Orgenesis Inc. (OTCQX: ORGS) is a global biotech company working to unlock the full potential of cell and gene therapies (CGTs) in order to improve access and outcomes in healthcare. The company has made significant strides in redefining the accessibility of these advanced therapies through its innovative decentralized approach, which is designed to expedite capacity setup, enhance production efficiency, and reduce treatment costs.

Company Background

The company's journey began in 2014 when it was founded in Germantown, Maryland. Orgenesis was established with the vision of transforming the traditional, centralized model of CGT development and commercialization. Recognizing the inherent challenges of the industry, such as the high costs and complex logistics associated with delivering these treatments to patients, the company set out to develop a more accessible and scalable solution.

Business Model

Orgenesis has developed a collaborative worldwide network of research institutes and hospitals engaged in its Point-of-Care (POCare) model. This network is complemented by a pipeline of licensed POCare advanced therapies that can be processed and produced under closed and automated processes and systems. The company's innovative approach aims to overcome the limitations of traditional commercial manufacturing methods that often prove cost-prohibitive and logistically challenging for advanced therapies.

Business Segments

Orgenesis operates two main business segments: POCare Services and Therapies. The POCare Services division, also known as the Octomera segment, provides harmonized and standardized services to customers, known as POCare Centers, through a network of decentralized hubs. These services include process development, automation, and closed-system adaptation, as well as the processing and supply of therapies under GMP conditions.

The Therapies segment focuses on in-licensing advanced therapy candidates and adapting them to the POCare platform. Orgenesis works closely with research institutes and hospitals to identify promising therapies that can benefit from a decentralized production model. The company then partners with regional entities to expedite the clinical development and commercialization of these therapies in non-core geographical regions.

Financials

Orgenesis' financial performance has been impacted by the challenges faced by the broader biotech industry. For the nine months ended September 30, 2024, the company reported revenues of $734,000, compared to $365,000 for the same period in the prior year. The net loss for the nine-month period was $28.64 million, down from $58.30 million in the corresponding period of 2023.

Breaking down the revenue by segment for the nine months ended September 30, 2024, the Octomera segment generated revenues of $322,000, while the Therapies segment generated revenues of $435,000. The Octomera segment had a gross profit of $970,000, while the Therapies segment had a gross profit of $86,000.

In the most recent quarter, Orgenesis reported revenue of $347,000, representing a significant 215% increase compared to the same quarter in 2023. This growth was primarily attributed to increased cell processing development and hospital services work. The net income for the quarter was $9,120,000. However, the company faced challenges in cash flow, with operating cash flow (OCF) of -$4,630,000 and free cash flow (FCF) of -$4,688,000 for the quarter.

Liquidity

The company's liquidity position has been a concern, as it reported an accumulated deficit of $204.41 million and negative operating cash flows of $14.98 million for the nine months ended September 30, 2024. Orgenesis has been actively seeking additional financing and exploring ways to reduce or delay expenditures to address these liquidity challenges.

As of December 31, 2023, Orgenesis had a net debt position of $21.45 million. The company's cash and cash equivalents stood at $1.48 million. The current ratio and quick ratio were both 0.25, indicating potential short-term liquidity challenges. These financial metrics, combined with the company's accumulated deficit, have raised substantial doubt about its ability to continue as a going concern.

Recent Developments

In October 2024, Orgenesis faced a significant setback when its common stock was delisted from the Nasdaq Capital Market and began trading on the OTCQX market on October 21, 2024. This development has added uncertainty to the company's ability to raise additional capital, as the lack of a Nasdaq listing may make it more difficult to attract investors.

Despite these challenges, Orgenesis remains committed to its mission of revolutionizing the accessibility of cell and gene therapies. The company has made notable progress in its strategic partnerships and acquisitions, which have strengthened its POCare platform and expanded its pipeline of advanced therapy candidates.

Strategic Acquisitions and Partnerships

On January 29, 2024, Orgenesis acquired all of the preferred units of Octomera LLC that were previously owned by Metalmark Capital Partners. This acquisition allowed the company to reconsolidate Octomera into its accounts, further integrating its decentralized production capabilities.

Additionally, in 2024, Orgenesis entered into several asset purchase agreements to expand its therapeutic portfolio. The company acquired technology and intellectual property from Broaden Bioscience and Technology Corp. and Theracell Advanced Biotechnology, broadening its capabilities in areas such as CAR-T, beta-thalassemia, and kidney disorders.

The company's strategic partnership with Harley Street Healthcare Group (HSHG), announced in August 2024, also holds significant potential. The two companies agreed to form a joint venture to collaborate on the clinical development and commercialization of wellness and longevity-related services, including personalized preventative care and regenerative therapies, in key global markets.

Outlook

While Orgenesis faces ongoing challenges, the company's innovative decentralized approach to cell and gene therapy production continues to garner attention in the industry. The company's focus on improving accessibility and reducing costs for these advanced treatments aligns with the growing demand for more affordable and scalable CGT solutions.

Orgenesis is working to expand the number and scope of its POCare Centers, believing this provides an efficient and scalable pathway for CGT therapies to reach patients rapidly at lowered costs. The company's strategy of in-licensing promising therapies and adapting them to a point-of-care approach through regional partnerships aims to lower overall development costs and enable additional funding from grants and regional partners.

As Orgenesis navigates the complexities of the biotech landscape, its dedication to advancing the field of cell and gene therapy remains unwavering. The company's ability to forge strategic partnerships, expand its pipeline, and effectively execute its decentralized production model will be crucial in determining its long-term success and its impact on the future of healthcare. The company's focus on providing affordable and accessible CGT therapies through its POCare Services and in-licensing of promising therapy candidates positions it uniquely in the market, despite the ongoing financial challenges.