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Updated Cust. Splits from the 10-K (ADC Therapeutics popped up in the listed cust’s for FY’19 at 21%:
Period Halozyme ADC-Therap. Coherus-BioSci. Other-Custs
FYE 4-30-14 91% 8%
FYE 4-30-15 79% 9%
FYE 4-30-16 69% 26% 5%
FYE 4-30-17 58% 26% 16%
FYE 4-30-18 55% 9% 22% 14%
FYE 4-30-19 30% 21% 13% 36%
4-30-19 10-K (iss. 6-27-19): http://tinyurl.com/yxukx6t4 (pg.43)
The Russell3000 MktCap rankings were taken at close 5-10-19 this year. For 2019, the low end of the R3000 is $152.3M, so CDMO stays in this year (5-10-19 close $3.70 x 56M sh. = $207M). Reconstitution CHGS (not us, we stay in) take place eff. this Monday AM (7-1-19).
https://www.ftserussell.com/research-insights/russell-reconstitution/market-capitalization-ranges
What I want more than anything is for new CEO Richard Hancock and CFO Daniel Hart to re-interate the various “profitability is coming” statements from 3-19-19/Q3:
ROGER LIAS (CEO) – OPENING:
“...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].”
DANIEL HART (CFO) – OPENING:
“...In addition, and importantly, during recent discussions with our customer Halozyme, we were informed that they are planning to increase production levels, which we believe will have a positive impact on our revenue and net income in the coming quarters. ...In the past 12mos, we have significantly diversified our client base, thus reducing risk and building a pipeline of future mfg. Opportunities. ...As a result, we are firmly on track towards profitability and positive EBITDA.”
Q#A #2: Paul Knight - Janney
”You have talked about achieving profitability in FY2020 (fye 4-30-20)...”
Daniel Hart: We're making improvements every day to our business. We'll give more thoughts on the timing of that when we come out with the FY2020 plan.
3-19-19 PR: HIGHLIGHTS SINCE OCTOBER 31, 2018
* “During the past 12mos we have significantly diversified our client base, thus reducing risk and building a pipeline of future mfg. 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."
3-19-19: https://investorshub.advfn.com/boards/read_msg.aspx?message_id=147475461
Recap Article on Tracy Kinjerski’s 6-5-19 Bio2019 Interview w/BioProcess Insider Daily’s editor Dan Stanton posted 6-24-19:
6-24-19: "CEO changing, but Avid continues its versatile CDMO strategy (Tracy Kinjerski Interview)"
By: Dan Stanton, Editor, BioProcess Insider Daily
https://bioprocessintl.com/bioprocess-insider/facilities-capacity/ceo-changing-but-avid-continues-its-versatile-cdmo-strategy/
Having relaunched itself in 2018, Avid Bioservices says it is going from strength-to-strength in the contract manufacturing space and its strategy will continue with a new CEO. Avid Bioservices emerged from drug developer Peregrine Pharmaceuticals in January 2018 as a pureplay contract development & manufacturing organization (CDMO).
“While we were a product development organization, we also had manufacturing facilities to support the manufacturing of our pipeline. While we were focused on developing products, we were also offering our services for process development and manufacturing, our excess capacity,” Tracy Kinjerski, VP of Business Operations at Avid said during a 6-5-19 Insider Daily interview at BIO. “In 2016, the leadership took a step back and was looking at where we were in our pipeline and how things were proceeding, and they decided we had to make a decision: ‘What was our business going to be? Where we were going to go?’ The decision was made to divest the entire portfolio of our own pipeline and focus being Avid Bioservices, a dedicated CDMO.”
In the 18 months since relaunching, Kinjerski told the BPI Theater the firm has been “very well-received by the customers and the industry.” The firm had been in the game for 26 years – and approved as a commercial manufacturer for almost 15 – but Avid still has an independent, small to mid-size CDMO feel, she continued, being a boon to its customers. “We’re able to be really flexible and make quick decisions. We really pride ourselves in working closely and collaboratively with our customers trying to come up with creative solutions to help them. We also have that strength in commercial. They know that when they work with us, they can transfer a project in at any phase and they don’t ever have to leave us.”
CHANGING HEADS
Recently, the firm has lost its CEO Roger Lias after only 17 months in the job. No reason was given for the departure. Richard Hancock has been place as interim CEO, but the firm is actively looking for a new leader. Kinjerski said Avid’s business model is unlikely to change whoever takes the top job. “Really what folks can count on is that we’ve established ourselves very well in the CDMO industry. We’re very well known, we have a very nice spread of skills and stages of molecules that we’re working on. We plan to continue down that pathway.”
As an example, she said the firm is in “growth mode” and plans for an expansion at a 42,000sf shell next to one of its facilities in Tustin, CA will continue to be assessed. “We actually do have a tentative design that has been put forth a year or so ago,” she said. “We’re trying to really take a closer look at the trends and really think about, ‘What do our customers need and where are we going in the industry?’ We are thinking about it, but we have not finalized what that buildout is going to look like.”
6-10-19/OCBJ “Avid Aims for Rebound After CEO Departure - New Analyst Sets $5 Price Target”
By A. Leigh Corbett (Orange Co. Business Journal)
Tustin-based Avid Bioservices Inc. (Nasdaq: CDMO), a pharmaceutical contract manufacturer that’s seen its share of change the past year, might be returning to the light as its stock gains traction, and the attention of a new analyst.
PIC: Rick Hancock (Pres./CEO)
https://www.ocbj.com/news/2019/jun/10/avid-aims-rebound-after-ceo-departure/
Can anybody get to this?
Bryce Chaney’s LinkedIn now showing Avid’s SeniorDir/BusDEV
https://www.linkedin.com/in/brycechaney
Posted by: Bfiest 5/22/2019
“Bryce Chaney is the newest business development hire. He brings 20 years industry experience in business development to Avid. Is the new interim CEO bringing in his people now?”
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=148959606
Posted by: ViaRoble 5/20/2019
“Mr. Faughnan is no longer with Avid. He lasted less than a year, like most of Tracy's direct reports.”
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=148928482
7-16-18: Michael Faughnan (ex-Lonza & WuXi Biologics) joins Avid as Sr.Dir./BusDev./West Coast https://tinyurl.com/yaozdggz
I can’t find anything definitive about Michael Faughnan leaving Avid as yet. His LinkedIn still shows Avid: https://www.linkedin.com/in/mike-faughnan-b5581a4
Today: Bio Intl/Philly: 2 Talks, Tracy Interview
Jun3-6/Booth3149: BIO Intl. Convention, Philadelphia https://convention.bio.org/2019/
...1. June5 10:45am: Tracy Kinjerski (VP/BusOP): Interview, “BioProcess Insider Daily”
...2. June5 1:05pm: Ray Marzouk (VP/Quality): “Quality Considerations for Introducing New Products Into Your Facility.”
...3. June5 1:45pm: Gene Yoshioka (Dir/MFG): Roundtable, “Capacity Challenge: How Single-Use is Feeding the Demand for Commercial Biologics Mfg.” (w/Dr. Steven Hager, Sr.Dir/TechSupp Catalent Biologics)
5-28-19/PR: https://tinyurl.com/y4aya583
Looking indeed like Bryce Chaney replacing Michael Faughnan as Dir./BusDev.(West?), as stated by prior posts by ViaRoble & Bfiest. Maybe we’ll hear more from Tracy Kinjerski (VP/BusOper) in her interview at BIO-Intl. June 3-6.
LinkedIN: Ray Marzouk. VP, Quality at Avid Bioservices
https://www.linkedin.com/in/ray-marzouk-29965128
Ray Marzouk (and several others) likes Tracy Kinjerski’s LinkedIn statement:
I can’t open the link, but Tracy Kinjerski is saying, “I am very pleased to announce Bryce Chaney...”
Posted by: Bfiest 5/22/2019
“Bryce Chaney is the newest business development hire. He brings 20 years industry experience in business development to Avid. Is the new interim CEO bringing in his people now?”
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=148959606
Posted by: ViaRoble 5/20/2019
“Mr. Faughnan is no longer with Avid. He lasted less than a year, like most of Tracy's direct reports.”
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=148928482
7-16-18: Michael Faughnan (ex-Lonza & WuXi Biologics) joins Avid as Sr.Dir./BusDev./West Coast https://tinyurl.com/yaozdggz
= = = = = = = = = = = = = = = 5-28-19 PR: https://tinyurl.com/y4aya583
Jun3-6/Booth3149: BIO Intl. Convention, Philadelphia - PR: https://tinyurl.com/y4aya583
...1. June5: Ray Marzouk (VP/Quality): “Quality Considerations for Introducing New Products Into Your Facility.”
...2. June5: Gene Yoshioka (Dir/MFG): Roundtable, “Capacity Challenge: How Single-Use is Feeding the Demand for Commercial Biologics Mfg.”
...3. June5: Tracy Kinjerski (VP/BusOP): Interview, “BioProcess Insider Daily”
Total INST.+LARGE Holdings now 33,480,083 59.7% (3-31-19)
Down from 34,044,987 60.7% at 12-31-18.
21,686,541 38.7% INSTITUTIONS (a/o 3-31-19)
https://www.nasdaq.com/symbol/cdmo/institutional-holdings
+ 11,793,542 21.0% LARGE SHAREHOLDERS via Forms13/14 (Tappan, EasternCap/Dart, Ronin/Stafford) – ie, not in Nasdaq Inst. List.
I’m not sure about Eastern Cap(K.Dart) and Ronin(Stafford/Farley) - no updates since 12-2017 & 4-2018 respectively. I’m assuming that means NO CHG.
------------
= 33,480,083 59.7%
Note: Ownership %’s based on 56,074,509 common O/S at 3-4-19. (10Q: https://tinyurl.com/yxqjs7an )
9 LARGEST SHAREHOLDERS:
1. Tappan Street (Prasad Phatak): 4,854,100 8.7% (+337,993 a/o 12-31-18 13G: http://tinyurl.com/yxrpla3b )
2. Eastern Capital (Kenneth Dart): 4,300,992 7.6% (a/o 12-7-17 14A: https://tinyurl.com/y7qprpg9 acq. 10-2015)
3. Blackrock Inc. (Larry Fink): 3,524,271 6.3% (-56,512 q/e 3-31-19 Nasdaq Inst.; also 13G http://tinyurl.com/y3pmv4ko )
4. IsZo Capital Mgt. (Brian Sheehy): 3,245,375 5.8% (-244,939 a/o 3-31-19 Nasdaq Inst.)
5. Ronin Trading (John Stafford III+Roger Farley): 2,638,450 4.7% (a/o 4-17-18 13D: https://tinyurl.com/ycf7d2uk )
6. Vanguard Group: 2,656,335 4.7% (+224,939 q/e 3-31-19 Nasdaq Inst.)
7. Snyder Capital: 2,353,817 4.2% (+261,344 a/o 3-31-19 Nasdaq Inst.)
8. Altravue Capital: 1,975,475 3.5% (+655,507 a/o 3-31-19 Nasdaq Inst.)
9. State Street: 864,097 1.7% (+50,674 a/o 3-31-19 Nasdaq Inst.)
BIGGEST DROPS q/e 3-31-19:
Eam Global -256,781 Sold Out
Oxford Asset Mgt -343,063 To 45,018
Eam Investors -353,982 Sold Out
Bandera Partners -396,767 Sold Out
Driehaus Capital Mgt -773,276 Sold Out
= = = = = = = = = = = =
Shares O/S as of 3-4-19=56,074,509 - history since 4-2006: http://tinyurl.com/yy6dvjvc
...A/O 1-31-19: 3,301,498 stock options outstanding at a wgt.avg. exercise price of $7.51 (pg.14 10Q).
3-11-19: Qtly. Conf. Call (Lias/Hart) PR & Transcript http://tinyurl.com/yy6dvjvc
10-4-18: ASM/2018 (@Myford Facility) - Roger Lias’ Slideshow & Attendee Report https://tinyurl.com/yctfzhlb
Eb, you misread what he was saying I think. He was saying exactly what you are, that The Risk of NOT having a diversified base, “puts a limit on a client wanting to do biz”. That’s the risk we want to eliminate.
I can only surmise this little run is people anticipating that VP Tracy Kinjerski’s 12-10-18 CC statement is going to happen on time. We’ll know the Yes/No answer by close next Tuesday 4/30 for sure.
“I’m excited about bringing you news of very positive developments in the coming 2 quarters [ie, Q3+Q4 q/e 4-30-19] and into FY2020.”
12-10-18/Q2 CC:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=145386179
Background: 14191 Myford Rd. = “Myford Facility = Avid II” (84,000sf), leased 7/2014. 40,000sf (1/2) commissioned for business 3/2016. The remaining ½ un-developed side of the building reserved for future CDMO expansion as new business warrants.
3-7-16/Avid II: Formal Commissioning of Avid's New 40,000sq "Myford" Facility, “single-use/fully disposable” http://tinyurl.com/y5jmfpo3
7-16-18/Roger Lias CC on Future Expansion of Myford Facility:
Q&A#2: Paul Knight - Janney Montgomery: And lastly, could you talk about capacity? How much is built out now? How much is available?”
Roger Lias: So, the first question how much is built out? Of course, we’ve our legacy what we call the Franklin Facility, which has been in place for some time now. And that remains busy with both some commercial manufacturing in support of the Halozyme program, which is in the public domain, and also clinical manufacturing. The Myford facility, we've built out basically 50% of the available footprint, that takes us to volumetric scales of up to 3 by 2,000 liter bioreactors, but that build out also includes warehouses, quality labs, the infrastructure, if you like, the utilities necessary to support the entire footprint. So we have the opportunity to build out the remainder of that facility, which will be an additional 40,000+sf, relatively efficiently based on the design we already have there, and that would roughly triple the overall capacity of that facility. We’d be going from 1 mfg. core to 3. And then in terms of capacity utilization, our idle capacity, as we’ve talked about previously is what hurts, not just us but anybody in our business. So we’re effectively now through these, on-boarding of these new clients starting to chip away that idle capacity. I don’t know if I have a number for you in terms of percentages.
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=142251652
Current website says 3x2000, 3x1000, 6x200’s.
It looks like at some point since 8-2018 they ADDED a 1000L and 2 200L’s.
The 8-2018 Avid Fact Sheet PDF said:
https://avidbio.com/wp-content/uploads/2018/08/Avid-Fact-Sheet_Corporate.pdf
But now, the current 3-22-19 website Corp. Services & Capabilities page says:
https://avidbio.com/services/
Towards profitability: Q3(1-31-19) needed to cover $3.2M/G&A + $1.4M/Div = ~$4.7M expenses, but revs of $13.8M @ GM=15% only covered $2.1M of expenses, thus a net Loss of $2.6M.
If(when) we get to $16M revs at GM=30%, that would gen. GP of $4.8M and flip over to a net Profit for the qtr. And then, BAM!
Roger Lias 3-11-19 CC:
"All of this positions us well for growth and achieving profitability, which we believe is now within reach in the coming FY [FY2020: fye 4-30-20].
AVID GROSS PROFITABILITY BY QTR: DEFER CUST
QTR (1000’s) Rev$ COGS$ Prof$ GP% REV$ INVEN$ DEP.
FY13Q1 7-31-12 4,135 2,024 2,111 51% 6,056 5,744 10,224
FY13Q2 10-31-12 6,061 3,703 2,358 39% 6,221 5,426 8,500
FY13Q3 1-31-13 6,961 3,651 3,310 47% 5,061 4,635 6,729
FY13Q4 4-30-13 4,176 3,217 959 23% 4,171 4,339 8,059
FY14Q1 7-31-13 4,581 2,670 1,911 42% 4,164 5,679 8,528
FY14Q2 10-31-13 7,354 4,195 3,159 43% 3,468 4,033 7,658
FY14Q3 1-31-14 3,885 2,416 1,469 38% 4,329 5,224 8,646
FY14Q4 4-30-14 6,474 3,829 2,645 41% 5,241 5,530 5,760
FY15Q1 7-31-14 5,496 3,583 1,913 35% 4,670 5,998 6,226
FY15Q2 10-31-14 6,263 4,139 2,124 34% 3,612 5,379 7,549
FY15Q3 1-31-15 5,677 3,113 2,564 45% 5,752 6,148 8,311
FY15Q4 4-30-15 9,308 4,758 4,550 49% 6,630 7,354 11,363
FY16Q1 7-31-15 9,379 4,608 4,771 51% 8,291 10,457 9,599
FY16Q2 10-31-15 9,523 4,741 4,782 50% 9,688 12,554 14,935
FY16Q3 1-31-16 6,672 3,896 2,776 42% 15,418 15,189 22,433
FY16Q4 4-30-16 18,783 9,721 9,062 48% 15,418 15,189 24,212
FY17Q1 7-31-16 5,609 3,062 2,547 45% 21,531 25,274 21,731
FY17Q2 10-31-16 23,370 15,441 7,929 34% 17,980 25,924 26,928
FY17Q3 1-31-17 10,747 7,974 2,773 26% 26,367 33,829 26,210
FY17Q4 4-30-17 17,904 11,782 6,122 34% 28,500 33,099 17,017
FY18Q1 7-31-17 27,077 20,448 6,629 24% 13,433 24,235 14,322
FY18Q2 10-31-17 12,782 16,242 -3,460 -27% 7,473 16,518 13,138
FY18Q3 1-31-18 6,819 10,951 -4,132 -61% 6,633 14,218 17,602
FY18Q4 4-30-18 6,943 8,904 -1,961 -28% 10,922 16,129 17,013
FY19Q1 7-31-18 12,589 11,397 1,192 9% --,--- 9,168 --,---*
FY19Q2 10-31-18 10,178 9,844 334 3% --,--- 9,736 --,---*
FY19Q3 1-31-19 13,781 11,731 2050 15% --,--- 8,660 --,---*
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=147475461
3-11-19 Qtly CC-Transcript, PR(Q3FY19/qe1-31-19), Avid Revs History Table
*Revs Guidance (FY’19 fye 4-30-19): lower half of $51-55M. 1-31-19 Backlog=$43M
*Cash: 1-31-19: $27.8mm
*As of Mar 4, 2019: 56,074,509 shares o/s.
*10Q/1-31-19 iss. 3-11-19: https://tinyurl.com/yxqjs7an
*Avid Total Revs May03-Jan19: $332.1M
*Avid’s website: https://avidbio.com
This large post has 4 sections:
I. 3-11-19 Qtly. Earnings Conf. Call TRANSCRIPT (FY19/Q3 q/e 1-31-19)
II. 3-11-19 CDMO Press Release: Q3/FY19 Earnings & Developments
IV. Updated Table of Avid Revenues By Quarter (May’06-Current)
III. Updated O/S Shares History Table – 2006-curr.
…Recall: Avid’s FY runs May-Apr, so FY’19 = May’18-Apr’19.
((( Orig. transcript from SeekingAlpha.com [http://tinyurl.com/y4c38zx4 ] with numerous corrections made. )))
Link to webcast replay: http://ir.avidbio.com/events-and-presentations => https://edge.media-server.com/m6/p/v8r9ngvy
TRANSCRIPT 3-11-19 FY’19/Q3 Earnings Conf. Call (q/e 1-31-19) (Lias/Hart)
ROGER LIAS (CEO) – OPENING COMMENTS:
Thanks to all of you who’ve dialed in or joined the webcast today. I’m pleased to be able to discuss an extremely productive 3rd quarter, with notable advancements & achievements taking place across the business. From a financial perspective, Q3 was strong, as we beat the consensus estimates on both revenue & earnings/sh. while also increasing backlog. We achieved these results while continuing to manage our cash carefully and maintaining our positive bottom-line trajectory. Dan will provide more details regarding our financial performance in a moment. Operationally, we made numerous positive developments during the quarter as we continued to upgrade our process dev. capabilities, advanced our new business discussions, and completed a process validation campaign in anticipation of future commercial production. In addition, we have expanded scopes of work for multiple existing customer projects, contributing significantly to our revenue & backlog. To support this growth we’ve been successfully hiring the necessary additional talent. And most importantly, we continued to deliver high-quality pharmaceutical products to our clients and their patients. 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]. These developments are a result of the considerable efforts that are being made to transition the business since we announced Avid Bioservices as a dedicated contract dev. & mfg. organization just 14mos. ago. With that summary I will turn the call over to Dan to provide a financial overview.
DANIEL HART (CFO) – OPENING COMMENTS:
Thanks, Roger. Before I begin, I’d like to recommend that everyone participating today refer to our 10-Q filing which we filed today for addl. details. [ https://tinyurl.com/yxqjs7an ] I’ll discuss our financial results from continuing operations for Q3 ended Jan. 31, 2019, starting with revenue. Q3 was a strong one, as we experienced an increase in the number of mfg. runs, both in process and completed in the current period compared to the prior period, primarily due to increased demand from a more diversified client base. As a result, we recognized revenue of $13.8M, an increase of 102% as compared to $6.8M in Q3 of the prior year. For the 9mos. ended 1-31-19, revenues were $36.5M, a 22% decrease as compared to revenues of $46.7M during the prior year period. This decrease was primarily attributed to the previously discussed temporary reduction in demand from our largest customer [Halozyme], which primarily impacted the first 6mos of FY2019 [fye 4-30-19].
Going forward, we expect client concentration to play less of a role in the business, as we diversify our customer base and continue to hire top talent, refine our business practices, systems, and other conditions necessary to operate as a preferred biologics CDMO. As we began our 2nd year as a fully dedicated CDMO, we’re proud to say that we have taken, and we will continue to take, the steps necessary to achieve profitability in the not-too-distant future. In addition, and importantly, during recent discussions with our customer Halozyme, we were informed that they are planned to increase production levels, which we believe will have a positive impact on our revenue and net income in the coming quarters. Roger will further elaborate during his remarks.
Our backlog had strong growth during Q3, growing to $43M, and it is continues to fuel our quarterly revenue goals. We expect to recognize a majority of this balance in FY2020. As a reminder, the company provided revenue guidance for the full FY2019 of $51-55M under the ASC 606 revenue recognition standard. As we approach the end of FY2019, we believe that we will be within the lower half of this range. Gross margins also increased for the 3 & 9mos ended 1-31-19. Gross margin for Q3 was a positive 15%, a significant increase compared to the negative GM of -61% in the prior year period. The increase in gross profit for Q3 was primarily attributed to product mix & volume, therefore resulting in increased cost absorption and decreased idle capacity costs. Idle capacity costs of $1.7M during Q3/FY2019 negatively impacted gross margin by approx. 13%. Gross margins for the 9mos ended 1-31-19 was 10%, a significant increase compared to a negative -2% in the prior year period. Similarly, this increase was primarily attributable to product mix & volume. This was the 3rd qtr in a row where we've seen positive improvement in our gross margins as compared to prior year. As we’ve stated previously, given fixed costs associated with highly regulated biologics mfg. under current Good Mfg. Practices, we expect margins will continue to improve as we increase capacity utilization. To this end, we continued an aggressive effort to both expand our customer base and extend current client projects to increase our backlog and improve overall capacity utilization.
I will now shift to operating expenses. Total SG&A for Q3/FY19 were $3.2M, a 33% decrease compared to the $4.8M in Q3/FY18. For the 9mos of FY19, SG&A expenses were $9.3M, a 24% decrease compared to the $12.3M in the first 9mos of FY18. The decreases for Q3 and the first 9mos of FY19 were primarily due to a reduction in personnel related costs, facility costs, and professional fees, including legal costs during FY2019 as compared to FY2018. For Q3, the company recorded consolidated net loss attributable to common stockholders of $2.6M, or $.05/sh., compared to $12.4M, or $.28/sh. for the same period of prior year. For the 1st 9mos of FY19, the company recorded consolidated net loss attributable to common stockholders of the $8.2M, or $.15/sh., compared to $28.4M, or $.63/sh., for the 1st 9mos of FY18. Cash & cash equivalents as of Jan. 31, 2019 were $27.8M, compared to $42.3M at FY18 ended April 30, 2018. This concludes my financial overview. I will now turn the call back over to Roger to provide a more detailed operational & commercial update.
ROGER LIAS (CEO) – Q3/FY19 OPERATIONAL & COMMERCIAL UPDATE:
Given the continued strength of our biologics CDMO market, and in particular the significant & persistent demand for products derived from mammalian cell culture, as expected our business dev. team remains exceptionally busy. During Q3, we actively participated in numerous industry events & conferences. We continue to see strong demand by the high-quality request for proposals that we are receiving and to work diligently to issue proposals for projects that are good fit for Avid’s technical capabilities and available capacity. It’s important to remember that the receipt of a request for proposal is just the first step in a long & highly complex sales cycle that includes significant technical interactions, quality audits and so on, in addition to commercial & legal negotiations. A period of 12mos from receipt of a request for proposals or execution of agreement is not uncommon, especially when dealing with major biotech and pharma companies that employ significant future planning. We continue to execute a 2-tiered strategy of pursuing both IND enabling early stage projects that contribute relatively quickly to revenue and build a pipeline of future mfg. opportunities as well as maintaining dialogue on later stage and marketed product opportunities. Accordingly, we remain engaged in discussions for multiple opportunities, many of which will require manufacturing in 2020 and beyond. 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.
In addition to prosecuting new business discussions, we continue to be highly successful in expanding scopes of work for existing customers as their projects progress through development. During Q3, we expanded multiple such projects, representing $23.8M in future revenue. To illustrate the significant contribution that existing customers make to our business growth, it’s worth noting that since the beginning of FY19 [5-1-18], project expansion orders from our current clients have increased by 68%. This increase is in net of the discontinuation of one of our smaller earlier stage projects due to this client’s clinical outcomes and not related to work undertaken at Avid. Such discontinuations are out of our control, but are an unavoidable occurrence in the development stage of CDMO business. Based on work undertaken recently, Avid’s overall client portfolio was significantly stronger and more stable than it was 12mos ago and we believe that our expanding customer base continues to de-risk our business.
