San Diego 3-D bioprinting company Organovo Holdings Inc. has filed a libel complaint with the Delaware Court of Chancery against little-known Simeon Research LLC in response to its publishing two inflammatory reports about Organovo that the company believes contains “unsubstantiated and intentionally misleading claims.”
Organovo (NYSE: ONVO) has received a number of accolades in recent years for its technology that can use 3-D printing technology to build new body organs — using cells as “ink.” The tissues could potentially be used for medical research and therapeutic applications.
Simeon Research’s barebones website contains little beyond the two reports; information not listed includes where the company is located and who works there. The firm was formed a month before its first report, which was released March 20.
The first report, titled “Organovo: Dissecting the Fairy Tale,” asserts that Organovo is overvalued and has misled investors in how far its research has progressed and the technology’s capacity. The second report, “Bargaining with the Devil — How Organovo Used Fraudulent Brokers and Promoters to Sell its Shares and Story to Investors,” called into question the company’s recent reverse stock split that enabled it to upgrade to the New York Stock Exchange.
Based on the source of the reports and the negative tone, the company said it believes the reports were issued by or at the request of a short seller or short sellers. A decline in Organovo’s stock price would then enable those to profit from it.
Despite the lack of information about Simeon Research, its inflammatory reports apparently have had an impact on Organovo’s stock value, analysts said. Stock for the company has declined from $8.97 on March 19 — before the reports were released — to $6.32 as of April 23, though the current weak biotech market also could have had an impact on the declining stock value.
“We do not take this step lightly,” Organovo said of the lawsuit. The company asserts it has confidence in the case and the ability to demonstrate it.
The company, of late, has reached a few key milestones: It recently performed its first 3-D liver tissue delivery.
“In developing these tissues, we have gone through a careful set of research studies involving many individual tissues, and greatly increased our ability to produce them,” said Sharon Presnell, chief technology officer at Organovo. “By the end of January, we expect to have bioprinted nearly 400 3-D liver tissues during the month.”
Organovo also introduced updated guidance on the timing of its product launch. Organovo said it had planned to launch its 3-D liver tissue product by the end of December 2014. It now expects to commence the commercial launch and start generating revenue through a services model prior to then.
ORGANOVO HOLDINGS INC.
CEO: Keith Murphy
Revenue: $264,000 for the nine months ended Dec. 31, 2013
Net loss: $19.4 million for the nine months ended Dec. 31, 2013
No. of local employees: 30
Headquarters: Sorrento Valley
Year founded: 2007
Stock symbol and exchange: ONVO on the New York Stock Exchange
Company description: Developing 3-D bioprinting technology
Key factors for success: Being one of the first in applying lucrative 3-D printing technology to life sciences