What: Organovo Holdings (ONVO 2.00%), a 3D bioprinting company, saw its stock price slip by nearly 9% in July. The stock also fell 18% from its highs during the month:
Although there wasn't a specific catalyst that drove the stock lower for the month, Organovo's share price has been slipping every since its $46 million secondary offering in June; helped in part by a lack of long-term guidance for its first marketed product, the exVive 3D Human Liver Tissues.
So what: Organovo's shares have been nosediving throughout the year, as investors lose patience with the slow commercial uptake of the company's human liver tissues. At the end of last June, for instance, management stated that the total contract bookings for this product stood at a mere $1.94 million. That's nowhere near enough to turn the company into a cash flow-positive entity, evinced by its -$6.3 million in operating cash flow in the first fiscal quarter of 2016.
Now what: With its second product, the exVive 3D Human Kidney Tissue, expected to hit the market in late 2016, Organovo may be able to start to turn the corner within the next 18 months or so. After all, management believes the demand for kidney tissue will be stronger than for liver, and its price should be substantially higher as well ($250,000 vs. $150,000). That said, this company looks destined to tread water until the launch of the kidney tissue product next year. And that's why you may want to remain safely on the sidelines with this speculative stock, despite the futuristic and headline-grabbing nature of its technology.
