Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
I agree with you WRT trends...
And as long as we get an offer well north of where we are now, I'll be happy...
2021-22 could be very interesting.
Good luck to all.
Regards
golfho
Good question...
I personally have no clue.
But I would prefer that we stay independent and, strategically acquire good revenue producers or associated technology enhancers for the next few years.
Regards
golfho
Interesting write-up from Seeking Alpha today...
https://seekingalpha.com/article/4393271-halozyme-7-years-of-royalty-bliss-coming-afterwards-questions-to-answer?utm_medium=email&utm_source=seeking_alpha&mail_subject=halo-halozyme-7-years-of-royalty-bliss-coming-afterwards-questions-to-answer&utm_campaign=rta-stock-article&utm_content=link-2
"It does take a bit of a leap of faith to stay with this stock for the long term; however, the rewards are potentially huge if the company can find a way to bridge the patent expirations. In 2027, the company should be generating roughly $850 million in earnings in its current form just from royalties leading to core EPS of $6-6.50 that is relatively stable due to the long-term royalty agreements in place out to 2037 or longer.
Putting a relatively conservative 15 PE multiple on just the core royalty EPS gives you a potential price of $90-97 with a milestone revenue kicker on top.
And if the company is able to acquire or develop a new source of revenue, multiple expansion could be much higher."
Good luck to all.
Regards
golfho
WELL...WELL...WELL...
I'm not feeling drunk...
I plan on getting drunk...!!!
I think that the long winter is over.
This should take us to solid double digits.
GOOD LUCK TO ALL
Stay well, stay safe.
Regards
golfho
It's not that I have...
A high regard for Zacks.
But, here's something of interest
https://finance.yahoo.com/news/why-halozyme-therapeutics-halo-28-163004373.html
Good luck to all
Regards
golfho
what just happened...???
Not clay trader...
That's for sure...LOL
YES...
Is the webcast still available?
It seems to me that…
There are several people on this board that think that Remdesivir might be a candidate for AVID. It’s my understanding that Remdesivir is a mono phosphoramidate prodrug with a chemical composition of C27H35N6O8P I don’t think that we make that stuff.
I did some research on Gilead's pipeline and posted the results a week or so ago. It seems that they have several monoclonal antibodies in PII PI trials. I think that those are the candidates for AVID production. From what I understand Lanza and Ono are the current manufacturers.
About expansion and margins…
With the recent agreement with Argonaut, AVID can now provide a full suite from “process development” to “manufacturing” to “fill and finish” soup to nuts. Remember AVID was able to produce revenue of $10M annually for process development. The agreement with Argonaut with enhance revenue opportunities as we will provide process development for their biologic candidates. We can exceed $10M this year in process development with this agreement. I have no idea how much revenue can be generated with fill & finish and we will split the profit with Argonaut but it could be $10M to $20M. As stated by the previous team we can produce $100M in revenue from manufacturing alone.
So…
We can produce revenue of between $110M to $130M without expansion.
What about margins you ask…???
With the recent disaster almost behind us. We will resume our normal work schedule. People that were down and idle will be fully productive, lost material was accounted for in the last quarterly report. According to the last C.C. we did not lose orders, they were only delayed...We will see, come the next report in a few weeks. Remember we achieved margins of +25% in past years...
I’m getting very tired of this...It’s been a very...very...very long time…
I’m 73 and 6 weeks ago I had a heart attack and open heart surgery…
The way things are going...AVID will hit $30 the day I get checked out…
Grrrrr……
A little bit bitter...golfho
Some research into the Gilead contract…
Monoclonal antibody’s from Gilead:
magrolimab originally developed by Forty Seven, Inc. Note: Forty Seven, Inc. was purchased by Gilead in April of this year. It is currently in 4 clinical trials, one is PIII, two in PII and one in PI/II...
From Forty Seven Inc. last 10-K issued on 3-20-20:
“On July 10, 2019, we entered into an exclusive license and collaboration agreement with Ono Pharmaceutical Co., Ltd., or Ono. Under the agreement, we granted Ono an exclusive license to develop, manufacture and commercialize magrolimab, our monoclonal antibody against CD47, as well as other anti-CD47 antibodies controlled by us in Japan, South Korea, Taiwan and the ASEAN countries, or the Ono Territory. We retain all rights to magrolimab and other licensed antibodies outside of the Ono Territory.”
AND…
“We currently do not own or operate any manufacturing facilities. We rely, and expect to continue to rely for the foreseeable future, on third party contract manufacturing organizations, or CMOs, including Lonza and Northway BiotechPharma, or BTPH, to produce our product candidates for preclinical and clinical testing, as well as for commercial manufacture if our product candidates receive marketing approval. We require that our CMOs produce bulk drug substances and finished drug products in accordance with current cGMPs and all other applicable laws and regulations. We maintain agreements with our manufacturers that include confidentiality and intellectual property provisions to protect our proprietary rights related to our product candidates.
