VivoSim Labs, INC. (VIVS)
VivoSim Labs (NASDAQ: VIVS), formerly Organovo, has pivoted from clinical‐stage drug development to offering premium 3D human tissue testing services in liver and intestinal toxicology. FDA endorsement of non-animal NAM methods is a major catalyst. The Company sold its FXR program to Eli Lilly fo...
VivoSim Labs, Inc. 2025 10-K Review: A Pivot to Predictive 3D Human Tissue Services
Table of Contents
Warren.AI 💰 4.3 / 10
- Overview and Corporate Evolution
- Business Model: 3D Human Tissue Services
- Recent Strategic Transaction: FXR Program Sale
- Intellectual Property Portfolio
- Financial Highlights
- Cash Flow and Liquidity
- Going Concern and Nasdaq Compliance
- Risk Factors and Mitigation
- Investment Outlook
1. Overview and Corporate Evolution
VivoSim Labs, Inc. (formerly Organovo Holdings, Inc.) has redefined its business from a clinical-stage biotech developer into a specialized services provider for pharmaceutical and biotechnology companies.
- Former focus: Advanced FXR314, a drug candidate for inflammatory bowel disease (IBD) through a clinical program.
- Shift in 2025: Sold the FXR program to Eli Lilly for $10 million upfront plus $50 million in potential milestones.
- New identity: Effective April 24, 2025, the Company rebranded to VivoSim Labs to reflect its pivot toward drug testing services built on proprietary 3D human tissue models.
2. Business Model: 3D Human Tissue Services
VivoSim’s core offering: predictively test drug candidates using 3D human tissue constructs, focusing on liver and intestinal toxicity—major causes of drug failures and post-approval withdrawals.
- NAM models: New Approach Methodologies (NAM) endorsed by the FDA as of April 2025 to reduce reliance on animal testing.
- Liver toxicity accuracy: Presented best-in-class performance at Digestive Disease Week 2025: 87.5% sensitivity and 100% specificity on challenging compounds.
- Service lines:
- Toxicity screening: Early- and mid-stage candidates.
- Mechanism-of-action: Clarifying how drugs work in complex tissues.
- Custom disease models: Personalized or disease-specific constructs for research and drug development.
Mosaic Cell Sciences (now discontinued)
- Launched Feb 2024 to produce and sell human cell inventories for internal R&D and external life-science customers.
- Discontinued commercial sales in Q3 FY2025 as the Company refocused on its tissue-model services.
3. Recent Strategic Transaction: FXR Program Sale
- Buyer: Eli Lilly & Company acquired the FXR314 portfolio on March 25, 2025.
- Deal terms:
- Upfront: $9 million cash plus $1 million escrow for indemnification.
- Milestones: Up to $50 million tied to clinical, regulatory, and commercial targets.
- Accounting: Recognized $10 million gain under Other Income (ASC 610-20), as it did not meet the definition of customer-based revenue (ASC 606).
4. Intellectual Property Portfolio
VivoSim holds or exclusively licenses over 160 patents and applications worldwide—core to its 3D bioprinting platform:
- Base bioprinter patents: 11 U.S. and 15 foreign patents covering bioprinting methods and instrumentation.
- Tissue-specific patents: "NAMkind™" human liver (4 U.S., multiple foreign) and kidney tissue constructs.
- In-licensed: Forgacs IP from University of Missouri and MUSC, foundational patents on scaffold-free bioprinting.
- Licensing revenue: Since 2022, royalties from BICO Group AB licensing the bioprinting patents (5% upfront fee, ongoing sales royalties).
5. Financial Highlights (FY2025 vs. FY2024)
| Metric | FY2025 | FY2024 | Change |
|---|---|---|---|
| Total Revenue | $0.1M | $0.1M | +9% |
| —Royalty Income | $0.12M | $0.11M | +9% |
| —Product Revenue (Mosaic) | $0.03M | $0.00M | New |
| R&D Expense | $5.03M | $5.50M | –9% |
| SG&A Expense | $7.73M | $9.70M | –20% |
| Operating Loss | $(12.62)M | $(15.09)M | –16% |
| Other Income (Gain on FXR sale) | $10.13M | $0.42M | +2,329% |
| Net Loss | $(2.49)M | $(14.67)M | –83% |
| Net Loss per share, basic | $(1.70) | $(19.25) | N/A |
- Accumulated Deficit: $342.2M at 3/31/2025 vs. $339.7M at 3/31/2024.
6. Cash Flow and Liquidity
- Operating cash burn: –$9.5M (FY2025) vs. –$14.7M (FY2024).
- Investing inflow: +$9.0M from FXR sale (FY2025) vs. +$0.8M from investment maturities (FY2024).
- Financing inflow: +$8.8M from ATM and public offerings (FY2025) vs. +$1.4M (FY2024).
- Cash & Equivalents: $11.3M at 3/31/2025 vs. $2.9M at 3/31/2024.
- Working Capital: $8.4M (3/31/2025) vs. $2.0M (3/31/2024).
7. Going Concern and Nasdaq Compliance
- Going Concern: Auditors and management note substantial doubt due to recurring losses and reliance on financing.
- Nasdaq: Received deficiency notices in July 2024 (bid price) and Feb 2025 (shareholders2 equity).
- Reverse Stock Split: 1-for-12 split on March 21, 2025 to meet listing requirements.
- Regained compliance: Initial Hearings Panel exception through April 15, 2025 and compliance demonstrated on April 30, 2025. Subject to 1-year monitor.
8. Risk Factors and Mitigation
Key Risks
- Going Concern: Cash runway dependent on further equity raises and service revenue growth.
- Revenue Model Unproven: Pivot to a services model has no track record of scale or profitability.
- IP Challenges: Ongoing patent disputes (e.g., BICO Group AB) and potential generic/competing tissue platforms.
- Regulatory & Reimbursement: Services depend on FDA’s acceptance of NAM methods; no guarantee of broad adoption or reimbursement.
- Talent & Partnerships: Reliant on key personnel, consultancies (e.g., Viscient), and strategic partnerships in a competitive market.
Mitigations:
- Strategic IP licensing and cross-licensing (Viscient, BICO Group AB).
- Reducing SG&A costs by 20% and R&D by 9% to extend runway.
- Focused marketing of "NAMkind" predictive power.
9. Investment Outlook
Strengths
- Proprietary 3D bioprinting IP and track record of peer-reviewed publications.
- FDA’s endorsement of NAM methods paves regulatory pathway for non-animal models.
- Leaner cost structure post-FXR sale and workforce reduction.
Weaknesses
- Practically zero recurring service revenue currently.
- Dependent on new capital and market acceptance of services.
- Going concern and Nasdaq listing on a monitor status.
Opportunities
- Rapid expansion of the NAM services market.
- Licensing of tissue models to pharma R&D pipelines.
Threats
- Competition from advanced in vitro, organ-on-chip, and AI-driven safety screening.
- Patent challenges and trade secrets risk.
Investment Score: 4.3 / 10
A balanced view of runway extension, a strong IP mo del, and regulatory tailwinds is offset by recurring losses, unproven revenue streams, and financing dependence.
Net Loss FY2025: -$2.488M
Key Takeaway: VivoSim Labs is transitioning from internal drug development to a 3D human tissue services platform with best-in-class predictive power, but execution risk and financing remain critical hurdles.