my view on organovo (over-) valuation

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Gy vcmw bf … dbw gukd Br`nfbvb (BFQB) cs rmniiy wbrtd2 - N t mftntcvm vniuntcbf nttmgpt … uscf` Cfpsdmrbs– tmkdfbib`y! -01% jbwfscjm rcsl  /dmy … jbf–t trust gm … C–g prbhnhiy wrbf ` … ns niwnys/ Br`nfbvb Dbijcf`s, Cfk., n puhick kbgpnfy vniumj npprbxcgntmiy ba ][J 0??g, jmvmibps tdrmm- jcgmfscbfni (;J) hcb prcftcf` tmkdfbib`y abr krmntcf` aufktcbfni dugnf tcssums bf jmgnfj abr rmsmnrkd nfj gmjckni nppickntcbfs. Zdm kbgpnfy–s ;J Fbvb@mf hcb prcftcf` tmkdfbib`y wbrls nkrbss vnrcbus tcssum nfj kmii typms, nfj niibws abr tdm pinkmgmft ba kmiis cf jmscrmj pnttmrf.  Cf[pdmrb N@, n prcvntmiy dmij [wcss hnsmj Kbgpnfy, cs n imnjcf` suppicmr ba br`nfbtypck, hcbib`ckni cf vctrb ;J gckrb tcssums abr dc`diy prmjcktcvm jru` tmstcf`. Zdm kbgpnfy kurrmftiy kbufts nii ba tdm tbp tmf `ibhni pdnrgnkmutckni nfj kbsgmtcks kbgpnfcms ns kustbgmrs nfj cs dmipcf` tdmg tb cgpimgmft cts pntmftmj gckrb tcssum tmkdfbib`y c f tdmcr jmvmibpgmft wbrl-aibw.  Cf[pdmrb ;J Cfsc`dtGckrb tcssums mfnhim gbrm hcbib`ckniiy rmimvnft cf vctrb nppickntcbfs cf maacknky (m.`. cf bfkbib`y) nfj tbxckbib`y, cfkiujcf` ibf`-tmrg nfj cfainggntcbf-gmjcntmj tbxckcty tmstcf`. N hrbnj pbrtabicb ba tugbr nfj icvmr gckrb tcssums cs nvncinhim, wctd njjctcbfni tbxckbib`y gbjmis cf tdm pcpmicfm. Cf[pdmrb's ;J gckrb tcssums nrm gbrm prmjcktcvm, inst ibf`mr nfj nrm gbrm naabrjnhim tdnf kbfvmftcbfni kmii-hnsmj gbjmis. (dttp5//www.cfspdmrb.kbg/kbgpnfy )  Ns tdm KMB pbcftmj but jurcf` tdm rmkmft (Jmk. =, 8?>;) prmsmftntcbf, Cfvmstbrs sdbuij fbt mxpmkt BFQB tb stnrt _rcftcf` Br`nfs. Dm jmskrchmj BFQB–s pbtmftcni gnrlmt ns abi ibws5

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Page 1: My View on Organovo (Over-) Valuation

7/22/2019 My View on Organovo (Over-) Valuation

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Gy vcmw bf … dbw gukd Br`nfbvb (BFQB) cs rmniiy wbrtd2

- N tmftntcvm vniuntcbf nttmgpt … uscf` Cfpsdmrbs– tmkdfbib`y! ‛

-01% jbwfscjm rcsl

 /dmy … jbf–t trust gm … C–g prbhnhiy wrbf` … ns niwnys/

Br`nfbvb Dbijcf`s, Cfk.,  n puhick kbgpnfy vniumj npprbxcgntmiy ba ][J 0??g, jmvmibps tdrmm-

jcgmfscbfni (;J) hcb prcftcf` tmkdfbib`y abr krmntcf` aufktcbfni dugnf tcssums bf jmgnfj abr

rmsmnrkd nfj gmjckni nppickntcbfs. Zdm kbgpnfy–s ;J Fbvb@mf hcb prcftcf` tmkdfbib`y wbrls nkrbss

vnrcbus tcssum nfj kmii typms, nfj niibws abr tdm pinkmgmft ba kmiis cf jmscrmj pnttmrf.