We have engaged Lonza to manufacture magrolimab for preclinical and clinical use. Additional CMOs are used to label, package and distribute magrolimab for preclinical and clinical use. We obtain our supplies from these CMOs on a purchase order basis and do not have any long-term commercial supply arrangements in place. We do not currently have arrangements in place for redundant supply. For all of our product candidates, we intend to identify and qualify additional manufacturers to provide the active pharmaceutical ingredient and fill-and-finish services prior to seeking regulatory approval.
In August 2016 and December 2017, we entered into development and manufacturing agreements with Lonza relating to the manufacturing of magrolimab-related products and preclinical testing. The August 2016 agreement was amended in November 2017 to provide for the manufacturing of our other preclinical program related products. In July 2018, we entered into development and manufacturing agreements with BTPH relating to the manufacturing of FSI-174 related products and preclinical testing. For additional details, please see “Management Discussion and Analysis—Contractual Obligations and Commitments” section.”
In addition they are developing FSI-174 and FSI-189, two other Monoclonal antibody’s.
Gilead is also testing several other monoclonal antibody’s
We could get very busy soon…
Regards
golfho
Hi All;
Process development has steadily increased over the quarters since it was started about three years ago.
2017 = $5.4M,
2018 = $6.18M,
2019 = 10.1M
2020 = $7.66M NOTE: If there was no equipment failure we would not have a loss of $2.5M. We would have had revenue of $10.16M for 2020. That’s ~$10M for two years in a row.
So…
$10M revenue annually is a reality. Can it go up or down...Of course.
If my recollection is correct, our former CEO stated that in “Campaign Mode” we can produce ~$100M in revenue with the current manufacturing equipment.
So…
With the current equipment, without any expansion we can produce $110M of revenue annually.
With today's announcement we will be able to provide “Fill & Finish” to the services we provide. If my memory serves me well, I remember talk about adding “Fill & Finish” as a service. The agreement signed with Argonaut will allow us to provide this service without the expense of building a dedicated facility and getting regulatory approval.
Too me this is a win-win situation.
I don’t get the price action today….
Grrrrrrr……
Regards
golfho
Wildhorses…
I agree completely with the scenario you presented in your first two paragraphs. That is a very likely hypothesis of the chain of events. I would like to address some of the other points in your post.
“Does it matter if they are batches for process development or regular production if the customer still plans to purchase the product.”
The point I was trying to make was that a lot of people-hours, money and material needed to be trashed...Trashed to the tune of $2.5M. Re-purchase of raw material to produce a new batch needs to be made and that’s an extra cost. Down and Idle time for highly skilled labor is a loss.
“Also, do we get paid for "development" work that is not just direct production?”
YES, we do...I did not go back past 2017 but in every 10-Q and 10-K from 2017 there are two revenue streams, Manufacturing and Process Development. I quoted the annual revenue in my post. It’s around page 40ish in the 10-K. I remember a few years back when they installed this new equipment, they stated that it would be a new and separate stream of income and allow AVID to develop new customers.
I agree with your final point.
Stay well and stay safe
Regards
golfho
My guess is...
She is saying that no one cancelled their orders...
Well I suppose that that's some good news.
But...If you spent more than three full months of labor and material and then had to throw it away...To the tune of $2.5M YOU HAD A LOSS...!!!
Regards
golfho
Hi All…
I’m not happy with the reporting on the “production interruption and revenue deferral”. Something stinks. Production interruption would seem to imply that the problem would be in the manufacturing part of the business. BUT IT WAS NOT.
NOTE: Every quarter, they split the revenue between the manufacturing and process development sections. Process development has steadily increased over the quarters since it was started about three years ago. 2017 = $5.4M, 2018 = $6.18M, 2019 = 10.1M AND THEN 2020 $7.66M
From the 10-K: “Revenues were $59.7 million in fiscal 2020, compared to $53.6 million in fiscal 2019, an increase of approximately $6.1 million, or 11%. The increase in revenues can be attributed to a $8.6 million increase in manufacturing revenue primarily due to an increase in the number of manufacturing runs in-process and/or completed in fiscal 2020 compared to fiscal 2019, partially offset by a decrease in process development revenue”. AND…
“Net decrease in process development revenues (2.5)”
THAT’S $2.5M in loss...NOT deferred.
How did this “production interruption” impact Gilead? One would think that when we contracted Gilead we needed to DEVELOP THE PROCESS...NO? In my view this was a significant smack down for us. THIS BETTER NOT HAPPEN AGAIN.
