jefferies healthcare conference...pharma discovery program o $2+ billion o 7,000 annual pharma...

© Copyright 2017, Organovo, Inc. © Copyright 2017, Organovo Inc.

Jefferies Healthcare Conference

Taylor J. Crouch, CEOCraig Kussman, CFOJune 8, 2017

© Copyright 2017, Organovo, Inc. 2

Forward-Looking StatementsThis presentation contains statements about future events and expectations known as “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company has based these forward-looking statements on its current expectations and the information currently available to it, but any forward-looking statements are subject to a number of risks and uncertainties. The factors that could cause the Company’s actual future results to differ materially from its current expectations, or from the results implied by any forward-looking statements, include, but are not limited to, risks and uncertainties relating to the Company's ability to develop, market and sell products and services based on its technology; the expected benefits and efficacy of the Company's products, services and technology; the Company’s ability to successfully complete studies and provide the technical information required to support market acceptance of its products, services and technology, on a timely basis or at all; the Company’s ability to generate revenue and control its operating losses; the validity of the Company’s intellectual property rights and the ability to protect those rights; the Company's ability to implement and achieve its business, research, product development, regulatory approval, marketing and distribution plans and strategies; the Company’s ability to secure additional contracted collaborative relationships; and the Company’s ability to meet its fiscal-year 2018 outlook. These and other factors are identified and described in more detail in the Company’s filings with the Securities and Exchange Commission (“the SEC”), including those factors listed under the caption "Risk Factors" in the Company’s Form 10-K for the year ended March 31, 2017, filed with the SEC on June 7, 2017, as well as other filings Organovo makes with the SEC from time to time.

Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this presentation. Except as required by applicable law, we do not intend to update any of the forward-looking statements to conform these statements to reflect actual results, later events or circumstances or to reflect the occurrence of unanticipated events.


Non-GAAP Financial MeasuresIn addition to disclosing financial results that are determined in accordance with U.S. GAAP, the Company provides Adjusted EBITDA which is a non-GAAP financial measure, as a supplemental measure to help investors evaluate the Company's fundamental operational performance. Adjusted EBITDA represents earnings before interest, income taxes, depreciation and amortization, share-based compensation expenses and CEO transition costs. Adjusted EBITDA does not represent, and should not be considered, an alternative to U.S. GAAP measurements such as net income or loss. By eliminating interest, income taxes, depreciation and amortization, share-based compensation expenses and one-time restructuring costs, the Company believes the result is a useful measure across time in evaluating its fundamental core operating performance. Management also uses Adjusted EBITDA to manage the business, including in preparing its annual operating budget, financial projections and compensation plans. The Company believes that Adjusted EBITDA is also useful to investors because similar measures are frequently used by securities analysts, investors and other interested parties in their evaluation of companies in similar industries. However, there is no standardized measurement of Adjusted EBITDA, and Adjusted EBITDA as the Company presents it may not be comparable with similarly titled non-GAAP financial measures used by other companies. Since Adjusted EBITDA does not account for certain expenses, its utility as a measure of the Company's operating performance has material limitations. Due to these limitations, the Company's management does not view Adjusted EBITDA in isolation, but also uses other measurements, such as net income or loss and revenues to measure operating performance.


Changing Medicine

Technology leadership – Strong IP portfolio

Attractive and growing markets – Critical unmet needs

Growing revenue – Building product and service platform

Favorable competitive dynamics – First mover advantage


Organovo Overviewo Founded in 2007, NASDAQ listedo Proprietary 3D bioprinting

technology invented at University of Missouri with $5 million NSF grant; continued engineering and IP development at Organovo

o Creating tissue architecture systems for high-value drug profiling

o Key customers/partners include major pharma (11 of global Top 25; sophisticated drug developers in the liver therapeutics space) and academic institutions


Key Financial Metrics FY17 ($M) FY16 ($M) Y-O-Y %

Product & Service Revenue $3.2 $0.8 293%

Collaborations & Grants Revenue $1.0 $0.7 57%

Total Revenue $4.2 $1.5 185%

Cash & Cash Equivalents(1) $62.8

Key Financial Metrics & FY18 Outlook

(1) As of 3/31/2017(2) Guidance speaks only as of the date it was originally provided (June 7, 2017). Inclusion of guidance herein should not be interpreted as a re-affirmation by Organovo of its guidance. Organovo undertakes no obligation to update its

guidance after the date it was originally provided.(3) A reconciliation of non-GAAP negative Adjusted EBITDA, as forecasted for fiscal 2018, to the closest corresponding GAAP measure, net loss, is not available without unreasonable efforts on a forward-looking basis due to the high

variability and low visibility of certain charges that may impact our GAAP results on a forward-looking basis, such as the measures and effects of share-based compensation.

FY18 Outlook(2)

Total Revenue $6.0 million - $8.5 million

Negative Adjusted EBITDA(3) $29.0 million - $31.0 million


o Enable better predictive, physiologically relevant in vitro modelingo Fill the gap between in vitro and in vivo preclinical researcho Potential to avoid ~$1 billion in development costs and timeline delays for a single drug

with better information about which drugs to advance o Provide high-value compound screening and profiling in key organ disease systems across

the preclinical and drug development spectrum

Target Discovery

Target Validation

Lead Optimization

Pre-Clinical non-GLP Pre-Clinical GLP Clinical Trials

3D Human Tissue Models

Program Costs ->$ $$ $$ $$$ $$$$ $$$$$

High-Value Drug Profiling

10-12 Years, ~$1.2 billion

Enhancing Pharmaceutical R&D


o 73% of 126 phase 3 clinical trial failures from 1990-2010 were due to lack of efficacy or toxicity

o 39 drugs withdrawn from the market from 1990-2010, 59% related to toxicity

o One-third of drugs approved in U.S. from 2001-2010 later found to have a safety issue

Critical Unmet Need for More Predictive Preclinical Tissue Systems

References: FDA.gov; Pharmaceutical Research Manufacturers of America Profile; EvaluatePharma; Parexel Sourcebook; CDER Report to Nation; Tufts Center for Drug Discovery; Journal of the American Medical Association


Non-Alcoholic Fatty Liver Disease (NAFLD)

o ~33% of U.S. adults on NAFLD spectrum(1)

o ~20% of fatty liver patients progress to NASH(1)

o Predicted to become leading cause of end-stage liver disease in coming decades(2)

o Clinical biomarkers and therapeutics are lacking

o Need improved preclinical models that reflect human biology

(1) Cohen et al, Science 332:1519 (2011)(2) Ray K. Gastroenterology and Hepatology 10, 621 (2013)

Deteriorating liver health in key patient populations


(1) Pharmaceutical Research Manufacturers of America Profile(2) Company data and projections

Liver Toxicology

o $1+ billiono 7,000 annual pharma

discovery programs

o Gaps in 2D and animal models

o Unsatisfying Next Gen models

o Growing revenue per pharma discovery program

o $2+ billiono 7,000 annual pharma

discovery programs

o Gaps in 2D and animalmodels o Launched September

2016

o >$50 billion in annual R&D; new drug ~$1.2 billion and 10-12 years

o Gaps in 2D and animal models

o Enable discovery in areas with roadblocks

o Royalty opportunity

o >120,000 U.S. patients on transplant waiting list

o ~30,000 transplants annually

o N/A

o Partner with academiao IND in 2020o FDA clinical trials for

marketed product

Market Size(1) CompetitionOrganovo Position &

Growth Strategy(2)

Kidney Toxicology

Drug Profiling

Therapeutic Tissues

Favorable Markets & Competitive Dynamics


A Powerful and Versatile Platform

FutureNow

Liver

Kidney

Custom

Pharma/ Biotech

CROs

Cosmetic

Chemical

Preclinical Safety

Efficacy

Disease Modeling

Tissue Therapeutics

Multiple Tissues Multiple ApplicationsMultiple Markets

Academia/Govt.


Human Cells

NovoGel® Bio-Ink

NovoGen Bioprinter®

Platform (MMX-07)

3D Human Tissues

o Primary or iPSo Normal or diseasedo Samsara is key

source

o Multicellularo Cell:Cello Cell:Hydrogel

o Biocompatibleo Multimodalo Spatial control

o 100% cellular (scaffold-free)

o Reproducibleo Scalableo Healthy and diseased

tissues

NovoGen Bioprinting ProcessThe successful development of 3D tissue requires optimization ofeach key parameter


Best-In-Class Customers & Partners


Three Growth Pillars

High-Value Drug

Profiling

Therapeutic Tissues

IPPortfolio

Powerful & Versatile Technology Platform


Growth Pillar #1 – High-Value Drug ProfilingToday’s commercial growth engine

o Preclinical safety/toxicologyo Compound screening in disease

models to aid drug discoveryo De-risk total discovery program

costs by enabling decision points further upstream

o “Human preclinical models”


ExViveTM Human Liver Tissue – Strong Body of Scientific Data

Selected ExamplesSystem Troglitazone(2) Trovafloxacin(3) Methotrexate(4)

