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UT was the developer of the technology and had stake in the game. Breken worked for the lab at UTSW that developed the tech. If anything, Breken saved the tech from certain doom given the previous regime could not find a home for it.
yes and not really... yes in that your biggest client with $423 mil in cash gets $15 mil more to pay the bills.... not really in that it will have no impact on avid sp...
i did watch the Bright and Bowen testimony before congress.... folks now understand the impact of not having US based manuf capability for critical items like meds and equipment...
this should help avid over the near term by having available capacity... should be lots of shots on goal w/ covid activity for the cdmo market overall...
all imo
Fourth qtr ending April 30 is prob a dud given machine issue... is that already baked into the SP... the question is what will FY 21 look like...
Darzalex approval EU and US... Roche approval in Oct... what else is brewing?
Overall demand in CDMO space is strong w/ Covid issues...
agree.... supply chain appears to be good... the demand for drugs being manufactured by avid should be strong given the SC delivery advantage ..... it appears overall capacity demand in the cdmo space is strong given covid demand and desire to be US based at this time... as for any issues with weak qtr, wall street looks forward not backwards..
Halo CC transcripts...
full speed ahead... cliff notes... darzalex us and EU approval... Roche FDA date Oct 2020.... no supply interruptions from manufacturers ... sc versions limiting exposure to other patients in hospital setting per roche
https://www.fool.com/earnings/call-transcripts/2020/05/12/halozyme-therapeutics-inc-halo-q1-2020-earnings-ca.aspx
Darzalex is already a blockbuster and analysts were expecting a high conversion to the sc version based on convenience and reducing staff loads at hospitals and this was pre covid as well.
yes... and the pr did not mention that the drug could be administered at home by a nurse which saves a trip to a hospital or clinic.... The ceo of Halo mentioned this advantage in a presentation a while back. The comment was made pre covid and the advantage is even better if one wants to avoid covid hot zones. I would guess it is full speed ahead in manuf to get ready for commercial launch.
European approval yesterday. Things should start heating up. Next up to bat is Roche/Halo drug that avid manufacturers.
I have schwab and could not find it. eom
good news w/ darzalex sc...
https://www.businesswire.com/news/home/20200430005934/en/CHMP-Grants-Positive-Opinion-DARZALEX%C2%AE%E2%96%BC-daratumumab-Subcutaneous
The Janssen Pharmaceutical Companies of Johnson & Johnson announced today that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) has issued a Positive Opinion recommending approval for DARZALEX®? (daratumumab) subcutaneous (SC) formulation for the treatment of adult patients with multiple myeloma in frontline and relapsed/refractory settings.
Halo pr
https://finance.yahoo.com/news/halozyme-announces-janssens-receipt-chmp-205600114.html
halo gets a cut of what avid produces... why buy the cow when the milk's free? ... still think we are a buyout target but from a bigger cdmo like TMO or CTLT or even a private CDMO wanting to go public....
increased demand for cdmo's from covid. Avid FY ends 4/30 so looking forward to new FY.
#COVID19 has increased demand for outsourcing but it is too early to tell what long term impact the pandemic will have, say leading #CDMOs Lonza and Thermo Fisher (Patheon). https://t.co/6WiqJw1Gt4
— Dan Stanton (@Dan5tanton) April 24, 2020
and some of it could be forgiven if used on payroll, rent etc... maybe why the pop... would be nice to be in the know a head of times like some folks seem to be...
Given the rev was moved forward it actually helps because if it was already recognized, it would not of mattered due to overall market conditions. I think the market will continue to get whipsawed based on the general perception as to whether the collective hands in the Covid problem (all of us) have a clear idea as to where this is heading and the real time impact as to whether it ("it meaning the collective result") works, whether it is worth it or whether the poop hits the fan part two.
At the same time capital is probably getting restless as well and companies that perform and have good outlooks will get attention. Just a question as to how far the tide goes out and the impact on the overall economy and functioning of the credit markets.
in response to
"Hiring two high level BD people would be questionable if an acquisition was imminent."
not sure on this one... avid could be a division of a TMO or catalent... keep its brand for some time... would still need sales folks to keep pipeline.... as for ceo... that would be more redundant than sales people.. all imo...
