-- Achieved Revenue of $13.8 Million, an Increase
of 102%Compared to Prior Year Quarter --
Avid Bioservices, Inc. (NASDAQ:CDMO) (NASDAQ:CDMOP), a dedicated
biologics contract development and manufacturing organization
(CDMO) working to improve patient lives by providing high quality
development and manufacturing services to biotechnology and
pharmaceutical companies, today announced financial results for the
third quarter of fiscal year (FY) 2019 ended January 31, 2019, and
provided an update on its contract manufacturing operations, and
other corporate highlights.
Highlights Since October 31,
2018
“The third quarter was busy and productive as
reflected by our strong financial results,” said Roger Lias, Ph.D.,
president and chief executive officer.
“Our process development group is increasingly
busy, now contributing over 20% of revenues. With respect to
new projects, we continue to see growth in the number of RFPs
received. We are increasingly recognized as an attractive
service-provider within the biologics outsourcing market and
continue to work diligently to close new business
opportunities.
“Importantly, we continue to successfully expand
our scopes of work with existing customers, and during the third
quarter, we expanded multiple ongoing projects. Since the
beginning of fiscal 2019, project expansion orders from our current
clients have increased by 68%, demonstrating the significant
contribution that existing customers make to our business.
“Looking to future growth, we are pleased to
report that we have recently completed a process validation
campaign for one of our clients and have others ongoing.
These validation campaigns precede commercial production.
Pending completion of pivotal clinical trials and regulatory
approval, each of these validations is highly likely to result in
future production in support of product launch.
“During the past 12 months we have significantly
diversified our client base, thus reducing risk and building a
pipeline of future manufacturing opportunities. We have built
commercial and operational infrastructure to support growth,
right-sized the organization, significantly cut costs, and
increased capacity utilization resulting in improved margins.
As a result, we are firmly on-track towards profitability and
positive EBITDA.
“Driving these achievements is the truly
exceptional team at Avid Bioservices whose dedication and hard work
have contributed to our successes to-date. Together we
continue to execute to-plan as we build a sustainably profitable
and admired company and firmly establish Avid Bioservices as an
acknowledged leader in the CDMO sector.”
Financial Highlights and
Guidance
- Contract manufacturing revenue
was $13.8 million for the third quarter of FY 2019, an
increase of 102% compared to $6.8 million for the third
quarter of FY 2018. This increase is primarily due to
increased demand from a more diversified client base.
- Revenue backlog grew significantly
during the third quarter from existing customers. As of
January 31, 2019 revenue backlog was $43 million, the majority
of which is expected to be recognized in FY 2020.
- Gross margin for the third quarter
was a positive 15%, a significant improvement compared to a gross
margin of negative 61% during the prior year period. The
increase in gross margin for the quarter was primarily attributed
to our product mix and volume.
- Selling, general and administrative
expenses for the third quarter of FY 2019 were $3.2 million, a
33% decrease compared to $4.8 million for the third
quarter of FY 2018.
- For the third quarter of FY 2019,
the company recorded consolidated net loss attributable to common
stockholders of $2.6 million, or $0.05 per
share, compared to a consolidated net loss attributable to common
stockholders of $12.4 million, or $0.28 per share,
for the third quarter of FY 2018.
- Avid reported $27.8
million in cash and cash equivalents as of January 31,
2019, compared to $42.3 million on April 30,
2018.
- The company expects to end the
fiscal year within the lower half of its revenue guidance of $51
million - $55 million.
More detailed financial information and analysis
may be found in Avid Bioservices’ Quarterly Report on Form 10-Q,
which will be filed with the Securities and Exchange Commission
today.
Recent Developments
- Signed project expansion orders
during the third quarter with current clients representing future
revenue in the amount of $23.8 million.
- Completed a process validation
campaign for future commercial production during the third quarter
and have other process validations ongoing.
- Process development operations
contributed over 20% of revenue during the third quarter.
Conference Call
Avid will host a conference call and webcast
this afternoon, March 11, 2019, at 4:30 PM EDT (1:30 PM PDT).
To listen to the conference call, please dial
(877) 312-5443 or (253) 237-1126 and request the Avid Bioservices
conference call. To listen to the live webcast, or access the
archived webcast, please visit:
http://ir.avidbio.com/events.cfm.