I'm pleased to be able to report that contributing to this growth from current clients is an increasing demand from Halozyme Therapeutics, a manufacturer of recombinant human hyaluronidase supporting their Enhanced Technology platform. Halozyme has recently announced that Avid manufactures its products, not only for their current collaboration products, but also for collaboration product candidates currently in development. We believe the strength & forecast was driven by both key Halozyme partner for who Avid is the exclusive supplier, depleting inventory as previously anticipated, and perhaps more importantly, new launches and market growth for that partner’s commercial products and their expanding list of newer partners and partnered projects in development. We anticipate that this trend will continue into FY2020, as Halozyme’s partners advance their clinical dev. programs and begin preparing for commercialization. We certainly maintain an extremely good relationship with Halozyme and we look forward to continuing to support their growing needs. On the topic of commercialization, we’re pleased to report that we’ve recently completed a process validation campaign for a new scaled up mfg. process on behalf of Halozyme in anticipation of future commercial manufacturing. And we are also currently completing process validation campaigns for other clients. As a reminder, these process validation campaigns are required prior to the manufacture, launch, and marketing of commercial biopharmaceutical products and the details all and specifications resulting from the process validation are included as part of our customers’ biologics license applications to the FDA and in other global registry filings. Depending on the timing of such filings and associated regulatory reviews, it may be a significant period before production begins to generate addl. revenue for Avid, depending on the magnitude & duration of pivotal clinical trials and the time necessary for preparation, submission, review, and approval of regulatory applications. Once the process validation is completed, however, that customers is essentially locked into the process developed at Avid for commercial production within our facilities. Subject to completion of pivotal trials, the regulatory approval of these drugs each of these validation campaigns is highly likely therefore to result in future commercial production, significantly expanding Avid’s current business. Given advances with our process development infrastructure and capabilities, new business discussions, expansions of current customer projects and validation campaigns completed in ongoing, we're confident that we're building a robust pipeline that will generate sustainable business growth.
To support anticipated growth we’re continuing to invest in upgrade of our facilities. In particular, we’ve invested in, and continue to invest in, process dev. facilities & equipment, which were in significant need of enhancement in order to best service the new projects that come into Avid. As a reminder, every project that comes into Avid Bioservices, whether it's early development work or transfer of a well-established manufacturing process, must first pass through our process dev. laboratories. Accordingly, these facilities are a critically important part of our business and a key factor in attracting new customers. As we reported last quarter, we’ve completed the upgrade to our first refurbished laboratory in the purification development area; work continues on other laboratories, including a major new upstream dev. laboratory suite to support development of cell culture processes, as well as other refurbishment work within our existing buildings. These new laboratories are being fitted with state-of-the-art equipment and capability enhancements that we expect will introduce considerable efficiencies. 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 delay is solely a timing issue and there are no other factors contributing. Beyond the upgrades to our process development capabilities, we’re evaluating the need to expand mfg. capacity in order to support client needs & market demand. Our assessments are demand driven and based on a number of factors including increasing forecast related to current programs, visibility into the future needs of our current client base, ongoing business development discussions, and a robust pipeline of opportunities. As a more immediate precursor to expansion, we are implementing new operational procedures & systems to allow more efficient utilization of currently installed capacity. We are also planning capital improvement projects within our current facilities that will increase efficiency & throughput and prepare for future capacity build-out.
During Q3, we continued hiring for operational positions in manufacturing, quality, and process development, again in preparation for growth & expansion. Identifying, training, and retaining qualified personnel is critically important to our plans for growth. And we continue to take steps to ensure that prospective qualified employees are favorably aware of the opportunities at the company, both within our geographic location and across a broader biomanufacturing marketplace.
I strongly believe that another important factor in establishing Avid Bioservices as a preferred biologics CDMO is the adoption of new technologies that deliver value to clients by increasing the speed at which we can develop robust, scalable, and economically viable manufacturing processes and by greatly improving manufacturing throughput and facility utilization. Both objectives deliver a corresponding increase in revenue opportunity from installed capacity and differentiate Avid within our competitive marketplace. As a result, we are actively engaged in discussions with multiple vendors and leading industry stakeholders to evaluate possible technology collaborations and service extensions that will position Avid as a high value proposition thought leader and also, in some cases, deliver pipeline of opportunities as a new client capture. Avid was an early adopter of single-use manufacturing technologies, and in our dynamic and fast-moving market it’s imperative that we remain state-of-the-art organization offering cutting edge technology to support the evolving needs of our customers. As I hope is evident, we are rapidly putting into place the myriad components necessary to deliver sustainable growth & profitability. While we would of course like this to happen at a faster pace, it is necessary to understand the cadence of the business and the speed with which we are making transformative changes to the company. We’re progressing incredibly quickly, given the position that we were in just 12mos ago as an excess capacity player with little commercial infrastructure, and given the highly regulated technically challenging and customized work that we do and our long and incredibly complex sales cycles. Given these factors, I believe we made truly remarkable progress in our first year of operation as a dedicated CDMO.
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. Driving these achievements is a truly exceptional team at Avid Bioservices, whose dedication and hard work have contributed to our successes to-date. Together, we continue to execute the plan as we build a sustainably profitable and admired company and firmly established Avid Bioservices as an acknowledged leader in the CDMO sector. This concludes my prepared remarks for today and we can now open the call up for questions.
Q&A: [beg. 18:40]
1. Joe Pantginis - H.C. Wainwright
JP: ”First, since you mentioned this a couple of times during your prepared comments, several quarters ago, you were obviously discussing being in such a hot area for mfg. capacity in the CDMO business. So how is hiring going and the ability to attract the right talent?”
Roger Lias: Yes, I am prepared now to say Joe it’s going well. If you’d have asked me 6mos ago, it was giving me some concern, we had some turnover as we expected in the transition of the business and we were keeping our heads above pretty well but not bringing in the talent at that time that I thought we needed to grow, but that's changed quite dramatically. It’s a tough field in general, not just for Avid. Across biomanufacturing right now, it’s critical and retention, but we’re at the point now where we’re quite comfortable; we’ve got the numbers under control and have a pretty nice plan for hiring to sustain the growth in the next 12mos. So I think right now I'm pretty comfortable.
JP: ”Re: backlog. First very nice to hear about the Halozyme increasing commitment. I was just curious how much of this commitment is in sort of your current backlog that you discussed? And also the particular client that sort of went away due to our negative clinical outcome. What was the impact size of data from a backlog perspective?”
Roger Lias: I don’t know if we’re in a position to give numbers because of client sensitivity. Certainly, the impact from the client that went away was negligible to us; it certainly wasn’t significant - it’s one of our smaller programs. So we’re comfortable with that. With respect to the actual magnitude of the Halozyme, we have both increased forecasts and we have better visibility to their longer-term needs as well. Certainly it’s significant contributor to the backlog, but again we've been working hard to diverse it. While we’re happy to have growth from Halozyme, we’re still looking to decrease the percentage contribution as a total from any individual customer, and we’re being successful in doing that. So it’s meaningful but it’s not half the backlog or anything like that.
2. Paul Knight - Janney
PK: ”Re: the increase in the backlog, part of that was Halozyme or no?”
Roger Lias: Yes part of it was Halozyme. Yes.
PK: ”When do you talk about the process dev. being 20% of revenue, what was that, a year ago?”
Roger Lias: Oh boy, off of, top of my -- probably it was approx. 10% last year.
PK: ”There doesn't seem to be a shortage of MAB mfg. Around. Is it the same in your region, do you believe there is a shortage?”
Roger Lias: Yes, the devil is in the details Paul, but I think overall capacity is certainly still tight. It’s much easier to talk on a macro level, but on a specific client-by-client, project-by-project basis, of course individual timelines scales of capacity, so on and so forth, even geographical location, IP, these will come into play. So I think there was a survey, which was published in April of this year by our Eric Langer [?] and BioPlan Associates where almost exactly 50% of respondents in a large survey listed concerns about capacity availability - that wasn't just monoclonals that was across biospace, but I think that’s about right, I think on a macro level where we as an industry are still relatively balanced compared to where we were a few years back. But on a project-by-project basis, I would suggest that capacity is still tight.
PK: ”And then you talked to about gross margin, I didn't quite catch about. Was there still some impact on GM due to idle capacity in Q3? What was that commentary I didn’t quite catch?”
Daniel Hart: Yes, Paul. We had about $1.7M of idle capacity costs that hit us in Q3. So as we continue to grow, though we're seeing pretty healthy margins on the service side, we have some dilutions in the amount of pass-through costs and material costs that we have are very low margin below 10% that gets added to our overall margin and then further diluted by idle capacity costs. But, as we continue forward and continue to grow the top-line and to fill out the capacity on the floor, those margins will start to increase.
PK: ”Was that $1.7M was a cost?”
Daniel Hart: Yes.
PK: ”You have talked about achieving profitability in FY2020 (fye 4-30-20). I guess when we think about quarterly rollout, are you basically as we get to the end of the year in those quarters you do hope you can get to profitability?”
Daniel Hart: Yes Paul. We're making improvements every day to our business. We'll give more thoughts on the timing of that when we come out with the FY2020 plan.
PK: ”Got it: on the rollout. When you talk about the new technology like single-use, is this a lineup that you believe you're able to offer that others aren't, or you're doing it faster? What's the dynamic around its technology like single-use?”
Roger Lias: I guess it's subset of single-use. We've been doing single-use for some time now, so I'm sure if we would call single-use as a concept new particularly anymore, although we were very early adopters, so we have a lot of experience. It’s individual assets within single-use processing. So, anytime we could, for instance, if there were Fast Flow resins which reduce the resident’s time in our facility so we could process in 5 hours instead of 10 or whatever it might be, that's also a benefit and to the benefit of our clients. So there is a whole host of -- it's not one sort of suite of technologies. There are some interesting concepts out there like continuous processing, which are alot closer to smaller molecules and they are for biologics right now, but that's certainly something we very much involved in discussions about. But it's taking a holistic look at the new technologies that are out there - high density cultures - there is a whole host of them out there, not specifically that are single-use. Are we better positioned than some of our competitors? In some ways we are. We have a lot more flexibility. Of course, the market has become through M&A, some of our competitors are not truly independent, they don’t actually have the ability probably to bring on some of the technologies that we do, because of parent company relationships and so on and so forth. But I don't overstate that, obviously the technology vendors out there are keen to get their technologies deployed in CDMOs as well as in product companies manufacturing their products actively. But I think we do have the ability to move more quickly. And of course we have space available and we're not quite as hampered by sort of some of the systems that are out there as well. It comes back to the same differentiator that we have in general in the marketplace. It’s combination of being agile and able to move quickly alongside the long regulatory track record is really exceptionally unusual. So we will make the most of that.
3. Steve Schwartz - First Analysis
SS: ”I will start off with SG&A expense and the hiring dynamics that are going on. You highlighted that not only you’ve brought people on but you lost a few people. So I think you know if you could net it all out what should we expect with respect to SG&A spending & salaries?”
Roger Lias: On SG&A we’re basically where we need to be; we’re flat. We don't expect any great change to SG&A as I said during the call. The hiring we’re doing is operational, these are revenue-generating people, whether it’s process dev. or quality lab folks releasing product or mfg. operators. So SG&A-wise, we don’t anticipate any great change in the coming 12mos. If it is, it will be based on things like project managers, for instance, as we bring in more projects, but it really should be minimal.
SS: ”Re: the pipeline, how would you parse out the $43M between mfg. and process dev.?”
Roger Lias: An interesting question. I’m not sure we have it right at hand. I mean it’s probably somewhere between currently we're 20% PD and we are aiming toward 33%. So, I'm guessing it will still be 20% or a little bit higher PD as PD grows. But the process dev. contribution for this coming year will probably be greater than 20% and less than 30%, if I were to guess.
SS: ”That's good. That's helpful to walk through.”
Roger Lias: And percentage wise, Steve, it doesn't take much of a change in mfg. to put the percentages out the window anyway.
SS: ”Re: Halozyme, in FY '18, they were about 55% of your revenue stream and certainly the news today that they've come to you for additional dev. work and what have you in manufacturing. That's fantastic news. Where do you think they finish up FY '19 and even in FY '20, where do you think they stand relative to that 55% of FY '18?”
Roger Lias: Yes. I think, probably, they’ll be reduced. Before the nice increase in forecast that we got, I would have given you a lower number, but for the coming FY2020, maybe they'll achieve as much as 40% because of some growth, significant growth, in forecast. But again, over time, we should see, it's not a bad problem to have, but we should see continued reduction in their percentage contribution. But we were happy to take a significant kick up recently.
SS: ”That’s fantastic news on both sides. You mentioned capital spending on some laboratory projects and the one got pushed out, it sounds like into what, Q1/FY20, because of the permitting situation. Can you just guide us for what your CapEx could be over the next couple of quarters given these projects?”
Daniel Hart: Sure, Steve. The CapEx related to the build-out of the PD labs is a little more than 50%. So, I'm going to say it’s substantially spent going into this last quarter here. The delays aren't adding significant costs, it's just a matter of timing. So, I would anticipate that our Q4, I'd call it, about $1 million in CapEx, if not less.
ROGER LIAS (CEO) – CLOSING COMMENTS:
I'd just like to thank everybody for dialing in and joining by webcast. We're certainly looking forward to continuing on our current trajectory and I feel that we've put in a strong quarter. So, we appreciate everybody's support and we look forward to the next earnings call. Thank you.
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3-11-19: Avid Bioservices Reports Financial Results for First Quarter FY2019 Ended Jan. 31, 2019 and Recent Developments
GlobalNewsWire: https://tinyurl.com/y2btdhqf
-- Achieved Revenue of $13.8 Million, an Increase of 102% Compared to Prior Year Quarter
-- Signed Project Expansion Orders with Existing Customers Representing $23.8 Million
-- Completed Process Validation Campaign for Future Commercial Production with Other Validations Ongoing
TUSTIN, March 11, 2019: Avid Bioservices, Inc. (NASDAQ:CDMO/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 CEO.
* “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 & 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 $.05 per share, compared to a consolidated net loss attributable to common stockholders of $12.4 million, or $.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 $51-55 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 SEC today. [ https://tinyurl.com/yxqjs7an ]
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 4:30PM EDT (1:30PM 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. http://www.avidbio.com
Forward-Looking *snip*
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 average
common shares outstanding 56,068,844 45,225,804 55,949,164 45,032,335
Basic and diluted net (loss) income per common share
attributable 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 to
common 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; 1,647,760
shares 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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From 10-Q header: “As of Mar 4, 2019, there were 56,074,509 shares outstanding.”
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Latest 10K 4-30-18 iss. 7-16-18 https://tinyurl.com/ydc8vew5 PR: https://tinyurl.com/y93fux9h (Cash 4-30-18=$42.3mm)
Latest 10Q 1-31-19 iss. 3-11-19 https://tinyurl.com/yxqjs7an PR: https://tinyurl.com/y2btdhqf (Cash 1-31-19=$27.8mm)
ALL SEC filings for PPHM: http://tinyurl.com/6d4jw8
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Updated PPHM REVS-BY-QTR TABLE, now thru FY19'Q3(qe 1-31-19), per the 10-Q (https://tinyurl.com/y2btdhqf ) issued 3-11-19.
• Total Avid Revs since May’03: $332.1M
• 3-11-19: FY'19 (May'18-Apr'19) Avid revs guidance lower half of $51-55M (committed B/L=$43 at 1-31-19).
• Inventories at 1-31-19 total $8.7M, DOWN from $9.7M at 10-31-18.
Avid’s website: http://www.avidbio.com
AVID GROSS PROFITABILITY BY QTR: DEFER CUST
QTR (1000’s) Rev$ COGS$ Prof$ GP% REV$ INVEN$ DEP.
FY13Q1 7-31-12 4,135 2,024 2,111 51% 6,056 5,744 10,224
FY13Q2 10-31-12 6,061 3,703 2,358 39% 6,221 5,426 8,500
FY13Q3 1-31-13 6,961 3,651 3,310 47% 5,061 4,635 6,729
FY13Q4 4-30-13 4,176 3,217 959 23% 4,171 4,339 8,059
FY14Q1 7-31-13 4,581 2,670 1,911 42% 4,164 5,679 8,528
FY14Q2 10-31-13 7,354 4,195 3,159 43% 3,468 4,033 7,658
FY14Q3 1-31-14 3,885 2,416 1,469 38% 4,329 5,224 8,646
FY14Q4 4-30-14 6,474 3,829 2,645 41% 5,241 5,530 5,760
FY15Q1 7-31-14 5,496 3,583 1,913 35% 4,670 5,998 6,226
FY15Q2 10-31-14 6,263 4,139 2,124 34% 3,612 5,379 7,549
FY15Q3 1-31-15 5,677 3,113 2,564 45% 5,752 6,148 8,311
FY15Q4 4-30-15 9,308 4,758 4,550 49% 6,630 7,354 11,363
FY16Q1 7-31-15 9,379 4,608 4,771 51% 8,291 10,457 9,599
FY16Q2 10-31-15 9,523 4,741 4,782 50% 9,688 12,554 14,935
FY16Q3 1-31-16 6,672 3,896 2,776 42% 15,418 15,189 22,433
FY16Q4 4-30-16 18,783 9,721 9,062 48% 15,418 15,189 24,212
FY17Q1 7-31-16 5,609 3,062 2,547 45% 21,531 25,274 21,731
FY17Q2 10-31-16 23,370 15,441 7,929 34% 17,980 25,924 26,928
FY17Q3 1-31-17 10,747 7,974 2,773 26% 26,367 33,829 26,210
FY17Q4 4-30-17 17,904 11,782 6,122 34% 28,500 33,099 17,017
FY18Q1 7-31-17 27,077 20,448 6,629 24% 13,433 24,235 14,322
FY18Q2 10-31-17 12,782 16,242 -3,460 -27% 7,473 16,518 13,138
FY18Q3 1-31-18 6,819 10,951 -4,132 -61% 6,633 14,218 17,602
FY18Q4 4-30-18 6,943 8,904 -1,961 -28% 10,922 16,129 17,013
FY19Q1 7-31-18 12,589 11,397 1,192 9% --,--- 9,168 --,---*
FY19Q2 10-31-18 10,178 9,844 334 3% --,--- 9,736 --,---*
FY19Q3 1-31-19 13,781 11,731 2050 15% --,--- 8,660 --,---*
*7-31-18 10Q: “prior-yr amts related to deferred revenue
& cust deposits have been reclass’d to contract liabilities.”
...q/e 4-30-18: contract-liabilities=27,935 <=reclassified
...a/o 7-31-18: contract-liabilities=17,994
...a/o 10-31-18: contract-liabilities=17,307
...a/o 1-31-19: contract-liabilities=14,620
FY13 TOTAL: 21,333 12,595 8,738 41%*
FY14 TOTAL: 22,294 13,110 9,184 41%*
FY15 TOTAL: 26,744 15,393 11,151 42%*
FY16 TOTAL: 44,357 22,966 21,391 48%*
FY17 TOTAL: 57,630 38,259 19,371 34%*
FY18 TOTAL: 53,621 56,545 -2,924 -5%*
*Avid Net-Profit(Selling/G&A) not split out from PPHM-Corp. in the fin’s.
AVID TOTAL REV’s BY YEAR):
FY04 4-30-04 3,039 (Avid-Revs didn’t incl. Avid’s Gov’t work)
FY05 4-30-05 4,684
FY06 4-30-06 3,005
FY07 4-30-07 3,492
FY08 4-30-08 5,897
FY09 4-30-09 12,963
FY10 4-30-10 13,204
FY11 4-30-11 8,502
FY12 4-30-12 14,783
FY13 4-30-13 21,333
FY14 4-30-14 22,294
FY15 4-30-15 26,744
FY16 4-30-16 44,357
FY17 4-30-17 57,630
FY18 4-30-18 53,621
FY19 1-31-19 36,548 <=YTD/9mos.
**TOTAL: 332,096 (5/1/2003–1/31/19)
.
QTLY. NET PROFIT/LOSS BY QTR:
(“attributable to common stockholders”; ie, incl. PREF Div’s**)
**2-11-14: PPHM Raises $16.2M, 700k Pref. Shares w/10.5% DIV.
FY16Q1 7-31-15 -15,101,000
FY16Q2 10-31-15 -14,578,000
FY16Q3 1-31-16 -18,227,000
FY16Q4 4-30-16 -13,264,000
FY17Q1 7-31-16 -12,437,000
FY17Q2 10-31-16 -4,498,000
FY17Q3 1-31-17 -9,216,000
FY17Q4 4-30-17 -6,714,000
FY18Q1 7-31-17 -2,647,000
FY18Q2 10-31-17 -14,066,000
FY18Q3 1-31-18 -12,446,000
FY18Q4 4-30-18 +1,578,000 <=includes $9,154,000 income from disc. operations.
FY19Q1 7-31-18 -3,403,000
FY19Q2 10-31-18 -2,893,000
FY19Q3 1-31-19 -2,581,000
Period Halozyme Coherus-BioSci. Other-Custs
FYE 4-30-14 91% 8%
FYE 4-30-15 79% 9%
FYE 4-30-16 69% 26% 5%
FYE 4-30-17 58% 26% 16%
FYE 4-30-18 55% 22% 23%
...(cust. Splits not given in 7-31-18+ 10Q’s)
The difference is living in a rented apartment near Hqtrs, (not “permanent housing”) and ultimately buying a house near Hqtrs (ie, “permanent housing”).
Total INST.+LARGE Holdings now 34,044,987 60.7% (12-31-18)
Up from 28,166,076 50.3% at 9-30-18.
22,251,445 39.7% INSTITUTIONS (a/o 12-31-18)
https://www.nasdaq.com/symbol/cdmo/institutional-holdings
+ 11,793,542 21.0% LARGE SHAREHOLDERS via Forms13/14 (Tappan, EasternCap/Dart, Ronin/Stafford) – ie, not in Nasdaq Inst. List.
I’m not sure about Eastern Cap(K.Dart) and Ronin(Stafford/Farley) - no updates since 12-2017 & 4-2018 respectively. I’m assuming NO CHG., but you know what it means to assume.
------------
= 34,044,987 60.7%
Note: Ownership %’s based on 56,067,867 common O/S at 12-3-18. (10Q: https://tinyurl.com/y8boxjys )
9 LARGEST SHAREHOLDERS:
1. Tappan Street (Prasad Phatak): 4,854,100 8.7% (+337,993 a/o 12-31-18 13G: http://tinyurl.com/yxrpla3b )
2. Eastern Capital (Kenneth Dart): 4,300,992 7.7% (a/o 12-7-17 14A: https://tinyurl.com/y7qprpg9 acq. 10-2015)
3. Blackrock Inc. (Larry Fink): 3,580,783 6.4% (+3,834 q/e 12-31-18 Nasdaq Inst.; also 13G http://tinyurl.com/y3pmv4ko )
4. IsZo Capital Mgt. (Brian Sheehy): 3,489,698 6.2% (NEW a/o 12-31-18 Nasdaq Inst.; also 13G: http://tinyurl.com/y432zmgw )
5. Ronin Trading (John Stafford III+Roger Farley): 2,638,450 4.7% (a/o 4-17-18 13D: https://tinyurl.com/ycf7d2uk )
6. Vanguard Group: 2,431,396 4.3% (+101,198 q/e 12-31-18 Nasdaq Inst.)
7. Snyder Capital: 2,092,473 3.7% (+195,595 a/o 12-31-18 Nasdaq Inst.)
8. Altravue Capital: 1,319,968 2.4% (NEW a/o 12-31-18 Nasdaq Inst.)
9. Driehaus Capital: 773,276 1.4% (-108,615 a/o 12-31-18 Nasdaq Inst.)
= = = = = = = = = = = =
Shares O/S as of 12-3-18=56,067,86 - history since 4-2006: https://tinyurl.com/y9n374kp
...A/O 10-31-18: 3,023,463 stock options outstanding at a wgt.avg. exercise price of $8.22. (pg.16 10Q)
12-3-18: Qtly. Conf. Call (Lias/Hart//Kinjerski) PR & Transcript https://tinyurl.com/y9n374kp
10-4-18: ASM/2018 (@Myford Facility) - Roger Lias’ Slideshow & Attendee Report https://tinyurl.com/yctfzhlb
They just added 9 2019 Events to website – none were there the other day:
http://ir.avidbio.com/events-and-presentations
Feb 13: SoCalBio Mini Conference - Working with the Best CROs, UCLA California NanoSystems Inst.
...William Leonardi(ProjMgr) pres., “The Difficult Decision - Identifying What's Important for CDMO Selection”
Mar11-14/Booth401: BioProcess Intl. US West (BPI West), Santa Clara
...Gene Yoshioka(SrDirMFG)/Panel, “Flexible & Smart Facilities"
...William Leonardi(ProjMgr) & Dave Briggs(SrMgrQUAL) pres., “Avid Case Study – Taking Your Molecule Through Process Validation"
Mar18-21: Drug, Chemical & Associated Tech. Assoc. (DCAT) Week, NYC
Apr2-4/Booth1159: Interphex Conf., NYC
...William Leonardi(ProjMgr) pres., “Avid Case Study – Taking Your Molecule Through Process Validation"
Jun3-6/Booth3149: BIO Intl. Convention, Philadelphia
Aug12-15/Booth322: The Bioprocessing Summit, Boston
Sep9-12/Booth903: Biotech Week Boston
Oct16/Booth__: Outsourced Pharma, San Diego
Dec9-13/Booth__: Antibody Engineering & Therapeutics, San Diego
VP Tracy Kinjerski said this in the 12-10-18 CC: “I’m excited about bringing you news of very positive developments in the coming 2 quarters and into FY2020.”
I don’t think she would throw a statement like that out there without good reason. A real boost to FY2020 (May’19-Apr’20) Guidance (v. $51-55M FY2019, y/e 4-30-19) is what we really need to start the ball rolling.
12-10-18/Q2 CC:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=145386179
12-10-18 Qtly CC-Transcript, PR(Q2FY19/qe10-31-18), Avid Revs History Table
*Revs Guidance (FY’19 fye 4-30-19): $51-55mm. 10-31-18 Backlog=$36M
*Cash: 10-31-18: $32.7mm
*As of Dec 3, 2018: 56,067,867 shares o/s.
*10Q/10-31-18 iss. 12-10-18: https://tinyurl.com/y8boxjys
*Avid Total Revs May03-Oct18: $318.3mm
*Avid’s website: https://avidbio.com
This large post has 4 sections:
I. 12-10-18 Qtly. Earnings Conf. Call TRANSCRIPT (FY19/Q2 q/e 10-31-18)
II. 12-10-18 CDMO Press Release: Q2/FY19 Earnings & Developments
IV. Updated Table of Avid Revenues By Quarter (May’06-Current)
III. Updated O/S Shares History Table – 2006-curr.
…Recall: Avid’s FY runs May-Apr, so FY’19 = May’18-Apr’19.
