Organogenesis (NASDAQ:ORGO) is a regenerative medicines company founded in 1985 and headquartered in the US. This is a revenue-generating company with revenues of $99 million, $138.7 million, $198.5 million, $193.4 million, $261 million respectively in the last 5 fiscal years, and $231.5 million net revenue in the 9 months ended 9/30/2020. Revenue estimates for 2020, 2021, and 2022 are $312.34 million, $327.56 million, and $370.85 million, respectively. The company has a market cap of just $585mn. The company has, until now, followed inexpensive non-BLA pathways for product approvals, which means its R&D expenses should be minimal. Despite all that, the company has been running as a loss-making concern all these years, and only in 2020 did it announce that it expects to generate positive net income and positive adjusted EBITDA for the full-year 2020.
The company says in its Annual Report, "We have identified material weaknesses in our internal control over financial reporting, and our management has concluded that our disclosure controls and procedures are not effective." I also noted that the CFO resigned in August. This could be unrelated to the above.
I wanted to put that out right at the top because this sounded very strange to me and quite incongruous with what otherwise looks like an excellent market-stage company with a volley of products generating strong revenues.
Other financial highlights
On November 9, the company published third quarter earnings. The company said that:
Operating expenses for the third quarter of 2020 were $54.9 million, compared to $53.4 million for the third quarter of 2019, an increase of $1.5 million, or 3%. R&D expense was $3.7 million for the third quarter of 2020, compared to $3.9 million in the third quarter of 2019, a decrease of $0.2 million, or 5%. Selling, general and administrative expenses were $51.1 million, compared to $49.5 million in the third quarter of 2019, an increase of $1.7 million, or 3%.
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