A planned merger between struggling 3-D “bioprinter” Organovo and Tarveda Therapeutics, a privately held cancer drug developer looking to join the public markets through a reverse merger, has fallen through.
Organovo (NASDAQ: ONVO) management announced in mid-December that its board of directors and Tarveda’s had approved the companies’ combination. But Organovo shareholders, who under the merger proposal would have owned 25 percent of the combined company, have rejected the deal, the company said Tuesday.
The company did not report the vote percentages. However, last month at a shareholders meeting where a vote was to be taken on the proposal, a separate item to delay that vote to April 7 to better the merger’s chances passed narrowly, with about 48 percent in favor, 47 percent against, and 4 percent abstaining, documents show.
The terms of the deal valued Organovo at $50 million and Tarveda at $150 million, according to a securities filing.
The San Diego-based biotech halted all research and development in August and laid off about 70 percent of its workforce to save cash as it sought “strategic alternatives.” In November, it sold its cell isolation business, Samsara Sciences, to Virginia Beach, VA-based LifeNet Health, for $1.5 million.
About 50 companies talked with Organovo about potential tie-ups; Tarveda was among 21 companies that indicated interest in making a bid, regulatory documents show.
One of the proposals came from Organovo co-founder Keith Murphy, who served as CEO from 2007 to 2017 before leaving to start another San Diego biotech. Murphy, who holds 1 percent of Organovo shares, outlined an offer to combine the company and his new enterprise, Viscient Bioscience. Viscient has been using Organovo’s 3D bioprinting technology in its work developing NASH drugs.
Organovo management passed over his proposal and others in favor of Tarveda, citing the potential of its oncology medicines and strong investor base, among other advantages. Since then Murphy has been petitioning other shareholders to vote against the Tarveda plan.
Following the merger failure, Organovo hasn’t yet said what its next move will be. CEO Taylor Crouch, in a statement, said the company will provide details “in the coming weeks.”
As of the end of 2019, Organovo reported about $30 million in cash and equivalents. The company, which has reduced its headcount to six people, said in its latest quarterly report that the funds should carry it through the end of 2020, but not sustain it on a long-term basis.