The potential to biomanufacture organs, create toxicology assays for the pharmaceutical industry, and produce living cancerous tissue for testing drug combinations are just some of the applications of tissue engineering platforms. While Organovo Holdings (ONVO -0.96%) is pursuing all three health-care opportunities mentioned above, it is doing so with varying time horizons. It's also worth noting that the company has yet to commercialize a product or generate meaningful revenue outside of research and development collaborations and grants.

With investors debating the long-term potential of the company, it would behoove investors to ask the following question: How quickly can Organovo Holdings generate revenue?

Development timeline for first product
The company's first product, 3-D liver assays for toxicology, will certainly mark an improvement to the 2-D cell culture standard used by the pharmaceutical industry. As CEO Keith Murphy wrote in the company's 2013 annual report published in July:

More than 150 drugs were either withdrawn from the market or failed in phase 3 clinical trials between 1990 and 2010, and about 25% of those withdrawals or failures were due to liver toxicity that was not predicted during preclinical testing. Such late stage or post-market failures endanger lives and cost billions of dollars to pharmaceutical companies. There is a clear need for more predictive preclinical toxicology models that can enable safer drugs to come to market faster and at lower cost.

Good news. At the end of October, Organovo reported that its 3-D liver tissues demonstrated the "retention of key liver functions for up to 40 days" against know liver toxicants such as acetaminophen -- the active ingredient in Tylenol and NyQuil. The study showed that the company's tissues do in fact have potential in assessing toxic effects of drugs. Meanwhile, the ability to remain active for more than one month allows the company to test multiple doses of drugs on the same tissue -- something that isn't possible with 2-D cultures. Where do you go from there?

In December, Organovo will begin the functional validation phase of its 3-D liver tissues. At this stage in development, data will be collected using known drugs that will allow the company to compare the metabolism of its biomanufactured tissues against known responses from native tissue. If you can't demonstrate the flexibility of assessing known liver toxicants with comparable effectiveness to native tissue, how the heck can you confidently use your product to test newly discovered drugs in the pharmaceutical industry's pipeline? It's all part of the development process.

Organovo is then planning to deliver the product to key opinion leaders in academia and industry for alpha and beta testing in April 2014. Assuming all goes well during functional validation and pre-market testing, the company hopes to launch 3-D liver tissue assays for toxicology in December 2014. Let's repeat that: In a best-case scenario, the company is more than ,one year away from launching its first commercial product. That means Organovo won't have revenue streams from products until 2015 at the earliest.

Why does this matter?
The company is also planning to develop and launch 3-D kidney and 3-D heart tissue assays for toxicology in the next several years, while other products are even further out. Nonetheless, investors should temper their expectations for any explosions in revenue in the near future. Toxicology assays developed at Organovo may be novel and may add value to the pharmaceutical industry, but even then, the company would have to sell an incredible amount of them to crack $100 million in sales. That watermark will also take years to reach.

It seems a bit premature to value Organovo Holdings anywhere near $1 billion given its underwhelming potential for revenue in the next few years. It is also a risky stock for individual investors to own with less than 10% institutional ownership and fewer than 80 million shares available. Regardless of stock price, I'm steering my investing boat clear of the company. I want to see progress in development materialize into real sales potential before I consider buying.