((( Orig. transcript from SeekingAlpha.com [https://tinyurl.com/y9de6ol4 ] with numerous corrections made. )))
Link to webcast replay: http://ir.avidbio.com/events-and-presentations => https://edge.media-server.com/m6/p/5gs2g7b5
TRANSCRIPT… 12-10-18 FY’19/Q2 Earnings Conf. Call (q/e 10-31-18) (Lias/Hart/Kinjerski)
WELCOME & FWD-LOOKING STATEMENTS: Tim Brons, Vida Strategic Partners (IR)
ROGER LIAS (CEO) – OPENING COMMENTS:
Thank you, Tim, and thanks to all of you who’ve dialed in, who are participating today via the webcast. Q2 was very important for Avid and a successful one, as we continued to execute the plan and build the foundation needed for significant future growth in an exciting and dynamic market space. While the period may have seemed quiet from the outside, I can assure you that it was quite the opposite. During the quarter, we made significant progress in positioning the company for strong growth and transition to profitability. We’ve continued process development, laboratory expansion and upgrades and executed the most comprehensive maintenance overhaul in the company’s history. While these vital improvements were being made, we continued to execute existing projects in both process development and manufacturing according to plan and have progressed and importantly, expanded current client programs. The focus of our process development team on timely execution of current revenue-generating customer projects limited our ability to onboard any significant new projects during the quarter, though the expansion and improvements being implemented in this area now allow us to advance numerous ongoing discussions with new customers, and Tracy will provide an update on progress in this area and her discussion of our business operations. In addition to customer discussions, we’re also exploring other potentially beneficial collaborations with highly qualified players in the biologics manufacturing arena. As these activities have been progressing, we’ve been diligently managing our cash in order to position Avid Bioservices to transition to cash generation and positive EBITDA. As mentioned during our Q1 call, the precise point at which we hit these important milestones is to some extent, dependent on issues that are out of our direct control, such as scientific and technical progress and the scheduling of existing client programs. Given the improving visibility that we have today, however, we’re very pleased with the steady progress we continue to make towards these goals. I’ll provide more details on all of these matters, including the maintenance overhaul and the enhancement of the process development capabilities following the review of financial results from Dan. So with that, I’ll turn it over to him to provide a financial overview.
DANIEL HART (CFO) – OPENING COMMENTS:
Thanks, Roger. Before I begin, I’d like to recommend that everyone participating refer to Avid’s 10-Q filing [ https://tinyurl.com/y8boxjys ] which we filed today for additional details. I’ll now discuss our financial results from continuing operations for Q2 ended Oct. 31, 2018, starting with revenue. As a reminder, Avid has provided revenue guidance for the full FY2019 of $51-55 million under the ASC 606 revenue recognition standard and today we are reaffirming this goal. We remain confident in our ability to meet this guidance despite a decline in revenues during Q2/FY2019, as compared to the prior year period. Specifically, Avid recognized revenue of $10.2 million, a decrease of 20%, as compared to $12.8 million in Q2 of the prior year. Our current period revenues were impacted by our planned sequential shutdown of both Franklin & Myford manufacturing facilities that occurred during the quarter in order to conduct broad scale and significant overhaul maintenance and upgrades. During this period, manufacturing was halted for several weeks creating idle capacity and a decline in revenues compared to the same prior year period. While these shutdowns obviously limited revenue- opportunity during the quarter, they are critical to maintaining regulatory compliance and the highest standards for manufacturing. All reputable biologic manufacturers, including CDMOs, conduct such maintenance programs on an annual basis. Roger will give more detail as to the specifics of the maintenance overhaul following my review.
For the 6 months ended Oct. 31, 2018, revenues were $22.8 million, a 43% decrease, as compared to revenues of $39.9 million during the prior year period. This decrease was primarily attributed to a few key factors, including the aforementioned shutdown and maintenance in Q2, the previously discussed reduction and requirement for materials by commercial clients, and the fact this year represents our transition year to a dedicated CDMO. On a positive note, each of these factors will immediately contribute to new growth and increase to future revenue. Supporting our revenue goal is our backlog, which as of Oct. 31, 2018 was $36 million, the majority of which we expect to recognize in FY2019. Gross margin for Q2 was a positive 3.3%, a significant increase compared to a negative gross margin of 27.1% in the prior year period. Idle capacity costs of $2.9 million during Q2/FY2019 negatively impacted gross margin by 29 percentage points. The increase in gross profit for the quarter was primarily attributed to product mix, resulting in an improved overhead efficiencies, combined with a decrease in idle capacity cost. Gross margin for the 6 mos. ended October 31, 2018 was 6.7%, a 16% decrease compared to the 8% in the prior year period. This decrease was primarily attributed to the variability of product cost, offset by a favorable reduction in idle capacity cost. It was gratifying to see our margins improve during Q2, and they would have been further improved had we not incurred additional idle capacity due to the maintenance overhaul. As we’ve stated previously, given the fixed costs associated with highly regulated biologics manufacturing under current good manufacturing practices, margins will continue to be impacted until capacity utilization is increased. To this end, we continue an aggressive effort to both expand our customer base and extend current client projects to increase our backlog and enhance capacity utilization.
Turning now to operating expenses. During the prior year quarter ended October 2017, we incurred charges of $1.6 million directly related to a restructuring plan we implemented in August of 2017. For more information on the restructuring, please refer to our annual report on Form 10-K for the year ended April 30, 2018. The remaining discussion of SG&A excludes the impact of these restructuring charges. Total SG&A expenses for Q2 of FY2019 were $2.8 million, a 22% decrease compared to the $3.6 million in Q2 of FY2018. The decrease in the quarter was driven primarily by a reduction in facility costs and professional fees, including legal and accounting. For the 6 mos. of FY2019, SG&A expenses were $6 million, a 19% decrease compared to $7.4 million in the first 6 mos. of FY2018. The decrease for the first 6 mos. of FY2019 was primarily due to a reduction in personnel-related costs, facility costs, and professional fees during the period. For Q2/2019, the company recorded consolidated net loss attributable to common stockholders of $2.9 million, or $.05 per share, compared to a consolidated net loss attributable to common stockholders of $14.1 million, or $.31 per share for the same prior year quarter. For the 6 mos. of FY2019, the company recorded a consolidated net loss attributable to common stockholders of $5.9 million, or $.11 per share, compared to a consolidated net loss attributable to common stockholders of $16.4 million, or $.36 per share for the 6 mos. of FY2018.
The improvements in both Q2/FY2019 and 6-month periods also included the sale of average remaining legacy R&D asset, r84, to Oncologie Inc., for $1 million upfront. r84 is a preclinical novel therapeutic antibody asset targeting VEG-F that has demonstrated anti-tumor activity in animal models. Under the terms of the asset purchase & assignment agreement, Avid is eligible to receive up to an addl. $21 million in the event that Oncologie achieves certain development, regulatory and commercialization milestones with respect to r84, as well as royalties on net sales that are in the low to mid single digits in the event that Oncologie commercializes and sells products utilizing r84. Cash & cash equivalents as of Oct. 31, 2018 were $32.7 million, compared to $42.3 million at the FY2018 ended April 30, 2018. This concludes my financial overview. I will now turn the call back over to Roger to address some key activities and achievements during Q2 of FY2019.
ROGER LIAS (CEO) – Q2/FY19 KEY ACTIVITIES:
As I stated at the beginning of the call, Q2 was a very busy and productive time for Avid. Though most of our advancements took place behind closed doors, we’ve made important foundational progress across all sectors of the business. So firstly, I’d like to address the planned sequential maintenance shutdowns of both the Franklin & Myford manufacturing facilities. In the past, the former subsidiary of Peregrine Pharmaceuticals, Avid has implemented primarily limited rolling overhauls that while allowing basic maintenance did not allow the implementation of certain critical upgrades and maintenance procedures necessary to mitigate risk and ensure efficient bioprocessing. Our last full shutdown was undertaken on the Franklin facility in 2013. Realizing that a scheduled annual shutdown is potentially a new concept to many of our stockholders, I thought it would be useful to provide some additional context regarding the importance of these efforts. While planned facility shutdowns to allow overhaul & maintenance are not specifically required by industry authorities, there are some activities the execution of which are essential to meeting regulatory requirements and reducing risk. These activities include, but are not limited to, the maintenance of equipment & facilities to continue to meet required commercial quality standards, periodic upgrades to and recalibration of equipment, and the installation of new systems and equipment essential to maintaining our ability to meet the needs of our customers. So annual planned shutdowns have become an industry standard and an essential part of maintaining compliance and ensuring the highest quality service and product for customers and, of course, the timely delivery of safe medicines to patients. One of the reasons that most biologics manufacturers then execute a full and complete planned overhaul of manufacturing facilities on a one-time annual basis is the complex nature of the effort. So the shutdowns require truly tremendous coordination between contractors, equipment vendors and company staff, with the goal of minimizing the impact to operations and maintaining customer project timelines. Because no manufacturing work can be conducted during the full overhaul, facilities become idle from a revenue-generating perspective during the shutdown period. The planned annual overhauls that we successfully executed during Q2 of this FY2018 were longer in duration than will typically be required going forward, and this is for a number of reasons. In the case of a Franklin facility, we undertook very significant maintenance and upgrade work necessitated by the age of the facility that had not been adequately addressed previously. In the case of the newer Myford facility, it was necessary to complete some work associated with the commissioning the facility and to add backup power to the laboratory areas, new monitoring systems and some redundancy. The Franklin facility, as a result, will shutdown for a total of 23 days and the Myford facility for 22 days during Q2. Future more routine annual shutdowns will likely span 7-14 days per facility, dependent on the exact nature of the work performed each year. It’s also important to note the facilities have to be first declassified prior to any such shutdown and they must then be reclassified prior to resuming cGMP operations. During the de- and reclassification periods, scheduling inefficiencies also, by definition, impacted. Given the loss of revenue opportunity occasioned by the declassification shutdown and reclassification of manufacturing facilities, I’m pleased with our financial performance during the quarter. I’m also very happy with the performance of our team in efficiently executing these complex activities. Both manufacturing facilities are back to full operational status. It’s important to note that our process development services were not impacted by the shutdowns and work in our labs continued during the period.
As detailed in our Q1 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. As detailed previously, our legacy process development facilities lacked investment & scale and were not of a standard necessary to compete effectively within the global biologic CDMO space. As a result, and as many of you are already aware, we’re currently investing in significant upgrades to our labs and related equipment that will allow us to best serve the needs of existing customers to win new business and to grow our manufacturing pipeline. As we expand and improve our facilities and capabilities in this area, we’ve taken great care to phase this work so as not to disrupt any ongoing projects. As we reported last quarter, our first refurbished laboratory, which is the purification development, has been completed and is now fully operational. Ongoing work includes the installation of a major new upstream development laboratory suite that supports development of cell culture processes, as well as other refurbishment work within our existing buildings. These new laboratories are being outfitted with state-of-the-art equipment that introduce considerable efficiencies. We will take occupancy of the new upstream suite in Q1 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. So today, our process development group is operating as a standalone profit center and contributing immediate and meaningful revenues. As we progress through the current FY2018, we add qualified process development scientists, analysts, and associates, will open new labs, commission new equipment, and continue phase laboratory improvements, we look forward to commencing work on additional new projects and the further extension of existing programs.
Before handing over to Tracy to discuss some really good progress being made in the business operations area, I’d like to reiterate the importance of our staff in achieving our goals. Demand for qualified biologics development, manufacturing and quality professionals is truly exceptionally high around the globe currently, and the job market in the biomanufacturing field is highly competitive. In common with our peers, hiring is slower than we would like, but I’m pleased to be able to report that we are identifying and hiring extremely well-qualified and capable candidates into open positions. Continuing to identify and retain qualified personnel is a vital component of our business and critical to growth. And as a result, we have commenced numerous initiatives in this area to ensure that Avid is visible to prospective qualified employees and viewed as an attractive employer, both in the broad biomanufacturing market and in our geographic location. So with that, I’m now happy to be able to turn over the call to Tracy to provide an update on our business operations activities. Tracy?
TRACY KINJERSKI (VP, BUSINESS OPERATIONS):
As Roger detailed in our previous earnings calls, our market segment, development and manufacturing services for biopharmaceuticals derived from from mammalian cell culture, remains extremely robust. We are seeing strong demand for our services and we anticipate an extremely busy 2nd-half of this FY. Of course, some of the strong demand that we’re seeing at Avid is being driven by our continued enhanced marketing efforts, as we bring new awareness of Avid and our capabilities to target audiences that have previously not been aware of us as a CDMO. The efforts of our newly hired business development leads in both the Eastern & Western halves of North America have been a part of the increased market penetration. The number of requests for proposals received doubled between Q1 one and Q2, and the number of proposals issued also doubled during the same period. Perhaps more importantly, the quality of the requests for proposals being received has also greatly improved, allowing us to be more selective and to target opportunities from potential clients that represent a good fit for our existing capabilities and installed capacity.
Our marketing efforts have included a stepped-up media campaign, resulting in significant increased column inches and media outlets targeted to our commercial audience. These included activities such as interviews, articles, and webcasts. We’ve also had strong showings at multiple important trade shows and industry conferences over the last few months, each of these building our visibility within the industry. As a result, the number of new business discussions in which our team is actively engaged continue to grow. I’m also pleased with the progress we’re making with longer lead customers looking to engage in new mfg. partners in the 2020 timeframe and beyond. These tend to be more established potential clients with significant forward-planning. The sales cycles for these opportunities is significant. Before making substantial contracted commitments, these potential clients will further evaluate Avid through additional activities, such as significant technical meetings and reviews, quality audits, financial audits, and environmental health and safety audits in order to place us on preferred vendor list and for us to be considered for future opportunities. These activities draw considerable resources from throughout our organization, but are vital. Though this process and related commercial conversations take more time than we’d like, our discussions are progressing as expected, and we anticipate securing contracts with several of these organizations. I’m pleased to be able to report that we’re currently engaged in negotiations on two substantial new projects, and we look forward to providing further details on these projects once the anticipated contractual agreements are finalized.
Equally as important as engaging new customers is the increasing strength of our relationships with our existing customers. During Q2, we gained increased visibility into forecast for several of our larger ongoing programs. Customer concerns related to confidentiality prevent us from sharing these specific projections based on this information at this time, but we believe demand from these customers will positively impact revenue, margins, and capacity in the coming quarters. Unsurprisingly, given the history of the relationship between our two companies and its importance, we are frequently asked about our business with Halozyme Therapeutics and the outlook for continued commercial manufacturer of enzyme products used in their enhanced platform by their partner companies such as Roche. Our relationship with Halozyme remains strong and we were able to review, both technical & commercial progress with our colleagues there at a recent business review meeting. Halozyme’s booked sales of recombinant human hyaluronidase enzymes and enhanced drug products have recently increased, and this trend is expected to continue into 2019, as Halozyme partners advance their clinical programs and begin preparing for commercialization.
In the short-term, Avid will continue to execute against our regularly updated forecast, and we look forward to increasing our support of Halozyme and their growing list of partners in the not too distant future. As has been detailed previously, ours is a sticky business and contracted commitments from clients extend and expand as their programs progress through clinical development. During Q2, we signed expansion orders for many of our current projects. These developments highlight the value of our existing customer relationships as a valuable source of revenue and growth, now and in the future. In addition to ongoing communication with you and existing clients, we are also entertaining numerous dialogues with vendors and other industry stakeholders as we evaluate possible technology collaborations and other relationships that will allow us over time to introduce additional efficiencies in both process development and manufacturing and, in some cases, provide the opportunity for additional new client capture. In summary, before I hand the call back to Roger for closing remarks, our market opportunity remains considerable, and as we become better-positioned to take advantage of this through the expansion of our process development capabilities and the numerous other initiatives designed to support strong future growth and profitability, I’m excited about bringing you news of very positive developments in the coming two quarters and into FY2020. Roger?
ROGER LIAS (CEO) – FOLLOWUP REMARKS:
In closing, I’d like to briefly revisit and highlight the important strides that we’ve made during Q2, many of which are crucial as we continue to build a very solid foundation for the future. The transition from underfunded excess capacity provider to a dedicated pure play biologic CDMO is, I believe, a more significant undertaking than understood by most based on our starting point. From the formal kickoff of Avid Bioservices less than 12 mos. Ago, concurrent with the JPMorgan Healthcare event in San Francisco, we remain consistent in our message, as we continue to transition this business. Our business development and project management functions that were lacking under the previous model and now delivering and the expansion of process development capabilities is now fully in progress, allowing us the ability to win and onboard new business and expand and diversify our client base. Both are key cornerstones of our business and they, along with other key initiatives, will deliver what we expect to be a strong and profitable business in FY2020. We’ve made significant investments in infrastructure that while limiting our revenue-generating potential during this past Q2, will allow us to provide high-quality and efficient services going forward, with minimized operational and regulatory risk to our customers. Separate from our maintenance activities, we also continue to invest in expanding and enhancing our process development laboratories and capabilities. Our business development team has made very significant progress during the quarter and average visibility continues to improve in the global marketplace. We’re generating high-quality opportunities and are in negotiations with new projects and advancing longer lead time discussions with potential commercial customers. Importantly, during Q2, we also signed expansion orders with many of our current customers. Our backlog remains robust and we have good visibility on opportunities well into the next FY. There remains more work to be done to complete our foundations for growth in our transition, but this comes along side a very considerable opportunity. So in closing, I’m pleased with the progress that we’ve made during Q2/FY2019, as we execute the plan and to continue to put the necessary building blocks in place to support a strong 2nd-half and FY2020 as a dedicated biologics contract development and manufacturing organization. So this concludes my prepared remarks for today, and we’ll now open the call up for questions. Operator?
Q&A: [beg. 25:58]
1. Joe Pantginis - H.C. Wainwright
JP: ”Just wanted to wrap my arms a little bit around the upcoming planned and expected maintenance in the facilities. So is this the time of the year that we should generally expect them? Are the ones that happened really the only full shutdowns we’ll see for a while or they’re more phased going forward, just wanted to get a sense of the forward-looking aspect?”
Roger Lias: So obviously, we’ve completed really a much more major shutdown and maintenance overhaul than we would expect on an annual basis. So it’s good to get that behind us a lot of necessary work that perhaps haven’t been taken care of in the past few years. Going forward, I think, what we’d anticipate is an annual planned shutdown. Again, probably at around this time of year, it doesn’t have to be coordinated, so it’s absolutely at the same time or month even going forward, but this is probably typically annual the is way we would do it. And as mentioned during the call, more typically, I think, the shutdown is likely to be between 1-2 weeks for routine annual shutdown now that a lot of the major work is being taken care of. Now, it can change a little bit year-to-year obviously, if we’re installing a lot of new equipment. For instance, it might take a little bit longer, it could take a little bit less if things are humming along well. So in summary then, I’m not sure if I’m answering your question correctly, but I think so, these will be annual, they will be planned, they will be between 1-2 weeks in duration and they will be around this time of year same Q2, although they don’t have to be.
JP: ”You highlighted on the call, all of you, your strong presence at trade shows and technical shows, so I know this question might touch upon maybe proprietary information, but with all of the advertisements and presence that you have, what else do you highlight, say, from a scientific or technical advancements standpoint that you guys have succeeded with that potentially give you a competitive edge in attracting new business?”
Roger Lias: Yes, and I’ll perhaps go first, but Tracy may want to add comments as well. I think, really we’re unusual, Joe, what is attractive to us, so with the short-term, we have capacity available, of course, and that’s something that will change as we fill. But that’s an interest in speed, whether it’s to clinical to market, so that helps us right now. Although, obviously, from the numbers point of view, we would rather have the capacity full. But having that capacity available to us and useful in the marketplace really, I think, our main differentiators are a combination of our long regulatory track record, being releasing products for the FDA, approved commercial products, for about 13, 14 years now, alongside being if you like small enough and agile enough and with these incredible flexible facilities that we have, the new Myford facility, to be able to bring customers on quickly and efficiently. This just saying you have 2000L bioreactors doesn’t differentiate that much, it’s what you do with them that really counts. Tracy, do you have any extra comments?
Tracy Kinjerski: Well, I would say that there’s one other thing to touch on and that is that Avid, as a CDMO. is unique, in that we also have experience as a product development company. So from a scientific and technical perspective, we have folks that are here at Avid still who have been involved for many years in product development, so when our clients come to us and they need help, they want to take their projects and their molecules through all the phases of clinical trials into market, we totally understand where they’re coming from and we really have empathy for their needs and the journey that they’re on, and I think that’s really very important point to consider.
2. Paul Knight - Janney
PK: ”Can you talk to the backlog. Backlog was down sequentially $60M went to $36M in this quarter. How much of that in your view was kind of planned from kind of the legacy business? And then lastly, I know Tracy had mentioned the level of customer activity. Could she kind of repeat where she was on that? Was it a doubling? Could she just give a little more color, again, I missed that part?”
Roger Lias: With respect to the backlog, I mean, I don’t call it plan, but certainly, we anticipated that we wouldn’t see much growth in any backlog during this quarter, partly because, say, we were limited in our ability to actually bring on new business because of the runway on the process development space. So that was certainly anticipated. On the plus side, during the quarter, of course, it gave us the opportunity then, as I say, we are in very active negotiation with a number of clients now that when we cut the ribbon on the new process development space in the New Year, we’re able to execute those programs going forward. So it’s been, if you like, an iterative process, we have to bring some on, execute some, bring some on, execute some. But that funnel, if you like, that pipeline is now opening with the process development capabilities are expanded. So I would say, it was anticipated and I think we could equally anticipate the backlog will now grow again going forward.
Daniel Hart: And, Paul, I think, you’re probably also asking to backlog based on prior guidance 605 revenue recognition criteria vs. 606. If you look at prior revenue recognition of 605, our backlog went from $60M to $58M, with the difference being revenue and the new contracts that we’ve signed up during the period.
Roger Lias: So it wasn’t much of a drop-off, so we might comparing apples to oranges, Paul. ...And then, Tracy, you had the question for Tracy about the sort of flow of business.
PN: ”Yes. Well, more specifically, the 2 customers that you believe could be large customers. Are they from your existing lineup, or is it 2 new names?”
Tracy Kinjerski: We are signing new projects with new clients. I think that’s the question you’re asking. We have a lot of businesses coming in from existing clients, but the 2 I mentioned are new manufacturing opportunities for us. So they are significant and important part of our, I guess, our portfolio going forward. And just to kind of reiterate, since our East & West Coast business development representatives have come online, they both have significant experience in the industry and have been instrumental in their role in helping us increase visibility in the market and doubling the number of high qualified high-quality RFPs that we’ve received and proposals that we’re issuing as a result.
PN: ”And then lastly, Roger, what’s the state of the monoclonal antibody production market globally? Is production supply tight, or enough is around? What is the status of the market right now for mAb production? Scripts seem to be up 20%, pipelines are big, where are we with production capacity globally in U.S.?”
Roger Lias: We’re following the market in terms of the strong demand for antibodies, so the strong demand for manufacturing put simply. If you look at recent data, growth on the mammalian biologics CDMO space as a whole, which isn’t all antibodies, but it’s certainly driven primarily by antibody and antibody derivatives, depends whose statistics you read 15%, 16% annual growth. My view is, it’s a project-specific question really. For a specific project, you may well find it hard to find capacity or find capacity in the timelines you’re looking for or there might be geographic problems. But, I think in general across the industry, my personal opinion is, we’re about in balanced right now. We have seen huge investments in capacity, but it’s largely in Asia at the moment. And frankly for Avid, we don’t lose too much sleepover that; we have a customer from Asia, but we’re not active in that marketplace. So, it’s a very nuanced question, Paul. I mean, I think overall, we’re roughly in balanced, but if I were a customer with a need to enter the clinic in August of next year or something, I better darn well be getting my capacity reserved now, because you’re going to find it tough sledding if you don’t.
3. Steve Schwartz - First Analysis
SS: ”If we could continue with Paul’s question on the backlog, if I look at it sequentially, the 39M, you went about $10M through revenue, you ended up at $36M. It looks like the $6.3 million of project expansion orders is essentially what you booked new to the backlog in the quarter. Am I reading that correctly?”
Roger Lias: That’s correct.
SS: ”And if you look at the production forecast in the industry that runs out 12-18 mos., what is it about being shutdown for 3 weeks that would hamper your ability to book new work?”
Roger Lias: No, the shutdown had no impact on our ability to book new work, Steve, just to execute, obviously, manufacturing revenue-generating projects and recognize that revenue. The slight bottleneck we’ve had over the past quarter has been in process development. In fact, it’s precisely that it’s – the lab work that we need to bring these projects into manufacturing and, of course, it’s revenue-generating work in its own right as well. But the shutdown didn’t have any impact on our ability to book new work, in fact, just the opposite. Our clients obviously like to see that we’re taking care of routine maintenance. We were able to install backup power and all sorts of things, which customers like to see. So that’s a positive going forward.
SS: ”Maybe I just misinterpreted your comment that you expected the backlog build in the quarter to be light because of so many of these production-related activities that you had going on. So, I guess, I would have expected the backlog in this circumstance to build exceptionally, given that you could not produce and given that, especially since you’re still expecting the same level of revenue for the year and then to work down a higher backlog from Q2 through the 2nd-half of the year? I’m just trying to reconcile kind of what my perspective is vs. what I’m seeing in the numbers here with respect to revenue in the backlog, that’s all?”
Roger Lias: Essentially, we were able to – we didn’t bring on any new projects, so we were able to expand the value of existing projects to roughly the same value of the revenue we recognized during the quarter, roughly speaking, that’s what I meant by remaining roughly balanced.
SS: ”It’s nice to hear Tracy talk about the 2 new customers that are coming on potentially that you’re working with. If you were to secure projects from those new customers, can you give us some sense of the magnitude of what that would be? I mean, are we talking like $10M, $15M, again, just to give us some perspective relative to the existing backlog?”
Roger Lias: I don’t think we can right now, Steve. We hope that we’ll be able to make announcements of those when they’re consummated, if you like, when the final ink is dry on those contracts.
SS: ”Yes. Okay, that’s it for me.”
Roger Lias: They’re substantial. They’re material to our business, I think.
SS: ”Certainly understand, but thought I would ask. My next question is just relative to production risk. When you do the shutdowns like you did, what’s the involvement of the FDA? I would imagine, they’re involved, of course. And does that at all kind of reduce the risk going forward for the next couple of years that you have any 483s, things like that, because you’ve done this work and they’re involved?”
Roger Lias: The FDA actually isn’t involved. It’s entirely an internal exercise. I guess one way we’re looking at it is to stop the FDA from getting involved in future, because you’re doing your maintenance, so to the 2nd part of the question, it does reduce the probabilities that you’ll run into any future problems that’s the reason for doing it, I guess. But the FDA is not directly involved in this at all. This is an internal exercise.
SS: ”So, figuratively speaking, you’ve put yourself in a much better position for future inspections?”
Roger Lias: Yes, absolutely. And for execution, we need to maintain our equipment and make sure that we’re delivering to our customers as well. So yes, very much so.
