Why Organovo Holdings Shares Vaulted Higher

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Organovo Holdings (NYSEMKT: ONVO  ) , a tissue engineering specialist whose products are used for research and medical applications, jumped as much as 20% after the company announced the first delivery of 3-D liver tissue to a key opinion leader, or KOL, or in layman's terms, a top research scientist.

So what: This delivery marks a three-month advance in the company's previous guidance on when it would deliver its first 3-D liver tissue to an outside laboratory for research. The expectation is that Organovo will deliver nearly 400 of these 3-D liver tissue products to various KOLs by the end of this month. They will, in turn, offer suggestions on how to improve the product, as well as drum up interest in the 3-D liver tissue with colleagues. With this move being made ahead of schedule Organovo now anticipates that it will launch its 3-D liver tissue assay test before its previously guided December 2014 deadline.

Now what: Today's story is all about the potential for revenue. The big question on every investors' mind is whether this novel idea can be transformed into something that actually produces revenue. The simple fact that Organovo's timeline is running ahead of schedule is certainly surprising. That it's on pace to bring its 3-D liver assay product to market before its originally guided date is great news as well, and would certainly imply that commercial product is a real possibility. While I'm personally excited for Organovo as a health care sector enthusiast, I'm also a realist and wouldn't exactly expect sales to take off, or losses to shrink, in any meaningful way anytime soon. What that means is that the stock will likely remain volatile in the near term, but that its upside is reasonably limited.

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  • Report this Comment On February 05, 2014, at 7:12 PM, AnsgarJohn wrote:

    This really seems to have "Pump and dump" written all over it. KOL? That's laughable.

    "Organovo Announces First Delivery of 3D Liver Tissue to Key Opinion Leader

    01/29/2014

    SAN DIEGO, Jan. 29, 2014 /PRNewswire/ -- Organovo Holdings, Inc. (NYSE MKT: ONVO) ("Organovo"), a three-dimensional biology company focused on delivering breakthrough 3D bioprinting technology, today announced that it has performed its first 3D Liver tissue delivery.

    The achievement marks the delivery of Organovo's 3D Liver tissue to a laboratory outside of the company to a key opinion leader (KOL) for experimentation, and marks the achievement of a milestone along the pathway to commercial launch of its 3D liver tissue product. Organovo achieved the milestone ahead of its April 2014 target date. Key opinion leaders are generally experts, in this case top research scientists, in a particular field whose opinions and publications will influence practice. Organovo expects KOLs to make recommendations on improvements to the tissue before launch and to influence peers through their reporting of their research results at conferences and through peer reviewed publications."

    Citron http://video.cnbc.com/gallery/?video=3000237705

  • Report this Comment On February 10, 2014, at 2:46 PM, Flygal5 wrote:

    I think that it is pretty typical for Citron, and other short sellers, to bash small innovative companies. The lack of coverage and low institutional ownership will make this stock volatile, without question.

    But this company is doing something valuable, help speed up drug development. Helping lower costs for Pharmaceutical companies. The name gives away the long term, printed organs. Sort of like Netflix, you knew where the company intended to go. But they identified DVDs as a first step that would establish the company.

    ORGO has identified a path. Tissue for drug development; then tissue patches for humans: blood vessels, heart patches; and hopefully eventually printed full parts.

    They may or may not succeed. But I am glad to provide them capital for the effort. And patience.

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