H.C. Wainwright downgraded Organovo Holdings (NASDAQ:ONVO) to “neutral” from “buy” and removed its price target after the company engaged a financial advisor to assist management in exploring strategic alternatives. The stock closed at 28 cents on Aug. 7.
To support the range of possible strategic options under consideration, analyst Ed Arce writes that the company is also implementing a restructuring plan to significantly reduce expenses, including suspending development of its lead liver therapeutic tissue program, NovoTissues, in order to preserve cash and extend its runway as it evaluates various strategic scenarios focused on maximizing shareholder value.
“We believe the following assets are likely to be key to any transaction: the core 3D bio-printing technology platform for diagnostic or modeling purposes as a CRO and/or as a therapeutic tissue, and related IP; wholly-owned subsidiary, Samsara Sciences, which isolates and supplies high-quality, primary human liver cells; pre-clinical development capabilities and know-how; its public listing; and cash,” Mr. Arce said.
“In our view, meaningful value may be unlocked by placing these assets in the right hands,” he added.