Not a bad time to have one's bad qtr because everybody is having one... looking forward to next FY which starts May 1. Darzalex sc and Roche hercp/perj combo sc approvals coming up... my guess is biologic US manuf capacity is prob a good thing to have right now.... demand has to be good because the big boys have the needs and resources as in cash to get things done... i would not be surprised if some biologic manuf is getting resorted on a global basis right now... the viral stuff has to be increasing demand which could impact capacity across the board... enough at the margins to make a difference...
And sc delivery is probably more important now so maybe more biz w/ Halo enhanze clients...
The big question mark is corona v... the virus doesn't pay attention to the politics and blame game... it does what it does... the world doesn't get back to normal until vaccine or containment like they did in china... look at the small towns that thought they were oblivious...
The question is how avid plugs along under these conditions... still a buyout candidate in the not too distant future... all imo
nothing to fill until darzalex sc and the roche drug get approved... darzalex approval date was estimated to be sometime in May based on typical approval times of 10 months.... both drugs allow patients to get treatment at home vs hospital visit... should be no brainer in getting approved imo...
what isn't being trampled? prob owned by lots of funds with clients both instit and retail via 401ks preparing for the end of the world as we know it... same with TMO and others... lots of sellers... few buyers... was tempted to get out but waited for cc thinking positives would outweigh negatives... wrong again charlie brown... still think we are takeover candidate...
once dust settles and it prob will, the moat is even better given most construction for competing projects prob got delayed is best guess and focus on US location will be a plus imo... bp needs to keep their balls moving .... if anything the gen public takes this stuff more seriously... and the fed has helicopters waiting for QE to save the day...
i live in a hurricane area... this is a big hurricane (tsunami is prob better descrip) but you hunker down, wait it out and clean it up with disinfectant vs a cat 3 wipe out with major hurricane... the aftermath could be lots of dead seniors and folks with preexisting conditions that could not handle covid .... avoidable yes but a topic for another day... sunlight is one of the best disinfectants and there will be plenty of sunshine looking back on gov initial response... all imo
in and out but more importantly, can get shot at home... no need to go to hospital ...
the fed is doing everything to free up hospital resources and bending rules to make things work... both the darzalex and roche sc versions of their drugs do that ... free up hours per patient for an IV... and they would keep compromised patints away from hospital settings.... basically a low risk decision to give early approval... both passed phase 3's with flying colors and actually reduced infusion reactions... these are not elective drugs for cancer patients... would be surprised if action not taken soon... all imo...
just watched cuomo talk about urgent need to free up hospital resources... talking about mandatory postponement of elective surgery... responding to a reporter question need for hospital beds and availability for NYC area... he threw out what his experts are saying based on what they saw in China and Italy etc..... rough calc of need for hospital beds was low end 40 percent of 18 mil in area get covid and 17% need hospital beds with roughly 55k icu beds availability... that is what is keeping them up at night .... even if 5% need beds, good luck if you need one...
high end is 60% get covid... thus the gov scramble....
given that situation, an early approval of Dazelex SC would free up hospital space and resources and lower exposure of compromised patients...
and patients don't stop taking the meds
good art on HALO.... really spells out enhanze biz outlook...
https://seekingalpha.com/article/4331581-halozyme-upside-is-still
in response, halo is not in the cdmo biz, they just downsized to focus on enhanze and they get a markup on manuf product anyway.... whether avid or catalent produces the product.... so why would they own something like a complex cdmo manuf facility.....
cdmo biz is still consolidating into bigger players and expect it will continue...
agree... panic selling and rightfully so... i think the fear of the virus and more importantly the fear that there doesn't seem to be a plan or effective leadership...
i keep asking myself (other than the obvious why didn't you sell at $8) the following with respect to the covid situation
biz going forward and chances of interruption? clients are strong and halo needs to get the ball rolling with strategy change... always chance of interruption in this environment...
demand for biz... should increase given Darzelex indications expanding and several competitors failed recent phase 3's .... approval should happen sooner given the load it could take off the health care system....
