For most applications, additive manufacturing alters the economics of the product while the product itself more or less remains the same. In bio-printing, however, additive manufacturing creates a completely new product category that has the potential to change the healthcare industry. Organovo, a biotechnology company based in San Diego, CA, harnesses the power of 3D printing to “bio-print” living human tissue with the ultimate goal of creating viable organs from scratch that can function within the human body .
Recently, there has been a significant organ shortage in the United States .
One driver of the demand for organs is that the incidence of liver disease, and associated healthcare costs, continues to grow. One in five adults is affected by nonalcoholic fatty liver disease (typically due to obesity) which contributes to the projected growth of the market to $25 billion annually by 2026. Liver transplants represent the costly primary treatment for this and many other liver diseases .
Amongst potential healthcare innovations, bio-printing is uniquely equipped to both decrease the demand for organ transplants (through direct therapeutic application) and also increase the supply of transplantable organs (through the fabrication of healthy whole organs). With over 100 patents and its proprietary NovoGen™ platform that facilitates the printing of complex human tissues via extrusion, Organovo is one of the leading bio-printing companies. To create a sustainable competitive advantage, Organovo has developed a distinct strategy that enables it to create value in the short term that helps fund the value it strives to create in the long term .
To create short term value, Organovo has two distinct business opportunities. The first is via its ExVive™ offering. Organovo bio-prints customizable tissue “on demand” for its pharma clients to specification. This service speeds up drug development by enabling proactive modeling of a drug’s efficacy and de-risks further company investment via earlier human tissue testing .
The second short term opportunity is via Organovo’s subsidiary, Samsara Sciences. Since actual human tissue is an initial input of bio-printing, Organovo has developed a capability to procure normal and diseased human cells from a network of donors which it then supplies to customers . Both ExVive™ and Samsara are short term revenue drivers for Organovo, encompassing its entire commercial presence, and effectively fund its longer term goal of bio-printing implantable tissues.
Though Organovo’s ultimate goal is to bio-print a complete human organ, its more attainable long term goal is to develop bio-printed tissues that can be implanted into patients to repair or replace damaged or diseased tissue. In December 2017, Organovo achieved a major milestone when the FDA gave orphan drug designation to the Company’s bio-printed NovoTissue™ therapy for Alpha-1 Antitrypsin Deficiency (“A1AT”), a rare genetic disorder . The therapy intends to postpone or prevent the need for a liver transplant by replacing damaged tissue and promoting healthy tissue regeneration. The next step is for Organovo to file an Investigational New Drug application with the FDA, which it intends to do by 2020. Getting the therapy approved for commercial use will take three to five additional years post-filing . Approval would give Organovo exclusive access to the untapped $1 billion market for A1AT . Over the long term, Organovo will extend its therapeutic development platform beyond A1AT to create human tissue products for additional indications and organs.
While Organovo’s short term and long term strategies around bio-printing uniquely situate it to compete in the market across both time horizons, management needs to be aware of the Company’s capitalization. With $37 million of cash in its coffers as of September 30, 2018, Organovo has approximately two years of runway until it is no longer able to fund its business .
Since NovoTissue™ will be commercialized in 2022 at the earliest, Organovo needs to be prepared to raise outside capital within the next 24 months or feel confident that ExVive™ and Samsara can generate enough cash to fund the therapeutic side of the business indefinitely. Like many biotechnology companies, Organovo should consider selling a future royalty in NovoTissue™ to a large pharma company to gain cash for the business and an aligned partner to mitigate regulatory, operational, and financial hurdles.
Despite its achievements, Organovo is still far away from bio-printing liver tissue for human implantation. Will the Company be able to bio-print tissue in sizes large enough to achieve therapeutic benefits or will the challenge of achieving tissue innervation and vascularization be a limiting factor ? If the NovoTissue™ therapy regimen is approved, will it prove cost effective (despite the high input costs of human tissue and high labor costs of surgery) and clinically effective enough to be reimbursed? Though through Organovo and its bio-printing technology, it feels as if the future of healthcare is here, there is much left to be proven before bio-printing can be touted as commercially and clinically viable.
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