Organovo raised millions of dollars from investors to fuel its goal of developing 3D “bioprinted” human tissues for use in people with end-stage liver disease and other life-threatening illnesses.
But the San Diego company fell short of bringing its lead regenerative medicine program into clinical trials, and now it is charting a course as a vehicle for privately held cancer drug developer Tarveda Therapeutics to join the public markets.
Under the deal, announced Monday, Tarveda shareholders will own 75 percent of the combined company; Organovo shareholders, 25 percent. The boards of directors of the companies have approved the transaction, which is anticipated to close in the first quarter of 2020.
The combined company will be run by Tarveda’s management team, helmed by president and CEO Drew Fromkin; be headquartered in Watertown, MA; and trade on the Nasdaq exchange under the stock symbol “TVDA.” Fromkin has led Tarveda since 2015, when it was known as Blend Therapeutics.
Tarveda, which adopted its current name in 2016, calls the cancer drugs it is developing “Pentarins.” These investigational drugs are like miniature versions of antibody-drug conjugates, which aim to more precisely hit solid tumors by deploying molecules linked with anti-cancer compounds to target cancer cells. Pentarins, however, use peptides, molecules that are smaller than antibodies.
The company has one drug, PEN-866, in Phase 1 testing in patients with a range of solid tumors; it targets a molecule known as heat shock protein 90 (HSP90), which is overexpressed in some tumors. The company also has preclinical studies ongoing of other potential drugs targeting HSP90.
Its second clinical-stage drug, PEN-221, is in a Phase 2a trial for patients with solid tumors expressing a protein called somatostatin receptor 2, or SSTR2, such as neuroendocrine tumors and small cell lung cancer.
Launched in 2007, Organovo was founded around technology that used deposits of cultured human cells in 3-dimensional patterns, which would then grow together, to form human tissue. The tech was pioneered by Gabor Forgacs, then at the University of Missouri.
The company entered the public markets through a reverse merger, listing on the over-the-counter markets, in 2012. The following year, it uplisted to the New York Stock Exchange; in 2016, it moved its listing to Nasdaq.
In recent years, as Organovo worked to get its 3D tissue models ready for therapeutic use, it established a business selling the bioprinted products to researchers, who used the tissues to predict the safety of compounds during preclinical development. But the revenue from those sales wasn’t enough to fund the costs of R&D associated with the experimental therapeutic tissues. In August, the company announced it was shuttering those studies, cutting 40 staffers, and seeking strategic alternatives.
After Organovo’s August announcement, one of its founders and former CEO, Keith Murphy, publicly proposed the company merge with his new venture, San Diego-based Viscient Therapeutics. Viscient is working on potential treatments for the fatty liver disease nonalcoholic steatohepatitis (NASH).
In the end, Organovo came to an agreement with Tarveda. Following the merger, Tarveda anticipates it will have $35 million in cash in hand, money that it says will get its two clinical-stage programs through their next set of milestones and fund the company into the second half of 2021.
Organovo will get to name two of eight people to the combined company’s board of directors. The company’s stock price, which closed at 50 cents per share Friday, rose 24 percent Monday, closing at 62 cents apiece.