About Avid Bioservices,
Inc.Avid Bioservices is a dedicated contract
development and manufacturing organization (CDMO) focused on
development and CGMP manufacturing of biopharmaceutical products
derived from mammalian cell culture. The company provides a
comprehensive range of process development, high quality CGMP
clinical and commercial manufacturing services for the
biotechnology and biopharmaceutical industries. With 25 years of
experience producing monoclonal antibodies and recombinant proteins
in batch, fed-batch and perfusion modes, Avid's services include
CGMP clinical and commercial product manufacturing, purification,
bulk packaging, stability testing and regulatory strategy,
submission and support. The company also provides a variety of
process development activities, including cell line development and
optimization, cell culture and feed optimization, analytical
methods development and product
characterization. www.avidbio.com
Forward-Looking
StatementsStatements in this press release, which are not
purely historical, including statements regarding Avid
Bioservices' intentions, hopes, beliefs, expectations,
representations, projections, plans or predictions of the future,
are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. The forward-looking
statements involve risks and uncertainties including, but not
limited to, the risk the company may not achieve cash flow or
EBITDA positive, the risk the company may experience delays in
engaging new clients, the risk that the company may not be
successful in executing client projects, the risk that the company
may experience technical difficulties in completing client projects
which could delay delivery of products to customers, revenue
recognition and receipt of payment or the loss of the customer, the
risk that one or more existing customers terminates its contract
prior to completion or reduces or delays its demand for development
or manufacturing services, and the risk that the company may need
to use the majority of its cash to fund operations, thereby
delaying the in-process upgrades to its process development
capabilities and contemplated expansion plans. Our business could
be affected by a number of other factors, including the risk
factors listed from time to time in our reports filed with
the Securities and Exchange Commission including, but not
limited to, our annual report on Form 10-K for the fiscal year
ended April 30, 2018, as well as any updates to these risk
factors filed from time to time in our other filings with
the Securities and Exchange Commission. We caution investors
not to place undue reliance on the forward-looking statements
contained in this press release, and we disclaim any obligation,
and do not undertake, to update or revise any forward-looking
statements in this press release except as may be required by
law.
|
AVID BIOSERVICES, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) |
(in thousands, except share and per share
information) |
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
January 31, |
|
January 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
Contract manufacturing
revenue |
$ |
13,781 |
|
|
$ |
6,819 |
|
|
$ |
36,548 |
|
|
$ |
46,678 |
|
Cost of contract
manufacturing |
|
11,731 |
|
|
|
10,951 |
|
|
|
32,972 |
|
|
|
47,641 |
|
Gross
profit (loss) |
|
2,050 |
|
|
|
(4,132 |
) |
|
|
3,576 |
|
|
|
(963 |
) |
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
Selling,
general and administrative |
|
3,242 |
|
|
|
4,824 |
|
|
|
9,273 |
|
|
|
12,273 |
|
Restructuring charges |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,258 |
|
Total
operating expenses |
|
3,242 |
|
|
|
4,824 |
|
|
|
9,273 |
|
|
|
13,531 |
|
Operating loss |
|
(1,192 |
) |
|
|
(8,956 |
) |
|
|