 Cf[pdmrb N@, n prcvntmiy dmij [wcss hnsmj Kbgpnfy, cs n imnjcf` suppicmr ba br`nfbtypck, hcbib`ckni

cf vctrb ;J gckrb tcssums abr dc`diy prmjcktcvm jru` tmstcf`. Zdm kbgpnfy kurrmftiy kbufts nii ba tdm

tbp tmf `ibhni pdnrgnkmutckni nfj kbsgmtcks kbgpnfcms ns kustbgmrs nfj cs dmipcf` tdmg tb

cgpimgmft cts pntmftmj gckrb tcssum tmkdfbib`y cf tdmcr jmvmibpgmft wbrl-aibw.

 Cf[pdmrb ;J Cfsc`dtℨ Gckrb tcssums mfnhim gbrm hcbib`ckniiy rmimvnft cf vctrb nppickntcbfs cf

maacknky (m.`. cf bfkbib`y) nfj tbxckbib`y, cfkiujcf` ibf`-tmrg nfj cfainggntcbf-gmjcntmj tbxckcty

tmstcf`. N hrbnj pbrtabicb ba tugbr nfj icvmr gckrb tcssums cs nvncinhim, wctd njjctcbfni tbxckbib`y

gbjmis cf tdm pcpmicfm. Cf[pdmrb's ;J gckrb tcssums nrm gbrm prmjcktcvm, inst ibf`mr nfj nrm gbrm

naabrjnhim tdnf kbfvmftcbfni kmii-hnsmj gbjmis. (dttp5//www.cfspdmrb.kbg/kbgpnfy) 

 Ns tdm KMB pbcftmj but jurcf` tdm rmkmft (Jmk. =, 8?>;) prmsmftntcbf, Cfvmstbrs sdbuij fbt mxpmkt

BFQB tb stnrt _rcftcf` Br`nfs. Dm jmskrchmj BFQB–s pbtmftcni gnrlmt ns abiibws5

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Zdm sicjm nhbvm, `cvms gbrm jmtncis nhbut tdm ’rmvmfum pbtmftcni‗ jcskibsmj hy tdm Kbgpnfy cf

tdm >>/8?/8?>; _X. 

]fjmr sukd n jmacfctcbf ba tdm Gnrlmt BFQB cftmfjs tb mftmr cf, Kyprbtmx (Icstmj bf tdm  I[M ) sdbuij

nisb hm cfkiujmj ns n pbtmftcni kbgpmtctbr.

’Kyprbtmx cf kbiinhbrntcbf wctd Cf[pdmrb cs kb-gnrlmtcf` nfj prbvcjcf` smrvckms rmintmj tb

 Cf[pdmrb's prbprcmtnry ;J Cfsc`dtZG rnt nfj dugnf icvmr gckrb tcssum tmkdfbib`cms. Btdmr gckrb

tcssum smrvckms nrm mxpmktmj tb abiibw ns tdm uptnlm ba ;J kmiis abr Zbxckbib`y tmstcf` `ntdmrs pnkm.‗

Dbw gukd jcj Xmkmftiy _rcvntm Mqucty Cfvmstbrs Qnium Cfspdmrb N@2 Gy hmst @umss.

>. Cfsdpmrb N@ smkurmj cts acrst ([mrcms N) Acfnfkcf` cf Nu`ust 8?>?

Uurckd, [wctzmrinfj, Nu`ust 1, 8?>? ‛ Cf[pdmrb N@, n suppicmr ba fbvmi ;J kmii-hnsmj nssnys abr

maacknky tmstcf` nfj tbxckbib`y, nffbufkmj ct dns smkurmj KDA>,4??,??? acfnfkcf` (npprbx. ][J

8,???,???) imj hy Xmjnipcfm Qmfturm _nrtfmrs. (?1/Nu`/8?>? ‛  Icfl ) 

?8/Nu`/8?>?, tdm Kbgpnfy's Knpctni (fbgcfni) wns cfkrmnsmj hy KDA 88'?=4 (arbg KDA >??,???).

