Proposal details and FAQ

Viscient proposes to exchange all shares of Viscient Bio, Inc. for newly issued shares in Organovo. The new shares would constitute a majority of the ownership of the Company. Current Organovo shareholders would hold up to 43% of the final shares, depending on the final valuations negotiated. The company name would be changed to reflect the effective ownership shift and because a brand change is necessary in order to successfully reset trading in the stock. The final company, after a reverse stock split as approved by shareholders recently, would trade under a Viscient entity name, most like as a stock in the price range of $4.50-$5.50. The market cap of the company would likely be in the $75-$125M range after the transaction. Viscient would keep access to in vitro technology to leverage the tissues in its drug discovery platform. Key staff related to in vitro liver, kidney, intestine, and other tissues would be retained or, where possible, rehired. Viscient would continue as the operating company, developing its NASH drug portfolio and leveraging additional tissues to build new opportunities, such as in kidney fibrosis, Crohn’s disease, or irritable bowel syndrome (IBS).

The transaction is essentially a strategic reverse merger. Many reverse mergers are used simply as vehicles to go public, but this transaction would be highly strategic due to the potential for the use of Organovo’s technology in Viscient’s drug discovery paradigm.

Frequently Asked Questions
What are the alternatives to Viscient’s proposal?

 

Organovo has begun a process of seeking strategic alternatives. Viscient does not have knowledge of all of Organovo’s options, but we believe that by far the most likely alternative other than what we are proposing is a non-strategic reverse merger. In a non-strategic reverse merger, a selected biotech company not working in the 3D bioprinting space and with no interest in the technology would take over Organovo. A company, perhaps a biotech with a clinical drug, which for some reason has not been able to access a typical IPO route, would seek to go public by taking over Organovo. Organovo shareholders would own a portion of a company that the Organovo Board and bankers selected from a pool of applicants.


Viscient believes that such a non-strategic reverse merger is not in the interests of shareholders compared to Viscient’s proposal. We believe that shareholders of Organovo share with us a belief in the groundbreaking potential of 3D bioprinting technology, and that they invested because of that belief.  We believe that shareholders want to see the technology leveraged inside a public company that they can continue to invest in and root for. We also believe that the very compelling opportunity for stock appreciation, given that the final entity will start at an approximately $100M market cap with the potential to grow to $500M-$1B or beyond (contingent upon successfully moving drugs forward in our pipeline).

Is it at all possible for Organovo to continue operations?

 

Based on the strategic alternatives process begun by the Organovo board, a wind up of the business is in process. Most of the staff have been laid off and the laboratory equipment is being auctioned. Viscient seeks to leverage and retain the intellectual property and core assets of the bioprinting business in a new proposed effort. However, the option is between Viscient or another takeover entity and there is no future for Organovo by itself envisioned.

Who supports Viscient’s proposal?

 

Viscient has been fortunate enough to receive the expressed support of a number of Organovo’s existing shareholders in private conversations. Viscient has spoken to shareholders and individuals representing the decision making for over 30% of Organovo voting shares, and in every case, we have received an indication of support for the proposal. We expect to add to that now in the public conversation. Please consider adding your voice to the support already expressed to Organovo here. 

What factors drive the possible final ownership share of current Organovo shareholders?

 

In negotiating the final breakdown in ownership of the merged company, Viscient will take into consideration two major items. The first is the projected cash that will be available after all Organovo debts, severance packages, banker advisory fees, and other costs are paid. The second is which assets will be part of the final company. Organovo may or may not seek to sell off certain assets prior to the merger, including its remaining therapeutic (transplantable) tissue businesses and/or Samsara’s business. If those are sold prior to the final deal, the final Organovo enterprise value would be reassessed. Viscient’s high end projection of 43% ownership by current Organovo shareholders assumes that $35M of cash and all assets are a part of the deal.

Why is Viscient making an announcement publicly?

 

Viscient believes it is time to start building shareholder support for our proposal. At the end of the process, a shareholder vote must be held, and it helps for Organovo to know that the proposal will find favor. We believe we have the strongest offer, but extra support always helps. We think that this proposal will receive powerful support from Organovo’s shareholders, who invested in 3D bioprinting due to the power of the technology, and encourage them to reach out to Organovo to indicate their support for this proposal.

 

Organovo has expressed concern that they are worried about being accused of unfair dealing because of Mr. Murphy’s prior relationship with the company. We hope to make sure that Organovo hears from its shareholders that they are not confused and understand that Mr. Murphy is currently a fully independent third party. More importantly, we want shareholders to let the Board know that they strongly prefer this transaction it leverages the bioprinting technology they invested in, that other transactions may scatter the bioprinting IP in many directions and leave shareholders no opportunity to benefit from it, while holding an investment in a company they don’t choose and never sought, and because it provides a potential opportunity to bounce back from the subpar performance they have suffered so far with their Organovo investment and validate their original investment idea that 3D bioprinting represents an important step forward.
 

Please take a moment to let Organovo hear your voice by expressing support for this proposal.  

What is the difference between Viscient’s plan and the disease modeling aspect of Organovo’s 2017-2018 business model?

 

Organovo was pursuing selling services to make disease models for other companies. Viscient was buying those services and moving towards the creation of drug candidates. The main difference in the model is that the total preclinical CRO market size is about $3B, and the global pharmaceutical market is over one trillion dollars. Viscient is pursuing high value drug candidates to partner with pharma or sell to pharma at high deal values. Comparing back to animal studies, Organovo’s model was comparable to selling mice and rats to pharma for research, and Viscient’s model is comparable to Merck and Pfizer buying those animals to search for new drug candidates. We are a drug therapeutic company finding new drugs and are not providing any services to others.

Disclaimer

Any statements contained on this website that do not describe historical facts constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995.  Any forward-looking statements contained on this website are based on current expectations, but are subject to a number of risks and uncertainties.  Forward-looking statements include, but are not limited to, statements regarding the combination of Viscient and Organovo, potential benefits of the combination, and the prospective performance and outlook of the combined company’s business. Viscient does not intend to update any of the forward-looking statements to conform these statements to reflect actual results, later events or circumstances or to reflect the occurrence of unanticipated events.

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