SS: ”For this upstream lab suite that you’re going to be starting up here in the next couple of months, is that the type of thing you can pre-sell, or is Tracy have to pretty much wait until the lights are on? You’ve got bodies in there and then you can go out and sell it, how does that work?”
Tracy Kinjerski: So, Steve, actually, we haven’t stopped selling during this period. So, it doesn’t impact whether or not we can bring projects forward. So it’s not a bad thing from a business development perspective at all. And actually, it does set us up to put us in a really nice position going forward, as we have additional projects coming our way, but it hasn’t hindered our ability to find.
SS: ”My last question, I think is for Dan. This is with respect to cash from operations. For the past 5 quarters, you’ve earned about $7M in cash from operations. And now we are looking at the 2nd-half of the year, where it looks like, production is definitely going to step up, revenue generation is going to step up. Can you give us any kind of guidance on what cash from operations might look like for 3rd & 4th quarters?”
Daniel Hart: What information that I’ll provided is the burn rate we’ve had for the last 2 quarters involved some of the legacy discontinued operations spend that was still on our balance sheet that we needed to clean up. Going forward, as a pure-play CDMO, we’re going to start to see those wind down. And as our top line increases, our margins will continue to increase as we fill the idle capacity with and utilize that within our facilities and we’ll start to see a lot more of that drop to the bottom line.
ROGER LIAS (CEO) – CLOSING COMMENTS:
In closing, thank you, everybody, for your time today and your continued interest in Avid Bioservices, and, as always, I’d certainly like to thank our Board of Directors, in particular, our employees, our investors and our many other stakeholders for continuing to support the company as we pursue our goals for growth and value creation. So with that we’ll conclude the call. Thank you, and have a great afternoon.
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12-10-18: Avid Bioservices Reports Financial Results for First Quarter FY2019 Ended Oct. 31, 2018 and Recent Developments
GlobalNewsWire: https://tinyurl.com/y9yp8b23
-- FY2019 Projected Revenue of $51-55 Million Reaffired
-- Signed Project Expansion Orders for $6.3 Million with Current Customers
-- Successfully Executed Scheduled Broad Scale Facilities Maintenance and Upgrade Program
TUSTIN, Dec. 10, 2018: Avid Bioservices, Inc. (NASDAQ:CDMO & 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 Q2 of fiscal year (FY) 2019 ended October 31, 2018, and provided an update on its contract manufacturing operations, and other corporate highlights.
HIGHLIGHTS SINCE JULY 31, 2018
“During Q2 we have made very significant progress in both the commercial arena and in our operations as we continue to execute to plan. Re-launching the company as a dedicated biologics contract development and manufacturing organization is a challenging endeavor and I am exceptionally pleased with our progress,” said Roger Lias, Ph.D., Avid’s President and CEO. “On the commercial front we continue to see strong demand and we are making substantial progress in advancing both new and existing projects and improving our profitability. We are engaged in negotiations on new programs that will contribute revenue both during the current fiscal year and through FY2020 and, perhaps more importantly, many of our current customer programs expanded during the quarter. In addition to securing nearer-term business, our recently installed and highly experienced business development team is advancing longer lead time discussions with established biopharmaceutical clients for future commercial opportunities. To support the on-boarding of new projects and to deliver robust, compliant and cost-effective processes to our expanding and diversifying customer base, we continue to strengthen our process development function via the expansion and enhancement of our laboratories and the addition of state-of-the-art equipment. Process development services will become an increasingly important contributor to revenue and will build a strong pipeline of future manufacturing opportunities. It’s pleasing to be able to report revenue of over $10 million and a backlog of $36 million during a quarter in which revenue generating potential was limited by planned sequential maintenance shutdowns of both of Avid’s cGMP manufacturing facilities. These shutdowns, during which we undertook important maintenance activities and upgraded systems represent the most comprehensive overhaul program in the company’s history and were crucial to maintaining compliance; serving our current clients and winning new business, as well as minimizing operational and regulatory risk. Collectively our significant operational and commercial progress, along with diligent management of our financial resources position Avid Bioservices well for transition to cash generation and positive EBITDA.”
RECENT DEVELOPMENTS
1. Signed project expansion orders with current clients representing future revenue in the amount of $6.3 million during Q2.
2. Increased marketing and media activities during the quarter to enhance industry visibility. Received double the number of Requests for Proposal in Q2 2019 as compared to Q1 2019 and increased the number of proposals issued by 100% during the same period.
3. Sold remaining legacy R&D asset, r84, to Oncologie, Inc., for $1.0 million upfront. r84 is a pre-clinical novel therapeutic antibody asset targeting VEG-F that has demonstrated anti-tumor activity in animal models. Under the terms of the purchase and assignment agreement, Avid is eligible to receive up to an additional $21.0 million in development, regulatory and commercialization milestones, as well as low to mid-single digit royalties on net sales upon commercialization of products utilizing r84.
4. Continued progress with ongoing expansion and optimization of our process development capabilities and laboratory space, including:
5. Expanding the total available process development laboratory space to more than 6,000 square feet;
6. Upgrading the infrastructure and equipment within the existing process development laboratories;
7. Implementing new state-of-the-art technologies and equipment designed to facilitate efficient, high-throughput development of upstream and downstream manufacturing processes.
8. Successfully executed the most comprehensive sequential maintenance overhaul in the company’s history, to best serve our existing customers and entice new business.
FINANCIAL HIGHLIGHTS AND GUIDANCE
1. The company is reaffirming revenue guidance for the full FY 2019 of $51-55 million.
2. The revenue backlog as of October 31, 2018 was $36 million, the majority of which we expect to recognize in FY 2019.
3. Contract manufacturing revenue from Avid's clinical and commercial biomanufacturing services was $10.2 million for the Q2/FY2019 compared to $12.8 million for the Q2/FY2018. The decline in the Q2/FY2019 was primarily due to decreased demand from our two lead customers as previously disclosed. In addition, our revenues were impacted by the scheduled facility maintenance and upgrade shutdown.
4. Gross margin for Q2 was a positive 3%, a significant improvement compared to a gross margin of negative 27% during the prior year period. The increase in gross margin for the quarter was primarily attributed to our product mix resulting in improved overhead efficiencies.
5. Selling, general and administrative expenses for the Q2/FY2019 were $2.8 million, compared to $3.6 million for the Q2/FY2018. The decrease in the Q2/FY2019 was primarily due to reductions in facility costs and legal, accounting and other professional fees.
6. For the Q2/FY2019, the company recorded consolidated net loss attributable to common stockholders of $2.9 million, or $0.05 per share, compared to a consolidated net loss attributable to common stockholders of $14.1 million, or $0.31 per share, for the Q2/FY2018.
7. Avid reported $32.7 million in cash and cash equivalents as of October 31, 2018, compared to $42.3 million on April 30, 2018.
More detailed financial information and analysis may be found in Avid’s Quarterly Report on Form 10-Q, which will be filed with the SEC today. [ https://tinyurl.com/y8boxjys ]
Conference Call
Avid will host a conference call and webcast this afternoon, December 10, 2018, at 4:30 PM EST (1:30 PM PST). 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. http://www.avidbio.com
Forward-Looking *snip*
AVID BIOSERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
(in thousands, except share and per share information)
Three Months Ended
October 31, 6 mos. Ended
October 31, 2018 2017 2018 2017
Contract manufacturing revenue $10,178 $ 12,782 $ 22,767 $ 39,859
Cost of contract manufacturing 9,844 16,242 21,241 36,690
Gross profit (loss) 334 (3,460 ) 1,526 3,169
Operating expenses:
Selling, general and administrative 2,816 3,596 6,031 7,449
Restructuring charges — 1,258 — 1,258
Total operating expenses 2,816 4,854 6,031 8,707
Operating loss (2,482 ) (8,314 ) (4,505 ) (5,538 )
Interest and other income, net 119 13 181 37
Loss from continuing operations before income taxes $ (2,363 ) $ (8,301 ) $ (4,324 ) $(5,501 )
Income tax benefit 173 — 173 —
Loss from continuing operations $ (2,190 ) $ (8,301 ) $ (4,151 ) $ (5,501
Income (loss) from discontinued operations, net of tax 739 (4,323 ) 739 (8,328 )
Net loss $ (1,451 ) $ (12,624 ) $ (3,412 ) $ (13,829 )
Comprehensive loss $ (1,451 ) $ (12,624 ) $ (3,412 ) $ (13,829 )
Series E preferred stock accumulated dividends (1,442 ) (1,442 ) (2,523 ) (2,523 )
Net loss attributable to common stockholders $(2,893) $ (14,066 ) $ (5,935 ) $ (16,352 )
Basic and diluted weighted average common shares outstanding 56,008,541 45,097,474 55,889,325 44,935,600
Basic and diluted net (loss) income per common share attributable to common stockholders:
Continuing operations $ (0.06 ) $ (0.21 ) $ (0.12 ) $ (0.18 )
Discontinued operations $ 0.01 $ (0.10 ) $ 0.01 $ (0.18 )
Net loss per share attributable to common stockholders $ (0.05 ) $ (0.31 ) $ (0.11 ) $(0.36 )
AVID BIOSERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share information)
October 31, 2018 April 30, 2018
Unaudited
ASSETS
Current assets:
Cash and cash equivalents $ 32,694 $ 42,265
Trade and other receivables 4,197 3,754
Contract assets 5,092 —
Inventories 9,736 16,129
Prepaid expenses 774 679
Assets of discontinued operations — 5,000
Total current assets 52,493 67,827
Property and equipment, net 26,279 26,479
Restricted cash 1,150 1,150
Other assets 302 304
Total assets $ 80,224 $ 95,760
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 3,223 $ 1,909
Accrued payroll and related costs 1,829 2,564
Contract liabilities 17,307 27,935
Other current liabilities 433 905
Liabilities of discontinued operations 416 4,550
Total current liabilities 23,208 37,863
Deferred rent, less current portion 2,126 2,159
Capital lease, less current portion 93 —
Commitments and contingencies
Stockholders’ equity:
Preferred stock—$0.001 par value; 5,000,000 shares authorized; 1,647,760 shares issued and outstanding at October 31, 2018 and April 30, 2018, respectively 2 2
Common stock—$0.001 par value; 150,000,000 shares authorized; 56,063,488 and 55,689,222 shares issued and outstanding at October 31, 2018 and April 30, 2018, respectively 56 55
Additional paid-in capital 614,541 614,810
Accumulated deficit (559,802) (559,129)
Total stockholders’ equity 54,797 55,738
Total liabilities and stockholders’ equity $ 80,224 $ 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
- - - - - - - -
From 10-Q header: “As of Dec 3, 2018, there were 56,067,867 shares outstanding.”
- - - - - - - - - - - - - - - - -
Latest 10K 4-30-18 iss. 7-16-18 https://tinyurl.com/ydc8vew5 PR: https://tinyurl.com/y93fux9h (Cash 4-30-18=$42.3mm)
Latest 10Q 10-31-18 iss. 12-10-18 https://tinyurl.com/y8boxjys PR: https://tinyurl.com/y9yp8b23 (Cash 10-31-18=$32.7mm)
ALL SEC filings for PPHM: http://tinyurl.com/6d4jw8
= = = = = = = = = = = = = = = = = = = = = = = = = = = =
Updated PPHM REVS-BY-QTR TABLE, now thru FY19'Q2(qe 10-31-18), per the 10-Q (https://tinyurl.com/ycfrgsjm ) issued 12-10-18.
• Total Avid Revs since May’03: $318.3mm
• 12-10-18: FY'19 (May'18-Apr'19) Avid revs guidance $51-55mm (committed B/L=$36M at 10-31-18).
• Inventories at 10-31-18 total $9.7mm, UP from $9.2mm at 7-31-18.
Avid’s website: http://www.avidbio.com
AVID GROSS PROFITABILITY BY QTR: DEFER CUST
QTR (1000’s) Rev$ COGS$ Prof$ GP% REV$ INVEN$ DEP.
FY13Q1 7-31-12 4,135 2,024 2,111 51% 6,056 5,744 10,224
FY13Q2 10-31-12 6,061 3,703 2,358 39% 6,221 5,426 8,500
FY13Q3 1-31-13 6,961 3,651 3,310 47% 5,061 4,635 6,729
FY13Q4 4-30-13 4,176 3,217 959 23% 4,171 4,339 8,059
FY14Q1 7-31-13 4,581 2,670 1,911 42% 4,164 5,679 8,528
FY14Q2 10-31-13 7,354 4,195 3,159 43% 3,468 4,033 7,658
FY14Q3 1-31-14 3,885 2,416 1,469 38% 4,329 5,224 8,646
FY14Q4 4-30-14 6,474 3,829 2,645 41% 5,241 5,530 5,760
FY15Q1 7-31-14 5,496 3,583 1,913 35% 4,670 5,998 6,226
FY15Q2 10-31-14 6,263 4,139 2,124 34% 3,612 5,379 7,549
FY15Q3 1-31-15 5,677 3,113 2,564 45% 5,752 6,148 8,311
FY15Q4 4-30-15 9,308 4,758 4,550 49% 6,630 7,354 11,363
FY16Q1 7-31-15 9,379 4,608 4,771 51% 8,291 10,457 9,599
FY16Q2 10-31-15 9,523 4,741 4,782 50% 9,688 12,554 14,935
FY16Q3 1-31-16 6,672 3,896 2,776 42% 15,418 15,189 22,433
FY16Q4 4-30-16 18,783 9,721 9,062 48% 15,418 15,189 24,212
FY17Q1 7-31-16 5,609 3,062 2,547 45% 21,531 25,274 21,731
FY17Q2 10-31-16 23,370 15,441 7,929 34% 17,980 25,924 26,928
FY17Q3 1-31-17 10,747 7,974 2,773 26% 26,367 33,829 26,210
FY17Q4 4-30-17 17,904 11,782 6,122 34% 28,500 33,099 17,017
FY18Q1 7-31-17 27,077 20,448 6,629 24% 13,433 24,235 14,322
FY18Q2 10-31-17 12,782 16,242 -3,460 -27% 7,473 16,518 13,138
FY18Q3 1-31-18 6,819 10,951 -4,132 -61% 6,633 14,218 17,602
FY18Q4 4-30-18 6,943 8,904 -1,961 -28% 10,922 16,129 17,013
FY19Q1 7-31-18 12,589 11,397 1,192 9% --,--- 9,168 --,---*
FY19Q2 10-31-18 10,178 9,844 334 3% --,--- 9,736 --,---*
*7-31-18 10Q: “prior-yr amts related to deferred revenue
& cust deposits have been reclass’d to contract liabilities.”
...q/e 4-30-18: contract-liabilities=27,935 <=reclassified
...a/o 7-31-18: contract-liabilities=17,994
...a/o 10-31-18: contract-liabilities=17,307
FY13 TOTAL: 21,333 12,595 8,738 41%*
FY14 TOTAL: 22,294 13,110 9,184 41%*
FY15 TOTAL: 26,744 15,393 11,151 42%*
FY16 TOTAL: 44,357 22,966 21,391 48%*
FY17 TOTAL: 57,630 38,259 19,371 34%*
FY18 TOTAL: 53,621 56,545 -2,924 -5%*
*Avid Net-Profit(Selling/G&A) not split out from PPHM-Corp. in the fin’s.
AVID TOTAL REV’s BY YEAR):
FY04 4-30-04 3,039 (Avid-Revs didn’t incl. Avid’s Gov’t work)
FY05 4-30-05 4,684
FY06 4-30-06 3,005
FY07 4-30-07 3,492
FY08 4-30-08 5,897
FY09 4-30-09 12,963
FY10 4-30-10 13,204
FY11 4-30-11 8,502
FY12 4-30-12 14,783
FY13 4-30-13 21,333
FY14 4-30-14 22,294
FY15 4-30-15 26,744
FY16 4-30-16 44,357
FY17 4-30-17 57,630
FY18 4-30-18 53,621
**TOTAL: 295,548 (5/1/2003–4/30/18)
.
QTLY. NET PROFIT/LOSS BY QTR:
(“attributable to common stockholders”; ie, incl. PREF Div’s**)
**2-11-14: PPHM Raises $16.2M, 700k Pref. Shares w/10.5% DIV.
FY16Q1 7-31-15 -15,101,000
FY16Q2 10-31-15 -14,578,000
FY16Q3 1-31-16 -18,227,000
FY16Q4 4-30-16 -13,264,000
FY17Q1 7-31-16 -12,437,000
FY17Q2 10-31-16 -4,498,000
FY17Q3 1-31-17 -9,216,000
FY17Q4 4-30-17 -6,714,000
FY18Q1 7-31-17 -2,647,000
FY18Q2 10-31-17 -14,066,000
FY18Q3 1-31-18 -12,446,000
FY18Q4 4-30-18 +1,578,000 <=includes $9,154,000 income from disc. operations.
FY19Q1 7-31-18 -3,403,000
FY19Q2 10-31-18 -2,893,000
Period Halozyme Coherus-BioSci. Other-Custs
FYE 4-30-14 91% 8%
FYE 4-30-15 79% 9%
FYE 4-30-16 69% 26% 5%
FYE 4-30-17 58% 26% 16%
FYE 4-30-18 55% 22% 23%
...(cust. Splits not given in 7-31-18+ 10Q’s)
10-4-18/2018 ASM: Roger Lias’ Slideshow & Attendee Report
...Audio/Slideshow: https://tinyurl.com/y8oc6hx8
...8-17-18 Proxy/14A: https://tinyurl.com/ya6xvmlh (192 FT employees)
ATTENDEE REPORT:
EB0783/10-4-18: https://investorshub.advfn.com/boards/read_msg.aspx?message_id=144002598
“Dr Lias' presentation is good but the second presentation given by Dr. Magnus Schroeder was extra good to me since he showed us (gave a sense of) how complicated their work is. When you listen/see his, keep realizing that EVERY thing they do for every customer is customized and highly, highly complicated. AS an indication, compare that Acetaminophen has 20 atoms in a simple small molecule that can be stamped out exactly the same every time. Whereas, a monoclonal antibody (mAB) has 20,000 atoms, built by cells and twisted by them into in a very complex physical structure.”
...F/U #328978: “Lias told us in a sidebar that they were in hiring mode. Take it for what you want. I know how I will.”
...F/U #328987: “...per Lias, they had to reduce and tightly control expenses early in 2018. That also allowed them to reorganize into the necessary structure to be a real CDMO. Now they have process development going on (immediate payoff) and product orders to deliver (a few months to a year payoff). Revenue & profits will come.”
...F/U #328991: “I would say there were not more than 7 shareholders. The BOD was much more loose unlike last year when they came in at the last minute and hurried out afterwards so they would/could not have to talk to anyone. This year 2 of them (Patrick Walsh & Richard Hancock) even approached us to be friendly with short conversations before the meeting. WE did enjoy the annual tour of the Myford facility after the meeting. It was the fourth one my wife and I have had (starting in Oct.2015). So with that snapshot each year, we get a sense of the progress/change as time goes on. ...The installed 2000L reactor was the only obvious improvement over the last tour. Talked about, but unseen, is the process development (PD) lab being completed in the Franklin legacy site since space there was freed up when they moved admin/exec offices to the Michelle Dr. building. The PD lab will translate into immediate revenues (per Lias) as opposed to the longer time-line for producing and delivering product after a signed contract/order.”
...F/U 329005: “After the meeting, Lias came over to Horselover45 and me for a sidebar. I asked about Halozyme. He said: We are still producing for Halozyme. Their main customer Roche ordered a stockpile a while back because they were planning that we were going to use a newer, state-of-the-art, process which would take a while to get all the FDA testing, paperwork, and approvals. We are cautiously optimistic that Roche has worked through that stockpile. Halozyme is supposed to be communicating the latest forecast in a week or so. We are the sole supplier of that product to Roche. That is because we were the only ones who passed all the strict requirements that they had (that is a remarkable achievement). Now, we know that Halozyme has a few more customers for this product and we are presently producing for one of them, Shire. Others may also use us. He did not elaborate on other customers but he restated that they want Halozyme's business to be more like 5% and not 95% of our total.”
= = = = = = = = = = = = = = =
9-10-18 Qtly CC-Transcript, PR(Q1FY19/qe7-31-18), Avid Revs History Table
*Revs Guidance (FY’19 fye 4-30-19): $51-55mm. 7-31-18 Backlog=$39M (If non-ASC606=$60M)
https://tinyurl.com/y8oc6hx8
Total INST.+LARGE Holdings now 28,166,076 50.3% (9-30-18)
16,710,527 29.8% INSTITUTIONS (a/o 9-30-18)
https://www.nasdaq.com/symbol/cdmo/institutional-holdings
+ 11,455,549 20.6% LARGE SHAREHOLDERS via Forms13/14 (Tappan, EasternCap/Dart, Ronin/Stafford)
------------
= 28,166,076 50.3%
Note: Ownership %’s based on 56,001,456 common O/S at 9-5-18. (10Q: https://tinyurl.com/ycfrgsjm )
7 LARGEST SHAREHOLDERS:
1. Tappan Street (Prasad Phatak): 4,516,107 8.1% (a/o 12-31-17 13G: https://tinyurl.com/yd7xkdzg )
2. Eastern Capital (Kenneth Dart): 4,300,992 7.7% (a/o 12-7-17 14A: https://tinyurl.com/y7qprpg9 acq. 10-2015)
3. Blackrock Inc. (Larry Fink): 3,576,949 6.4% (+315,661 q/e 9-30-18 Nasdaq Inst.)
4. Ronin Trading (John Stafford III+Roger Farley): 2,638,450 4.7% (a/o 4-17-18 13D: https://tinyurl.com/ycf7d2uk )
5. Vanguard Group: 2,330,198 4.2% (+120,673 q/e 9-30-18 Nasdaq Inst.)
6. Snyder Capital: 1,896,878 3.4% (NEW a/o 9-30-18 Nasdaq Inst.)
7. Driehaus Capital: 881,891 1.6% (NEW a/o 9-30-18 Nasdaq Inst.)
10-4-18/2018 ASM: Roger Lias’ Slideshow & Attendee Report
...Audio/Slideshow: https://tinyurl.com/y8oc6hx8
...8-17-18 Proxy/14A: https://tinyurl.com/ya6xvmlh (192 FT employees)
ATTENDEE REPORT:
EB0783/10-4-18: https://investorshub.advfn.com/boards/read_msg.aspx?message_id=144002598
“Dr Lias' presentation is good but the second presentation given by Dr. Magnus Schroeder was extra good to me since he showed us (gave a sense of) how complicated their work is. When you listen/see his, keep realizing that EVERY thing they do for every customer is customized and highly, highly complicated. AS an indication, compare that Acetaminophen has 20 atoms in a simple small molecule that can be stamped out exactly the same every time. Whereas, a monoclonal antibody (mAB) has 20,000 atoms, built by cells and twisted by them into in a very complex physical structure.”
...F/U #328978: “Lias told us in a sidebar that they were in hiring mode. Take it for what you want. I know how I will.”
...F/U #328987: “...per Lias, they had to reduce and tightly control expenses early in 2018. That also allowed them to reorganize into the necessary structure to be a real CDMO. Now they have process development going on (immediate payoff) and product orders to deliver (a few months to a year payoff). Revenue & profits will come.”
...F/U #328991: “I would say there were not more than 7 shareholders. The BOD was much more loose unlike last year when they came in at the last minute and hurried out afterwards so they would/could not have to talk to anyone. This year 2 of them (Patrick Walsh & Richard Hancock) even approached us to be friendly with short conversations before the meeting. WE did enjoy the annual tour of the Myford facility after the meeting. It was the fourth one my wife and I have had (starting in Oct.2015). So with that snapshot each year, we get a sense of the progress/change as time goes on. ...The installed 2000L reactor was the only obvious improvement over the last tour. Talked about, but unseen, is the process development (PD) lab being completed in the Franklin legacy site since space there was freed up when they moved admin/exec offices to the Michelle Dr. building. The PD lab will translate into immediate revenues (per Lias) as opposed to the longer time-line for producing and delivering product after a signed contract/order.”
...F/U 329005: “After the meeting, Lias came over to Horselover45 and me for a sidebar. I asked about Halozyme. He said: We are still producing for Halozyme. Their main customer Roche ordered a stockpile a while back because they were planning that we were going to use a newer, state-of-the-art, process which would take a while to get all the FDA testing, paperwork, and approvals. We are cautiously optimistic that Roche has worked through that stockpile. Halozyme is supposed to be communicating the latest forecast in a week or so. We are the sole supplier of that product to Roche. That is because we were the only ones who passed all the strict requirements that they had (that is a remarkable achievement). Now, we know that Halozyme has a few more customers for this product and we are presently producing for one of them, Shire. Others may also use us. He did not elaborate on other customers but he restated that they want Halozyme's business to be more like 5% and not 95% of our total.”
9-10-18 Qtly CC-Transcript, PR(Q1FY19/qe7-31-18), Avid Revs History Table
*Revs Guidance (FY’19 fye 4-30-19): $51-55mm. 7-31-18 Backlog=$39M (If non-ASC606=$60M)
*Cash: 7-31-18: $37.5mm
*As of Sept 5, 2018: 56,001,456 shares o/s.
*10Q/7-31-18 iss. 9-10-18: https://tinyurl.com/ycfrgsjm
*Avid Total Revs May03-Jul18: $308.1mm
*Avid’s website: https://avidbio.com
This large post has 4 sections:
I. 9-10-18 Qtly. Earnings Conf. Call TRANSCRIPT (FY19/Q1 q/e 7-31-18)
II. 9-10-18 CDMO Press Release: Q1/FY19 Earnings & Developments
IV. Updated Table of Avid Revenues By Quarter (May’06-Current)
III. Updated O/S Shares History Table – 2006-curr.
…Recall: Avid’s FY runs May-Apr, so FY’19 = May’18-Apr’19.