Regards
golfho
I know that you are one of us long suffering investors. I wrote a post (#332593) shortly after the 2nd quarter report. In it I tried to calculate the amount of gross revenue we needed to become profitable and we all know what the 3rd quarterly C.C. brought us. In that post I stated: “The calculation goes like this:
“Needed revenue = yearly loss divided by the margin
(expressed as) X = ~$12.2/.18
At the current margin rate of 18% we will need revenue of ~ $67.8M”
Just as a review...What has happened? Well...We were supposed to be profitable THIS FY. Why weren't we? Well we had all of the maintenance issues that were to be behind us this FY and then we had the undefined breakdown that occurred in the 3rd Q. For me this is the last chance for them. Please see my comments to your very good points.
1)I believe the worst is behind us (and I am talking 3rd quarter last year) and we will get a modest beat in the 4th quarter which was revised downward at the last CC.
I’m not that interested in the last quarter report. From the person that you responded to, in one of his previous posts he provided this gem:
https://theenterpriseleader.com/2020/05/31/9-68-million-in-sales-expected-for-avid-bioservices-inc-nasdaqcdmo-this-quarter.html
The following was stated: “Wall Street analysts expect Avid Bioservices to post $9.68 million in sales for the current fiscal quarter, according to Zack Two analysts have provided estimates for Avid Bioservices’ earnings, with the highest sales estimate coming in at $9.80 million and the lowest estimate coming in at $9.55 million.
On average, analysts expect that Avid Bioservices will report full year sales of $56.85 million for the current year, with estimates ranging from $56.70 million to $57.00 million. For the next financial year, analysts forecast that the company will post sales of $84.60 million, with estimates ranging from $84.20 million to $85.00 million. Zacks’ sales calculations are a mean average based on a survey of analysts that cover Avid Bioservices.”
Now bare in mind...This Is Zack...But, it’s not hard to produce $9.68M in quarterly rev. We can conceivably produce more than that in “full campaign mode”
3)I believe we are going to have good numbers, because we have existing customers in place, plus several new and larger customers coming on line...etc.
I agree with this as well...And to quote the Zack article “ For the next financial year, analysts forecast that the company will post sales of $84.60 million…” How they can state that is interesting to me.
5)For the upcoming year, I say we should do $70 to $80 million....and really closer to the $80 million mark. The company should also turn profitable and remain profitable until this sad little company is finally taken out by some larger CDMO or Pharma.
See projections from Zack’s alleged consensus opinion. ~$85M annual would make us profitable.
6)And $100 million should definitely be achievable in the following year with only minor expansion/renovations and some new equipment purchases.
Good point...Steve King stated that in “in full champagne mode we can generate $100M in revenue” What we now have is the additional sources of revenue labeled “Process Development” and the added fill and finish capacity. Process development revenue has been steady over the last 3 quarters at about ~2M. I would expect an increase with the addition of “Fill & Finish” which in my view is only related to HALO at this time.
7)It is at times of crisis that companies either shine or fall, and being in this sector(CDMO healthcare) the world is their oyster....with proper management and careful planning this company should be growing profitably in leaps and bounds!
AMEN...From your lips to Gods ears…
FWIW…
I sold half of my position in AVID and bought some HALO…
Their light will shine first...Shortly after, ours will shine.
Good luck to all and please stay safe
Regards
golfho
Thanks...
I missed that one. Interesting question you brought up.
Regards
golfho
Hi djohn...
Where is the info on "CDMO applied before the new guidance. Have until May 7th to return the $4.4 mil"? I might have missed it but the Forbes article was about general rules on PPP and there's nothing on AVID's website that I could find WRT a loan application. Was that from Stephanie?
Thanks
golfho
Hi all…
I've been a long...long...suffering shareholder of PPHM/CDMO for more than anyone in their right mind should have been. HALO is CDMO’s most important customer. On 3-23-20 I purchased shares of HALO under the theory that HALO will do very well in the near future with FDA approvals of Darzalax and later in the year Perjeta/herceptin combo. The future looks very rosy. CDMO should benefit as sales ramp up.
Unfortunately, because I purchased HALO after the 3-2-20 shareholder cut off date, I have no proxy. Is there any way I can listen in on the meeting? Will there be a transcript made available? Will there be some contemporaneous commentary on this board?
Any help would be greatly appreciated. In the mean time I hope everyone will stay safe in these very troubling times.
Regards
golfho
Hi JDM...
One of the things that I thought possible was...
When we announced a while back that we signed a contract with one of the top ten Pharmas, that contract was for us to be a secondary/backup producer of a biologic. We never did receive any updates on that, but I am hoping that that could be it....
I know...
Hope springs eternal...!!!
Regards
golfho
I find it interesting...
