Long-term shareholders of Organovo Holdings (ONVO -0.94%) have been anxiously awaiting the launch of the company's 3-D liver assays—its first real product. But that won't happen until the end of this year—and we won't know how much revenue it produces until mid-2015.

But you don't have to wait until then to find out where the company is headed. Organovo recently held a virtual investor presentation day. In it, there were three key pieces on information that every investor in the company should know about.

Proof that it works
Scientists with Roche (RHHBY 1.72%) were some of the first professionals to get their hands on Organovo's 3-D liver assays. What they found impressed them: Organovo's liver cells responded in ways that only the native liver has been able to show so far.

Roche took a known toxin and introduced it to Organovo's liver assay. What's important to know is that the toxic drug did not show toxicity when it was originally tested with 2-D liver assays or in animal testing. It was only when the drug reached late stage trials—and after millions had been spent on it—that toxicity arose in humans.

But Organovo's liver assay, which can live for at least 42 days, correctly predicted toxicity—as measured by the amount of albumin (a protein produced by the liver) levels. It also showed no adverse effects when a molecularly similar—though non-toxic—drug was introduced into its system.

Proof that Organovo's assays work. Photo: Organovo 

That's a big deal, as it shows that Organovo's product can reduce money wasted on drugs that will eventually have to be scrapped due to liver toxicity.

Now we know how big the market could be
For the first time, Organovo has let us know just how big the market is for its first two key products. As I said, liver assays should be available before the end of the year. And the company also expects 3-D kidney assays to come to the market some time in 2016.

The company released this slide showing how big the total addressable markets for each of these products will be.

Source: Organovo 

There are a few key points to consider. First of all, the company thinks there are about 6,500 drug projects out there right now. Each project will need to test its toxicity every nine months—this means a steady revenue stream, not a one-off purchase.

Secondly, the company has already shown that providing five to ten liver tests per compound can yield about $150,000 in revenue. It also believes that since there are fewer alternatives in the kidney market, it could charge upwards of $250,000 for kidney tests in the years to come.

Put all of that together and you have a $3.4 billion market Organovo is going after. CEO Keith Murphy made clear during a recent question and answer session that there are two things that differentiate Organovo from others who print 3-D tissues. First, most of the others are academic ventures that are nowhere near the commercial stage. And even more importantly, Organovo is the only company producing tissues which, he believes, are actual living things—100% cellular tissue .

If that's true, Organovo could be able to capture a large swath of both of these markets.

We'll need more money
Sadly, it wasn't all good news for investors. As Murphy said, "to be frank...we have to be cautious about the fact that we have a budget," and because of that the company's current options for growth are limited.

Murphy made it clear that further dilutive offerings will likely occur in the future, which no doubt spooks some of the company's shorter-term investors. But, as Murphy pointed out, the money gained from these offerings can greatly broaden Organovo's horizons.

He specifically said that money from such offerings would be used to secure intellectual property rights, expand on skin, cancer, and liver cell development, and beef up the company's ability to conduct tests in-house.

The last point is important, as Organovo has learned that most pharmaceutical companies want to send drug compounds to Organovo to be tested, instead of Organovo sending the assays to them. That means more of an up-front investment in infrastructure by Organovo. Long-term, however, that could prove lucrative, as margins for the service would no doubt be higher.

Obviously, the most important numbers that investors want to hear about is sales of 3-D liver assays. We won't know about that for some time. In the interim, investors should be happy with the Roche results, take note of how much of the total addressable market is, and prepare themselves for dilutive offerings in the future.