((( Orig. transcript from SeekingAlpha.com [https://tinyurl.com/yddyjejs ] with numerous corrections made. )))
Link to webcast replay: http://ir.avidbio.com/events-and-presentations => https://edge.media-server.com/m6/p/8bpi6kui
TRANSCRIPT… 9-10-18 FY’19/Q1 Earnings Conf. Call (q/e 7-31-18) (Lias/Hart)
WELCOME & FWD-LOOKING STATEMENTS: Tim Brons, Vida Strategic Partners (IR)
ROGER LIAS (CEO) – OPENING COMMENTS:
Thanks Tim, and thank you to all of you who've dialed in or are participating via webcast today. It's been only 2 months since we last reported results, but it's been a very busy and productive 8 weeks as we continue to execute to plan. FY2019 is a transition year for Avid as we align our organization & operations with our new business model and direction and implement improvements designed to drive growth and profitability to deliver exceptional customer service and to ultimately meet the needs of our client-patient populations. During the quarter, we advanced the projects of our existing active clients and continue to engage with numerous potential new customers. This increasing activity is driven by our aggressive business development efforts, our newly client focused project manage team and our enhanced capabilities in process development, all of which position Avid well for growth and the achievement of positive cash flows. I will provide more details on each of these topics and provide an update on the biologic CDMO market following a review of our Q1/FY2019 financial results by Avid Bioservices new CFO Dan Hart. Dan officially joined us on August 1, and I'm delighted to be able to report that he has settled in extremely quickly and is already contributing his expertise and experience to our business. I can say without fear of contradiction that Dan is a great asset to our team. So with that I'll turn it over to him to provide a financial overview.
DANIEL HART (CFO) – OPENING COMMENTS:
Thanks Roger. Hello everyone. I'd like to first say that I'm very happy to join the Avid team at this important time of the company's development. With the transformational period behind us and the transition ongoing during FY2019, it's exciting to be part of an organization with such promising growth potential. And I also look forward to building a strong relationship with the investment community that has been so supportive of the company to date.
I'll now discuss our financial results from continuing operations for Q1 ended July 31, 2018 starting with revenue. During the Q1/FY2019 Avid recognized revenue of $12.6M a decrease of 54% as compared to $27.1M in Q1/FY2018. Excluding the impact of adopting the new revenue standard ASC 606 which is revenues from contracts with customers, revenue decreased 89%. The decline as compared to the same prior year period is primarily attributed to a previously disclosed shipping delay which resulted in $9.9M of revenue recognized in Q1/FY2018 for mfg. runs completed but not shipped during Q4/FY2017. Another factor contributing to the decline and the decreased demand from our 2 lead customers, which we anticipated and have previously disclosed. Offset by the adoption of ASC 606 which accelerated revenue recognition for a portion of Avid's projects enabling revenue for certain products to be recognized over time rather than upon delivery to the customer. Despite the decline, our Q1/FY2019 revenues put us on track to meet our annual projected revenue.
As stated during our year-end call in July, Avid is projecting revenues between $51-55M for FY2019 under ASC606 and we maintain this guidance. As a reminder, we adopted this new standard on a modified retrospective basis. As result of our adoption of ASC606 $10.8M of revenue that may have been recognized during FY2019 under the previous revenue recognition standard ASC605 has been moved to retained earnings. Our backlog as of July 31, 2018 was $39M, the majority of which we expect to recognize in FY2019. Excluding the impact of adopting ASC606, backlog was $60M, an increase of 3.6% from our Q4 backlog of $58M. Gross margins for Q1 was 9%, a 15% decrease compared to the prior year period. Excluding the impact of adoption ASC606, gross margins were negative 73%. The decrease in gross margin was primarily attributed to the $9.9M recognized in Q1/FY2018 due to the shipping delay discussed previously. Also fewer mfg. runs during the period contributed to an increase in idle capacity during the qtr, combined with the variability mfg. costs from product to product. While we are pleased that projects were successfully on boarding during the qtr, we recognize the importance of building our backlog and our customer base as well as improving our margins by increasing capacity utilization. During Q1 we made important advances to support each of these objectives and Roger will provide more color on those achievements in his comments.
Turning now to operating expenses, total SG&A expenses for the Q1/FY2019 were $3.2M, a 17% decrease compared to the $3.9M for Q1/FY2018. The decrease in the qtr was driven primarily by the company’s previous efforts to align the cost structure to match the needs of our current CDMO operations by reducing costs and the streamlining of our operations. For the Q1/FY2019, the company recorded consolidated net loss attributable to common stockholders of $3.4M, or $.06 per share, compared to a consolidated net loss attributable to common stockholders of $2.6M, or $.06 per share, for the same prior period quarter. Excluding the impact of adopting ASC606, diluted EPS from continuing operations was a net loss of $.11 per share. Cash & cash equivalents as of July 31, 2018 was $37.5M compared to the $42.3M at FY2018 ended April 30, 2018. Not reflected in our qtr-end cash balances receipt of the 3rd and final upfront payment on Sept. 6th from Oncologie of $2M for the assignment of the company's legacy R&D assets. This concludes my financial overview. I will now turn the call back over to Roger to address Avid Bioservices' key activities & achievements during the Q1/FY2019.
ROGER LIAS (CEO) – Q1/FY19 RECAP:
As I stated in our opening comments, FY2019 is a transition year for Avid Bioservices as we position the company for strong growth and success within the attractive global bio manufacturing marketplace. We continue to make changes and improvements across the organization. Today I will address the current CDMO market and provide an update on Avid's business development activities and enhancements to our process development service offering. So I'll start with a brief update on the biologic CDMO landscape.
Recent market research conducted by BioPlan Associates which was published in April shows that the demand for biologics production remains robust. BioPlan's findings show that the global biopharmaceutical market is currently valued at over $250B a year with a market for products that we manufacture at Avid being major contributors to that number. Recombinant proteins now contribute about $150B a year and the market for recombinant monoclonal antibodies is now greater than $80B. This market continues to grow at a compound annual growth rate of 12-15% and drives growth and demand for the services offered by Avid Bioservices. Future growth is expected to be fueled by increasing R&D spend on biopharmaceuticals and the more than 950 identified biosimilar products currently in development. Given the demand the availability of approx. capacity on a product by product basis remains a significant hurdle across every stage of bio processing from early stage clinical work to commercial manufacturing. When considering the worldwide pharmaceutical manufacturing capacity is now estimated at over 16M liters across all mfg. platforms, Avid needs only to capture a very small fraction of this demand to be at full utilization. Avid is focused on development & manufacture products derived from mammalian cell culture and as mentioned this manufacturing platform continues to dominate the biopharmaceutical manufacturing market, driven by highly complex recombinant proteins and monoclonal antibodies and their derivative products. When looking specifically at production of products derived from the manufacturing platforms and technologies that we offer at Avid, the figures become increasingly interesting. According to the findings, 54% of biopharmaceutical drug developers are currently outsourcing up to 50% of their production or 16% are outsourcing over 50% of their production. On this topic BioPlan Associates concluded that there is a continuing trend toward greater outsourcing of mammalian cell culture with 72% of users projecting at least some outsourcing by 2023. Researchers also noted that they believe that continued robust demand will extend to ancillary services also offered by Avid including analytical development, cell line development, stability studies and so on. Market report from Future Market Insights published just last Thursday, estimated that the global biopharmaceutical contract mfg.g market was valued at $5.6B at the end of 2017 and is expected to increase to $15.5B by the end of 2027 registering a compound annual growth rate of 10.6% over the forecast period. Within these numbers, mammalian cell culture is the largest segment by platform and estimated to represent a 68.6% share of the total market in 2017 and is projected to reach 81% share by the end of 2027 expanding at a compound annual growth rate of 12.5%. The U.S.A. is anticipated to remain the dominant market space although Asia-Pacific market excluding Japan is growing at a slightly higher rate. Given this growing demand and the current limited capacity for predominant themes in the industry revolve around productivity and cost reduction, continued adoption of single use technologies where incidentally Avid can be considered a market leader having been releasing GMP batches from single-use bio reactors for more than a decade and continuous bio processing. Avid has an expertise in single-use technologies and is actively developing relationships with key vendors and industry experts positioning the company as an innovator and leader within the biologic CDMO space.
With this backdrop, I'd now like to address our expanding business development activities and achievements. During Q1, our highly experienced new Eastern & Western U.S. business development leads became fully operational and we are currently receiving high quality requests for proposal from both territories. This represents the first time in Avid Bioservices' history that the company has had full CDMO targeted business development reach across North America. Despite the fact that there is a traditional summer lull in the biologic CDMO space, we are processing requests for proposals on a rate that we've never encountered before at Avid and our team is working diligently to issue high quality proposals and to meet deadlines. In an effort this RFP price line rapid pipeline and continue to expand our customer base and diversify our project mix, our team is executing a broad reaching targeted marketing and promotion campaign. With the trade show season now upon us we have recently exhibited at the Bioprocessing Summit 2018 and the 2018 Bioprocessing Intl. Conference and Exhibition, both in Boston. We also plan to exhibit or have other commercial presence at numerous industry events during the fall. These events generate visibility with customers and other stakeholders as we grow the Avid Bioservices brand and increase awareness among emerging and growing biotechnology companies and multinational pharmaceutical companies alike. We consider these conferences and trade events to be key opportunities to reach new clients and to generate future demand.
Of at least equal importance to on-boarding new projects is growth generated from our existing clients. I am very pleased to announce that each project governed by the Master Service Agreements executed by Avid in Calendar 2018 is now generating revenue. Almost all of our existing relationships have expanded since initial engagement either by progress against the originally scoped work program or by project expansion and extension. Such growth represents an important contributor to our revenue stream and we look forward to supporting the continued success of our client programs and accommodating increased demand as these programs progress through clinical development and inter global markets.
Another area of critical importance for us is enhancement of our process development service capabilities and work in this area has continued during Q1/FY2019. As we've discussed on prior calls, we believe process development to be a vital component of our success. Process development, or PDE, is typically broken down into 3 core functions; saline and cell culture development or upstream development where we persuade cells to express the desired protein and to grow efficiently, purification development or downstream development where we isolate the target protein from a vast soup of other proteins, cell debris, growth medium components and so on. And finally analytical development, where we develop the analytical methods needed to characterize the manufactured biopharmaceutical and to demonstrate that it is of sufficient quality and purity. Our process development scientists are also critically important for transferring process and methods that have been developed outside of Avid into our facilities. These functions which typically contribute around 1/3 of revenue for biologic CDMOs are vital for on-boarding new programs and securing a pipeline of mfg. opportunities. Prior to establishing Avid Bioservices within the dedicated CDMO, I think it is fair to say that the company's process development function was underserved and we are now investing in the enhancement of these capabilities in order to continue to support our existing clients and to attract new customers. Today, our process development group is contributing immediate and meaningful revenues and for the first time operating as a standalone unit. Process development will support both revenue growth and profitability during the FY2019 and beyond.
We've made progress in recent months with the previously announced laboratory expansion and improvement project. We've taken great care to phase this work so as not to disrupt any ongoing processing and planning is further evolved to reflect business needs. As part of this expansion, our first refurbished laboratory which is for purification development has been completed and is now fully operational. In addition, we've commenced work on a major new upstream development laboratory and are continuing refurbishment work within our existing buildings. These new and/or updated laboratories are being outfitted with state-of-the-art equipment to facilitate the development of robust, scalable, and cost-effective manufacturing processes and we are working closely with our vendors and collaborators to pioneer and optimize innovative processing approaches.
I would now like to touch briefly on the importance of the efforts of our human resources team as they continue to support our organizational realignment and positioning for growth. The fast growing and extremely complex biopharmaceutical manufacturing field is highly reliant on qualified and trained workforce and critical shortages are emerging in some areas. 28% of respondents in the recent BioPlan Associates' industry survey identified the inability to hire new experienced technical and production staff as a factor likely to create biopharmaceutical production capacity constraints by 2023 and it is known that companies in some bio manufacturing hubs are already being impacted by staff shortages. As we complete transition to our CDMO model and contemplate significant growth it is critically important that we maintain access to a qualified workforce and continue to focus on hiring, training, and retention.
In summary then, during the Q1/FY2019 Avid continued to successfully execute the plan we outlined during our year-end earnings call in July. As a result, we are reaffirming our revenue guidance for FY2019 of $51-55M. Our confidence in achieving this target is driven by the expected recognition of a significant portion of our confirmed backlog of $39M during the remainder of FY2019, combined with the anticipated extension and expansion of projects underway with existing clients and additional revenue expected from the numerous new client proposals that are currently in progress. To support this effort we have built an exceptional business development team with a cumulative 60+ years of successful and direct industry experience. We are aggressively pursuing new opportunities and successfully building awareness for the business within the industry. We have high visibility on customer orders for the balance of the FY and are actively and successfully on-boarding recently awarded projects. We are significantly enhancing our process development capabilities that best serve the growing demands of our customers. The Master Service Agreements that we've executed in calendar 2018 are all now contributing to revenue and our process development service is generating meaningful revenue also. While there is some business to secure to achieve our top line guidance, hitting our revenue targets for FY2019 will largely be about operational execution. Much work remains to be done during this transition year, but the advances made during Q1 puts us on track to achieve each of our primary goals. To grow & stabilize revenues through an expanded customer base, to improve margins, to increase capacity utilization and to position the company to achieve positive cash flow. With that in place, and the vital important business operations and process development CDMO functions now established and properly functioning for the first time in the company's history, we are on-boarding new revenue generating programs and expanding and extending existing projects. Focus will now shift towards operations during remainder of FY2019 as we work towards efficient conversion of backlog into revenue.
Q&A: [beg. 20:14]
1. Joe Pantginis - H.C. Wainwright
JP: ”Is there a potential why your backlog number could be could be potentially conservative and with that in mind, can you discuss maybe some general numbers as to the level of RFPs and proposals that you look at say a weekly or monthly basis?”
Roger Lias: I think it's fair to day that our backlog is a conservative number. This is business that is basically irrevocably contractually committed at this point. We have as we've discussed actually on some previous calls what I would describe as a trailing backlog which is work which is very highly likely to come in and this is continuing work on existing projects, but until that work is actually contractually committed we don’t add it to the backlog. So in addition to what I consider the hard backlog, we do have a very good window and runway of visibility to future opportunities from existing projects and we continue to execute those sort of in real time as we're going along and as the projects expand. So the projects expand both we get contractual commitments to current projects and then we also see growth within scopes almost inevitably, or I would say at least 9 times out of 10, once we sign a scope of work initially it grows over time as we realize the technical nuances of the project and additional work we need to be doing. And then of course it's very sticky business, so should a client meet perhaps one of its clinical milestones if they’re successful there is very, very low chance that they will go anywhere else for the next phase of work, so we tend to extend those projects as well. So I would say that backlog in general is conservative. With respect to proposals, we don't give out too much information. I think we can say a couple of weeks ago I think we were not struggling but working to get out 7 proposals in parallel to give you an idea of the magnitude of the work involved, we really are starting to generate a lot of RFP’s now. But it's not sheer numbers, it's really more important to me is the quality of those requests for proposals. Obviously we like to work with more established companies, we like realistic goals for the projects, but we have a very broad mix of opportunities right now.
JP: ”I appreciate the added details with regard to Q1 on gross margins. As the company matures, what is your ultimate goal with regard to gross margins? Obviously there's a lot of variability in it. And then the second part of that is with near term to moderate term impacts on gross margins based on your expansion needs and plans?”
Daniel Hart: Currently we have a growing product mix is what I'll say, and as we grow through our existing customers and move on to new customers with some follow-on work in signing some of these proposals, our gross margins will increase over time. But right now we have a little bit of a fluctuating gross margin based on the product mix and filling up the pipeline. So I think if you look at kind of our trajectories, as we start to fill that idle capacity, our margins will continue to improve over the rest of the year.
Roger Lias: If you look at some industry comparatives out there and unfortunately they are few and far between because obviously a lot of private companies out there, certainly we've seen in situations where mfg. facilities are extremely full or are full basically we've seen certainly gross margins in excess of 40%. But I must stress that that is, it’s really an occupancy business. So we have some ways to go before we get to those levels of facility occupancy right now.
2. Steve Schwartz - First Analysis
SS: ”With respect to the development revenue, is there a way to parse that out? I know you just list revenue as contract mfg., but Roger the way you described kind of the 3 categories of development work, there is revenue and there is project work that doesn’t necessarily hit your production floor per se right?”
Roger Lias: Yes, it's a complicated question to answer, because everything we do is custom. So we do everything from - we can bring in DNA sequence on a piece of paper and start with cell line development, or we can bring in partially developed processes or we can transfer in essentially fully-developed processes; even in that case we do some typically do some process development work to amend analytical techniques or on equipment and things like this. So I can understand that it's a difficult one to get a head around, so similarly on the same stage well not all process developments are created equally from the point of view of revenue, timing also comes into it. We only take on projects at the moment which are means to an end. Every project we bring in process development, the end goal is to be in mfg. of some sort. Now there's plenty of standalone process development as well out there, but right now based on available resources, we don't consider those projects. So you could have a process development project take 6 months before it starts to generate mfg. Revenue; you could have a process development project that takes 24 months before we start to generate meaningful mfg. revenue. So it's a difficult question to answer because it quite simply isn't the one size fits all and I realize that is probably not helping you much, but this is the fact of the matter.
SS: ”Ok, well you understand the nature of the question and certainly it's on my mind and I'm sure it's on others. So if you could just keep that in mind as you talk about the business.”
Roger Lias: Yes, certainly. We're trying very hard with this is new to certainly our company if you like to be dedicated in reporting standalone contract development and manufacturing results, so we're working on hard on how we can make things more granular going forward, it's a very inexact science. As soon as you put out an example of one project and apply it to a model, immediately that model is in essence incorrect because of the inherent variability in all these projects. But we are working very hard to make things as granular and transparent as we can going forward.
SS: ”Yes, now along those lines of just your revenue development with the new process development labs coming online, was there a backlog if you will of projects waiting for that facility, so in other words is there going to be like a secular step up if you will in revenue with that or are you going to have to build revenue into the newly available operations?”
Roger Lias: To answer another way, at the moment as soon as we have more space equipment people available they are revenue generating and busy. So we are - I won’t say we are struggling to keep up by any means, but it’s a balance at the moment between new business coming in and available resources to execute those projects.
SS: ”My last question and perhaps this one is for Dan, is on the ASC606. I think you mentioned in your prepared remarks that it basically was a benefit to revenue in Q1. And if that's the case, if we try to understand the flow of revenue does that essentially mean that on a % of completion basis, you took more revenue from Q2/FY2019 than you would have gained from 4Q 2018 under % of completion? How did you run that calculation on Q1 and how can we read that information with respect to revenue through the year?”
Daniel Hart: I can understand the complexity of moving from a point in time to an overtime type model from 605 to 606 essentially the revenues for 606 contributed to increasing revenues in Q1 because it's not based on the delivery of the product where the delivery of the product will happen during Q2 or Q3 sometime during FY2019, we set forth effort during Q1 which we can recognize revenue on a % of completion.
SS: ”Yes. And so it was a net benefit…”
Daniel Hart: Correct.
SS: ”And when you do the numbers behind that statement, a net benefit, you're also factoring in revenue booked on order shipment vs. % of completion for Q4/FY2018 too, right?”
Daniel Hart: Anything that was delivered in Q4 of 2018 and/or work done during Q4 of 2018 is essentially either was recorded in 2018 or was booked to the beginning balance retained earnings which was included in that $10.8M of revenue shifted back. So we started at a clean line in the sand on May 5th going forward.
ROGER LIAS (CEO) – CLOSING COMMENTS:
Thank you for your time today everybody and your interest in Avid Bioservices. I wish in closing to thank our board, our employees, and our investors for your continued support of the company as we pursue our goals for growth and value creation. We look forward to the next quarter call and with that we’ll conclude this one. Thank you and have a great afternoon.
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9-10-18: Avid Bioservices Reports Financial Results for First Quarter FY2019 Ended July 31, 2018 and Recent Developments
GlobalNewsWire: https://tinyurl.com/y9bok66v
-- FY2019 Projected Revenue of $51 to $55 Million Reaffired
-- Multiple Projects Advanced During the Quarter
-- Initiated Operations of New Process Development Laboratories
TUSTIN, Sept. 10, 2018 (GLOBE NEWSWIRE): Avid Bioservices, Inc. (NASDAQ:CDMO/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 first quarter of fiscal year (FY) 2019 ended July 31, 2018, and provided an update on its contract manufacturing operations, and other corporate highlights.
Highlights Since April 30, 2018
“During the first quarter of FY 2019, Avid continued to successfully execute the plan we outlined during our year-end earnings call in July. As a result, we are reaffirming our revenue guidance for FY 2019 of $51 to $55 million. Our confidence in achieving this target is driven by the expected recognition of a significant portion of our confirmed backlog of $39 million during the remainder of FY 2019, and high visibility on customer orders for the balance of the year. This includes the anticipated expansion of multiple projects underway with existing clients and additional revenue from numerous issued new client proposals. To support this effort, we have built an exceptional business development team with a cumulative 60+ years of CDMO industry experience. We are aggressively pursuing new customers and building visibility for the business within the industry. We are actively and successfully on-boarding recently awarded projects and significantly enhancing our process development capabilities to best service the growing demands of our customers. The Master Service Agreements that we’ve executed in calendar 2018 are all now contributing to process development revenue. We believe the advances made during the first quarter through our business development efforts and process development enhancements have placed us on track to achieve each of our primary goals: to grow and stabilize revenues through an expanded customer base; to improve margins through increased capacity utilization; and to position the company to achieve positive cash flow,” said Roger Lias, Ph.D., Avid’s President and CEO.
RECENT CDMO DEVELOPMENTS
* Initiated operations in the first of our new process development laboratories during the quarter.
* Continued progress with ongoing expansion and optimization of our process development capabilities and laboratory space, including:
1. Expanding the total available process development laboratory space to more than 6,000 square feet;
2. Upgrading the infrastructure and equipment within the existing process development laboratories;
3. Implementing new state-of-the-art technologies and equipment designed to facilitate efficient, high-throughput development of upstream and downstream manufacturing processes.
* Signed project extensions with existing clients in the amount of $4.1 million during the quarter. This $4.1 million is included in our current backlog.
RECENT CORPORATE DEVELOPMENTS
Received final payment of $2.0 million in September 2018 for a total of $8.0 million in upfront payments associated with the Asset Assignment and Purchase Agreement signed with Oncologie, Inc. in February 2018 for Avid's legacy phosphatidylserine (PS)-targeting program including bavituximab.
FINANCIAL HIGHLIGHTS AND GUIDANCE
The company is reaffirming revenue guidance for the full FY 2019 of $51-$55 million (ASC 606).
The current revenue backlog as of July 31, 2018 was $39 million, the majority of which we expect to recognize in FY 2019. Excluding the impact of adopting ASC 606, backlog was $60 million, an increase of 3.6% as compared to $58 million at the end of the fourth quarter of FY 2018.
Contract manufacturing revenue was $12.6 million for the first quarter of FY 2019 compared to $27.1 million for the first quarter of FY 2018. The decline as compared to the same prior year period is primarily attributed to a previously disclosed shipping delay which resulted in $9.9 million in revenue recognized in the first quarter of FY 2018 for manufacturing runs completed, but not shipped, from the fourth quarter of FY 2017. Another factor contributing to the decline is the decreased demand from our two lead customers as previously disclosed, offset by the adoption of ASC 606, which accelerated revenue recognition for a portion of Avid’s projects.
Gross margin for the first quarter of FY 2019 was 9%, a 15% decrease compared to the same prior year period. The decrease in gross margin was primarily attributed to the shipping delay discussed previously, fewer manufacturing runs during the period that contributed to an increase in idle capacity during the quarter, combined with the variability of manufacturing costs from product to product.
Selling, general and administrative expenses for the first quarter of FY 2019 were $3.2 million, a 17% decrease compared to $3.9 million for the first quarter of FY 2018. The decrease in the quarter was driven primarily by the company’s previous efforts to align the cost structure to match the needs of Avid’s current CDMO operations by reducing expenses and streamlining Avid’s operations.
For the first quarter of FY 2019, the company recorded consolidated net loss attributable to common stockholders of $3.4 million, or $0.06 per share, compared to a consolidated net loss attributable to common stockholders of $2.6 million, or $0.06 per share, for the same prior year quarter.
Avid reported $37.5 million in cash and cash equivalents as of July 31, 2018, compared to $42.3 million on April 30, 2018.
More detailed financial information and analysis may be found in Avid’s Quarterly Report on Form 10-Q, which will be filed with the SEC today. [ https://tinyurl.com/ycfrgsjm ]
CONFERENCE CALL
Avid will host a conference call and webcast this afternoon, September 10, 2018, 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. http://www.avidbio.com
Forward-Looking Statements *SNIP*
AVID BIOSERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
(in thousands, except share and per share information)
Three Months Ended
July 31, 2018 2017
Contract manufacturing revenue $ 12,589 $ 27,077
Cost of contract manufacturing 11,397 20,448
Gross profit 1,192 6,629
Operating expenses:
Selling, general and administrative expenses 3,215 3,853
Operating (loss) income (2,023 ) 2,776
Other income (expense):
Interest and other income 73 27
Interest and other expense (11 ) (3 )
(Loss) income from continuing operations $ (1,961 ) $ 2,800
Loss from discontinued operations — (4,005 )
Net loss $ (1,961 ) $ (1,205 )
Comprehensive loss $ (1,961 ) $ (1,205 )
Series E preferred stock accumulated dividends (1,442 ) (1,442 )
Net loss attributable to common stockholders $ (3,403 ) $ (2,647 )
Weighted average common shares outstanding:
Basic 55,770,108 44,773,727
Diluted 55,770,108 44,877,985
Net (loss) income per common share attributable to common stockholders, basic:
Continuing operations $ (0.06 ) $ 0.03
Discontinued operations $ — $ (0.09 )
Total $ (0.06 ) $ (0.06 )
Net (loss) income per common share attributable to common stockholders, diluted:
Continuing operations $ (0.06 ) $ 0.03
Discontinued operations $ — $ (0.09 )
Total $ (0.06 ) $ (0.06 )
ASSETS
Current assets:
Cash and cash equivalents $ 37,484 $ 42,265
Trade and other receivables 2,951 3,754
Contract assets 4,775 —
Inventories 9,168 16,129
Prepaid expenses 528 679
Assets of discontinued operations 2,014 5,000
Total current assets 56,920 67,827
Property and equipment, net 26,336 26,479
Restricted cash 1,150 1,150
Other assets 302 304
Total assets $ 84,708 $ 95,760
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 3,122 $ 1,909
Accrued payroll and related costs 2,030 2,564
Contract liabilities 17,994 27,935
Other current liabilities 609 905
Liabilities of discontinued operations 1,969 4,550
Total current liabilities 25,724 37,863
Deferred rent, less current portion 2,145 2,159
Capital lease, less current portion 93 —
Commitments and contingencies
Stockholders’ equity:
Preferred stock—$0.001 par value; authorized 5,000,000 shares; 1,647,760
shares issued and outstanding at July 31, 2018 and April 30, 2018,
respectively
Common stock—$0.001 par value; authorized 500,000,000 shares;
55,990,274 and 55,689,222 shares issued and outstanding at July 31, 2018
and April 30, 2018, respectively 55 55
Additional paid-in capital 615,040 614,810
Accumulated deficit (558,351 ) (559,129 )
Total stockholders’ equity 56,746 55,738
Total liabilities and stockholders’ equity $ 84,708 $ 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
- - - - - - - -
From 10-Q header: “As of Sept 5, 2018, there were 56,001,456 shares outstanding.”
