Organovo Announces Preliminary Fiscal Second-Quarter Total Revenue; Company Restructures to Improve Operational Efficiency
SAN DIEGO, Oct. 04, 2017 (GLOBE NEWSWIRE) -- Organovo Holdings, Inc. (NASDAQ:ONVO) (“Organovo”) today reported preliminary unaudited total revenue for the fiscal second quarter of 2018. The Company expects to release full fiscal second-quarter financial results on November 9, 2017. The Company also announced a restructuring plan to improve operational efficiency.
Selected Organovo Financial Highlights
Preliminary fiscal second quarter total revenue is expected to be between $1.3 million and $1.4 million, consisting largely of product and service revenue. At the midpoint, this result reflects a 2 percent decrease in total revenue versus the comparable period of fiscal 2017 and a 36 percent increase versus the fiscal first quarter of 2018.
“We are executing against our key objectives halfway through fiscal 2018, with the second quarter representing our second highest quarterly revenue to date and our third consecutive quarter of sequential product and service revenue growth,” said Taylor J. Crouch, CEO, Organovo.
“Our tissue systems continue to gain traction with biopharma clients and academic partners, with exceptionally strong engagement in developing disease models for compound screening. We see strong indicators that one or more of our clients will move to implement our platform for larger routine use applications by the end of our current fiscal year.”
Crouch continued, “We’re also pleased that our recently announced NIH grant to study liver disease is off to such a strong start. Non-alcoholic fatty liver disease (“NAFLD”) is a growing public health issue around the world, and we believe our ExViveTM Liver Tissue is uniquely suited to model the dynamics of non-alcoholic steatohepatitis (“NASH”) and other conditions such as liver fibrosis in a way that mimics many aspects of human livers. Our bioprinting platform can facilitate breakthroughs in studying fatty liver disease and lead to revolutionary approaches for discovering and developing drugs in this critical, unmet disease area.”
Restructuring Plan
Organovo announced a plan to restructure its business to better focus and align resources, reducing approximately 15 positions, or 13% of its overall workforce. The internal reorganization will improve operational efficiency, consolidate overlapping positions and streamline the Company’s management structure. As a result, the Company expects to record a restructuring charge in the fiscal third quarter of approximately $0.9 million, primarily related to employee severance and benefits costs.
In addition, Organovo expects the workforce reduction will decrease operating costs by $1.3 million in fiscal 2018 and $2.7 million in fiscal 2019. The reduction in future operating expenses is expected to improve the Company’s fiscal 2018 negative Adjusted EBITDA. The actions associated with today’s restructuring announcement are anticipated to be complete by the end of calendar-year 2017.
“As we direct our strategic effort to growing liver and kidney tissue research services, and the ongoing preclinical development of our liver therapeutic tissue, we identified the opportunity to streamline our operational capabilities and align our organization more closely with achieving these precise commercial and R&D goals,” said Taylor J. Crouch, CEO, Organovo.
“We expect to achieve important process and scale efficiencies that allow us to better engage with our customers and focus on opportunities with the highest return-on-investment for our business. Our new organizational structure also allows us to reduce costs in non-core areas, and more carefully manage our cash burn rate with an eye towards delivering long-term shareholder value.”
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