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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers