Viscient Biosciences (“Viscient”), a biotech therapeutics company working at the intersection of 3D tissue technology and transcriptomics technology to discover and develop drugs across a range of therapeutic areas with significant unmet medical need, today announced that it has formally submitted a merger proposal to Organovo Holdings, Inc.’s (“Organovo”) Board of Directors to combine the two companies. Viscient has previously made strides forward using 3D liver tissue to discover drug opportunities for non-alcoholic steatohepatitis (“NASH”).
On August 7, 2019, Organovo announced that it had engaged a financial advisor to assist in the exploration of strategic alternatives after timeline challenges arose for its lead program, therapeutic liver tissue for clinical transplant. Organovo has a wide set of other tissues for research use at various stages of development.
Viscient CEO, Keith Murphy, was a co-founder of Organovo (NASDAQ:ONVO), and its Chief Executive Officer and Chairman from 2007 until 2017, a time during which he was responsible for all company operations and oversaw share price growth averaging 23% per annum as a private company and 24% per annum as a public company. Subsequent to commercial launch of its products, Mr. Murphy oversaw an average annual growth rate of revenues of 172%, nearly tripling revenue each year. On the day Mr. Murphy elected to step down from the Board of Directors, he was named Chairman Emeritus.
“There remains tremendous opportunity to unlock the power of Organovo’s proprietary technology,” said Keith Murphy, CEO, Viscient Biosciences. “Viscient has built a powerful NASH drug discovery platform to a value of tens of millions of dollars in a very short period of time, with strong internal efforts coupled with contract research performed by Organovo. Having already established the paradigm for drug discovery in 3D tissue in liver, Viscient now has the potential to efficiently use the other tissues in Organovo’s portfolio to develop drugs for additional high-value indications. After reviewing the recent deal landscape, it is clear to me that a Viscient/Organovo combined entity could be valued in the hundreds of millions over the next couple of years as we hit preclinical and clinical milestones for drug candidates, unlocking significant value for all stakeholders.”
Viscient’s merger proposal involves the issuance of new Organovo shares to existing Viscient shareholders. It is expected that the combined entity could be up to 43% owned by Organovo’s existing shareholders and the balance owned by Viscient’s shareholders. The final ownership allocations will depend on the final mix of assets and cash in Organovo at closing. Viscient is pleased to offer Organovo shareholders a transaction that will deliver them a premium over Organovo’s current valuation, justified by the tremendous synergy of the two technology platforms, and currently believes it is the only actual strategic merger alternative for Organovo’s corporate entity, as opposed to non-strategic suitors seeking cash and a public shell.
Viscient invites shareholders interested in more details about the proposal to refer to Viscient’s website.
Since 2017, Viscient has built a platform that gives powerful insight into the biology of NASH, which has led to novel, actionable, insights. Viscient is at the lead target stage, while entertaining business development discussions with pharma around both platform deals and individual target opportunities for which the company is building a narrative. Viscient expects to be at lead chemistry for its first program by the end of 2020.
Deteriorating liver function is a growing and serious public health concern, with the Wall Street Journal estimating that 12% of Americans are suffering from NASH, and that the total economic burden of NASH could grow to $40 billion. Left unchecked, the disease can progress to cirrhosis and cancer, and can further progress to the need for liver transplant. It is the second leading cause of liver transplants in the U.S. Despite decades of intense research worldwide, the understanding of NASH progression and the development of novel therapeutic approaches have been limited by the lack of advanced systems that mimic human liver biology over an extended period of time.
Date: October 08, 2019