Is Organovo for Real?

Organovo Holdings (NYSEMKT: ONVO  ) was one of last week's biggest winners, soaring 55% after making the leap to the more prolific NYSE MKT exchange.

A bigger stage plays well when you have a neat tale to tell, and Organovo certainly has all of the makings of a hot story stock.

Organovo takes 3-D printing to a seemingly implausible extreme. Its bioprinting process can generate a reasonable proxy to human tissue in a lab that can be used in culture plates or bioreactors for medical research and therapeutic applications.

Yes, that's pretty cool, and recent investors seeing the stock jump from $3.87 to $6.01 in a single week have a good reason to get giddy.

Unfortunately, long-term investors have seen this before.

The stock traded as low as $2.35 in May of last year, only to peak at $10.90 a month later and bottom out at $1.49 the month after that.

Organovo is a volatile little specimen, and it can thank 3D Systems (NYSE: DDD  ) and Stratasys (NASDAQ: SSYS  ) for all of the attention.

3-D printing wasn't on the investing radar until last year when 3D Systems and Stratasys made it fashionable. Manufacturing printers capable of cranking out on-demand aircraft parts, prosthetics, orthodontics, and even your nephew's missing Lego piece is no longer the handiwork of science fiction. Sure, the printers are slow as molasses and pretty darn expensive, but we've seen technology get faster and cheaper over time.

Office supply chains are starting to stock 3-D printers. The mainstream push is coming.

Stratasys shares soared 164% last year, and they come off as slackers compared to the 284% pop for 3D Systems.

Their Wall Street success has spawned interest in other companies with 3-D printing models, though clearly there's a major difference between the reality that 3D Systems and Stratasys have achieved and the unfulfilled yet lofty ambitions of Organovo.

For now, the wild swings are fueled by speculation. Organovo isn't generating any kind of meaningful revenue. It cranked out a mere $0.2 million in revenue during the first three months of this year, and half of that was the result of grant revenue.

There will be more rallies like we experienced last week, and it wouldn't be a surprise to see the company try to shore up its balance sheet by raising new financing during the good times. There will also be more crashes like we had last summer, and the "I told you so" will sting until the story stock regains its swagger. Until the market gets a clear snapshot on the viability of Organovo's business and its legitimate upside and market positioning, speculators on both ends will concoct their own theories for why the stock will either change the world or fade away.

Keep an eye on Organovo, but always be aware that this tantalizing Petri dish of an investment is going to be ridiculously risky in the near term.

Learn more about why 3-D printing is changing the world 
With the U.S. relying on the rest of the world for such a large percentage of our goods, many investors are ready for the end of the "made in China" era. Well, it may be here. Read all about the biggest industry disrupters since the personal computer in "3 Stocks to Own for the New Industrial Revolution." Just click here to learn more.


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Comments from our Foolish Readers

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  • Report this Comment On July 15, 2013, at 9:56 AM, scjanson wrote:

    Long ONVO

  • Report this Comment On July 15, 2013, at 11:15 AM, ScottAtlanta wrote:

    I've been watching ONVO....and even predicted there'd be a pop when it was approved for the NYSE.

    But I had no idea, anything like this. This is really just wild speculation since, as you noted. I think there's better timing for this stock....when it reports in subsequent quarters there's going to be real disappointment....but those may be buying ops if the company actually progresses towards its goals.

  • Report this Comment On July 15, 2013, at 12:28 PM, 110254545yy wrote:

    Every investment is a risk, but I am willing to stake in a pioneering company like ONVO.

    NYSE listing makes it even more attractive.

    Sure they will raise funds somewhere down the line, but it would be for growth I hope. Buy at every dip and hold for a long time

  • Report this Comment On July 15, 2013, at 12:37 PM, TMFBlacknGold wrote:

    Here's what I don't like about Organovo:

    "Organovo Holdings, Inc. (Organovo), formerly Real Estate Restoration & Rental, Inc., is a development-stage company."

