3D bioprinting leader Organovo has been steadily growing this year, signing deals with pharmaceutical giant Merck and cosmetics company L’Oreal, as well as releasing news related to their first 3D printed kidney tissue. Given these big partnerships, then, it strikes me as a bit odd that the company is looking for more money.
Yesterday, the company announced the sale of 9,425,000 shares of common stock at $4.25 per share, with underwriters given a 30-day option to buy an additional 1,413,750 shares. With Jefferies LLC and Piper Jaffray & Co. as joint book-running managers and Cantor Fitzgerald & Co. as a co-manager, the company hopes to raise about $40,056,250, which they will use “for general corporate purposes, including research and development, the development and commercialization of its products, general administrative expenses, license or technology acquisitions, and working capital and capital expenditures.”
This secondary offering comes after Organovo’s stock closed at $5.23 the day before, diluting the price down to $4.25. Why a company with some $50 million in cash would need $40 million more may scare some investors, particularly given the fact that Organovo began trading on the pink sheets before moving to the NYSE. Interestingly, two days ago, before the dilution, Cantor Fitzgerald, co-manager of the secondary offering, rated Organovo stock as a “Buy”.
Lately, I’ve become skeptical about the stock market altogether, especially 3D printing stocks and even more so about penny stocks, but I have high hopes for the bioprinting industry as a whole. Whether it be Organovo or any one of the other firms out there pursuing the technology, I hope that someone can produce some tangible results to reduce the need for animal testing and increase the supply of transplantable organs for those in need.
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