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Our Stock Pick of the Month: Organovo

A Human Cell at a Molecular Level

A Human Cell at a Molecular Level

Our stock pick for the month of February is Organovo Holdings, Inc. (ONVO).

This cutting edge company is using technology that is making functional human tissues using three dimensional bio-printing technology.

The focus of the company combines medical research with therapeutic applications.

Two years ago the stock was below 2 dollars a share. In the past year the stock has seen a low of $3.27 a share and a high of $13.65.

As of the close of business on Friday February 07, the stock stood at $9.35 a share. It was up 0.42 for the day an increase of 4.70%.

This is a stock is an investment to be purchased and held for a longer term since revenue generated from actual product delivery and services provided can first be expected by the end of 2014.

At the end of 2013 the company had total current assets of $50.5 million and current liabilities of $2.9 million, resulting in working capital of $47.6 million. This compares to March 31, 2013, when assets stood at $16.1 million and liabilities of $8.4 million with only $7.7 million in working capital. Much of the increase can be attributed to the issuance of stock in the company in August of 2013. The net proceeds from this sale was $43.4 million.

The total amount of common stock issued and outstanding is now at 89,125,246 shares as of December 31, 2013.

The 3 dimensional bio-printing technology combines engineering and biology to create living human tissues that attempt to duplicate the manner and function of human organs. This is achieved by producing thick tissues of 20 or more cell layers, comprised of multiple cell types. Tissue creation will become automated and reproducible.

The scientific origins of scaffold-free bio-printing can be traced to the the laboratories of Organovo and its scientific founder Dr. Forgacs. The discoveries that followed have lead to a portfolio of patents that are licensed exclusively to Organovo. With continued research the company hopes to advance 3D bio-printing technology with the NovoGen Bioprinter platform. Recently there has been a new round of patent applications because of the advances made in these labs.

At the end of 2012 Organovo began a partnership with AutoDesk Research to create the first 3D design software for bio-printing. The joint efforts of these two companies is leading to major advancements in medical research, drug discovery and development. Next will be surgical therapies and transplantation.

Some of this new technology was already selected as one of the “Best Inventions of 2010” by Time Magazine. There has also been reports generated by The Wall Street Journal and The Economist.

On January 14, 2014 Organovo announced a new collaboration with National Institutes of Health. More specifically with the National Eye Institute (NEI) and the National Center for Advancing Translational Sciences (NCATS). The goal is to develop better and more clinically predictive tissue models using Organovo’s NovoGen MMX Bioprinter. It will allow the creation of three dimensional, architecturally correct functional living tissues.

On January 29, 2014 Organovo would announce that it had performed its first 3D Liver tissue delivery. This was achieved ahead of the original April 2014 target date. It will now be viewed by an outside laboratory for experimentation by a key opinion leader (KOL). This will now enable Organovo to commence the commercial launch and start generating revenue through a services model.

Additional data releases this year on 3D Kidney and breast cancer tissues are to be expected.

Organovo is a development stage company, and does not expect product based revenue until the commercial release of its liver toxicity assay product, currently planned to be in November 2014. Since inception, the company has periodically received revenue from grants and collaborative research agreements.

Although one can expect increased competition Organovo will be a leader in solving complex medical research problems and building the future of medicine. It is already changing the shape of medical research and practice. One can just imagine the importance to medical patients of a transplant that no longer requires anti-rejection medicine because the new organ is generated from the imprint of their own cells.

The list of diseases that are the result of organ failure like diabetes, hepatitis, cirrhosis, heart disease etc.,seems endless. The potential for this type of technology is almost infinite.

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