That both hires stated that they were involved in fill and finish. Dr Brady "he managed the company’s expansion into the development and manufacturing of antibody drug conjugates, as well as the onboarding of new clients focused on fill/finish of complex biologics" Ms. Hinds "possesses nearly 17 years of experience in key business development roles in the CDMO and contract research organization (CRO) industries, having established specialized expertise in biologics, gene and cell therapy, and sterile fill/finish services."
This was a service that was stated as a goal several Quarters ago as a very profitable added service.
Boy is this taking forever...!!!
Regards
golfho
I feel like the guy…
That was assigned the job of arranging the deck chairs on the Titanic…!!!
We are in horrific times…
We are witnessing a once in over a century pandemic effecting the entire world…
Ronin has been selling stock at what ever price they can get…
And we are still trying to focus on the effects of this and other factors in an effort to determine the outcome of our investment in AVID.
I’m back to hiding under my bed again…!!!
Well...on the one hand, that is practicing social distancing…!!!
I’ve spent some time calculating the all important numbers and they are, new orders & backlog. I created a spreadsheet that includes: quarterly revenue for process development, manufacturing and total revenue, backlog and calculated new business.
FWIW here are the numbers:
Quarterly revenue for process development has been fairly consistent over the last 4 quarters at ~$2.2M. That was a little disappointing in that we were told that this would be an increasing stream of revenue going forward...Not so much.
Quarterly revenue for manufacturing, as noted by management has been and will be choppy/lumpy varying from $11.5M this last quarter to $15.9M the previous quarter.
Backlog for the last reported quarter increased to $58M from $52M…
We clearly missed our target of anticipated revenue of between $64M to $67M to now between $55M to $59M for the year...That’s an average of ~$8.5M in deferred revenue. My “calculated new business”, based on the above facts, is ~$11M. So we added ~$11M in new business this last quarter.
Not bad...Not good…!!!
FWIW…
I sold 1/3 of my CDMO stock and purchased HALO…
If they're successful they will be rewarded. And so will we. They first...And then we…
Just some thoughts from under my bed.
Regards…
And more importantly…
Stay well…
golfho
P.S. The above post was written after the COB yesterday...And after a bottle of my favorite cab. Today’s market move is encouraging...Though I think that we are in for a prolonged down turn.
I don't quite understand your post...
But Biopharm would be the person that would most likely be able to answer your questions.
In my view, this is no longer an issue (The IP sale) that I care to address.
Prior to the sale of our IP and change in management I urged ALL on this board to write to the BOD requesting that the sale process (Bidding) be open to all shareholders. 30 some odd people wrote letters to the board (That's roughly 30 out of ~4000 shareholders)The process, as we all know was closed to the shareholders. Some of us attempted to address this through a 220 request for information. That effort fizzled...
Regards
golfho
WRT biosimilars…
I’ve spent some time researching biosimilars. To be truthful it was not a completely thorough assessment. I’m not being paid for my research. But from what I’ve read...We have the following…
There was a patent cliff starting in 2010 that was taken advantage of by secondary manufacturers. Included in that, are blockbuster biologics such as Avastin, Humira, Herceptin, Rituxan, etc. At this point there are several manufactures of biosimilars for the above biologics. Their approval, from the most important agency's (FDA, EU Agency) started around 2015 and, has continued. as an example there are now 8 different biosimilars approved for adalimumab (Humira) in the E.U. and 5 approved by the FDA. The source of this information came from the following sources, that include McKinsey & Company, The FDA, Wikipedia, GaBI Journal (Generics & Biosimilars Initiative) (2018 update)
https://www.mckinsey.com/industries/pharmaceuticals-and-medical-products/our-insights/five-things-to-know-about-biosimilars-right-now
https://www.fda.gov/drugs/biosimilars/biosimilar-product-information
https://en.wikipedia.org/wiki/Biosimilar
http://gabi-journal.net/patent-expiry-dates-for-biologicals-2018-update.html
So...WTF
Well from a layman's point of view the biosimilar market, facing strong head winds will continue to garners market shares.
In the short term...For CDMO I think that they are trying to position themselves to be the right facility in the right time to capture a portion of a multi-billion dollar market. Time will tell...And Boy oh Boy am I tired of waiting for that time to come…!!!
For a bit of more clarity…
We built a “State of the art “Process development facility”” that can process a large number of candidates quickly. Rejecting quickly, failures and advancing, promising candidates.
Soon…???
Hopefully in my lifetime...
Regards
golfho
AMEN...EOM
So…
Some simple math:
(Please double check this...I might be delusional)
As reported in the last 10-Q for the 6 months ending 10/31/19
Comprehensive loss = $3.594M
Series E preferred stock accumulated dividends = $2.523M
Net Loss = $6.117M
Implied by these figures is that, at the current rate we will finish this fiscal year with a net loss of ~$12.2M at the current revenue projection.