2D hepatocytes No toxicity seen No toxicity seen No fibrosis seen

Rat models No toxicity seen No toxicity seen No fibrosis seenHuman results Toxic Toxic Chronic fibrosis

Organovo Liver Toxic Toxic Chronic fibrosis

Pfizer paid $750 million in legal costs and $150 million to remove drug from market

(1) Bioprinting: An Industrial Perspective (2015-Roskos, Stuiver, Pentoney, Presnell)(2) FDA Final Report (2000): Executive Summary, Liver Failure Risk with Troglitazone (Rezulin)(3) PLOS One, “Bioprinted 3D primary liver tissues allow assessment of organ-level response to clinical drug induced toxicity in vitro” (July 2016-Nguyen,

Funk, Robbins, Grundy, Presnell, Singer, Roth)(4) Toxicological Sciences, “Modeling compound-induced fibrogenesis in vitro using three-dimensional bioprinted human liver tissues” (September 2016,

Volume 154 #2-Nguyen, Gerber, Presnell, LeCluyse)

Accurately characterized the safety profile of 46 compounds in high percentage of studied cases based on clinical correlation


o Strong data showing robust liver fibrosis model validation

o Non-alcoholic steatohepatitis (NASH/fatty liver disease) is a significant area of current research in pharma drug discovery

ExVive Human Liver Tissue can be leveraged for drug discovery

Healthy ExVive Human Liver Tissue

Fibrotic ExVive Liver Tissue After Methotrexate Exposure

PF

BFNF

NF: Nodular FibrosisPF: Parenchymal FibrosisBF: Bridging Fibrosis

Osuga et al, Int J Clin Exp Pathol 2015;8(2):1961-1966

Clinical Sample After Methotrexate Exposure

Disease Models – Liver Tissue

(1) Toxicological Sciences, “Modeling compound-induced fibrogenesis in vitro using three-dimensional bioprinted human liver tissues” (September 2016, Volume 154 #2-Nguyen, Gerber, Presnell, LeCluyse)


Growth Pillar #2 – Therapeutic TissuesTomorrow’s growth option

o Supply issues are a significant and growing challenge in transplant medicine

o Creating tissue replacement products for surgical implantation

o Early research on multiple tissue types

o Cell therapies and conventional tissue engineering have struggled to address challenges (limited engraftment, cell migration)

U.S. Transplants 2003 – 2015(1)

(1) U.S. Department Health & Human Services (optn.transplant.hrsa.gov)


o Function seen as early as 7 days and for at least 60 days post-implantation

o Key evidence of synthetic function detectable in blood serum (albumin, fibrinogen)

o Robust staining for key human metabolic enzymes associated with inborn errors of metabolism (IEMS)

o Meaningful improvement in liver health versus non-treated control animals

Liver Therapeutic Tissue – Proof of Function & Preclinical Data

Rodent studies show robust vascularization and synthetic hepatocyte function

hAlbumin/hCD31OTC

FAH


Liver Tissue Clinical Opportunity: IEMs

(1) Jones, PM and Bennett, MJ. The changing face of newborn screening: diagnosis of inborn errors of metabolism by tandem mass spectrometry. Clinica Chimica Acta 324 (2002) 121–128 ; Applegarth, D et al. Incidence of Inborn Errors of Metabolism in British Columbia, 1969–1996 Pediatrics 2000;105; Dionisi-Vici C, Rizzo C, Burlina AB, et al; Inborn errors of metabolism in the Italian pediatric population: a national J Pediatr. 2002 Mar;140(3):321-7. US Census Bureau (4M live births); Summar, ML et al. Diagnosis, Symptoms, Frequency and Mortality of 260 Patients with Urea Cycle Disorders from a 21-Year, Multicentre Study of Acute Hyperammonaemic Episodes Acta Paediatr. 2008 October ; 97(10) Perlmutter, MH. Alpha-1-antitrypsin deficiency. Semin Liver Dis. 1998;18(3):217-25.; Campos, M. Detection of Alpha-1 Antitrypsin Deficiency in the US. The American Journal of Medicine, Vol 125, No 7, July 2012

(2) Estimated annual cost of current pharmacotherapy excluding hospitalization costs or outpatient visits

Indication Examples Incidence/Prevalence(1)

Annual Cost of Pharmacotherapy(2)

RegulatoryStatus

Inborn Errors of Metabolism

(IEM)

FAH, OTC and alpha-1anti-trypsindeficiencies

~1,000/~10,000

(U.S. only)