    Call me crazy, but I don't see a connection between real estate and biological printers. It sounds like a cool idea. However, there are academic teams making far more progress than the company. I don't see this as an opportunity for investors.

    --Maxxwell

  • Report this Comment On July 15, 2013, at 3:54 PM, mofo6145 wrote:

    The article and comments regarding onvo show a total lack of knowledge of the company. They have $14,000,000 in the kitty and no debt. They also have working agreements with Pfizer and several other top medical and research facilities. The real estate has nothing to do with the business. They bought a defunct business which enabled them to take their name and get listed by buying a majority of the stock which is much faster and easier then the normal qualifying method.

    They own the patent to the 3d computer and also have an agreement to manufacture and market the software.

    This is just a portion of what they have. Look up their news and announcements over the last 9 months. You will also be amazed by their staff.

  • Report this Comment On July 15, 2013, at 8:43 PM, jakewaliski wrote:

    They are absolutely for real.

    All negative commentary is fear and ignorance based and shows a lack of knowledge in the technology or the future implications of such technology. Big Pharm can now do studies without risk and for half the price, organ transplants may become a barbaric method of the past, trauma patients may survive potentially life threatening accidents, and cancer patients can have an entire organ removed and replaced without threat to the body.

    The market is every person in the world – 7 billion and growing, as well as every Pharm company interested in bringing in new meds to market at half the price of doing so. So while true, ONVO may not have ‘made’ much money right now, there is money there that only they can make.

  • Report this Comment On July 15, 2013, at 9:15 PM, SELLmtg wrote:

    My opinion:

    Is ONVO for real ? the answer is YES. YES, YES

    ONVO is an excellent buy.

    1) Its management and staff are excellent, they

    have been working hard to bring ONVO from OTC

    to NYSE market

    and they have been working harder to bring ONVO

    to be a successful company

    2) ONVO's 3D bio printing is not a sci-fi (just like 3 D printers, years ago,

    every one thought 3D printer(s) was a joke and now it became a reality)

    3) ONVO's bio printing technology will change the word and its stock will go higher (very high) and your investment dollars will grow with it.

    4) Go to its website Organovo.com and find more information and you will be very happy to be its investors.

    5) ONVO is now trading on NYSE, it gets notice, more and more daily . Hedge fund managers will buy ONVO and ONVO will go up quickly.

    6) ONVO is just like AAPL when AAPL was a penny stock, look at AAPL now.

    Conclusion: ONVO is an excellent buy.

  • Report this Comment On July 17, 2013, at 1:48 PM, Biffou wrote:

    I and my son each bought some healthy chunks of ONVO early this year when the stock was languishing in the $3-4 range post Consumer Electronics Show buzz on 3D Printing. I love the company because it is one of the only players (if not the ONLY player) in the human tissues and body parts aspect of 3D printing. Everyone else is looking at consumer applications whereas these folks are looking at human applications.

    Think of this for a minute. You are running in the Boston Marathon and a terrorist bomb results in your losing of a body part such as a leg. If you had a full body 3-D Digitized scan stored at a facility (I believe this will be a business in the near future and we will store body scans just as we do sperm or ovarian eggs), then the doctors would be able to make an exact duplicate of your leg using your own blood and body tissues which would drastically improve recovery and reduce rejection rates. Today we can only approximate what your appendages were like (such as length, diameter, etc.) which makes prosthetics never perfect. Then extrapolate this to common issues such as hip replacements, knee replacements or even dental grafts.

    ONVO may not be profitable and those of you who love looking at P/E rations, earnings, etc. will be disappointed. Those of us who look to the future see the potential of ONVO.

    Finally, around the same time as Bill Gates was trying to sell Microsoft for $100,000 to IBM (they refused), Ken Olsen, the president of Digital Computers said " There is no reason for any individual to have a computer in his home." Both IBM and Digital were not visionaries. Bill Gates, Michael Dell, Steve Jobs were. I'll go with the visionary anytime.

