This turned out to be great year for Organovo Holdings (ONVO). Shares of the 3D-bioprinting company climbed over 30% during 2016. Organovo had several important developments during the year, but what was the company's biggest win?
Launch of second commercial product
In September, Organovo announced the launch of its second commercial product, ExVive human kidney tissue. This kidney tissue enables customers to study the effects of drug exposure in the human kidney as part of their drug discovery and development processes. The company's first product, ExVive human liver tissue, hit the market in 2014.
Organovo was receiving orders for its new 3D-bioprinted kidney tissue even before the launch was announced. The company said that multiple contracts had been signed, including with two of the largest pharmaceutical companies in the world.
The primary benefit to customers for using the 3D-bioprinted kidney tissue is that it can allow drugmakers to detect toxicity earlier than conventional approaches such as animal testing. This early detection can potentially save pharmaceutical companies a lot of money.
Why was this the biggest win of the year for Organovo? The addition of a second product immediately added to the company's revenue growth. It also opened up a new market that is a natural extension to Organovo's liver tissue business. Organovo's executives think that the kidney tissue business could eventually generate annual revenue of $100 million or more.
While the launch of the ExVive human kidney tissue was arguably Organovo's biggest win in 2016, the company did have several other successes. Honorable mentions go to more than tripling revenue from the prior year and to a couple of important scientific publications and presentations.
In March, Bristol-Myers Squibb (BMY 0.28%) and Organovo scientists presented data at the Society of Toxicology's annual meeting. These presentations focused on the benefits and potential of using 3D human liver tissues to detect drug-induced liver toxicity.
In July, researchers from Roche (RHHBY 1.07%) and Organovo published data in the scientific journal PLOS One. This publication discussed the effectiveness of Organovo's human liver tissue in detecting toxicity. In particular, the data compared the 3D-bioprinted liver tissue to traditional pre-clinical testing methods, including animal models.
Although the collaborations with Bristol-Myers Squibb and Roche weren't quite as critical as the kidney tissue launch, they were nonetheless important to Organovo's future. The biggest hurdle to the company's success is resistance to adopting the new 3D tissues. Having major customers publicly endorse use of these tissues and citing data to back up why they're going do is huge.
Looking ahead to 2017
I expect Organovo to sustain its momentum in the new year. The company thinks that it will continue to grow revenue by triple-digit percentages well into the future. My hunch is that outlook will be true for 2017, at least.
Look for more presentations and publications in the new year like the ones with Bristol and Roche in 2016. The more Organovo gets the word out with solid data backing up its claims, the more traction it will get.
Organovo plans to expand its offerings to include metabolism studies. That's a smart strategy that fits well with what the company is already doing. Organovo hasn't announced a timeline for its metabolism program efforts. My prediction, though, is that its biggest win in 2017 will be the launch of this new service.