88'?=4> fmw sdnrms wmrm cssumj nt n fbgcfni vnium ba KDA >.?? / sdnrm. (?8/Nu`/8?>? ‛  Icfl ) 

Zdm Kbgpnfy cssumj 88,?=4 sdnrms cf mxkdnf`m ba npprbx. ][J 8,???,??? cf knpctni. (_rckm pmr sdnrm5

npprbx. ][J 3?.?? pmr sdnrm)

  Nu`ust 8?>? Acfnfkcf` Xbufj Cgpicmj Kbgpnfy Qniuntcbf5 ][J >?,34=,88? 

8. Cfsdpmrb N@ smkurmj cts smkbfj ([mrcms H) Acfnfkcf` cf Eufm 8?>;

’…[ukkmssauiiy kibsmj n acfnfkcf` rbufj ba KDA 8–???–??? inst gbftd (npprbx. 8–8??–??? ][J).

Zdcs smrcms H acfnfkcf` wns …’(>;/Eufm/8?>; ‛  Icfl ) 

?=/Euiy/8?>;, tdm Kbgpnfy's Knpctni (fbgcfni) wns cfkrmnsmj hy KDA 8:,:0? (arbg KDA 8?4'13:).

8:,:0? fmw sdnrms wmrm cssumj nt n fbgcfni vnium ba KDA >.?? / sdnrm. (?=/Euiy/8?>;‛  Icfl ) 

> Lmy nssugptcbf5 nii tdm sdnrms cssumj wmrm usmj cf tdm Acfnfkcf` Zrnfsnktcbf. Ca tdcs nssugptcbf cs aniscacmj, tdmf tdm

mftcrm rmsuits kbuij hm embpnrjczmj! Dbwmvmr, ct cs dc`diy uficlmiy tb kbfjukt n rbufj ba acfnfkcf` abr imss tdnf =% ba

tdm vnium ba tdm Kbgpnfy (cf tdm [tnrt-]p wbrij).

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Zdm kbgpnfy cssumj 8:,:0? sdnrms cf mxkdnf`m ba npprbx. ][J 8,8??,??? cf knpctni. (_rckm pmr sdnrm

7 npprbx. ][J 3?.?? pmr sdnrm)

  Nu`ust 8?>? Acfnfkcf` Xbufj Cgpicmj Kbgpnfy Qniuntcbf5 ][J 8?,34:,01?8 

Zb cftrbjukm n kmrtncf jm`rmm ba aimxchcicty (tdus kbrrmktcf` abr pbsschim Mrrbrs) wm usm nf Cgpicmj

Kbgpnfy Qnium ba ][J ;8.=?g (cfstmnj ba tdm knikuintmj ][J 8>g)

Nssugcf` Cfspdmrb N@ dns zmrb jmhts nfj zmrb Knsd, tdm rmsuitcf` Mftmrprcsm Qnium (MQ) wbuij hm

][J ;8.=?g. 

BFQB–s MQ cs ][J 1:=g! Gbrm tdnf >3.4: tcgms dc`dmr tdnf Cfspdmrb MQ (][J ;8.=?g)

Aurtdmrgbrm, ca ybu wmrm tb kbfscjmr tdnt

-  Cfspdmrb cs nirmnjy `mfmrntcf` rmvmfum / smiicf` tdm tcssums,

-  Cfspdmrb kbufts nii ba tdm tbp tmf `ibhni pdnrgnkmutckni nfj kbsgmtcks kbgpnfcms ns kustbgmrs,

-  Cfspdmrb–s tcssums nfj tmkdfbib`y cs nirmnjy usmj/stujcmj hy _aczmr nfj Xbkdm

-  tdm sdmia icam ba Cfspdmrb ;J icvmr Gckrb-Zcssums (dug.) cs 1? jnys vs. :? jnys ba BFQB icvmr tcssums

-  Cfspdmrb dns nigbst sngm fughmr ba wbrlmrs ba BFQB (8=)

…. ybu wcii dnvm n dnrj tcgm … tb eustcay BFQB–s kurrmft Gnrlmt Knpctniczntcbf!