“Gross margin for Q2 of 2020 was 18%, a significant increase as compared to the 3% gross margin in the prior-year period. The increase in gross margin for the quarter was primarily attributed to revenue from an increased number of manufacturing runs, which was more than enough to offset the unexpected costs incurred at the beginning of our fiscal year.”
With that in mind I’ll try to back into the number we need to be net profitable.
How much gross revenue do we need to become net positive?
Well our margins are increasing due to two factors, one is that we are utilizing our manpower more efficiently i.e. less down time for personnel. More runs means better efficiencies. And two, we are now over the necessary but costly maintenance down time and perhaps we will do these needed tasks at more efficient manner.
So…
The calculation goes like this:
Needed revenue = yearly loss divided by the margin
(expressed as) X = ~$12.2/.18
At the current margin rate of 18% we will need revenue of ~ $67.8M
Hmmmm…That number rings a bell…
Again from the last C.C.
“Given the strength of our backlog and the visibility we have into current customer projections, we are reaffirming our revenue guidance for FY2020 of $64M to $67M. We are pleased with our financial performance during the quarter. The company continues to approach our near-term milestone of operational breakeven, which we believe will position the company to achieve both industry standard margins and sustainable profitability.”
So…
If we increase our margins or increase our revenue or both we will become a profitable company this fiscal year...Period.
On the other hand…
Looking at the current market cap. of ~$460M and using the 6 time revenue formula, we arrive at a market cap. of $68M X 6 = ~$408M.
To me that indicates that the market thinks that we will achieve our goal...For now. And that we are fair to slightly over priced.
When we do arrive at that magic moment, we will be able to use a better measure of a company...EBITA
Some other interesting numbers:
Before the last C.C. I wrote.
“OK…
So what to expect…
Revenue for the quarter subtracted from the backlog of orders should be:
$61M - $15.3M = $45.7M
If we manage to sign new orders worth ~$15M we will have maintained pace with projections.
If we sign new orders in excess of ~$15M, we will be well on our way to sustained profitability."
What was reported:
Revenue of ~$18.3M, $3M more that the ~$15.3M reported last quarter and a backlog of $52M reported for this quarter.
$61M - $18.3M = $42.7M means that we added ~$9.3M in new business this passed quarter. We have 2 quarters to add to our backlog and considering the following...I think that 2020 will be a good year.
Whats on the horizon?
Important future business:
From HALO:
In October 2019, collaboration partner Roche nominated one new undisclosed target to be studied utilizing the ENHANZE® technology, triggering a $10 million milestone payment to Halozyme.
In October 2019, collaboration partner Bristol-Myers Squibb initiated a Phase 1 study of relatlimab in combination with nivolumab utilizing the ENHANZE® technology.
In September 2019, Roche announced that the global Phase 3 FeDeriCa study met its primary endpoint...followed by regulatory submissions to health authorities worldwide anticipated in early 2020.
In September 2019, a Halozyme collaboration partner initiated a Phase 1 study in healthy volunteers for an undisclosed target utilizing the ENHANZE® technology.
In August 2019, Roche initiated a Phase 1 study with OCREVUS® (ocrelizumab) utilizing the ENHANZE® technology in patients with multiple sclerosis
And more…
I’m feeling much better now...I’m sleeping on the top of my bed...Not under it…!!!
(Old joke for any newbies)
I wish all a happy and prosperous 2020
Regards
golfho
My hopes for this coming quarterly C. C.
From the previous C. C.
Revenue for the quarter was $15.3M
Our backlog at the end of Q1 of 2020 was approx. $61M
We are reporting cash & cash equivalents as of July 31, 2019 of $28.9M as compared to $32.4M as of the prior FY ended April 30, 2019.
FROM TRACY KINJERSKI (VP, BUSINESS OPERATIONS)
As we announced in early July, Avid signed 2 new contract mfg. service agreements to support the development of novel drug candidates during Q1. The agreements include the addition of one of the world's leading pharmaceutical companies to Avid's growing list of customers, as well as the expansion of the relationship with one of the company's existing biotechnology customers. The onboarding processes for both of these projects were initiated during Q1 and they are proceeding well. As a reminder, I'd like to restate the importance of winning new business with existing customers. While some of this business results from the expansion of a current project, much of this new business is from completely new projects, requiring development and/or manufacturing of new molecule.
During Q1, Avid also successfully completed a process validation campaign for a scaled-up mfg. process on behalf of an existing customer in anticipation of future commercial manufacturing. This represents our 1st process validation of FY20, followed by the completion of 2 in FY19.