(5,697 |
) |
|
|
(14,494 |
) |
Interest and other
income, net |
|
9 |
|
|
|
28 |
|
|
|
190 |
|
|
|
65 |
|
Loss from continuing
operations before income taxes |
$ |
(1,183 |
) |
|
$ |
(8,928 |
) |
|
$ |
(5,507 |
) |
|
$ |
(14,429 |
) |
Income
tax benefit |
|
44 |
|
|
|
— |
|
|
|
217 |
|
|
|
— |
|
Loss from continuing
operations |
$ |
(1,139 |
) |
|
$ |
(8,928 |
) |
|
$ |
(5,290 |
) |
|
$ |
(14,429 |
) |
Income (loss) from
discontinued operations, net of tax |
|
— |
|
|
|
(2,076 |
) |
|
|
739 |
|
|
|
(10,404 |
) |
Net loss |
$ |
(1,139 |
) |
|
$ |
(11,004 |
) |
|
$ |
(4,551 |
) |
|
$ |
(24,833 |
) |
Comprehensive loss |
$ |
(1,139 |
) |
|
$ |
(11,004 |
) |
|
$ |
(4,551 |
) |
|
$ |
(24,833 |
) |
|
|
|
|
|
|
|
|
Series E preferred
stock accumulated dividends |
|
(1,442 |
) |
|
|
(1,442 |
) |
|
|
(3,604 |
) |
|
|
(3,604 |
) |
Net loss attributable
to common stockholders |
$ |
(2,581 |
) |
|
$ |
(12,446 |
) |
|
$ |
(8,155 |
) |
|
$ |
(28,437 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
weighted averagecommon shares outstanding |
|
56,068,844 |
|
|
|
45,225,804 |
|
|
|
55,949,164 |
|
|
|
45,032,335 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
(loss) income per common shareattributable to common
stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
$ |
(0.05 |
) |
|
$ |
(0.23 |
) |
|
$ |
(0.16 |
) |
|
$ |
(0.40 |
) |
Discontinued operations |
$ |
— |
|
|
$ |
(0.05 |
) |
|
$ |
0.01 |
|
|
$ |
(0.23 |
) |
Net loss
per share attributable tocommon stockholders |
$ |
(0.05 |
) |
|
$ |
(0.28 |
) |
|
$ |
(0.15 |
) |
|
$ |
(0.63 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVID BIOSERVICES, INC. |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(in thousands, except share information) |
|
|
|
|
|
January 31, |
|
April 30, |
|
2019 |
|
2018 |
|
Unaudited |
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
27,758 |
|
|
$ |
42,265 |
|
Trade and
other receivables |
|
7,885 |
|
|
|
3,754 |
|
Contract
assets |
|
3,912 |
|
|
|
— |
|
Inventories |
|
8,660 |
|
|
|
16,129 |
|
Prepaid
expenses |
|
567 |
|
|
|
679 |
|
Assets of
discontinued operations |
|
— |
|
|
|
5,000 |
|
Total
current assets |
|
48,782 |
|
|
|
67,827 |
|
Property and equipment,
net |
|
25,876 |
|
|
|
26,479 |
|
Restricted cash |
|
1,150 |
|
|
|
1,150 |
|
Other assets |
|
302 |
|
|
|
304 |
|
Total
assets |
$ |
76,110 |
|
|
$ |
95,760 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
2,916 |
|
|
$ |
1,909 |
|
Accrued
payroll and related costs |
|
2,549 |
|
|
|
2,564 |
|
Contract
liabilities |
|
14,620 |
|
|
|
27,935 |
|
Other
current liabilities |
|
638 |
|
|
|
905 |
|
Liabilities of discontinued operations |
|
125 |
|
|
|
4,550 |
|
Total
current liabilities |
|
20,848 |
|
|
|
37,863 |
|
|
|
|
|
Deferred rent, less
current portion |
|
2,105 |
|
|
|
2,159 |
|
Capital lease, less
current portion |
|
93 |
|
|
|
— |
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
Stockholders’
equity: |
|
|
|
Preferred
stock—$0.001 par value; 5,000,000 shares authorized;
1,647,760shares issued and outstanding at January 31, 2019 and
April 30, 2018,respectively |
|
2 |
|
|
|
2 |
|
Common
stock—$0.001 par value; 150,000,000 shares authorized;56,072,291
and 55,689,222 shares issued and outstanding at January 31,2019 and
April 30, 2018, respectively |
|
56 |
|
|
|
55 |
|
Additional paid-in capital |
|
613,947 |
|
|
|
614,810 |
|
Accumulated deficit |
|
(560,941 |
) |
|
|
(559,129 |
) |
Total
stockholders’ equity |
|
53,064 |
|
|
|
55,738 |
|
Total
liabilities and stockholders’ equity |
$ |
76,110 |
|
|
$ |
95,760 |
|
Contacts:
Stephanie Diaz (Investors)
Vida Strategic Partners
415-675-7401
sdiaz@vidasp.com
Tim Brons (Media)
Vida Strategic Partners
415-675-7402
tbrons@vidasp.com
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