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Latest 10K 4-30-18 iss. 7-16-18 https://tinyurl.com/ydc8vew5 PR: https://tinyurl.com/y93fux9h (Cash 4-30-18=$42.3mm)
Latest 10Q 7-31-18 iss. 9-10-18 https://tinyurl.com/ycfrgsjm PR: https://tinyurl.com/y9bok66v (Cash 7-31-18=$37.5mm)
ALL SEC filings for PPHM: http://tinyurl.com/6d4jw8
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Updated PPHM REVS-BY-QTR TABLE, now thru FY19'Q4(qe 7-31-18), per the 10-Q (https://tinyurl.com/ycfrgsjm ) issued 9-10-18.
• Total Avid Revs since May’03: $308.1mm
• 7-16-18: FY'19 (May'18-Apr'19) Avid revs guidance $51-55mm (committed B/L=$39M at 7-31-18).
• Inventories at 4-30-18 total $9.2mm, down from $16.1mm at 4-30-18.
Avid’s website: http://www.avidbio.com
AVID GROSS PROFITABILITY BY QTR: DEFER CUST
QTR (1000’s) Rev$ COGS$ Prof$ GP% REV$ INVEN$ DEP.
FY13Q1 7-31-12 4,135 2,024 2,111 51% 6,056 5,744 10,224
FY13Q2 10-31-12 6,061 3,703 2,358 39% 6,221 5,426 8,500
FY13Q3 1-31-13 6,961 3,651 3,310 47% 5,061 4,635 6,729
FY13Q4 4-30-13 4,176 3,217 959 23% 4,171 4,339 8,059
FY14Q1 7-31-13 4,581 2,670 1,911 42% 4,164 5,679 8,528
FY14Q2 10-31-13 7,354 4,195 3,159 43% 3,468 4,033 7,658
FY14Q3 1-31-14 3,885 2,416 1,469 38% 4,329 5,224 8,646
FY14Q4 4-30-14 6,474 3,829 2,645 41% 5,241 5,530 5,760
FY15Q1 7-31-14 5,496 3,583 1,913 35% 4,670 5,998 6,226
FY15Q2 10-31-14 6,263 4,139 2,124 34% 3,612 5,379 7,549
FY15Q3 1-31-15 5,677 3,113 2,564 45% 5,752 6,148 8,311
FY15Q4 4-30-15 9,308 4,758 4,550 49% 6,630 7,354 11,363
FY16Q1 7-31-15 9,379 4,608 4,771 51% 8,291 10,457 9,599
FY16Q2 10-31-15 9,523 4,741 4,782 50% 9,688 12,554 14,935
FY16Q3 1-31-16 6,672 3,896 2,776 42% 15,418 15,189 22,433
FY16Q4 4-30-16 18,783 9,721 9,062 48% 15,418 15,189 24,212
FY17Q1 7-31-16 5,609 3,062 2,547 45% 21,531 25,274 21,731
FY17Q2 10-31-16 23,370 15,441 7,929 34% 17,980 25,924 26,928
FY17Q3 1-31-17 10,747 7,974 2,773 26% 26,367 33,829 26,210
FY17Q4 4-30-17 17,904 11,782 6,122 34% 28,500 33,099 17,017
FY18Q1 7-31-17 27,077 20,448 6,629 24% 13,433 24,235 14,322
FY18Q2 10-31-17 12,782 16,242 -3,460 -27% 7,473 16,518 13,138
FY18Q3 1-31-18 6,819 10,951 -4,132 -61% 6,633 14,218 17,602
FY18Q4 4-30-18 6,943 8,904 -1,961 -28% 10,922 16,129 17,013
FY19Q1 7-31-18 12,589 11,397 1,192 9% --,--- 9,168 --,---*
*7-31-18 10Q: “certain prior-yr amts related to deferred revenue
& cust deposits have been reclass’d to contract liabilities.”
...a/o 7-31-18: contract-liabilities=17,994
...q/e 4-30-18: contract-liabilities=27,935 <=reclassified
FY13 TOTAL: 21,333 12,595 8,738 41%*
FY14 TOTAL: 22,294 13,110 9,184 41%*
FY15 TOTAL: 26,744 15,393 11,151 42%*
FY16 TOTAL: 44,357 22,966 21,391 48%*
FY17 TOTAL: 57,630 38,259 19,371 34%*
FY18 TOTAL: 53,621 56,545 -2,924 -5%*
*Avid Net-Profit(Selling/G&A) not split out from PPHM-Corp. in the fin’s.
AVID TOTAL REV’s BY YEAR):
FY04 4-30-04 3,039 (Avid-Revs didn’t incl. Avid’s Gov’t work)
FY05 4-30-05 4,684
FY06 4-30-06 3,005
FY07 4-30-07 3,492
FY08 4-30-08 5,897
FY09 4-30-09 12,963
FY10 4-30-10 13,204
FY11 4-30-11 8,502
FY12 4-30-12 14,783
FY13 4-30-13 21,333
FY14 4-30-14 22,294
FY15 4-30-15 26,744
FY16 4-30-16 44,357
FY17 4-30-17 57,630
FY18 4-30-18 53,621
**TOTAL: 295,548 (5/1/2003–4/30/18)
.
QTLY. NET PROFIT/LOSS BY QTR:
(“attributable to common stockholders”; ie, incl. PREF Div’s**)
**2-11-14: PPHM Raises $16.2M, 700k Pref. Shares w/10.5% DIV.
FY16Q1 7-31-15 -15,101,000
FY16Q2 10-31-15 -14,578,000
FY16Q3 1-31-16 -18,227,000
FY16Q4 4-30-16 -13,264,000
FY17Q1 7-31-16 -12,437,000
FY17Q2 10-31-16 -4,498,000
FY17Q3 1-31-17 -9,216,000
FY17Q4 4-30-17 -6,714,000
FY18Q1 7-31-17 -2,647,000
FY18Q2 10-31-17 -14,066,000
FY18Q3 1-31-18 -12,446,000
FY18Q4 4-30-18 +1,578,000 <=includes $9,154,000 income from disc. operations.
FY19Q1 7-31-18 -3,403,000
Period Halozyme Coherus-BioSci. Other-Custs
FYE 4-30-14 91% 8%
FYE 4-30-15 79% 9%
FYE 4-30-16 69% 26% 5%
FYE 4-30-17 58% 26% 16%
FYE 4-30-18 55% 22% 23%
...(cust. Splits not given in 7-31-18 10Q)
Total INST.+LARGE Holdings now 23,633,450 42.4% (6-30-18)
12,177,901 21.8% INSTITUTIONS* https://www.nasdaq.com/symbol/cdmo/institutional-holdings
+ 11,455,549 20.6% LARGE SHAREHOLDERS via Forms13/14 (Tappan, EasternCap/Dart, Ronin/Stafford)
------------
= 23,633,450 42.4%
* TAPPAN 9-30-17 pulled from Nasdaq Inst. Holdings; picked up via 2-14-18 Form 13G a/o 12-31-17.
. . . . .Nasdaq-INST a/o 6-30-18: (15,048,901 – 2,871,000/Tappan) = 12,177,901
Ownership %’s based on 55,793,107 common O/S at 7-10-18.
5 LARGEST SHAREHOLDERS:
1. Tappan Street (Prasad Phatak): 4,516,107 8.1% (a/o 12-31-17 13G: https://tinyurl.com/yd7xkdzg )
2. Eastern Capital (Kenneth Dart): 4,300,992 7.7% (a/o 12-7-17 14A: https://tinyurl.com/y7qprpg9 acq. 10-2015)
3. Blackrock Inc. (Larry Fink): 3,261,288 5.8% (a/o 6-30-18: Nasdaq Inst.; +2,502,164 q/e 6-30-18)
4. Ronin Trading (John Stafford III+Roger Farley): 2,638,450 4.7% (a/o 4-17-18 13D: https://tinyurl.com/ycf7d2uk )
5. Vanguard Group: 2,209,525 4.0% (a/o 6-30-18: Nasdaq Inst.; +250,155 q/e 6-30-18)
...Note: Former #4 Kennedy Cap. dropped 1,923,244 q/e 6-30-18 to 692,118.
= = = = = = = = = = = = = = = = = =5-15-18:
re: TAPPAN: I have a new theory as to what's going on w/TAPPAN. I think they may have switched to the Form 13/14 method of reporting and NOT via Nasdaq INSTITUTIONS.
Ie, like EASTERN-CAP(Dart) and RONIN.
The last time they reported to Nasdaq INST. HOLDINGS was a/o 9-30-17 (as we know) – it’s still there, showing 2,871,000(a/o 9-30-17).
https://www.nasdaq.com/symbol/cdmo/institutional-holdings
BUT, remember this:
=> Tappan filed a 13G on 2-14-18 showing holdings of 4,516,107, a/o 12-31-17.
So, maybe they've shifted to Form 13 reporting which DO NOT SHOW ON NASDAQ INST. HOLDINGS - just like EASTERN-CAP & RONIN.
...Ie, the Tappan 9-30-17 2.9M entry s/b NOT even be there on Nasdaq – it’s no longer applicable.
That's my theory!
If that’s true, their 12-31-17 holdings of 4,516,107 is still correct and won’t change until they file another 13G to change it.
ALL Tappan St. (Prasad Phatak) filings:
https://www.sec.gov/cgi-bin/browse-edgar?company=tappan&owner=exclude&action=getcompany
7-16-18 Qtly CC-Transcript, PR(Fin’s Q4FY18/fye4-30-18), Avid Revs History Table
*Revs Guidance (FY’18 fye 4-30-18): $51-55mm. Current committed B/L=$57.8mm.
*Cash: 4-30-18: $42.3mm
*As of July 10, 2018, 55,793,107 shares o/s.
*10K/4-30-18 iss. 7-16-18: https://tinyurl.com/ydc8vew5
*Avid Total Revs May03-Apr18: $295.5mm
*Avid’s website: https://avidbio.com
This large post has 4 sections:
I. 7-16-18 Q4/FY18 Qtly. Earnings Conf. Call TRANSCRIPT (q/e 4-30-18)
II. 7-16-18 CDMO Press Release: Q4/FY18 Earnings & Developments
IV. Updated Table of Avid Revenues By Quarter (May’06-Current)
III. Updated O/S Shares History Table – 2006-curr.
…Recall: Avid’s FY runs May-Apr, so FY’18 = May’17-Apr’18.
((( Orig. transcript from SeekingAlpha.com [https://tinyurl.com/y7up5493 ], with numerous corrections made. )))
Link to webcast replay: http://ir.avidbio.com/events-and-presentations => https://edge.media-server.com/m6/p/7obj3szs
FULL TRANSCRIPT… 7-16-18 FY’18/Q4 Earnings Conf. Call (q/e 4-30-18) (Lias/Kinjerski/Lytle)
WELCOME & FWD-LOOKING STATEMENTS: Tim Brons, Vida Strategic Partners (IR)
ROGER LIAS (CEO) – OPENING COMMENTS:
Thank you, Tim, and thanks to all of you who've dialed in and those who are participating via webcast today. Beyond reporting our financial results for Q4/FY18 ended April 30, 2018, we have several goals for today’s call. After I’ve provided a financial overview and an update on our adoption of new ASC606 revenue recognition standard, Tracy will provide some detail regarding our new client on-boarding process and how these customers may impact our top & bottom lines throughout the year. And finally, I’ll provide our financial guidance for FY2019. I would like to start by stating that I am extremely pleased with the speed & efficiency with which we've been able to transition our business model to a pure play biologics CDMO organization. In a short period, we’ve established a targeted business development operation that is actively providing visibility for Avid Bioservices within our fast growing but competitive marketplace. I believe that the changes we’ve effected position us very well for strong growth and related efficient progression to (???) generation.
I would now like to introduce Avid Bioservices' new CFO and provide a review of our Q4 and FY2018 fiscal results. I am very pleased to be able to announce that after a comprehensive search Dan Hart will be joining the Avid Bioservices team as our new CFO. Dan brings considerable experience from both the private & public sectors. Most recently as CFO at Eno Holdings, a family of companies focused on the residential real estate market and prior to that the Senior VP and CFO with mgt. consultants, SM&A. I am exceptionally pleased that we’ve been able to attract the candidate with Dan’s experience and integrity to Avid Bioservices. Dan will formerly start his duties on August 1st and I look forward to introducing him more formerly in the coming months. Since the previous CFO’s departure, we’ve been fortunate to have an extremely experienced temporary CFO on board who has provided his considerable expertise during the yr-end process and the implementation of the new ASC606 revenue recognition procedures, which I will discuss later in my comments. Our temporary CFO will remain in place until Dan is situated in his new role, and I am very grateful to him for his invaluable assistance during the transition period.
I'll now discuss our financial results for Q4 and full year ended April 30, 2018, starting with revenues. We’ve consistently projected revenues of $50-55M for FY2018, and we’re pleased to report that we’ve achieved this goal. Revenue for the full FY2018 was $53.6M compared to $57.6M for FY2017. Revenue for FY2018/Q4 was $6.9M compared to $17.9M for the same period of the prior year. This decrease is primarily the result of a slowing in demand from our 2 lead customers, which we anticipated and as previously disclosed. In the past, we had a significant reliance on a small customer base, leaving us vulnerable to such demand fluctuations. Since January, we've been working aggressively to increase market visibility and to expand and diversify our client base. To that end, we've successfully secured mostly new customers that are currently in varying stages of being on-boarded and revenue generation, and we are in active discussions with many additional potential customers. Importantly, we’re also seeing healthy growth generated from existing customer projects. As a result, our committed backlog has increased significantly by 48.2% to $57.8M under ASC 605 revenue recognition standard compared to the backlog of $39M reported in our FY2018/Q3 earnings call. While we expect the majority of the backlog to be recognized as revenue in FY2019, it's important to point out that the backlog may cover multiple fiscal years. The highly technical & customized nature of our business makes it difficult to precisely predict in advance the amount of backlog that may be recognized as revenue in a specific FY since, for many projects, process development or technology transfer work needs to be completed prior to entering the manufacturing phase of a contract; and the phasing of revenue as subject to technical progress; project timelines may also be impacted by clinical and regulatory factors outside of the control of Avid. As a result and in common with other biologic CDMOs, our manufacturing schedule has to remain flexible and has updated on an almost continuous basis.
For both Q4 and full FY2018, margins declined as compared to the prior year periods. Gross margin for Q4 was negative 28% and gross margin for FY2018 was a negative 5%. These margins are compared to positive 34% for both Q4/FY2017 and the full FY2017. These declines in the amount of $2.8M during the quarter and $14M for the full FY were mostly driven by idle capacity during the fiscal year, and a batch failure caused by a component issue outside of Avid's control during the quarter. These margins are clearly well below our expectations for the business going forward. It's important to note that installation of our large scale fleet by 2,000L mfg. capacity in the Myford facility occurred in CY2017, and the new capacity by definition always begins life empty. In addition, it should be remembered that much of this capacity was anticipated to be acquired for the manufacturer of bavituximab. Even though fixed costs associated with highly regulated biologics manufacturing under current good mfg. practices, margins will be impacted until capacity utilization is increased. To effect the required improvements, we continue an aggressive effort to both expand our customer base and to extent current client projects to increase our backlog and enhance capacity utilization. We’ll also continue to evaluate our overall cost structure and to implement related operational efficiencies to better align it with the future needs of the business. In addition, we had anticipated seeing improved future contribution from processed development services as we expand our capabilities in this area. Avid has formally been under-served in this function that not only generates direct revenue, but is also critically important for technology transfer of existing manufacturing processes into our facilities. Importantly, it also ensures that we remain current on the many technological advances being made in the bio-processing field. In support of this is vitally important and growing component of our business, we've initiated the expansion and improvement of our Process Development Laboratories, and are delighted that Dr. Magnus Schroeder has joined Avid as VP of Process Sciences. Magnus brings many years of industry experience, including direct experience in the biologics CDMO space, and he will manage our process development function as an individual profit center for the first time in Avid's history.
Turning now to operating expenses, total SG&A expenses for Q4/FY2018 were $4.2M compared to $4.5M for Q4/FY2017. It's important to note, however, that SG&A results for Q4 included non-recurring expenses of approx. $1.2M, comprising a write-off related to previously purchased capital equipment that is no longer required to support the Avid business, and one-time charges associated with the transition to the pure play CDMO model. For the full FY2018, total SG&A expenses were $16.5M compared to $18.1M for the full FY2017. The decreases in both the quarter and the year were driven primarily by the elimination of costs associated with the Company's former drug development business and the streamlining of Avid operations. For Q4/FY2018, the Company recorded consolidated net income attributable to common stockholders of $1.6M or $.03 per share compared to consolidated net loss attributable to common stockholders of $6.7M or $.16/share for the same prior year quarter. For the full FY2018, the Company recorded a consolidated net loss attributable to common stockholders of $26.5M or $.56/share compared to consolidated net loss attributable to common stockholders of $32.8M, or $.88 /share for full FY2017. The improvements in both Q4/FY2018 quarter and the FY were primarily the result of the sale of Avid's legacy R&D assets to Oncologie Inc. for $8M and the associated discontinued operations. Cash & cash equivalents as of April 30, 2018 were $42.3M compared to $46.8M at FY ended April 30, 2017. As mentioned in February this year, the primary PS-targeting R&D assets were assigned to Oncologie Inc., an emerging biopharmaceutical company with a focus & expertise in the development of immuno-oncology assets. Under the terms of this agreement, Avid is entitled to receive $8M in upfront payments over 6 months, $6M of which has already been received according to the contractually agreed schedule. We anticipate receipt of the remaining $2M in Q2/FY2019. In addition, Avid is eligible to receive up to $95M in payments subject to Oncologie’s attainment of certain development, regulatory and commercialization milestones, as well as royalties on net sales that are upward-tiering into the mid-teens. One of the most valuable aspects of this deal is that Oncologie has also entered into a master services agreement with Avid for future contract development and manufacturing activities in support of bavituximab and potentially other products.
I would now like to take some time to discuss the new ASC606 revenue recognition standard and how it impact Avid's business and reporting. While we are pleased to have achieved our revenue guidance for the year, the comparison of Q4/2018 vs. Q4/2017 revenue highlights the very lumpy nature of the CDMO business. On May 1, 2018, we adopted the new revenue recognition standards, commonly referred to as ASC606. This new standard will have a significant impact on how we recognize and report revenue going forward, and we believe that it will decrease the variability in qtr-to-qtr & year-to-year comparisons that we've seen in the past. By way of background, we have previously recognized all revenue on any particular project or specific project component at a single point in time when all deliverables were completed. As an example, revenue from our mfg. run previously has been recognized when the drug substance has been shipped to the client and all other deliverables have been completed. As of May 1st, however, the new revenue recognition standard requires us to recognize revenue over a period of time for the majority of the services that we provide, including mfg. services. Accordingly, during FY2019, revenue for manufacturing run will now be recognized over the duration of the entire mfg. process, which might be a four month period. And the amount of revenue that we recognize will be based on the percentage of completion of that mfg. run at the end of each month. We have adopted this new standard on a modified retrospective basis. For FY2019, our statement of operations will report revenue under the new standard based on a percentage of completion for the majority of our revenue. And for comparison purposes, we will separately disclose, in the footnotes to our financial statements, the amount of revenue that would have been recognized during the FY if they have been reported under the previous point in time methodology. For future fiscal years, we will report only under the new ASC606 standard. As part of the implementation of the new standard, on May 1, 2018, we analyzed all partially completed revenue projects that were ongoing at the time. And the amount of revenue we will recognize in FY2019 will include only the amount of revenue associated which were not completed as of April 30, 2018. As an example, if $1M mfg. service was 80% complete as of April 30th then the amount of revenue we will recognize in FY2019 under ASC606 will be equal only to the value of the work yet to be completed, in other words, 20% of $1M or $200,000. The amount of revenue and associated costs related to the 80% proportion of the services that had already been completed as of April 30th and allocated to the period prior to May 1st will be reported as a one-time adjustment to retained earnings in fiscal 2019. As a result of the adoption of ASC606, therefore, Avid's forecasted revenues for the FY2019 decreased by the amount of revenue associated with projects in process, but not completed at April 30th. We estimate this decrease to be $9-12M. Revenues will also of course increase at yr-end 2019 by the proportion of revenue for ongoing programs at that time that would not have been recorded under the prior accounting standard. Additionally, the cumulative adjustment to retained earnings is in the range of $2-4M. While this change presents certain complications, over time, we believe the adoption of ASC606 will smooth our financial reporting as it eliminates much of the lumpy reporting caused by the previous standard. As such, we believe that it will provide a better indicator of Avid Bioservices business in the future, and leading us in this transition will be one of Dan Hart's first priorities as Avid's new CFO. This concludes my financial overview. I’ll now turn the call over to Tracy Kinjerski, VP of Business Operations to discuss Avid's strategy for growth.
TRACY KINJERSKI (VP/Bus.Operations) – OPENING COMMENTS:
Today, I will provide an update on our business and our recent business development activities, an overview of our current clients and product mix and review our planned approach to client and project portfolio management, going forward. For the past 25 years, Avid has operated as an excess capacity manufacturer. As such, until January of this year, we worked with only a small number of clients concurrently with one another. In fact, in FY2017, 98% of Avid’s revenue was generated by only three customers. In contrast, with recent changes in our business mission to a dedicated CDMO, during FY2018, our client mix altered rapidly with 6 customers generating 98% of Avid's revenue. We are very pleased with this diversification. That said, we recognize this model clearly demands continued market focus and increased reach to support our goals of expanding capacity utilization, growth and customer diversification. To support this effort, I am pleased to announce that, in recent week, our business development team has been significantly strengthened by the addition of Sandra Carbonneau and Michael Faughnan. Their primary focus will be to cover the U.S. and Canada with Sandy overseeing the eastern region of North America and Michael overseeing the western region. Sandy’s appointment, in particular, represents the first time that Avid has had dedicated coverage in the eastern part of the U.S., which significantly enhances our market reach. In addition, Roger and I will support international opportunities. Both Sandy and Mike are industry veterans with very long direct biologic CDMO experience at companies such as Cytovance Biologics, Lonza, and WuXi Biologics. Along with considerable knowledge of the bio-therapeutics market and services, both Sandy and Mike, bring with them a wide network of industry contacts. Combined with Roger and my network contacts and experience, I am confident that we have built an exceptional business dev. team.
All of us at Avid have been exceptionally pleased with the rapid establishment of a strong CDMO business operations function, comprised of business development, marketing and project management. In a short period of time, this effort has generated very robust market interest from a wide range of potential customers. Through our many recent discussions with members of the financial community, it has become clear that the biologics CDMO market is difficult to accurately model, and that more visibility is desired regarding our client on-boarding process and how a new client impacts our financial performance during a specified period of time. Every client program we undertake is customized. There is simply no one size fits all models that will deliver realistic and reliable forward-looking forecast. Biologic contract manufacturing is a long slow-earn business that cannot be accurately analyzed over short time cycles. Sale cycles are long and incredibly complex. Once the customer has been signed, it still takes time to transition project to the higher revenue generating manufacturing phase, regardless of whether we are developing a new process on behalf of an early stage customer or transferring in an established client process to support validation and commercial manufacturing campaigns. Not all early stage programs and not all later stage or commercial programs are created equally, nor do they advance from the standard or typical timeline. By way of illustration, we currently have early stage projects that may require single GMP manufacturing batch at 200 liters scale to serve this one clinical requirement, while another project appearing similar on paper might require multiple batches at 1,000L scale for early phase clinical trial purposes. Additionally, one process development program may require 6 months before progressing to clinical manufacturing and another may require 18 or 24 months. Equally, we have current clients requiring commercial manufacturing at differing volumetric scales ranging from 200-2000 liters. Product mix also significantly impacts our revenue opportunity. In addition to seeking later stage and typically larger scale manufacturing opportunities to increase capacity utilization, it is imperative that we also continue to convert opportunities for process development and clinical stage manufacturing work. Not only are these earlier stage projects immediately revenue generating are profitable, but they will also deliver strong and high probability pipeline of future late-stage and commercial manufacturing opportunities and assurance of capacity utilization. The highly complex technical & regulatory attributes of our business render very sticky, making it unusual early stage projects to transfer elsewhere as they progress to later stage development and manufacturing, unless driven by un-resolvable capacity limitation or by the previous manufacturer's inability to deliver commercial compliance of the type Avid has been providing for the past 15 years. Our aim is to focus our resources on identifying contracting and maintaining a diverse mix of clients and project portfolios, enabling us over the long-term to fill current capacity and to preemptively predict the need for expansion of capacity to ensure we can meet client needs and for the retention of the long-term clients.
In addition to new clients and projects, it is extremely important to understand that the expansion of existing client projects is a high probability and a very important component of our future growth. I am pleased to confirm that we are seeing excellent growth and potential from within our current customer base and the expansion of existing projects as they progress through development, and also for new projects recently contracted. We are proud of the high percentage of our client base, which represents repeat business. By way of examples, we have an existing client for whom we started work on a single product in 2017, and for whom we are now working development of 3 different products with the 4th under discussion. Similarly, one of the new clients that which signed within the past 6 months while still-in-process development has already approached us about the potential for additional manufacturing batches beyond those initially scoped for that project. Project expansion as well as on-boarding of new projects will contribute considerably to future level growth. In summary, we are very pleased with the progress we have made acquiring new clients and the advancement of activities with our existing clients. That concludes my overview for today. I'll now turn the call back over to Roger.