FROM RICK HANCOCK (CEO)
I'd now like to provide a brief update regarding operations at Avid. With respect to our expansion work, we continue to make progress with the process development lab at our Franklin facility. This purpose built state-of-the-art facility will house Avid's expanded upstream & downstream process development capabilities. We remain on track to begin operations in this facility in the fall of calendar 2019. More broadly, we continue the ongoing evaluation of our facilities, equipment, and processes. It is the goal of the organization to optimize where possible, update where necessary, and ensure that we are employing the most effective technologies and processes to ensure our standing as a leading CDMO. As we conduct this review, we are finding areas for improvement. It is always our intent to identify any potential problems before they occur, and to this end, Avid conducts a comprehensive annual maintenance overhaul, during which time, our facilities may be partially or completely shut down. We are currently in the middle of this annual process. Because of the significant amount of work that was done during last year's shutdown, this year will require less downtime. Last year, both facilities were shut down for more than 3 weeks. This year, Franklin was down for less than 2 weeks, and at Myford, we will only have a partial shutdown affecting only the exterior of the building. As a result of our annual maintenance overhaul, we expect anomalies in both revenue and margins during Q2/FY20, but we do not expect this to impact our ability to achieve our stated revenue guidance for the year.
OK…
So what to expect…
Revenue for the quarter subtracted from the backlog of orders should be:
$61M - $15.3M = $45.7M
If we manage to sign new orders worth ~$15M we will have maintained pace with projections.
If we sign new orders in excess of ~$15M, we will be well on our way to sustained profitability.
They implied that production for the second quarter would be impacted by scheduled maintenance for that quarter. There should NOT be any additional unexpected negative impacts to revenue.
With regard to “The agreements include the addition of one of the world's leading pharmaceutical companies” Hopefully this is related to a contract for a biologic that is being produced by the original developer; and the pharmaceutical company is trying to develop a second source. i.e. HALO’s Enhanze being produce by AVID and then COOK (Or who ever they are called now). Implied is that once the regulatory approval is given we will receive prompt orders for delivery. This, to me will be an immediate and continuing impact event.
The “development and/or manufacturing of new molecules”, in my view is a long term effort, taking up to a decade before real productions occurs. Important future revenue sources but very lumpy. i.e. You develop a biologic and test in in the lab and then perhaps some animal testing. If successful a few years later a small PI trial. No need to go on, we’ve all been through this drill.
WRT the three process validations completed. They should start to produce revenue by end of calendar year 2019
In conclusion:
More like my hope is…
1- There will be a significant increase in backlog.
2- There will be an increase in cash & cash equivalents because of deposits made as part of new signed contracts.
3- There will be an increase in projected revenue (Guidance) for FY 2020 from ~$60M - ~$65M to $70M - $75M…
We can only hope…
I wish a BELATED Happy Thanksgiving to all and a happy and healthy holiday season.
Regards
golfho
The first quarter will close in a few days...
And they have traditionally reported around the second week in Sept. However, they reported the annual two weeks earlier than in the past. This may indicate that this new management team is capable of completing the reports in a timelier fashion and will issue reports when they are finished…Or not…!!!
Contrary to some posters opinion, the marketing team (Tracy) HAS added new business since they arrived. Specifically, a contract with “one of the top 10 pharmaceutical companies in the world”. Occupying/Utilizing a 2000L bioreactor. Details not reported. That’s not unusual in that most contract details are not reported.
Being well conditioned to expect more disappointment from the old management I fully expected the rise in share price would soon re-trace.
Well it hasn’t.
Why…???
In my view, the business model is much simpler. We manufacture stuff and sell it. Almost everyone can wrap their heads around that. In the old model, the major upside was tied to a successful drug introduction. Many more variables in that equation. Two, we have a far more competent management team, with less of a challenge.
Now back to “We have more business” Folks; We have more (New) business. How that translates will not be revealed until the quarterly report. The factors include…Current clients maintaining their need for product in our quarterly time frame. That won’t necessarily affect our annual progress but it will affect the near term.
I’m feeling guardedly more optimistically…
I like the current stock price movement…
I like the direction that we are going in…
What I would like to see stated in the next quarterly report is "reaffirmed its earnings guidance" statement at a minimum and "Increased our earnings guidance" as a bonus.
As a cautionary note…
I feel like someone who has crept into a manhole…For the purpose of survival…
Waiting years for redemption…
Peeking out…
Opening the manhole…
Seeing a little bit of sunlight…
Only to be run over by a truck…!!!
Somehow…I feel that this time is different.
Time will tell.
Regards
golfho
P.S.
Biopharm…
I’m amazed at your research WRT Bavituximab…
However…
If no one heeds the call…
If no one acts…
It is an exercise in futility…
Trust me I tried, but, at the end of the day when it was time to put the rubber to the road…To lay down money…
Crickets…
April to October - Mostly in Westchester, NY
October to April - Sarasota Fl.
Fore...
Quote from my post #330145...
Regarding the third quarter report.
