Should Organovo Investors be Worried About Insphero?
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Several months ago, we published an article titled “Organs-on-Chips: An Alternative to 3D Bioprinting?” in which we speculated that 3D Bioprinting small samples of organ tissues to use for drug testing could be displaced by organs-on-chips. Organovo (NYSEMKT:ONVO), the only publicly traded 3D Bioprinting company, commands a market cap of over $500 million with just minuscule revenues because investors believe that 3D Bioprinted tissues will disrupt the drug testing industry when products are finally commercialized. While Organovo scientists have a +$40 million cash stockpile to use for R&D, they may not have much time. One little known Swiss startup company, InSphero, claims to be “the world leader in 3D cell culture technology for safety and efficacy testing” and has commercialized 3D InSightTM Liver Microtissues.
About Insphero
A spin-off company of the Swiss Federal Institute of Technology Zurich and the University Zurich, InSphero was founded in 2009. The Company was named the #1 Swiss startup for 2014. Headquartered in Zurich, Switzerland, Insphero has subsidiaries in the USA and Germany, and currently counts all of the top 15 global pharmaceutical and cosmetics companies as their customers. Insphero has a broad portfolio of 3D tumor and liver microtissues available for both humans and rats. The Company’s 3D liver tissue pipeline can be seen below:
A brochure with extensive product information can be found here. The company has 10 commercial partners they are working with to develop their technology and 17 academic collaboration partners including the University of Queensland with whom Organovo recently announced an agreement with. Since 2011, InSphero operates under an ISO-9001-certified quality management system, a requirement that is no doubt mandatory for the world’s top pharmaceutical and cosmetics companies.
InSphero is also project coordinator for a three-year project funded by the European Commission called “The Body on a Chip“. The objective of the project, which includes Astrazeneca as a participant, is stated as follows:
High attrition and failures rates in pharmaceutical and biotechnological drug development require a paradigm change towards more physiological human cell-based assays at an early time point in the process. The central idea of this proposal is to develop a versatile and reconfigurable pharmaceutical screening technology platform that relies on organotypic three-dimensional spherical microtissues. This platform will accommodate different types of human microtissues (tumor, brain, liver, heart etc.)
With total funding of $2.4 million, the project is expected to conclude in May 2015.
Organovo vs. Insphero
According to Organovo, “2D cell cultures of human liver are the common standard used in the industry today, with over 90% market share“. They also state “3D culture models do not achieve adequate representation of human biology, as evidenced by the fact that 40% of total pharma R&D spending is on drugs that fail in human trials“. But if 90% of the market share is currently 2D cell cultures, is it really fair to say that 3D cell cultures are not adequate because 40% of current R&D spend is on drugs that fail?
Organovo’s claims that an advantage of their 3D Bioprinted liver tissues is that they last for 40 days instead of 2 days for 2D cell cultures. Insphero’s 3D liver microtissues last for over 35 days. When Organovo (NYSEMKT:ONVO) finally brings 3D Bioprinted liver tissues to market, they will then need to demonstrate that their tissues are superior to those currently available from InSphero or any other non-3D bioprinted 3D liver tissues for that matter. It is hard to see why Organovo investors should not consider InSphero a legitimate competitive threat to Organovo (NYSEMKT:ONVO) .
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Obviously (as disclosed this year) there is merit in Organovo’s tissues, or else there wouldn’t have been any orders for them. Also, competition doesn’t mean either one will fail necessarily. Companies adapt. If they didn’t, IBM, Microsoft or Apple would be out of business. I’m not worried about either company mentioned in this article.
Thank you for the comment Oleg. Organovo’s tissues certainly have merit based on the progress they have been making, but are in the validation stage prior to commercialization. It’s important for Organovo to distinguish the advantages of 3D bioprinted tissues versus currently available 3D tissues from companies like Insphero. Given the 90% market share for 2D, there’s lots of room for multiple players.
Thank you for your reply. I very much agree.
Bioprinting is a buzz word in medicine at the moment. With increased interest from investors, the field is starting to gain momentum and further commercialization. But if you look at bioprinting as a market, all you will see is news about Organovo. But there are a number of dynamic new businesses entering the bioprinting market including; 3DBio, Cyfuse Biomedica, TeVido Biodevices, 3Dynamic Systems Ltd, MicroFab Technologies Inc and OxSyBio. Although Organovo was one of the first companies to appear, and we have seen their technology in the media time and time again, but they no longer have the state of the art. Investors are putting all of their eggs into one basket and this is very risky. The companies to watch are the ones linked with Universities as they really appear to be pushing the boundaries, are developing new business models and show a high growth potential over the next five years. This is a very exciting new market and certainly one for biotech/tech investors to watch.
Organovo is also linked to university, but transfered to business. I will also say that not all the companies listed are providing the same thing as Organovo. Some in fact are looking to generate revenue short term by selling their platform to other scientists. This is all wonderful and exciting but until they get high caliber business people on their BoDs, things will be slow. I work in university in research and I can tell you that while many researchers are brilliant scientists, they are not business-minded. That is not to say, as has been pointed out, that there cannot be multiple winners, and, in the end, if we benefit from this technology that’s great for all of us and I’m sure all of these companies will be successful in select areas and ventures, but right now some are just further along in certain aspects. Cheers.
Thank you for the comment TobbMcCall. We published an article today which highlights 5 of the 3D Bioprinting startups you mentioned in your comment. We greatly appreciate the information you provided as it helped us research more exciting players in this space.
https://nanalyze.com/2014/11/5-more-exciting-3d-bioprinting-companies/
Organovo is not merely about bio printing tissue. They’re conducting a trial at Scripps with a leading Orthopedist, printing cartilage. The researcher wants to integrate 3-D scanning and printing as an alternative to knee and joint replacements in the future. If you can simply replace the cartilage you don’t need to reconstruct the joint.
Three facts remain, (1) over valued stocks, (2) which are in a market that although is exciting, but is not yet proven and (3) poor financials, no solid figures or firm customer base. What’s that I think that I can hear the words sell, sell, sell in the distance. This market segment is crazy, dictated by rumours and whispers and Organovo as a company is overhyped, this is not such a bad thing, but as my father used to say, don’t write a cheque with your mouth which your ass can cash.