Can Organovo Holdings Inc. Keep It Up?

Organovo more than quadrupled last year, and after tanking early in 2014 it's up 68% since bottoming out in April.

Jul 2, 2014 at 4:00PM

There aren't too many publicly traded companies with dreams as ambitious as Organovo Holdings (NYSEMKT:ONVO). Its ultimate goal -- true to its name -- is to bioprint proxies for human organs that can be used ideally for transplants but at the very least to speed up medical testing of promising treatments that are meandering in the arduous clinical trials process. 

That dream is likely decades away from potential realization, but bioprinting the lab equivalent of human tissue for the sake of drug testing is closer than you may think. Organovo's first viable product -- a 3-D liver assay test -- is still on track to hit the market later this year.

Shares of Organovo soared 18% last week on the news, fueled largely by kind words from Roche's head of mechanistic safety at the 3D Cell Culture 2014 conference in Europe last week. He noted that Organovo's 3-D liver assay test is able to discern between similar toxic and non-toxic compounds. Organovo followed that up by sticking to its target of launching the test by the end of this year. 

The assay test is naturally pretty important for a company that's bleeding money as it ramps up its research. The market wasn't impressed to see Organovo clock in with revenue of a mere $0.4 million for all of fiscal 2014 that ended in March, more than offset by operating expenses that doubled to $21 million. The sooner it can get its first needle-moving product to market the sooner investors can stop fretting about the unflattering pace of Organovo's cash burn. 

As you can imagine, you don't dream as big as Organovo without being a roller coaster of an investment. The stock soared 326% last year as its story got lumped into the 3-D printing craze that drove shares of the companies making printers that crank out physical objects higher in 2013. This year has been brutal for investors in 3-D printing, and that includes those that happened to own Organovo stock since peaking in November.

Organovo shares kick off this holiday-abridged trading week trading 22% lower in 2014 and 37% off of its November highs. However, the more recent trend has been encouraging. The stock has soared 68% since bottoming out at $5.12 just two months ago. Short interest is near its historical high, drumming up hope that a short squeeze can push the stock even higher. 

As a development-stage company with negligible revenue investors know that they're strapping themselves onto a white-knuckled ride here. This is a story that will take years -- not months -- to play out, but the obvious potential gains if Organovo becomes the first company to succeed commercially in bioprinting faux human tissue are substantial. This is the kind of company that could be worth billions or nothing at all in a few years. You don't get any riskier than that, and that will naturally keep the volatility at a feverish pace.

Leaked: This coming blockbuster will make every biotech jealous
The best biotech investors consistently reap gigantic profits by recognizing true potential earlier and more accurately than anyone else. Let me cut right to the chase. There is a product in development that will revolutionize not how we treat a common chronic illness, but potentially the entire health industry. Analysts are already licking their chops at the sales potential. In order to outsmart Wall Street and realize multi-bagger returns you will need The Motley Fool's new free report on the dream-team responsible for this game-changing blockbuster. CLICK HERE NOW.


Rick Munarriz has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information