impact on competition and capacity... my guess is available capacity in the US is prob a good thing.. if anything existing expansion work at other companies could get stalled with equipment etc... or they fast track it given the need...
impact of travel constraints and avid location with new environment ... avid location would be a plus....
net all that and the moat is still there...
don't know when capital gets back into the market... the earnings for many companies will be crushed over the next 12 months.... prob lots of capital carnage with companies that could not weather the storm... cruise lines, travel etc... avid's earnings should increase if they can execute... and the cdmo market will still consolidate... if the halo biz takes off, avid will need to expand and add fill finish capabilities and will need a capital raise... TMO has capital and has a finish fill capacity.... i imagine a company like halo wants finish fill because the other vendor can do it... could be the time to sell or get equity position with a TMO given the environment... a biomanuf facility with a good book of biz could be in play... mgmt has to execute in order to keep the keys to the car... just ask sk and crew...
my take on the call is s$hite happens.... downside is that $8 mil rev pushed back to the time period i hope to sell which is when significant halo biz starts to impute into share price which is prob early calendar yr 2021.... this assumes biz keeps running while this covid-19 crisis is going on... i think avids clients will be ok with respect to ability to pay and commitments..
folks still need cancer meds and the meds avid will manufacture will let them take it at home...
at the same time i think mgmt has no problem shaking out retail investors and benefits with low share price for the time being.... good time to hand out employee options and then let it ride... certainly helps employee retention when employees have a nice chunk of equity not vested... the old regime was quite top heavy handing out options to themselves
and any acquirer will benefit from this extended SP downtime that mgmt signaled...
looking at the financials, employees are buying... haven't studied details but activity is there
good opportunity for a thermo fisher type player to come in with some equipment and equity investment in the company... a couple of BOD members sold biz to TMO.... one would think the topic has come up...
at the same time hopefully pressure is coming from investors and clients that after the Lias BS/prod crap and other employee turnover, this horse needs to be in bigger hands.... my guess is that when the value investors see the inflection point, they may want to sell and the best price would be with a sale.. these guys are not coupon clippers... find a fixer up and get out.... i am sure many of them had quicker exit plans ......a production miss of $8 mil is not going to tube a TMO, if workers or mgmt talent is needed, a TMO type can fill needs... my guess is that this is an ongoing discussion or should be....
worse come to worse this is bought out at $8 to $10 imo... most of the investors in the game now would make a good return and in this mkt they would prob take it... this assumes we are not in zombie land in the next 6 to 12 months
all imo
the buyout pressure could come from big investors like tappan etc..... if mgmt was presented with say a $12 per share price, my guess in this environment many of the players will have made great returns....
i honestly don't think you can read anything in today's markets..... i have never seen the dow so crazy.... throw in the oil price shock with covid.... putin is tanking US oil production vs opec cutback as payback for pipeline blockage... saudis don't want competition as well...
capital has headed to the sidelines... when and where will it be deployed?
The corona adjusted universe is still unfolding... right now the baby gets thrown out with the bathwater....
issues to think about...
will the clients disappear or cut back? prob not given how pharma works... could be wrong
small biotechs might have trouble in capital markets ..
could clients get even busier? reasonable chance imo given the drugs that could be manufactured by avid for halo clients could help ease the health crisis situation given 5 minute infusion times vs 4 hours and ability to administer at home w/ nurse which keeps more compromised folks away from hospitals or shortened exposure times.... i would think the fda sees this and acts sooner than later w/ Darzalex and Roche drug.... Darzalex could be approved by May using avg approval times... and its adoption rate could be higher given the benefits to the health system....and Darzalex is already a $3 bil drug and expanding uses..... so are folks going to stop taking drugs that are saving their lives? don't think so
does having a biologics manuf facility w/ capacity within the US and located in an area with quite a bit of biotech be a good thing? could be... certainly not a bad thing..
so supply issues are question marks... worker contagion etc.... stuff everybody is trying to figure out.... if one looks at the pics of folks working in the production areas, it looks like they wear haz mat suits so i would imagine that helps containment...