ROGER LIAS (CEO) – FOLLOWUP COMMENTS:
Thank you, Tracy, for a great update on our business development activities and on our client mix. We will be looking forward to providing additional granularity during the remainder of the financial year. FY2018 was a restructuring year for the Company and FY2019 represents the transition. Today, Avid’s customer base and project mix are broader and more diverse that at any time in the past but it is our goal to continue to build new and existing client relationships with emerging biopharmaceutical companies and pharmaceutical multinationals alike, both domestically and in international markets. With our newest clients now making a meaningful contribution to revenue, we believe we have already significantly mitigated the risk associated with reliance on too new clients, and we continue to expand our customer base to further reduce this risk and to build a position of greater strength to support a breakthrough year in FY2020. While immediate focus is on filling capacity and driving revenue growth from our current mammalian derived drug substance service offering, the opportunity to expand Avid's offering with upstream from core areas of experience and expertise leading to significantly expand business development reach are considerable. In addition to organic growth of the current offering, examples of immediately adjacent potential future expansion opportunities include drug product manufacture and support of clinical stage clients, manufacturer proteins derived from microbial fermentation and expansion of our development services in areas such as cell line development, cell banking formulation development, analytical services and so on. We will assess future growth opportunities in the coming months. Beyond these areas, we watch with interest the growth in demand for services related to biosimilars manufacturer associated with gene therapy and immuno-cellular therapy such as CAR-T products. While diversion rates present, all represent potential future opportunities for Avid Bioservices. Finally, with the backdrop of the CDMO landscape and our escalating business development activities, we provide revenue guidance for the full FY2019 of $51-55M under the new ASC606 revenue recognition standard based on our current backlog of $57.8M and current assumptions. It should be remembered that $9-12M of revenue that may have been recognized during the FY under the previous ASC605 revenue recognition standard, it moves to retained earnings.
Given our financial expectations for FY2019 along with the indications of interest we are receiving from multiple existing and potential new customers, we believe that we are well-positioned for cash generation and on the path to achieving breakeven. Despite our confidence, we're not currently in a position to assign exact timing to when we may achieve this goal, or the current backlog potentially recognizable during this FY positions us extremely well. And we believe that we will be successful in on-boarding multiple additional new customers this year as previously discussed early stage project timelines are variable. Timing of conversion of backlog to revenue cannot be predicted with certainty and maybe adjusted based on customer and regulatory or clinical variables that are out of Avid's control or based on scientific and technical progress on the project. We are basing guidance on our current business snapshot and on conservative assumptions. I believe that taking this approach to reporting at this juncture is in the best interest of Avid, and that we will be able to provide considerably more granularity and guidance at the timing of breakeven as the year progresses, and we will update accordingly. This concludes my prepared remarks for today. And I will now open the call up to questions, operator?
Q&A: [beg. 26:30]
1. Joe Pantginis - H.C. Wainwright
JP: ”With regard to expanding your customer base, can you discuss what types of companies you’re getting interest from, and as well are any of those companies ex-U.S.?”
Roger Lias: I am pleased to say we, and I'll allow Tracy to make a few comments as well, but I'll kick off. We're getting interest from across the spectrum. We get interest from perhaps traditional emerging entrepreneurial biotech companies certainly plenty of it, but also we entertained a good deal of different interest from pharmaceutical multinationals. The difference really between the two is the timing with which they move and their planning and the business development cycles. We're able to typically covert the more fast-paced entrepreneurial opportunities more quickly whereas the pharmaceutical multinationals are very often planning years in ahead. And they also typically have a much more involved process, involving numerous audits not just quality but the DH&S. We host these on a regular basis and that's I think a good sign looking forward. With respect to where they come from, we're still proactively looking primarily, I wouldn’t say the U.S., I should say North America. We have Canadian interest as well. And we are currently dealing with international enquiries somewhat more reactively based on resource availability. But we do currently have on-board, we have existing clients and both within U.S. and from Southeast Asia. So I expect that international interest to increase.
JP: ”And then not to put you on the spot, but I want to do focus on Avid eventually with a question from a macro standpoint. The Biologics arena has been really expanding from a macro standpoint. How are you seeing the overall CDMO market develop, right now? And where do you see Avid fitting in based on your flexibility across the spectrum?”
Roger Lias: The overall market is very strong. I think we can agree, off of top of my head, some examples. I think, Zion Market Research has the value of the overall global biologics outsourcing market, I think in excess of $8B back in 2016, and they were predicting growth of $23B area in 2024. I think that’s a growth rate of around 17% over that period. And that’s supported I think by similar data from Frost & Sullivan and others. More specifically, of course, we specialize in mammalian manufacturing. We don't currently do microbial manufacturing. And certainly over 90% of all the biologic license applications filed with the FDA, to-date I think has been from the types of technology that we offer to our client base. So I think, overall, the market is very strong. It is competitive with huge barriers to entry but we’re seeing our competitors expand as markets grow. But I think we’re very well situated. We’re in the unusual position of being both agile enough to take on the earlier phase work and to meet the needs of that entrepreneurial side of the market and the earlier phase clinical but of course we also being releasing commercial products to the marketplace for 15 years now. And we have truly state-of-the-art micro facility with capacity available. So we feel very well about where we’re positioned within the marketplace.
2. Paul Knight - Janney Montgomery
PK: ”Could you talk about the 5 master service agreements one in the quarter, Phase II/I preclinical, could you talk to that if you can possibly?”
Roger Lias: Yes, without trying to -- obviously, one of them is in the public domain, a company called Acumen Therapeutics, but the others are not public domain. So we’re not able to, unfortunately, announce the name of the companies. These all, I would say the company-wise, they all would count in this entrepreneurial emerging biotech category, all well-funded companies but these are not pharmaceutical multinationals. The projects themselves, and I've got to go off the top of my head, was certainly we have, well, actually, I should start by saying of course we do have the master service agreement with Oncologie Inc. So that product we know very well, bavituximab was already being through Phase3 trial. So from a development perspective, CMC development perspective, that's a late phase project. The others are all I think, I’m right in saying, moving into Phase 1 clinical development. So we would have a process development and tech transfer component and then we would produce the first in human clinical materials for those clients.
PK: ”Do you have a goal for the number of MSA’s you want to strike in the he upcoming FY we’re now in?”
Roger Lias: I think that’s not a meaningful way of looking at it, Paul, to be honest, because it obviously depends, whether it could be an MSA with a relatively small work associated with it and an MSA where its huge amount of work associated with it. We’re working hard to balance our resources, so that we’re efficiently able to onboard these projects. And part of that is the expansion of the process development capabilities, but that lapse people equipment across the board. So we have to be somewhat cognizant of -- signing an MSA is one thing, but we still got to be able to do the work behind it to convert that backlog into revenue. So I don't think that's the appropriate way of thinking about it. But certainly, if we did the same again one more time, we’d have a huge amount of work on our hands to give some perspective.
PK: And lastly, could you talk about capacity? How much is built out now? How much is available?”
Roger Lias: So, the first question how much is built out? Of course, we’ve our legacy what we call the Franklin Facility, which has been in place for some time now. And that remains busy with both some commercial manufacturing in support of the Halozyme program, which is in the public domain, and also clinical manufacturing. The Myford facility, we've built out basically 50% of the available footprint, that takes us to volumetric scales of up to 3 by 2,000 liter bioreactors, but that build out also includes warehouses, quality labs, the infrastructure, if you like, the utilities necessary to support the entire footprint. So we have the opportunity to build out the remainder of that facility, which will be an additional 40,000+sf, relatively efficiently based on the design we already have there, and that would roughly triple the overall capacity of that facility. We’d be going from 1 manufacturing core to 3. And then in terms of capacity utilization, our idle capacity, as we’ve talked about previously is what hurts, not just us but anybody in our business. So we’re effectively now through these, on-boarding of these new clients starting to chip away that idle capacity. I don’t know if I have a number for you in terms of percentages.
3. Steve Schwartz - First Analysis
SS: ”If we could start off just talking about the revenue guidance, I wanted to just make sure I understand from your prepared remarks the clarity on what you just reported for FY’18 versus the guidance, because the midpoint of guidance is roughly flat. But first off, you had $4M from Oncology that came through or $6M rather…”
Roger Lias: $6M, yes…
SS: ”That came through and you are only going to get $2M in FY’19. So that’s a $4M headwind…”
Roger Lias: To be clear, Steve, that’s not revenue, per se… Because it goes to discontinued operations…
SS: ”It does, okay. That’s not factored in. You did also note though that ASC606 transition cost about $9-12M in revenue. Is that correct?”
Roger Lias: Yes, that’s correct on the front-end and of course we can't be, if you’d like, disingenuous about it. We will gain some back on the backend. But as of right now, we know roughly what obviously happened on April 30th & May 1st, we don't yet know exactly what things will look like at the end of the year. So we have to be a bit cautious in forecasting that. So I’d say for the guidance, we’ve taken pretty conservative assumptions under the, I guess the under promise and over deliver type scenario that seem to make sense to us.
SS: ”But still all that considered there’s still -- even though the numbers of what you just reported versus what you’re guiding to, doesn’t suggest revenue growth. There really is revenue growth occurring in there. Is that correct, am I understanding that correctly?”
Roger Lias: Yes, I think that's a reasonable statement.
SS: ”And then of that growth, how much is coming from existing customers expanding their work with you versus the new customers’ new projects, well new projects could be coming from existing. But I think maybe you understand the nature of my question.”
Roger Lias: Yes, and it's a great question. It's something hopefully that Tracy's remarks help to emphasize. We have to, and I think looking from outside, we tend to look obviously as new customers as being important and of course they are, and we’ll continue to bring on new customers. Those projects start small and grow over 6, 12, 18, 24 month period. So actually, I don't know honestly off the top of my head, by percentage but certainly the contribution of expansion of our existing clients is considerable. And I would suggest that that will, I've got to be careful, I'll come back to it, but that will certainly be a larger number in terms of the growth contribution than the new customers for this FY. And I should stress as well, this comes two ways. So existing customers we have projects that truly expand as in they are the scopes grow. And then also based on the way we previously contracted, we also have existing projects that are ongoing that we signed project authorizations as we go along for. They did not the entire value of those contract didn’t enter backlog, so some of the growth comes from basically, if you like, doing the work and progressing the projects. So those projects does grow and they progress.
SS: ”And looking at your gross margin, if I just apply 17% GM to Q4, essentially what I see is about $3M or $3.1M swing from what you reported vs. what might have been under, recently normal circumstances. Of that $3 million, can you parse out the impact of the idle capacity vs. the batch failure?”
Roger Lias: The idle capacity is the greater influence. Idle capacity in this business hurts everybody, so that the batch failure, as I say, it was a component issue which we really have little control over, it's unfortunate. But no, by far the larger contribution is the idle capacity.
SS: ”And am I right in thinking about that $3M or $3.1M, or am I completely crazy on that number. What are your thoughts?”
Roger Lias: I mean, probably idle capacity has probably contributed $2.8M…
SS: ”$2.8M…”
Roger Lias: Roughly to some there – thereabouts…
SS: ”And just generally speaking with respect to gross margin and in your prepared remarks you addressed the fact that it's very difficult to forecast out what the development of projects revenue is going to be. And I know gross margin goes with that. But what do you think the gross margin profile across this next year looks like? And what level do you hit a steady state and what might that gross margin level be? Is it 20%, 25%?”
Roger Lias: I'll just say improving. We have a complex mix that I think margins will tend to be better on the process development than the earlier phase business. This is just experience from many years in the industry, so there is a lot that goes into it. I think that our mix of business and how the projects progress will have -- could have quite a significant impact this year. I think once we achieve a bit more steady state and critical mass, if you like, I think it'll be easier to predict gross margins going forward years on out. But this transition year is going to be a tough one to predict in many ways.
SS: ”And then my last question, just with respect to the backlog and that figure, you made a comment that it could take, in some cases, years for some of those projects in the backlog to develop revenue. But what are your rough guidelines for, including something into that backlog tally? What's behind that number, if you could?”
Roger Lias: Yes, first, I'll just actually address the comment you made there. All of them, while some of roll back over multiple years, all of them contribute immediately. So none of them are waiting till next year to start, they're all immediately revenue generating. We take basically pretty conservative view of backlog. Backlog takes into account signed and committed contractual obligations on behalf of the customer. As I mentioned before, we previously contract these somewhat differently and we signed up for a large scope of work, but it would only actually get converted into backlog when we signed project authorizations almost a pay as you go approach under Tracy. And with the experience that both she and I have had in previous lives and we changed our contractual terms quite significantly now, so we're getting much greater commitments from the client upfront. So, at the time you sign a contract, a much greater proportion of that total value goes into backlog, because it’s committed. So we have, what I call, trailing backlog, which follows on which does not get rolled into our backlog number. So that's a very solid conservative number.
ROGER LIAS (CEO) – CLOSING COMMENTS:
So, during FY2018, we've initiated transition to a pure play biologics contract development and manufacturing organization. And today, Avid is I believe a recognized, established and well respected CDMO. We've already significantly diversified and expanded our client base, and we've bought, what I believe is an impressive new Board of Directors and established a cohesive new leadership team, with expertise spanning every area of the business from business development to process development and finance. We’re responding to and winning more request for proposal than at any time in our history, and we're well on our way to filling our available capacity with a product mix that will consist of both shorter term process development and clinical programs, as well as with longer term commercial programs. Our backlog is growing and we believe that we're on track to achieve breakeven in the delivery of positive EBITDA. While FY2018 was an impressive turnaround year for Avid, it was just our first year as a focused CDMO business. Looking ahead to FY2019, we're excited about the market opportunity and the very significant prospects for growth and market leadership that lie ahead of us. In closing, I would like to recognize the tremendous efforts, and I really do mean tremendous efforts of the staff at Avid Bioservices. The type of transition that we've affected is not easy. I remain incredibly impressed by the dedication and talent of the Avid team, and their commitment to exemplary customer service and continued industry leading compliance. So I'd like to very specifically thank them for their continued support. They without doubt remain the backbone of this business and our service offerings. So with that, I would like to conclude the call. So thank you, and have a great afternoon.
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7-16-18: Avid Bioservices Reports Financial Results for Quarter and Fy Ended April 30, 2018 and Recent Developments
GlobalNewsWire: https://tinyurl.com/y93fux9h
-- Company Records FY 2018 Revenue of $53.6 Million
-- Committed Backlog Increases to $57.8 Million (ASC 605)
-- Customer Base Expanded and Diversified
-- Key Appointments Strengthen CDMO Leadership Team
TUSTIN, July 16, 2018: Avid Bioservices, Inc. (NASDAQ:CDMO/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 fourth quarter and fiscal year (FY) 2018 ended April 30, 2018, and provided an update on its contract manufacturing operations, and other corporate highlights.
Highlights Since January 31, 2018
“During FY2018, Avid Bioservices initiated a transition to a pure play biologics CDMO. Today, Avid is a recognized, established and well-respected service provider to the biotechnology and pharmaceutical industry,” said Roger Lias, PhD, President and CEO of Avid Bioservices. “In recent months we have significantly diversified and expanded our portfolio of customers. This effort has also fostered a steady increase in our backlog, which creates a strong foundation as we diligently pursue our goal to achieve breakeven and positive EBITDA. We have brought in an impressive new board and established a cohesive new leadership team with expertise spanning every vital facet of our business from business development to process development and finance. We are responding to, and winning, more requests for proposal than at any time in Avid’s history and we are filling our available capacity with a product mix consisting of both earlier phase process development and clinical programs, as well as late phase clinical and commercial programs. While fiscal 2018 was an impressive turnaround year for Avid, fiscal 2019 will be our first full year as a focused CDMO business and we are excited about the market opportunity and the very significant prospects for growth and market leadership that lie ahead. I would like to recognize the tremendous efforts of the staff at Avid Bioservices. The type of transition that we have effected is not easy and I remain incredibly impressed by the dedication and talent of the Avid team and their commitment to exemplary customer service and continued industry leading compliance. I would like to very specifically thank them for their continued support. Our people remain the backbone of our service offering and our business.”
RECENT CDMO DEVELOPMENTS
Appointed multiple experienced executives to strengthen the leadership team including:
* Magnus Schroeder, PhD, VP of Process Sciences. Dr. Schroeder is an accomplished scientist with more than 16 years of experience spanning bioprocess development, cGMP manufacturing, CMC strategy and global project leadership. Dr. Schroeder most recently served as a director at AGC Biologics, formerly CMC Biologics, where he participated in the successful commercial launch of multiple products.
* Sandra Carbonneau, Director, Business Development, (eastern region). Ms. Carbonneau brings to Avid more than 26 years of relevant industry experience. Previously with Lonza Biologics, Ms. Carbonneau oversaw the global mammalian commercial development business unit, including manufacturing, quality assurance, compliance and contract management.
* Michael Faughnan, Senior Director, Business Development (western region). Mr. Faughnan joins Avid with more than 20 years of customer focused sales and management experience. In particular, Mr. Faughnan has 18 years of successful biotech and CDMO sales experience with industry leading companies including Lonza and WuXi Biologics, where he contributed to significant growth.
Initiated expansion and optimization of the company’s process development capabilities and laboratory space, including:
* Expanding the total available process development laboratory space to more than 6,000 square feet;
* Upgrading the infrastructure and equipment within the existing process development laboratories;
* Implementing new state-of-the-art technologies and equipment designed to facilitate efficient, high-throughput development of upstream and downstream manufacturing processes.
The first new laboratories are expected to be operational during Q3/CY2018.
Signed 5 new master service agreements (MSAs) in the first 6 months of CY2018. This is more than Avid signed during all of CY2017. New projects under the MSAs range from process development to clinical stage biomanufacturing. All projects will contribute to revenue during FY2019.
RECENT CORPORATE DEVELOPMENTS
Entered into an Asset Assignment and Purchase Agreement with Oncologie, Inc. in February 2018 for Avid's phosphatidylserine (PS)-targeting program including bavituximab.
* Avid is entitled to receive an aggregate of $8.0 million in upfront payments over a period of 6 months, of which $6.0 million has been received according to the contractually agreed schedule. Avid will also be eligible to receive up to $95.0 million with Oncologie, Inc.’s successful achievement of development, regulatory and commercialization milestones.
* Oncologie, Inc. is responsible for all future research, development and commercialization of bavituximab, and related intellectual property costs.
* Avid is eligible to receive royalties on net sales that are upward tiering into the mid-teens.
* Oncologie has entered into an agreement with Avid for future CDMO activities in support of bavituximab and other potential products.
Completed a public offering of 10,294,445 shares of common stock in February 2018 raising gross proceeds of approximately $23.2 million.
* Avid intends to use the net proceeds from the offering to support the growth of its contract manufacturing business and general corporate purposes.
FINANCIAL HIGHLIGHTS AND GUIDANCE
* The current revenue backlog increased by 48.2% to $57.8 million from $39.0 million at the end of the third quarter of FY 2018 (ASC 605).
* The company is providing revenue guidance for the full FY 2019 of $51-55 million (ASC 606).
* Contract manufacturing revenue from Avid's clinical and commercial biomanufacturing services was $6.9 million for Q4 of FY 2018 compared to $17.9 million for the fourth quarter of FY 2017. Revenue for the full FY 2018 met guidance at $53.6 million compared to $57.6 million for full FY 2017. The decline in both the fourth quarter and FY 2018 was primarily due to previously announced lower demand from one of our largest customers.
* Gross margin for the fourth quarter of FY 2018 was negative 28%, and gross margin for full FY 2018 was negative 5%. These margins are compared to positive 34% for the fourth quarter of FY 2017 and positive 34% for the full FY 2017.
* Selling, general and administrative (S,G&A) expenses for the fourth quarter of FY 2018 were $4.2 million, compared to $4.5 million for the fourth quarter of FY 2017. For the full FY 2018, total SG&A expenses were $16.5 million, compared to $18.1 million for FY 2017. SG&A expense for the fourth quarter of FY 2018 included one-time charges totaling $1.2 million for the write-off of equipment, severance and other one-time charges. The decreases in both the fourth quarter and FY 2018 were driven primarily by lower headcount and expense reductions.
* Income from discontinued operations for the fourth quarter of FY 2018 was $9.2 million, which was primarily due to the gain on sale of certain assets to Oncologie, Inc.
* For the fourth quarter of FY 2018, the company recorded consolidated net income attributable to common stockholders of $1.6 million or $.03 per share, compared to a consolidated net loss attributable to common stockholders of $6.7 million, or $.16 per share, for the fourth quarter of FY 2017. For full FY 2018, the company recorded a consolidated net loss attributable to common stockholders of $26.5 million or $.56 per share, compared to a consolidated net loss attributable to common stockholders of $32.8 million, or $.88 per share, for full FY 2017.
Avid reported $42.3 million in cash and cash equivalents as of April 30, 2018, compared to $46.8 million on April 30, 2017.
More detailed financial information and analysis may be found in Avid’s Annual Report on Form 10-K, which will be filed with the SEC today. [10K https://tinyurl.com/ydc8vew5 ]
CONFERENCE CALL
Avid will host a conference call and webcast this afternoon, July 16, 2018, at 4:30pm EDT (1:30pm 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. http://www.avidbio.com
Forward-Looking *snip*
AVID BIOSERVICES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Three Months Ended
April 30, Twelve Months Ended
April 30, 2018 2017 2018 2017
Contract manufacturing revenue $ 6,943,000 $ 17,904,000 $ 53,621,000 $ 57,630,000
Cost of contract manufacturing 8,904,000 11,782,000 56,545,000 38,259,000
Gross profit (loss) (1,961,000 ) 6,122,000 (2,924,000 ) 19,371,000
Operating expenses:
Selling, general and administrative 4,183,000 4,477,000 16,456,000 18,079,000
Restructuring charges — — 1,258,000 —
Total operating expenses 4,183,000 4,477,000 17,714,000 18,079,000
Operating income (loss) (6,144,000 ) 1,645,000 (20,638,000 ) 1,292,000
Other income (expense):
Interest and other income 19,000 37,000 102,000 108,000
Interest and other expense (9,000 ) (5,000 ) (27,000 ) (7,000 )
Income (loss) from continuing operations $ (6,134,000 ) $ 1,677,000 $ (20,563,000 ) $ 1,393,000
Income (loss) from discontinued operations 9,154,000 (6,949,000 ) (1,250,000 ) (29,552,000 )
Net income (loss) $ 3,020,000 $ (5,272,000 ) $ (21,813,000 ) $ (28,159,000 )
Comprehensive income (loss) $ 3,020,000 $ (5,272,000 ) $ (21,813,000 ) $ (28,159,000 )
Series E preferred stock accumulated
dividends (1,442,000 ) (1,442,000 ) (4,686,000 ) (4,640,000 )
Net income (loss) attributable to common stockholders $ 1,578,000 $ (6,714,000 ) $ (26,499,000 ) $ (32,799,000 )
Basic and diluted weighted average common shares outstanding: 53,360,424 42,141,720 47,063,020 37,109,493
Basic and diluted net income (loss) per common share attributable to common stockholders:
Continuing operations $ (0.14 ) $ 0.01 $ (0.53 ) $ (0.09 )
Discontinued operations $ 0.17 $ (0.17 ) $ (0.03 ) $ (0.79 )
Net income (loss) per share attributable to common stockholders $ 0.03 $ (0.16 ) $ (0.56 ) $ (0.88 )
AVID BIOSERVICES, INC.
CONSOLIDATED BALANCE SHEETS
AS OF APRIL 30, 2018 AND 2017
2018 2017
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 42,265,000 $ 46,799,000
Trade and other receivables 3,754,000 7,742,000
Inventories 16,129,000 33,099,000
Prepaid expenses 679,000 808,000
Assets of discontinued operations 5,000,000 1,426,000
Total current assets 67,827,000 89,874,000
PROPERTY AND EQUIPMENT:
Leasehold improvements 20,686,000 20,098,000
Laboratory equipment 10,258,000 10,229,000
Furniture, fixtures, office equipment and software 4,597,000 4,385,000
Construction-in-progress 3,310,000 2,841,000
38,851,000 37,553,000
Less accumulated depreciation and amortization (12,372,000 ) (11,508,000 )
Property and equipment, net 26,479,000 26,045,000
Restricted cash 1,150,000 1,150,000
Other assets 304,000 1,043,000
TOTAL ASSETS $ 95,760,000 $ 118,112,000
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,909,000 $ 3,000,000
Accrued payroll and related costs 2,564,000 5,055,000
Deferred revenue 10,922,000 28,500,000
Customer deposits 17,013,000 17,017,000
Other current liabilities 905,000 636,000
Liabilities of discontinued operations 4,550,000 8,723,000
Total current liabilities 37,863,000 62,931,000
Deferred rent, less current portion 2,159,000 1,599,000
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Preferred stock - $.001 par value; authorized 5,000,000 shares; 1,647,760 shares issued and outstanding at April 30, 2018 and 2017, respectively 2,000 2,000
Common stock - $.001 par value; authorized 500,000,000 shares; 55,689,222 and 44,014,040 shares issued and outstanding at April 30, 2018 and 2017, respectively 55,000 44,000
Additional paid-in-capital 614,810,000 590,971,000
Accumulated deficit (559,129,000 ) (537,435,000 )
Total stockholders' equity 55,738,000 53,582,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $95,760,000 $118,112,000
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
- - - - - - - -
From 10-Q header: “As of July 10, 2018, there were 55,793,107 shares outstanding.”
- - - - - - - - - - - - - - - - -
Latest 10K 4-30-18 iss. 7-16-18 https://tinyurl.com/ydc8vew5 PR: https://tinyurl.com/y93fux9h (Cash 4-30-18=$42.3mm)
Latest 10Q 1-31-18 iss. 3-12-18 https://tinyurl.com/yd4orsg7 PR: http://ir.avidbio.com/releasedetail.cfm?ReleaseID=1060611 (Cash 1-31-18=$17.9mm; 2-28-18=$41.7mm)
ALL SEC filings for PPHM: http://tinyurl.com/6d4jw8
= = = = = = = = = = = = = = = = = = = = = = = = = = = =
Updated PPHM REVS-BY-QTR TABLE, now thru FY18'Q4(qe 4-30-18), per the 10-Q (https://tinyurl.com/xxx7 ) issued 7-16-18.
• Total Avid Revs since May’03: $295.5mm
• 7-16-18: FY'19 (May'18-Apr'19) Avid revs guidance $51-55mm (committed B/L=$57.8mm at 4-30-18).
• Deferred-Revs at 4-30-18 total $10.9mm, UP from $6.6mm at 1-31-18.
• Cust.Deposits at 4-30-18 total $17.0mm, DOWN from $17.6mm at 1-31-18.
• Inventories at 4-30-18 total $16.1mm, UP from $14.2mm at 1-31-18.
• Avid’s Gross-Profit over last 4 qtrs: -$2.9mm(neg.) on revs of $53.6mm (GP%=-5.5%)
Avid’s website: http://www.avidbio.com
AVID GROSS PROFITABILITY BY QTR: DEFER CUST
QTR (1000’s) Rev$ COGS$ Prof$ GP% REV$ INVEN$ DEP.