$250K+ per patient Orphan

o Congenital absence of one key factor in patients (e.g. Ornithine Transcarbamylase (OTC) deficiency, Fumarylacetoacetate Hydrolase (FAH) deficiency and alpha-1-anti-trypsin (A1AT) deficiency)

o Prevalence of 10,000 represents patients who require liver transplant after drug therapy failure; actual patient population larger

o Favorable early discussions regarding reimbursement factors


Liver Therapeutic Tissue – Timeline & Next Steps for IEM Indication

Now –December 2018

January 2019 – Sept. 2020 2020

o Demonstrate efficacy in small animal disease models for multiple IEMs

o Validation of effect and dose finding; confidence in safety profile

o Partner with CROs and advisers to define and scope IND enabling studies

o Seek orphan designation

o Execute well designed IND-enabling studies showing disease modification

o Ongoing discussions with regulators –FDA input on IND sufficiency will play a major role in GLP study design

o Pursue breakthrough therapy designation and clinical development outside the U.S. to help accelerate time to market

Optimize final tissue design and complete pre-GLP safety and

efficacy studies

Complete definitive (GLP) safety and efficacy studies

Finalize and submit IND for IEM

indication to FDA


Growth Pillar #3 – IP Portfolio

o Own or exclusively license nearly 50 patents worldwide; more than 100 patent applications pending

o Exclusive licenses to foundational patents with early priority dates from three major U.S. universities

o Patent filings relate to bioprinting technology and its various uses in tissue creation, use in drug discovery and specific tissue constructs

o Potential opportunity for out-licensing revenue

A strong IP portfolio strengthens our first mover advantage


o Recent publication in ILAR Journal(1)

co-authored by FDA, Merck and LifeNet Health(2) executives

o Comprehensive review of current and emerging liver toxicology technologies

The Promise of New Technologies – The Future State of Drug Candidate Selection

(1) ILAR Journal “The Promise of New Technologies to Reduce, Refine, or Replace Animal Use while Reducing Risks of Drug Induced Liver Injury in Pharmaceutical Development (December 2016, Volume 57 #2-Sistare, Mattes, LeCluyse)(2) Former UNC-Chapel Hill and Hamner Institutes academic researcher, currently at LifeNet Health

“3D tissue constructs…exhibit a broad range of highly differentiated in vivo-like liver features

and functions”

“Results from studies…have shown very good reproducibility and concordance with observed

outcomes in vivo at the functional and histological levels”

“Bioprinting technology… represents a significant innovation in the study of drug-induced liver injury; addresses many of the shortcomings of traditional

in vitro and animal culture models”


Accelerating Breakthrough Research…

Technology leadership – Strong IP portfolio

Attractive and growing markets – Critical unmet needs

Growing revenue – Building product and service platform

Favorable competitive dynamics – First mover advantage


Appendix


o The automated fabrication of a tissue through the spatially-controlled deposition of cells and/or cell-containing materials in defined, user-controlled geometric patterns, wherein the resulting multi-cellular tissue is viable, three-dimensional and mimics key aspects of native tissue architecture and/or function

o Our finished tissues are scaffold-free, comprised only of relevant tissue cell types and the extracellular matrix the cells produce

What Is Bioprinting?


Spheroids Scaffold + Cells Micro-patterned cultures

Organovo Bioprinted Tissue

Tissue-like cellular density ✔ ✗ ✗ ✔

True 3D; >250m in x, y, and z axes ✔ ✔ ✗ ✔

Multiple tissue-specific cell types ✔ ✔ ✔ ✔

Spatially-controlled cell compartments ✗ ✗ ✔ ✔

In-vivo like tissue micro-architecture ✗ ✗ ✗ ✔

Reproducible; compatible with automated fabrication ✔ ✗ ✔ ✔

Easy-to-handle format ✗ ✔ ✔ ✔

Technology Leadership – Comparing In Vivo-Like Form & Function


Advancing Bioprinted Human Liver as First Therapeutic Tissue

o Deliver ‘dollar bill-sized’ patch directly to liver to repair damaged tissue and treat disease

o Improvement in liver health in treated animals and sustained function – engraftment, vascularization, stable detection of liver-specific proteins and metabolic enzymes

o Moving forward first due to technical feasibility, commercial opportunity, clinical, regulatory and reimbursement factors

o Total addressable market opportunity exceeds $3 billion


Jefferies Healthcare Conference

Taylor J. Crouch, CEOCraig Kussman, CFOJune 8, 2017

jefferies healthcare conference...pharma discovery program o $2+ billion o 7,000 annual pharma...

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