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My Thoughts On Organovo, Inc. (NYSE: ONVO) – Pfizer (NYSE: PFE) Partnership.

Dec. 17, 2013 1:39 PM ETONVO, DDD, PFE34 Comments
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What if, even before starting to generate any kind of substantial revenue, ONVO managed to lose a first potential client?

/hey … don't trust me … I'm probably wrong … as always/

See here how much I think ONVO coule be worth.

Recently, Richard Pearson, a seasoned Seeking Alpha contributor, released a very detailed report on Organovo (November 19, 2013 - Link).

While on the one hand, I do agree with the entirety of the thoughts presented in Pearson's article, on the other hand, I do also believe that the Announced "Collaborative - Agreements" are worth a closer look.

As of February 08, 2012 … two collaborative research agreements were in effect.

"We have collaborative research agreements with Pfizer and Unither, and will seek to enter into additional collaborations." (page. 25 - Form 8-K/A - Data of Report - February 8, 2012 - Link)

A closer Look at the Pfizer collaborative agreement and subsequent developments

"In December 2010, we entered into a collaborative research agreement with Pfizer to develop tissue based drug discovery assays in two therapeutic areas utilizing our NovoGen MMX Bioprinter™ technology. To date, Pfizer has paid us all amounts due under the agreement and we anticipate completing the research plan by March 2012. We anticipate that the agreement will be extended past March 2012; although we can give no assurance that it will in fact be so extended."

(page. 25 - Form 8-K/A - Data of Report - February 8, 2012 - Link)

Moreover, in its ANNUAL REPORT for the FISCAL YEAR ENDED DECEMBER 31, 2012, ONVO reported:

"We disclosed in 2012 that we had delivered constructs to Pfizer for internal evaluation as partial completion of the collaboration agreement; we additionally have delivered a study report to complete the scope of work in the original collaboration agreement. Constructs delivered by Organovo are currently being evaluated in the collaborator's laboratory, and we anticipate that an additional agreement or agreements will be arrived at to utilize Organovo tissues in its future research efforts, although we can give no assurance that future agreements will be arrived at."

(page. 7 - Form 10-K - Data of Report - Link)

I do think that any potential shareholder of ONVO deserves a more exhaustive answer about whether or not the collaborative research agreement with Pfizer has been extended as well as about the state of the negotiations. Unfortunately, I were not able to locate any definitive answers to such a question (please, if you have been able to, do not hesitate to send me a message).

So … I started looking for potential answers…

… and I discovered that in October/November 2012, Pfizer announced a collaboration agreement with Cyprotex.

"In 2012, we (Cyprotex) also announced a collaborative research programme with Pfizer in the area of predictive toxicology which is progressing well. " (Link)

It is interesting to note that: "Cyprotex and InSphero are jointly offering a new hepatotoxicity screening service using InSphero's 3D InSight™ liver mode". (September 20, 2012 - Link)

In addition, recently "Pfizer and Roche release positive study results with InSphero" (August 16, 2012 - Link)

"Recently, the leading US pharma company Pfizer /A client of Insphero AG/ could show that the InSphero 3D-InSight liver tissues, which contain all important cell types of the human liver, delivered unmatched results in studies investigating the effects of liver toxic substances. These positive results were presented at the world's most renowned toxicology congress (Annual SOT Meeting, San Antonio)." (August 16, 2012 - Link)

To my knowledge, neither Pfizer nor Organovo has released any results about the research project carried on within their Collaborative Agreement.

So, all we know is that …:

  1. … Organovo delivered constructs to Pfizer in 2012
  2. … We in over a year we have not hear about any new development with respect to this Partnership. The official word at ONVO is … "we are in negotiations"
  3. In August 2013, Pfizer showed that "InSphero 3D-InSight liver tissues, which contain all important cell types of the human liver, delivered unmatched results" (August 16, 2012 - Link)
  4. The Pfizer was not to be found in any of the ONVO's last presentations' slides, neither the CEO mentioned it during the formal presentation (Link to the Presentation)

SORRY IF I AM SKEPTICAL ABOUT THE STATUS OF THE NEGOTIATIONS. BUT IT SEEMS TO ME … PFIZER COULD HAVE ALREADY MOVED ON. (As a potential long investor, I would do the same!)

To see "My view on … how much Organovo (ONVO) is really worth?" … please go here.

Disclosure: I am short ONVO.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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