Hi Cheynew...
I’m not as concerned after reading the following at the bottom of their website.
“Survey Methodology: ISR's Contract Manufacturing Quality Benchmarking research is conducted annually via an online survey. For the 2019 CMO Leadership Awards, more than 120 CMOs were evaluated on 23 performance metrics. Research participants were recruited from biopharmaceutical companies of all sizes and were screened for decision-making influence and authority when it comes to working with CMOs. Respondents only evaluated companies with which they had worked on an outsourced project within the past 18 months. This level of qualification ensures that ratings come from actual involvement with a business and that companies identified as leaders are backed by experiential data. CMOs must meet the minimum threshold of customer survey responses to be eligible for an award.”
We are a relatively small company compared to some of the company’s that were awarded. I think it’s a volume and timing thing.
Regards
golfho
Some interesting facts:
Third quarter revenue was ~$13.7M. During that same quarter the backlog from second to third quarter went up from ~$36M to ~43M an increase of ~$7M. Implied is that, Sales (increase in orders) for that quarter was ~$20.7M. IF the sales dept. can maintain that pace we will be able to generate revenue of ~$80M for FY 2020.
Now for some silly math…
What is break even…???
From the 3rd quarter 10-Q covering the first 9 months of FY2019
Contract manufacturing revenue: ~$36.5M
Net loss attrib. to shareholders: ~$8.2M
The projected revenue for FY2019 is in the lower range of $50M - $55M lets use $51M. So projected revenue for 4th quarter must be ~$14.5M (This has nothing to do with “what is break even” Just free associating.) Back to break even. The “Net loss attrib. to shareholders” for the last 2 quarters were ~$2.9M and ~$2.6M. I’ll use $3M for simplicity.
$8.2M + $3M = $11.2M + $51M = ~$62.2M I’ll add some additional costs such as added payroll, construction costs, etc.
So…
I think that we will be “profitable” with revenue of ~$67M…Maybe less.
Quote from the CC
“Our Process Dev. Group is increasingly busy generating over 20% of revenue during Q3.”
About process development:
From the second quarter report:
“As detailed in our first quarter earnings call, our PD function, our process development function, which is responsible for the development of robust compliance and cost-effective processes for our clients and also facilitates the transfer of existing manufacturing processes into our facilities is an important new profit center for Avid.
Literally, every client project that comes into Avid Bioservices, whether it’s starting with a DNA sequence and creating a new production cell line for an emerging biotech company, we’re transferring in a well-established existing manufacturing process for a major biopharmaceutical company, either way these pass-through our process development laboratories. These process development functions, which typically contribute, to my experience, around of third of revenue for biologic CDMOs are vital for securing a pipeline of manufacturing opportunities.”
From the third quarter report:
“We see positive trends fueling near-term revenue growth. Our Process Dev. Group is increasingly busy generating over 20% of revenue during Q3. As every project must pass through some phase process development, we believe this important business unit will ultimately account for up to 1/3 of our revenue.”
My understanding of the above is that we have potiential revenue streams from several different sources:
1- Start-ups that are trying to develop a new biologic
2- Generic biologic companies that are trying to develop biologics that are coming off patent protection.
3- Established biologic companies that are trying to develop a second source for their commercial product.
About the new lab expansion Please NOTE djohn:
Second quarter report:
“We will take occupancy of the new upstream suite in the first quarter of calendar 2019, and it will approximately triple Avid cell culture process development capabilities, thus, significantly enhancing revenue potential and the ability to expand our client base and manufacturing pipeline. It will also facilitate strengthening of our cell line development service offering.”
Third quarter report:
“While we’re previously expected to take occupancy of the new upstream suite in Q1/Cal2019, our permitting delay will push this date back several months.”
This implies to me that the sleuthing performed by djohn WRT the construction at the Myford facility is most likely impacting the “occupancy” of the new lab. It is not clear whether the new upstream suite was completed or is still in process and is waiting for work to be completed by the landlord. We don’t have any info on this from IR but if one tried to parse Stephine’s statements and the permits pulled for the facility I can reasonably conclude that the landlord is making the necessary improvements to the building before CDMO occupies the space. Also implied is that once CDMO “occupies” the space a new lab must be completed or built and certified. I’m thinking that revenue from this new lab may not be realized until end of FY 2020 or FY 2021.
Thanks again djohn for your effort. I hope to meet you one day.
Opening and final remarks from Roger’s third quarter CC:
“All of this positions us well for growth and achieving profitability, which we believe is now within reach in the coming FY [FY2020: fye 4-30-20].”