  • Report this Comment On July 17, 2013, at 1:49 PM, Biffou wrote:

    Oops. Typo. Mean P/E ratios, not rations.

  • Report this Comment On July 21, 2013, at 9:24 PM, FooLawson wrote:

    @TMFBlacknGold

    The only reason I was skeptic of ONVO was the real estate restoration & rental inc. it was before. This does sound shady, but 3D printing applications that can be used for the human truly shows how diverse 3D printing can get...

    I will follow and most likely pull the trigger soon!

    I am bullish on this industry... I own shares of both DDD and XONE

  • Report this Comment On July 23, 2013, at 8:24 PM, jzjinvestor wrote:

    I guess Bill Gates wasn't quite the Visionary when he was trying to sell out to IBM?

  • Report this Comment On July 31, 2013, at 10:11 PM, ScottAtlanta wrote:

    @jzjinvestor -- yeah, I was thinking that too...but if you really think about it, just about all "visionaries" dont' end up on top the way they thought they would.

    But on ONVO....I was researching it prior to NYSE lisitng and noted that to get the listing they had to add another board member who did not have such a direct stake in the company. The woman they hired is no slouch...her resume included top posts in pharma as I recall. Would she take the post just for money? Or is is more likely that she has some integrity and took the post b/c she thinks the co. may go somewhere? If you had a top flight career would you want to append a loser, crazy speculative co. to your name? I'm guessing not and that she likely saw something she really liked....but ya never know, maybe she needs to buy her 20 year old boyfriend a new sports car...or maybe people like this sit on 20 boards for the perks.....

    Anyway...Onvo is coming off it's exuberant entry onto NYSE and now or a bit later may be a good time to take a nibble, back down to 5.07 today.

  • Report this Comment On November 13, 2013, at 5:11 PM, IveGotTheNUTS wrote:

    The stock is on a terror right now. Who knows how long it will last. Im sure there will be bear traps the whole way up. You will never hit a ten bagger on a conglomerate. Nor will you lose 80 percent of its value either in a day. But Exponential risk multiplied by profit divided by investment amount equals Tminus investment . Fundamentally this stock look HORRIBLE. On a technical basis this my be a text book chart example of a Secular Bull start. Amazing to watch these MOUNTAINS grow.

  • Report this Comment On November 19, 2013, at 4:50 PM, runnerman wrote:

    has ANYONE bothered to check this "real estate"company out??..take a peek at the insiders "dumping stock"..I have many friends in the science community,if this thing was even close to real, who in their right mind would dump stock. All you "experts" take a look at form #4 in the company sec filings and make your own mind up. Anyone who buys this scam deserves exactly what they will get. The last presentation involved a petri dish,NO machine of any kind..where are the patents?? Hmmmm!! sure smells like a scam..

  • Report this Comment On November 19, 2013, at 5:15 PM, runnerman wrote:

    By the way,I am a day trader and have been in and out of this "stock" since it was at $ 4.00..so before you think my comments may be "sour grapes", think again.. I really do have a conscience and do not take pleasure in the pain of others. I have made a six figure take from this thing. When it is back down to 3 or 4 dollars I may play again..Be informed,be aware, ALWAYS,take the profit and run.....

  • Report this Comment On December 05, 2013, at 4:13 PM, tamhas wrote:

    runnerman, Your entire history at TMF appears to be trashing ONVO. Might you have motives other than sharing of your knowledge?

    Where here http://www.organovo.com/company/history do you see any history in real estate renovation. The only thing outside I can find is a reverse merger partner, i.e., what sounds like a convenience in original organization, not a growth of one company into the other.

    Looks a whole lot like research leading to patent leading to forming a company. There are an awful lot of publications here http://www.organovo.com/science-technology/publications that suggest there is something other than snake oil.

    And, where do you get your numbers. With negative earnings, how do you get a P/E of 48. This http://finance.yahoo.com/q/ks?s=ONVO+Key+Statistics show price/book as 13.64.

    How about some substance instead of scare tactics?

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