Organovo Raises $6.5M, Lists on OTC, in Alternative Public Offering
Shares of San Diego-based “bio-printing” company Organovo are set to begin trading over the counter today, following a reverse merger and $6.5 million in private placement financing, which Organovo CEO Keith Murphy collectively describes as an alternative public offering.
Events leading up to the announcement were fairly complex, based on recent filings with the Securities and Exchange Commission. A public company based in Nevada, Real Estate Restoration and Rental, agreed to merge with a newly created business called Organovo Holdings a few days after Christmas. Organovo Holdings, in turn, was reincarnated as Organovo Inc., a Delaware company that actually merged on Feb. 8 with Organovo, the San Diego medical technology startup.
Organovo will remain in San Diego under the same leadership team, according to Murphy. In completing the merger, Organovo says in a statement released today that the company issued 22.4 million shares of its common stock to Organovo Inc.’s shareholders. As of today, the company will be quoted on the over the counter markets under the symbol ONVO.
The company says it raised total gross proceeds of $6.5 million through a private placement of its securities to qualified investors. Organovo had previously raised about $3 million in debt financing that could be converted to Organovo shares.
As I’ve previously reported, Organovo was founded in 2007 to advance “bio-printing” technology that deposits cultured human cells in 3-dimensional patterns, which grow together to form human tissue. Organovo’s technology was pioneered by the University of Missouri’s Gabor Forgacs, who explained the concept in a Dec. 5 TedMed presentation in San Diego.
Organovo was founded with a long-range goal of advancing the technology to make replacement blood vessels and organ tissue from a patient’s own cells. Murphy told me last year Organovo found a more immediate way to generate revenue by partnering with pharmaceutical companies to make human tissue samples that drug development companies could use to test experimental drugs before giving the drug to human patients in clinical trials.
Proceeds from the $6.5 million in financing will be used to expand Organovo’s operations and to help advance technology development in specialized areas where the company has no pharmaceutical partners, Murphy says.
“We’re going to be able to have more proof in hand when we go to these potential partners” with new applications of the technology, Murphy says. In oncology, for example, he says Organovo could develop ways to make human tumor tissue that could be used to test new anti-cancer drugs.