in negative working capital of $0.8 million. The company reported cash and cash equivalents of approximately $1.2 million, down from $2.9 million at the end of the previous fiscal year. This decline in liquidity raises concerns about the company's ability to continue as a going concern, as highlighted in its filing.

Organovo has been actively seeking additional funding to support its operations, having raised approximately $5.7 million through various financing activities in the nine months ended December 31, 2024. The company has also filed a new shelf registration statement to register $150 million of securities, which it may use for future capital raises. However, the company faces challenges in maintaining compliance with Nasdaq's listing requirements, having received a notice regarding its stock price falling below the minimum bid requirement. A hearing is scheduled for February 27, 2025, to discuss potential compliance strategies, including a possible reverse stock split.

Looking ahead, Organovo's management has expressed substantial doubt about its ability to continue as a going concern for at least the next year, emphasizing the need for additional funding to support ongoing research and development activities. The company plans to focus on advancing FXR314 and developing its proprietary 3D tissue technology, while also exploring strategic partnerships to enhance its financial stability and operational capabilities.