FY13Q1 7-31-12 4,135 2,024 2,111 51% 6,056 5,744 10,224
FY13Q2 10-31-12 6,061 3,703 2,358 39% 6,221 5,426 8,500
FY13Q3 1-31-13 6,961 3,651 3,310 47% 5,061 4,635 6,729
FY13Q4 4-30-13 4,176 3,217 959 23% 4,171 4,339 8,059
FY14Q1 7-31-13 4,581 2,670 1,911 42% 4,164 5,679 8,528
FY14Q2 10-31-13 7,354 4,195 3,159 43% 3,468 4,033 7,658
FY14Q3 1-31-14 3,885 2,416 1,469 38% 4,329 5,224 8,646
FY14Q4 4-30-14 6,474 3,829 2,645 41% 5,241 5,530 5,760
FY15Q1 7-31-14 5,496 3,583 1,913 35% 4,670 5,998 6,226
FY15Q2 10-31-14 6,263 4,139 2,124 34% 3,612 5,379 7,549
FY15Q3 1-31-15 5,677 3,113 2,564 45% 5,752 6,148 8,311
FY15Q4 4-30-15 9,308 4,758 4,550 49% 6,630 7,354 11,363
FY16Q1 7-31-15 9,379 4,608 4,771 51% 8,291 10,457 9,599
FY16Q2 10-31-15 9,523 4,741 4,782 50% 9,688 12,554 14,935
FY16Q3 1-31-16 6,672 3,896 2,776 42% 15,418 15,189 22,433
FY16Q4 4-30-16 18,783 9,721 9,062 48% 15,418 15,189 24,212
FY17Q1 7-31-16 5,609 3,062 2,547 45% 21,531 25,274 21,731
FY17Q2 10-31-16 23,370 15,441 7,929 34% 17,980 25,924 26,928
FY17Q3 1-31-17 10,747 7,974 2,773 26% 26,367 33,829 26,210
FY17Q4 4-30-17 17,904 11,782 6,122 34% 28,500 33,099 17,017
FY18Q1 7-31-17 27,077 20,448 6,629 24% 13,433 24,235 14,322
FY18Q2 10-31-17 12,782 16,242 -3,460 -27% 7,473 16,518 13,138
FY18Q3 1-31-18 6,819 10,951 -4,132 -61% 6,633 14,218 17,602
FY18Q4 4-30-18 6,943 8,904 -1,961 -28% 10,922 16,129 17,013
FY13 TOTAL: 21,333 12,595 8,738 41%*
FY14 TOTAL: 22,294 13,110 9,184 41%*
FY15 TOTAL: 26,744 15,393 11,151 42%*
FY16 TOTAL: 44,357 22,966 21,391 48%*
FY17 TOTAL: 57,630 38,259 19,371 34%*
FY18 TOTAL: 53,621 56,545 -2,924 -5%*
*Avid Net-Profit(Selling/G&A) not split out from PPHM-Corp. in the fin’s.
AVID TOTAL REV’s BY YEAR):
FY04 4-30-04 3,039 (Avid-Revs didn’t incl. Avid’s Gov’t work)
FY05 4-30-05 4,684
FY06 4-30-06 3,005
FY07 4-30-07 3,492
FY08 4-30-08 5,897
FY09 4-30-09 12,963
FY10 4-30-10 13,204
FY11 4-30-11 8,502
FY12 4-30-12 14,783
FY13 4-30-13 21,333
FY14 4-30-14 22,294
FY15 4-30-15 26,744
FY16 4-30-16 44,357
FY17 4-30-17 57,630
FY18 4-30-18 53,621
**TOTAL: 295,548 (5/1/2003–4/30/18)
.
QTLY. NET PROFIT/LOSS BY QTR:
(“attributable to common stockholders”; ie, incl. PREF Div’s**)
**2-11-14: PPHM Raises $16.2M, 700k Pref. Shares w/10.5% DIV.
FY16Q1 7-31-15 -15,101,000
FY16Q2 10-31-15 -14,578,000
FY16Q3 1-31-16 -18,227,000
FY16Q4 4-30-16 -13,264,000
FY17Q1 7-31-16 -12,437,000
FY17Q2 10-31-16 -4,498,000
FY17Q3 1-31-17 -9,216,000
FY17Q4 4-30-17 -6,714,000
FY18Q1 7-31-17 -2,647,000
FY18Q2 10-31-17 -14,066,000
FY18Q3 1-31-18 -12,446,000
FY18Q4 4-30-18 +1,578,000 <=includes $9,154,000 income from disc. operations.
Period Halozyme Coherus-BioSci. Other-Custs
FYE 4-30-14 91% 8%
FYE 4-30-15 79% 9%
FYE 4-30-16 69% 26% 5%
FYE 4-30-17 58% 26% 16%
FYE 4-30-18 55% 22% 23%
...Who likes to laugh at one kick-arse Funny person!!
6-7-18: Oncologie Launches with $16.5M Seed Funding Led by Pivotal bioVenture Partners China Fund
https://www.prnewswire.com/news-releases/oncologie-launches-with-16-5m-usd-seed-funding-led-by-pivotal-bioventure-partners-china-300661309.html
BOSTON & SHANGHAI, June 7, 2018: Oncologie, an innovative biopharmaceutical company, announced today that it is launching operations in both Boston and Shanghai with $16.5M seed financing led by Pivotal bioVenture Partners China [Fund]. Oncologie is committed to developing impactful cancer therapies to improve long-term survival of cancer patients worldwide. Building a pipeline of First and Best-in-Class clinical stage drug candidates through licensing and partnering, Oncologie is leveraging the recent regulatory changes in China to conduct parallel clinical development in China and the US to bring the next wave of Immuno-Oncology products to the two most important markets simultaneously.
Oncologie is developing multiple global programs currently in Phase 2 and Phase 3 whose mechanisms are designed to combine with immune checkpoint inhibitors to improve survival benefits. The management team of Oncologie includes industry veterans from biotech and pharma with proven track records in developing innovative cancer drugs in both China and the US.
Founder, President, and CEO, Dr. Laura Benjamin said, "Oncologie has built an all-star team of creative drug developers committed to revealing the full potential of our exciting pipeline that is positioned to maximize the benefits cancer immune therapy can bring. Oncologie has created a global leading clinical pipeline since its inception earlier of this year. We look forward to working together with our partners to bring safe and effective cancer therapies to the market."
"Oncologie is leveraging the opportunity to run clinical trials in both the US and China to develop drugs for the global market," said Jimmy Wei, PhD, managing partner of the Pivotal bioVenture Partners China Fund. "We think these coordinated efforts will shorten the time between launching innovative drugs in the US and China. Since there are too many undifferentiated PD-1/PD-L1 programs in China with very few combination trials ongoing, Oncologie has positioned itself as the leader in immune combination therapies."
"We are very glad to have the opportunity to work with Dr. Benjamin to build this company," said Peter Bisgaard, managing director of Nan Fung Life Sciences. "Laura brings with her 20 years of experience as a researcher at Harvard Medical School as well as an executive in the industry, and she has built an outstanding team of experts."
Oncologie raised $16.5M USD in a seed round recently. The round was led by Pivotal bioVenture Partners China Fund and joined by Nan Fung Life Sciences, China Merchant Bank Investments, and Volcanics Ventures.
ABOUT PIVOTAL BIOVENTURE PARTNERS CHINA
Pivotal bioVenture Partners China, a member of Nan Fung Life Sciences, is a venture capital firm specializing in venture building in the life sciences industry. Pivotal China closed on $150M for its first fund and is setting up an additional $50M equivalent RMB fund. Its investment strategy is centered on identifying promising innovative products and technologies and bringing them to build new companies in China. The Pivotal team includes experienced life science investors and entrepreneurs with a track record of venture building and scientific acumen.
ABOUT NAN FUNG LIFE SCIENCES
Nan Fung Life Sciences, part of Nan Fung Group, is a global investment platform focusing on life sciences. Leveraging on Nan Fung Group's strong capital base and long-term commitment to the area, the company is aimed to become the ideal partner for scientists, entrepreneurs, corporations and investors in the life science space. Through direct investments via Pivotal BioVenture Partners funds (both in the US & China) and fund investments covering full spectrum of the industry (including therapeutics, medical devices and diagnostics) and across different development stages, Nan Fung Life Sciences has significant presence in both the US and Greater China.
ABOUT ONCOLOGIE
ONCOLOGIE is an oncology therapeutics company committed to delivering better outcomes for cancer patients through an improved understanding of which patients will benefit from each drug in the pipeline. The current pipeline is focused on mid-stage clinical programs that modify the immune system to enhance efficacy of current standards of care and emerging immunotherapy agents. Headquartered in Boston, Massachusetts and Shanghai, China, Oncologie is working with global partners to acquire and develop innovative drugs for cancer patients around the world. http://www.oncologie.international
= = = = = = = =
2-12-18: Peregrine’s Legacy PS-Targeting IP Sold to ONCOLOGIE INC. (Boston, CEO: Laura E. Benjamin) for $8M/upfront, $95M/milestones https://tinyurl.com/yam8gb3h
...12-13-18/8-K: Overview of Oncologie sale: https://tinyurl.com/yab9c6cr
NOTE: “PS-targeting Exosome tech. not included; back to UTSW", see: https://tinyurl.com/yakdl4wj
Click here https://tinyurl.com/y8pq4rhc for an ARCHIVE of the History of Peregrine’s Anti-PS/Bavituximab Platform - MOA, Trials, and Activity over the years, from early 2000’s thru 2017, prior to being Sold to ONCOLOGIE.
Of Interest (post Oncologie Sale):
4-20-18/AACR’18: MSKCC(LudwigCC) Tweets about 2 WolchokLAB/”PPHM” Anti-PS Posters https://tinyurl.com/ycgjhvqa
4-26-18: New Bavi+Keytruda/LIVER Ph2 IST Trial, Sponsor=UTSW, Collab=MERCK https://tinyurl.com/y7fd9vdb
Totally wrong, 4OUR. It will be ~July13.
~Jul13: FY'18Q4 (fye 4-30-18) Financials & Conf. Call
Aug13-17/Booth310: The Bioprocessing Summit, Boston http://ir.avidbio.com/events.cfm
Sep4-7: BioProcess Intl. Conf. & Exhibition, Boston http://ir.avidbio.com/events.cfm
~Sep10: FY'19Q1 (qe 7-31-18) Financials & Conf. Call
Sep27-28/Booth918: Contract Pharma’s 17th Annual Contracting & Outsourcing Conf.”, NewBWK NJ http://conference.contractpharma.com
~Oct11: Avid's 2018 Annual Shareholder’s Meeting, Tustin CA
= = = = =
7-14-17: Qtly. Conf. Call (King/Shan/Lytle) Transcript http://tinyurl.com/yb4wulvu
...CEO SK: “We are seriously considering the possibility of separating our 2 distinct businesses, Avid and R&D/PS-Targeting.”
We're IN the Russell3000. Doesn't matter what the MktCap is today. The official Rankings Cutoff was 5-11-18.
CDMO closed at $3.68 on 5-11-18, MktCap=~$204M. The Russell Cutoff was in the $160-170M range.
See:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=140636390
Avid’s Sun Ra Bullins (Dir./Mfg.) 4-17-18 Interphex’18/NYC Recap
5-18-18/INTERPHEX’18: “Avid Bioservices: 'The Single-Use Facility Is Not All Sunshine'”
By Flora Southey, BioPharma-Reporter
* Fluid distribution & warehouse mgt. challenges are among the ‘pitfalls’ of the single-use biopharmaceutical facility, says Avid Bioservices executive.
https://www.biopharma-reporter.com/Article/2018/05/18/Avid-Bioservices-The-single-use-facility-is-not-all-sunshine
Avid Bioservices Director of Mfg., Sun Ra Bullins, said the single-use facility is inherently flexible, offers time & cost benefits, and provides operational advantages in the manufacturing process, but also poses challenges: “The single-use facility is not all sunshine.”
One of the bigger challenges is managing fluid distribution, said Bullins at Interphex in New York last month [April 17, 2018 http://www.interphex.com ], as limited sizing for disposable technology – including tubing – can result in limited flow. “When moving from expansion to production to the downstream process, fluid requirements increase heavily, and with some of these high titer molecules coming out…you can reach a point in the process where you can be dealing with 10,000L of fluid,” he told delegates.
Bullins proposed using multiple, smaller volume tanks, which he said “can have some degree of effectiveness,” but also poses potential floor space issues. “When dealing with disposables, the warehouse space explodes. No matter how much warehouse space you think you need, you need more,” he explained.
Insufficient supply chain availability for disposable technologies also can cause manufacturing delays, he added, begging the question: “How much equipment do we need on hand in order to tackle some of these downsides of single-use?”
*end*
Sun Ra Bullins, Dir./Mfg., Avid Bioservices http://www.interphex.com/en/Contributors/5531153/Sun-Ra-Bullins
= = = = = = = =
Apr17-18 2018: 39th Annual INTERPHEX 2018, NYC http://www.interphex.com
...Apr17 11:30-12:15pm, Sun Ra Bullins(Dir./Mfg), “The Perks & Pitfalls of a Single-Use Biopharm. Facility”
...Apr18 2:15-3:00pm, Roger Lias, “Biologics Outsourcing” panel
= = = = =
PRIOR NEWS:
*Avid Plans Expansion With Focus On Biologics Development https://www.biopharma-reporter.com/Article/2018/04/24/Avid-plans-expansion-with-focus-on-biologics-development
*Avid Offloads Phase III mAb, Becomes Pureplay CDMO https://www.biopharma-reporter.com/Article/2018/02/20/Avid-offloads-Phase-III-mAb-becomes-pureplay-CDMO
*Avid Letting Peregrine Fly Off As It Focuses On Bio-CDMO business https://www.biopharma-reporter.com/Article/2017/11/16/Avid-letting-Peregrine-fly-off-as-it-focuses-on-bio-CDMO-business
Total INST.+LARGE Holdings now ~22,027,435 39.7% (3-31-18)
10,571,886 19.0% INSTITUTIONS* https://www.nasdaq.com/symbol/cdmo/institutional-holdings
11,455,549 20.6% LARGE SHAREHOLDERS via Forms13/14 (Tappan, EasternCap/Dart, Ronin/Stafford)
------------
22,027,435 39.7%
* TAPPAN 9-30-17 pulled from Nasdaq Inst. Holdings; picked up via 2-14-18 Form 13G a/o 12-31-17.
. . . . .Nasdaq-INST a/o 3-31-18: (13,442,886 – 2,871,000) = 10,571,886
Ownership %’s based on 55,552,233 common O/S at 3-7-18.
4 LARGEST SHAREHOLDERS:
1. Tappan Street (Prasad Phatak): 4,516,107 8.1% (a/o 12-31-17 13G: https://tinyurl.com/yd7xkdzg )
2. Eastern Capital (Kenneth Dart): 4,300,992 7.7% (a/o 12-7-17 14A: https://tinyurl.com/y7qprpg9 acq. 10-2015)
3. Ronin Trading (John Stafford III+R.Farley): 2,638,450 4.7% (a/o 4-17-18 13D: https://tinyurl.com/ycf7d2uk )
4. Kennedy Capital Mgt: 2,615,362 4.7% (a/o 3-31-18: Nasdaq Inst.)
= = = = = = = = = = = = = = = = = =5-15-18:
re: TAPPAN: I have a new theory as to what's going on w/TAPPAN. I think they may have switched to the Form 13/14 method of reporting and NOT via Nasdaq INSTITUTIONS.
Ie, like EASTERN-CAP(Dart) and RONIN.
The last time they reported to Nasdaq INST. HOLDINGS was a/o 9-30-17 (as we know) – it’s still there, showing 2,871,000(a/o 9-30-17).
https://www.nasdaq.com/symbol/cdmo/institutional-holdings
BUT, remember this:
=> Tappan filed a 13G on 2-14-18 showing holdings of 4,516,107, a/o 12-31-17.
So, maybe they've shifted to Form 13 reporting which DO NOT SHOW ON NASDAQ INST. HOLDINGS - just like EASTERN-CAP & RONIN.
...Ie, the Tappan 9-30-17 2.9M entry s/b NOT even be there on Nasdaq – it’s no longer applicable.
That's my theory!
If that’s true, their 12-31-17 holdings of 4,516,107 is still correct and won’t change until they file another 13G to change it.
ALL Tappan St. (Prasad Phatak) filings:
https://www.sec.gov/cgi-bin/browse-edgar?company=tappan&owner=exclude&action=getcompany
re: TAPPAN: I have a new theory as to what's going on w/TAPPAN. I think they may have switched to the Form 13 method of reporting and NOT via Nasdaq INSTITUTIONS.
Ie, like EASTERN-CAP(Dart) and RONIN.
The last time they reported to Nasdaq INST. HOLDINGS was a/o 9-30-17 (as we know) – it’s still there, showing 2,871,000(a/o 9-30-17).
https://www.nasdaq.com/symbol/cdmo/institutional-holdings
BUT, remember this:
=> Tappan filed a 13G on 2-14-18 showing holdings of 4,516,107, a/o 12-31-17.
So, maybe they've shifted to Form 13/14 reporting which DO NOT SHOW ON NASDAQ INST. HOLDINGS - just like EASTERN-CAP & RONIN.
...Ie, the Tappan 9-30-17 2.9M entry s/b NOT even be there on Nasdaq – it’s no longer applicable.
That's my theory!
If that’s true, their 12-31-17 holdings of 4,516,107 is still correct and won’t change until they file another 13G to change it.
ALL Tappan St. (Prasad Phatak) filings:
https://www.sec.gov/cgi-bin/browse-edgar?company=tappan&owner=exclude&action=getcompany
= = = = = =
4 LARGEST SHAREHOLDERS:
1. Tappan Street (Prasad Phatak): 4,516,107 8.1% (a/o 12-31-17 13G: https://tinyurl.com/yd7xkdzg )
2. Eastern Capital (Kenneth Dart): 4,300,992 7.7% (a/o 12-7-17 14A: https://tinyurl.com/y7qprpg9 acq. 10-2015)
3. Ronin Trading (John Stafford III+R.Farley): 2,638,450 4.7% (a/o 4-17-18 13D: https://tinyurl.com/ycf7d2uk )
4. Kennedy Capital Mgt: 2,615,362 4.7% (a/o 3-31-18: Nasdaq Inst.)
Prior PPHM IST trials didn’t mention Peregrine in their ClinicalTrials entries either, so I would think that Oncologie not being mentioned in the new UTSW Ph2 Bavi+Keytruda/Liver trial entry doesn’t mean they aren’t in charge of the IP, just like Peregrine was for prior Bavi IST's. I’m assuming the new Bavi+Keytruda trial is a UTSW IST – could be wrong of course.
O. 6th IST Trial(UTSW): Bavi+Ipilimumab(Yervoy) vs. Adv.Melanoma (Ph1b)
http://www.clinicaltrials.gov/ct2/show/NCT01984255
N. 5th IST Trial(UTSW): Bavi+Capecitabine+RAD/Rectal) vs. Rectal Cancer (Ph1)
http://www.clinicaltrials.gov/ct2/show/NCT01634685
= = = = = = = = =
5-9-18: New Bavi+Keytruda/HCC Ph2 Trial hits ClinicalTrials. Sponsor=UTSW, Collaborator=MERCK
“A Phase II Study of Pembrolizumab(Keytruda) + Bavituximab in Patients with Advanced Hepatocellular [Liver] Carcinoma”
https://clinicaltrials.gov/ct2/show/NCT03519997
5-9-18: New Bavi+Keytruda/HCC Ph2 Trial hits ClinicalTrials. Sponsor=UTSW, Collaborator=MERCK
“A Phase II Study of Pembrolizumab(Keytruda) + Bavituximab in Patients with Advanced Hepatocellular [Liver] Carcinoma”
https://clinicaltrials.gov/ct2/show/NCT03519997
BRIEF SUMMARY:
This is a non-randomized, open-label, multi-site Phase II therapeutic trial of pembrolizumab(Merck’s Keytruda, Anti-PD-1) & bavituximab in patients with locally advanced HCC. Locally advanced or metastatic HCC is defined as disease that is not amenable to surgical and/or locoregional therapies. Subjects must not have received prior systemic therapy for advanced HCC in keeping with the first-line setting of this study.
SPONSOR: UTSW-MC/Dallas
COLLABORATOR: Merck Sharp & Dohme Corp.
First Posted: May 9 2018; Status: Recruiting
Actual Study Start Date: April 26 2018
Est. N=34
PI: Muhammad Beg, MD, UTSW-MC http://profiles.utsouthwestern.edu/profile/125541/muhammad-beg.html
HCC = Hepatocellular Carcinoma, a primary malignancy of the Liver
R3000 MktCaps Capture (Ranking) day is this FRIDAY(May11). Addition to Russell3000 (cutoff: 5-11-18) looking good, based on R3000 up ~12% since last year’s rank date (5-12-17). CDMO’s current MktCap=$~199M, and if the ranking were today (it’s actually FRIDAY 5-11-18), the 2018 R3000 cutoff would be ~$162M.
The Indexes are actually reconstituted on Monday 6-25-18.
Russell3000 Cutoffs:
2015: $176.7M
2016: $132.9M
2017: $143.6M
2018: a/o 5-8-18, UP ~12.1% => ‘18 cutoff EST. = ~$162M (based on 5/12/17 – 5/8/18)
http://www.ftserussell.com/research-insights/russell-reconstitution/market-capitalization-ranges
CDMO Mkt. Cap a/o 5-8-18 = ~$199M (Shares O/S = 55,552,233)
https://finance.yahoo.com/quote/CDMO?p=CDMO
R3000 INDEX Quote:
https://www.marketwatch.com/investing/index/rua
5-12-17: 1,416
5-8-18: 1,588 +12.1%
RUSSELL ANNUAL RECONSTITUTION
Rank Day 2017: 5-12-17
Rank Day 2018: 5-11-18 (takes effect 6-25-18/Monday)
http://www.ftserussell.com/index-series/index-resources/russell-reconstitution
Wolchok’s people are presenting one Anti-PS MSK+”PPHM” poster May4-5 at “IMMUNOLOGY 2018” in Austin TX.
http://www.immunology2018.org
http://www.immunology2018.org/pdfs/Full-Scientific-Program.pdf
By: AAI http://www.aai.org The American Association of Immunologists
“IMMUNOLOGY 2018” (Austin TX)
5-4-18 10:45am Block Symposium AND 5-5-18 2:30pm Poster Session (same Title)
COMBINATION THERAPIES For IMMUNO-ONCOLOGY
#122.10: “Phosphatidylserine Targeting Antibody in Combination with Tumor Radiation & Immune Checkpoint Blockade Promotes Anti-Tumor Activity in Mouse B16 Melanoma”
S.Budha, R.Giese, A.Gupta, O.DeHenau, R.Zappasodi, L.F.Campesato, C.Barker, J.Shan, J.Wolchok, T.Merghoub
Mem. Sloan Kettering Cancer Ctr & Peregrine Pharmaceuticals
https://www.immunology2018.org/pdfs/Full-Scientific-Program.pdf (pg.9 & 76)
NOTE:
Posters with the exact same title were presented by MSK/PPHM at both AACR’17 and SITC’16(Nov’16).
= = = = = = = = = = = = = = = = = = = = =
The above one is different from the 2 that MSK/PPHM presented at AACR’18, though very similar (updated?) as AACR’18 #2767 – see below:
4-20-18: MSKCC Tweets
re: Two AACR’18 PS-Targeting Posters.
Both author blocks reference joint MSKCC(Wolchok/Merghoub)/”PPHM”(S.King/J.Shan) scientists.
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=140228426
AACR’18:
#2767: “Phosphatidylserine Targeting & Radiation Improves Survival in a Mouse Tumor Model Resistant to Checkpoint Blockade”
Rachel Giese (Wolchok Lab), S. Budhu 1, C. Barker 1, A. Gupta 1, S. King 2, J. Shan 2, J. Wolchok 1, T. Merghoub 1
1=Mem. Sloan Kettering Cancer Ctr, NYC; 2=Peregrine Pharmaceuticals
#3568: “Phosphatidylserine Targeting Antibody Enhances Anti-tumor Activity of CAR T Cells in Mouse Melanoma”
Sara Schad (Wolchok Lab), D. Hirschhorn-Cymerman 1, S. Budhu 1, H. Zhong 1, X. Yang 1, J. Shan 2, S. King 2, T. Merghoub 1, J. Wolchok 1
1=Mem. Sloan Kettering Cancer Ctr, NYC; 2=Peregrine Pharmaceuticals
4-16-18 LUDWIG TWEET:
4-20-18 LUDWIG TWEET:
= = = = = = = = = =
2-12-18: Peregrine’s Legacy PS-Targeting IP Sold to ONCOLOGIE INC. (Boston, CEO: Laura E. Benjamin) for $8M/upfront, $95M/milestones https://tinyurl.com/yam8gb3h
...12-13-18/8-K: Overview of Oncologie sale: https://tinyurl.com/yab9c6cr
NOTE: “PS-targeting Exosome tech. not included; back to UTSW", see: https://tinyurl.com/yakdl4wj
Yeah, but I think those are just pre-arranged Transfers from one holding spot (where they previously bought into) to the actual final Index fund resting place. I THINK.
Don't think so, Michael (R/S is neutral wrt that). What I'd like to know is WHEN do they Buy when you're going back on the R3000? I know I read much earlier than the 6-28-18 eff. date, but how much earlier and how it all works is a mystery to me.
Addition to Russell3000 (cutoff: 5-11-18) looking good, based on R3000 up ~10% since last year’s rank date (5-12-17). CDMO’s current MktCap=$~217M, and if the ranking were today (it’s actually 5-11-18), the 2018 R3000 cutoff would be ~$160M.
I read once that a lot of R3000 buying (for potential ADDS) is done way before the reconstitution eff. date (6-28-18) – could that be part of CDMO’s rise from Mar28/$2.44 to Apr26/$3.90 (+60%)??
Russell3000 Cutoffs:
2015: $176.7M
2016: $132.9M
2017: $143.6M
2018: a/o 4-2018, UP ~10.4% => ‘18 cutoff EST. = ~$160M (based on 5/12/17 – 4/26/18)
http://www.ftserussell.com/research-insights/russell-reconstitution/market-capitalization-ranges
CDMO Mkt. Cap a/o 4-26-18 = ~$217M (Shares O/S = 55,552,233)
https://finance.yahoo.com/quote/CDMO?p=CDMO
R3000 INDEX Quote:
https://www.marketwatch.com/investing/index/rua
5-12-17: 1,416
4-26-18: 1,581 +10.4%
RUSSELL ANNUAL RECONSTITUTION
Rank Day 2017: 5-12-17
Rank Day 2018: 5-11-18 (takes effect 6-25-18)
http://www.ftserussell.com/index-series/index-resources/russell-reconstitution