Organovo Holdings Founder Issues Letter Regarding Alternative Paths to Illogical Merger With Tarveda Therapeutics to Stockholders

  • Intends to Vote "AGAINST" Proposed Merger With Tarveda
  • Intends to vote “FOR” Reverse Stock Split and Against All Other Provisions
  • Believes the Board, Which Has Presided Over Significant Value Destruction in Recent Years, Has Asked Stockholders to Take an Unnecessary Risk Without Offering a Compelling Rationale
  • Highlights Tarveda’s Dismal Financial Position, Lack of Synergies, and Highly-Questionable Future Prospects—Further Reinforcing Why a Merger is Terrible for Stockholders
  • Sees Tremendous Opportunities if Merger is Voted Down, Including Bioprinting Opportunities or Running a Credible Alternatives Process to Find a Combination Partner With More Promise

SAN DIEGO, March 23, 2020 (GLOBE NEWSWIRE) -- Keith Murphy, founder and former Chief Executive Officer of Organovo Holdings, Inc. (NASDAQ: ONVO) (“Organovo” or the “Company”), today issued a letter to stockholders in connection with the Company’s prospective merger with Tarveda Therapeutics, Inc. (“Tarveda”), a privately-held clinical stage biopharmaceutical company.

The full text of the letter is below.

Fellow Stockholders,

As stockholders of Organovo Holdings, Inc. (NASDAQ: ONVO) (“Organovo” or the “Company”), we have been forced to endure unacceptable stagnation and value destruction at the hands of the current Board of Directors (the “Board”). This is evidenced by Organovo’s dismal share price performance since mid-2017. Despite the Board’s record of poor business judgment and haphazard decision-making, it is now asking stockholders to vote by next week to approve an unjustified merger with Tarveda Therapeutics, Inc. (“Tarveda”).

Given my unique experience starting Organovo and operating in the biotechnology sector for decades, I hope that you will consider my informed personal perspective on whether a combination with Tarveda will lead to a turnaround and enhanced value creation. The facts underscore that Tarveda is in a weak financial position with unexciting technology and unattractive prospects. It is also important for stockholders to recognize that Organovo is already in its own precarious position due to recent mismanagement. This is why I firmly believe that the transaction being irrationally championed by the Board runs completely counter to stockholders’ best interests.

A key consideration for investors in the face of the spread of the novel coronavirus, SARS-CoV-2, is that I believe new market conditions make this merger even less attractive and viable. Biotech companies needing to raise cash over the next 12-month period are poised to face significant headwinds in my opinion. Tarveda is a company in need of additional capital beyond Organovo’s current cash in order to fund clinical trials to a successful point. In contrast, Organovo’s stock has been a relatively safer harbor, trending with the NASDAQ overall. Considering Organovo has natural downside protection due to being valued near its book value, I believe that waiting—and not consummating a reckless merger—may be the best course until the current storm has passed.

I want to stress that my assessment is unaffected by the Board’s decision to not pursue a merger with Viscient Biosciences (“Viscient”). While I firmly believe that the Board failed to create value for stockholders when it rebuffed what could have been a very synergistic merger with Viscient, I am fully aligned with you and recognize that there are many other viable combination partners out there. However, Tarveda is by no means an attractive deal partner.

I believe there are a number of factors to consider, including:

  • Tarveda was running out of money in late 2019, with no venture capital funds or public market investors apparently eager to invest;
  • Tarveda has been on a downward trajectory following a prior record of poor investments;
  • Tarveda possesses unattractive technology that needs a bailout, via a reverse merger, just to survive, and;
  • Tarveda lost its longtime Chief Scientific Officer, who was also President of R&D, in 2019, which is hardly the sign of a strong technology.

So, what options exist that may be superior to the Tarveda transaction?