“To summarize, in the past 12mos, we have significantly diversified our client base, thus reducing risk and building a pipeline of future mfg. opportunities. We’ve built commercial & operational infrastructure to support growth. We have right-sized the organization, significantly cut costs, and increased capacity utilization resulting improved margins. As a result, we are firmly on track towards profitability and positive EBITDA”
On a personal note…
I have a bad chest cold and it’s raining, so, I decided to post. I try to distract myself from this little nightmare that is PPHM/CDMO. I read this board once or twice a week. At nearly 72 I try to focus on the positive…Play golf, eat well, stay healthy and not think about the tragedy that is PPHM/CDMO. It was never my plan to be at this stage in my life and be so bitter.
FWIW I see a light at the end of the tunnel…
I hope it’s not another on-coming train.
Regards
golfho
I hope not...
I would like just a 10% retrenchment so that my re-buy will happen...
FWIW I'm trying to keep up with Sir Loof...
Regards
golfho
agree...EOM
I'm not sure that's correct...
"-- Company Records Fiscal Year 2018 Revenue of $53.6 Million"
"The company is providing revenue guidance for the full FY 2019 of $51.0 million - $55.0 million (ASC 606"
Seems to me that they are stating that for now they are projecting revenue to be the same as FY 2018. That seems prudent to me. They have a year in which they can increase guidance.
FWIW
golfho
Of course it does...
It's deeply concerning. I was speculating on a possible conspiracy where Stafford/Ronin are behind the Oncologie facade. Something like...They scrape up $6M from the sale of CDMO stock and then pass it to someone acting on behalf of Oncologie that then "Pays" the initial up front money that Oncologie was to provide to CDMO. That now gives them all the time in the world to market the IP at no cost to them
Just saying...!!!
Regards
golfho
I think...
that I know were that few million dollars that Onco. was supposed to deliver in April is now coming from...
IT'S TIME TO RELEASE THE HOUNDS...!!!
And all we do is *itch on this board.
Good grief
golfho
Hi North40000...
I'm not sure that the "Right to try" will save the day for us. To little to late. Before any bill passes the IP will be divested.
IMHO...
Regards
golfho
First…I would like to thank the 26 shareholders…
That did follow up with certified letters stating their desire for the BOD and management to conduct a vigorous and open process to divest our IP for the best possible price.
26 out of ~5000 shareholders were not enough. Clearly not enough.
The response from management made me vomit.
“Dr. Lias stated that Dr. Wolchok has not contacted the company. He mentioned that an associate of Dr. Wolchok had said that it will be 18 mos. before the next trial proceeds. (This was met with incredulity from several shareholders in attendance).
Dr. Lias stated that they have numerous discussions regarding CAR-T, but there was no interest. In some other discussions, they found our technology interesting, but then said "prove it in a trial".”
“Question regarding the interest in the Exosome test kit.
Dr. Lias “Not much commercial interest.”
The recent Noble presentation added little information to the above.
A week ago, there were calls to step up to the next level…Engage an attorney, collect additional signatures and write more letters.
To date nothing has happened. As is often the case; much talk, little action.
So, I guess that we will now work with what we have and accept what we get.
What are the facts?
1- The company is still projecting revenue of between $50M and $55M for FY ending on 4-30-18.
2- Last reported backlog was a measly $33M down from $73M the prior quarter.
From the 10-Q:
“Although it is difficult to predict all of our future liquidity requirements, we believe that our cash and cash equivalents as of October 31, 2017 and the remaining projected cash receipts from manufacturing services provided by Avid for its third-party customers under our backlog will only be sufficient to fund our operations through May 2018, which estimate assumes we raise no additional capital from the capital markets or other potential sources.”
3- We had a net loss of ~$14M over the first 2 quarters of this FY. At the upcoming quarterly in March we will have a clearer picture of the quarterly burn rate. Even after the lay-offs last quarter I predict that we will continue to operate at a net loss. My guess is $6M to $7M this quarter that just ended.
What do I think will happen?
Based on the shorting that is going on I suspect that there will be a private placement announced soon. How much…??? My back of the envelope calculation is around $30M +/- $5M. Our friends at Noble…???
4- My hope is that HALO returns with orders this coming quarter or the next at the latest.
5- New costumers…??? This is a tough one. Why?
a- If they are starting to enter clinical trials the development of significant revenue will take years and the failure rate is very high.
b- If they are in commercial production and are trying to establish a second or third source, the approval process is still very long, my guess is over a year.
c- Biosimilars? Tough field to enter and takes time.
6- Revenue from the sale of our IP? Grrrrr…. Don’t get me started…I’m not one who believes that the IP is worth $20B now. But I think that any thing less that $2B (The Abbot Labs offer in 2012) for the whole IP would be a shame after all these years. An offer of $100M to $500M up front with a percentage of profit if commercialized, would be very acceptable. An offer of a few million and a promise of something years down the road will bring a flock of vultures to the funeral.
I’m done…
Regards
golfho