If anything, we are prob closer to a buyout if things look good.... a big company can weather this storm better so the BOD has to be discussing this possibility... may not get the number folks were hoping for but human nature is to take the safe road...
recent article on halo... sorry if already posted...
https://bioprocessintl.com/bioprocess-insider/regulations/halozyme-eyes-major-drivers-in-roche-and-janssen-subcutaneous-approvals/
do you think the fda would want to act on this sooner vs later given hospital resources that could be freed up with either much quicker infusion times or even home care w/ a visiting nurse.... limit the number of sick people exposed to hospital setting...
seems like a no brainer and hopefully janssen and roche are in front of FDA with this issue
way back in the day, bavi was pretty active in the viral battle and seemed to work best w/ enveloped viruses... barton haynes w/ duke and many others... in fact Duke applied for bavi related patents......the technology was hampered by lack of funding and should have been partnered early on.... the viral side sat on the shelf due to lack of funding.... but the technology was squandered by a greedy 3 person bod and ceo who thought the 500k per yr gravy train was more important than advancing the science....
now bavi is in china of all places with some pretty strong backing.... and 3 merck trials underway... not saying it will be part of the corona cure but back in the day, bavi was a looker...
both darzalex sc and roche's sc version would free up hospital/clinic resources given it takes 4 hrs plus for darzalex IV infusions and 2 hrs for roche drugs... also patients can get infusions at home from a nurse.... so demand should increase.... also who wants to go to a hospital with all the germs floating around when one can stay home....
I wonder what the overall demand for biomanuf capacity will be if demand for viral capacity heats up... i would imagine some sites do both viral and biologics....
i am also inclined to believe mgmt would consider an earlier buyout as soon as the future is both visible and bright with respect to halo and others.... a bigger fish can survive a storm longer imo...
just read halo's pr on qtr.... Avid could be getting very busy.... expect an update on halo biz next cc.... if they can't get that biz which is basically tee ball, they have a problem.... that would have been sniffed out by now imo...
I had a couple conversations with Mr. White as well.... this was all during the time SK was scrambling to save his butt and adding to the BOD to keep control. White did not hold back on his disdain for what SK was doing. So the Lias hire was basically to try to save SK and the old BOD.... if you can remember the old crew delayed the ASM and were desperately trying to sell the IP but we don't know the conditions of the sale ie whether the old BOD was attached to any IP deal... look at the IP now... three trials with Merck going on.... two with ketruda and one trial status was updated recently ...80 patients several sites.... so Avid hopefully is getting manuf rev..... another w/ 34 patients....
As for biz dev team, the Compton guy came from Cambrex which was recently sold to private equity in a $2.4 bil deal.... his resume was a lot stronger than TK imo... could this be a setup for another acquisition by private equity?
And hiring a CEO? they are teeing this up for sale imo so a CEO is not needed imo... Richie Rich is all they need to run the facility imo...
I check CDMO M&A activity every couple of days.... major consolidation is still going on and clients prefer fewer suppliers/vendors with more service offerings... and biomanuf operations are slim pickens...
I check CDMO capacity as well.... short term things are tight and expanding trials particularly w/ virus/vectors seem to outpace new capacity from what I gather... in some case companies are paying to reserve space...
Avid's BOD knows what is going on and two BOD members sold their CDMO's to major players... they know the drill...
Now if they don't start showing improvement soon, they could be a hostile takeover target imo...
agree.should be getting update on halo biz in march cc. what i find interesting is slow increase in II ownership while sp slides.... MM are good at what they do...
agree.... just don't think we get anything until March cc ...
still think we are getting teed up for sale.... these quiet times are when accumulation happens... all imo
stop limit hunting....eom
halo bump related to analyst upgrade based on expectations of darzalex sc conversion rate of 75%...
https://seekingalpha.com/instablog/498952-bret-jensen/5405341-biotech-analyst-run-down-for-wednesday
hmmm.... where have we heard that before... been saying that for three months...
last blackrock 13 dec 31 2018
http://ir.avidbio.com/node/17976/html
3,580,783 shares
so increase of 353,648 shares
Tappan as of dec 2018 filing
http://ir.avidbio.com/node/18031/html
4,767,100 shares