  1. The Board Can Abandon the Merger to Re-Focus on Organic Growth via Bioprinting – It should be clear to the Board that investors believe in Organovo’s bioprinting opportunity. This was communicated to them at the Annual Stockholders meeting in September 2019, and more directly by many investors since then. It is time for the Board to listen to stockholders. I know many of the Company’s stockholders very well, and all of them invested based on the promise of 3D bioprinting and want to continue to see their investments used towards that end. In the case of an abandoned or defeated Tarveda merger, the Board can ensure Organovo actually utilizes the incredible bioprinting technology that stockholders paid to develop. I find it completely paradoxical that the Board, which lacks the knowledge of the sector and the capacity for innovation, is willing to essentially flee the bioprinting sector right as it begins to realize its promise in other hands.
  2. The Board Should Reconstitute its Membership – If the Board does not see the value of Organovo’s bioprinting opportunity following an abandoned or defeated merger, I believe the Board should step down. The stockholders want the company to pursue bioprinting and have communicated this clearly to the Board. A stockholder vote against the deal would be the ultimate message to the Board. Rather than improperly substitute its judgment for that of the stockholders, the Board of a bioprinting company that cannot find a way to pursue bioprinting should simply step down and find candidates with industry experience to take over.

    I personally believe that this Board has often appeared ill-equipped to lead the Company and meet its duty of enhancing value. I believe that the record shows that the current mix of inadequate directors lacks both sufficient expertise and proper alignment of interests when it comes to Company performance.
  3. The Board Can Run an Improved Strategic Alternatives Process – Having been Chairman for many years and having recruited each of Organovo’s Special Committee members to the Board, I feel that Organovo’s Board was not positioned to run an effective and value-maximizing process to identify potential suitable merger partners. The strengths of Organovo’s Board members are simply not innovative thinking or the type of entrepreneurial risk-taking required for a company like Organovo. The impression one gets from reading Organovo’s filings is that the Board ran the process with the primary goal of avoiding lawsuits rather than maximizing stockholder value. Unlike other companies with which Viscient has conversed about potential mergers, Organovo didn’t have significant discussions between management that knew the business best, deferring to a legalistic Board process.

    Rather than combining with a company that is in retreat, running low on capital and can only scrape together several months of cash in connection to the merger, the Board could admit its mistake and aim to find a combination partner that has upward trending progress of any type or the ability to leverage the Company’s world-class bioprinting technology. I know of at least one exciting private company that would have been a good merger partner, especially in light of its proven chief executive, whose last company exited in the billions. That company has already attracted tens of millions of dollars in new capital to back its latest effort that it can add to the cash in Organovo.

If you review the Company’s communications related to the merger closely, I suspect you will realize that the Tarveda merger is built on hopes and speculation about products and developments that I believe the circumstances prove have not been able to interest investment funds and have already lost support from VC funds. The Board expects us to trust its judgment over that of experienced investors and also expects us not to read into Tarveda’s tenuous current cash position or worry about the probable sell-off to be expected from current stockholders given their bioprinting interest and the resulting post-merger investor mismatch.

For all these reasons, I am voting “AGAINST” the proposed merger with Tarveda. I firmly believe this Board has not earned the right to have stockholders trust its judgment or its recommendation with respect to this merger. The Board’s record of value destruction speaks for itself.

I do plan to vote “FOR” the Company’s proposed reverse stock split, as I believe this is a necessary tool to avoid delisting from the NASDAQ stock exchange. In the context of a reverse stock split and no merger, the company should continue to trade for near its book value until an alternative plan is developed.


Keith Murphy


Any statements contained herein that do not describe historical facts, including future operations, are neither promises nor guarantees and may constitute “forward-looking statements” as that term is defined in the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements may include words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparable terminology. Any such forward-looking statements contained herein are based on current assumptions, estimates and expectations, but are subject to a number of known and unknown risks and significant business, economic and competitive uncertainties that may cause actual results to differ materially from expectations. Numerous factors could cause actual future results to differ materially from current expectations expressed or implied by such forward-looking statements, including the risks and other risk factors detailed in various publicly available documents filed by the Company from time to time with the Securities and Exchange Commission (SEC), which are available at, including but not limited to, such information appearing under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the SEC on June 3, 2019. Any forward-looking statements should be considered in light of those risk factors. Mr. Murphy cautions readers not to rely on any such forward-looking statements, which speak only as of the date they are made. Mr. Murphy disclaims any intent or obligation to publicly update or revise any such forward-looking statements to reflect any change in Company expectations or future events, conditions or circumstances on which any such forward-looking statements may be based, or that may affect the likelihood that actual results may differ from those set forth in such forward-looking statements.


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