BFQB nfj Cfspdmrb nrm twb vmry scgcinr kbgpnfcms (CGB, Cfspdmrb cs n icttim hct ndmnj ba BFQB

 arbg n tmkdfbib`ckni nfj mxmkutcbfni pbcft ba vcmw / smm [mptmghmr 8?>; Cfspdmrb _rmsmftntcbf). 

Zdm twb Kbgpnfcms jb dbwmvmr dnvm twb kbgpimtm jcaamrmft vniuntcbfs!

_rcvntm Mqucty (_M) Xmjnipcfm vniumj Cfspdmrb N@ nt ][J ;8.=?g cf Eufm 8?>; jurcf` tdm inst

acfnfkcf` rbufj, wdcim Crrntcbfni Xmtnci cfvmstbrs nrm kurrmftiy vniucf` BFQB nt n wdbppcf`

][J 1:=g MQ! (N >–44: % prmgcug / nssugcf` BFQB nfj Cfspdmrb nrm scgcinr kbgpnfcms)

Pmii, sbrry `uys … hut C jb trust gbrm tb _rcvntm Mqucty Mxpmrts rntdmr tdnf tb Crrntcbfni Gnrlmts

_nrtckcpnfts! Jbf–t ybu2

8  Ct cs dc`diy uficlmiy tb kbfjukt n rbufj ba acfnfkcf` abr imss tdnf =% ba tdm vnium ba tdm Kbgpnfy (cf tdm [tnrt-]p

wbrij). Ct abiibws tdnt wm hmicmvm wctd n dc`d jm`rmm ba kmrtncfty tdnt tdm tbtni Qnium ba Cfspdmrb (ns ba Eufm 8?>;) wns

fbt dc`dmr tdnf ][J. Abr bur nfniyscs wm usmj tdm rmsuitcf` nvmrn`m ba ][J ;8.=?g 

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Jbms tdm Ankt tdnt BFQB cs n puhick trnjmj Kbgpnfy, nfj jbms tdmrmabrm baamr cts sdnrmdbijmrs n

jm`rmm ba icqucjcty bf tdmcr cfvmstgmfts, eustcay n >–44:% _rmgcug!2 Fbt sb surm nhbut tdnt!

Nssugcf` tdnt5

>.  _rcvntm Mqucty (_M) cfvmstbrs mftmrmj cftb Cfspdmrb nt n hnr`ncf-prckm (mstcgntcf` tdm AQ ba

Cfspdmrb nt ][J 1=g ‛ npprbx. >??% dc`dmr)

8.  N ;:% Gnrlmt Icqucjcty JC[KB]FZ; 

Ct abiibws tdnt tdm Gnrlmt Qnium (7MQ) ba N icstmj Cfspdmrb wbuij hm npprbxcgntmiy ][J 34g

MQ ba BFQC cs kurrmftiy ][J 1:=g (1.=4 tcgms dc`dmr)

Hnsmj bf Cfspdmrb N@ vniuntcbf, BFQB sdbuij dnvm n Gnrlmt Knp ba ][J >=>G (MQ+ fmt knsd)

Kbrrmspbfjcf` tb n _rckm pmr [dnrm (__[) ba ][J 8.?3

BFQB, nt kurrmft _rckms (][J 3.?8), cs ;;>% Bvmrvniumj!

-01.4;% jbwfscjm rcsl abrg dmrm!

- Kbgpnrcf` Br`nfbvb tb Kyprbtmx (Icstmj bf tdm I[M) 

Zdm Gnrlmt Knp ba Kyprbtmx cs @H_ >0.1=g (7 ][J 84.00g)

Jb ybur gntd!

; Zdm [cihmr rm`rmsscbf jbms prbvcjm us wctd n smfsm ba dbw jcaamrmft tdm jcskbuft wcii hm abr n  rg wctd sgnii rmvmfums

vmrsus bfm wctd inr`m rmvmfums. Abr Gbrm Jmtncis smm [icjms ;8-;; ba tdcs _rmsmftntcbf 

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[BGM NJJCZCBFNI CFABXGNZCBF NH]B]Z CF[_DMXB

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Kbgpimtm Cfspdmrb–s prmsmftntcbf5 Dmrm