HCW assumes coverage of Organovo Holdings at buy; PT $2.50

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H.C. Wainwright analyst Ed Arce assumed coverage of Organovo Holdings (NASDAQ:ONVO) with a “buy” rating and price target of $2.50. The stock closed at $1.04 on Dec. 12.

Organovo was founded in 2007 as a CRO, offering pharma companies access to its ExVive 3D bioprinted functional human tissues for preclinical testing. Now focused on transitioning to a therapeutics company, Organovo is developing its 3D bioprinted human liver tissue, called “NovoTissues”, for surgical implantation in patients to restore organ function.

Organovo has three programs that address rare, life-threatening indications caused by a defect in a single gene: (1) alpha-1 antitrypsin (A1AT) deficiency; (2) hereditary tyrosinemia Type 1 (HT-1); and (3) ornithine transcarbamylase (OTC) deficiency. The company hopes that NovoTissues will delay and reduce the need for liver transplant.

Mr. Arce believes a pre-IND meeting with the FDA in 2019 is likely to support multiple potential indications for NovoTissues, with an accelerated concurrent development timeline to approval. Organovo’s promising lead program for A1AT deficiency has FDA orphan drug designation and an expected IND filing in 2020.

Organovo has a comprehensive IP suite for its proprietary NovoGen Bioprinters, which fabricate tissue using controlled deposition of cells. The result is viable, three-dimensional tissue that mimics native human tissue composition, architecture and function. A key distinguishing feature of the technology is its use of purely cellular "bio-ink" (building blocks comprised only of living cells) alone, enabling the production of complex 3D tissues without the use of any scaffolding.

Mr. Arce views Organovo as a clear leader in the early, pioneering technology of 3D bioprinting of solid organs, and with no direct commercial competitors, believes the company has an impressive first mover advantage in developing and realizing the potential of 3D bioprinting to transform the field of regenerative medicine.

Stephen Kilmer