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Buy volume so far 96K vs sell volume 76K. Maybe someone is trying to force margin calls.
Hoping we get a pr this week announcing the earnings date. Last year it was 12/6.
Some remarked activity today.
Date/Time Price Shares Exch/Mkt
11/22/2023 9:04:05 EST T 5.81 290 NDD
11/22/2023 8:18:50 EST I 5.75 17 CBOE BZX
11/22/2023 8:16:51 EST I 5.69 5 ARCA
11/22/2023 8:16:51 EST I 5.63 10 ARCA
11/22/2023 8:16:51 EST I 5.62 7 ARCA
11/22/2023 8:10:45 EST I 5.68 17 ARCA
11/22/2023 8:09:33 EST I 5.68 5 ARCA
11/22/2023 8:08:30 EST I 5.92 10 CBOE EDGX
11/22/2023 8:08:30 EST T 5.92 100 CBOE EDGX
11/22/2023 8:08:30 EST I 5.92 63 CBOE EDGX
11/22/2023 8:08:30 EST I 5.92 37 CBOE EDGX
11/22/2023 8:08:30 EST I 5.81 63 NSD
11/22/2023 8:08:30 EST I 5.81 37 NSD
11/22/2023 8:08:29 EST I 5.74 10 CBOE BZX
11/22/2023 8:08:27 EST I 5.74 3 CBOE EDGX
11/22/2023 8:08:02 EST I 5.74 2 NDD
11/22/2023 8:05:05 EST I 5.74 1 CBOE EDGX
11/22/2023 8:01:04 EST I 5.68 25 CBOE EDGX
11/22/2023 7:01:00 EST I 8.00 2
There is one less short only. There had been 4 now 3. II has gone up a percent as well.
Institutional Owners 417 total, 411 long only, 3 short only, 3 long/short - change of % MRQ
Average Portfolio Allocation % - change of % MRQ
Shares Outstanding shares (source: Capital IQ)
Institutional Shares (Long) 72,121,812 - 114.27% (ex 13D/G) - change of shares - change of % MRQ
Institutional Value (Long) $ 666,984 USD ($1000)
Strong going into the close.
A fairly large trade to start the day.
11/17/2023 9:30:00 EST X 5.24 39723
Buy vol 96K vs 83K sell so far.
Your posts are always insightful and educational.
Volume has picked up a little. Hope we hold these gains.
II up to 113.29%.
8 K filed.
ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
Amendment to Deferred Compensation Plan
On November 7, 2023, the Board of Directors (the “Board”) of Avid Bioservices, Inc. (the “Company”) approved and adopted an amendment (the “First Amendment”) to the Avid Bioservices, Inc. Deferred Compensation Plan dated July 7, 2023 (the “Plan”). The First Amendment makes certain modifications to the Plan in order to clarify that a participant who elects to defer equity awards, and therefore receives an interest in the Company Stock Fund (as defined in the Plan), will not be permitted to diversify such interest by transferring amounts out of the Company Stock Fund. In addition, the First Amendment makes certain modifications to clarify that distributions to a participant under the Plan shall be made in a lump sum consisting of cash and/or equity depending upon the composition of such participant’s deferral account at the time of such distribution.
The foregoing description is qualified in its entirety by reference to the First Amendment, a copy of which is filed as exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits. The following material is filed as an exhibit to this Current Report on Form 8-K:
Exhibit Number Description
10.1
First Amendment to Avid Bioservices, Inc. Deferred Compensation Plan
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
AVID BIOSERVICES, INC.
Date: November 14, 2023 By: /s/ Daniel R. Hart
Daniel R. Hart
Chief Financial Officer
II dropped 6% yesterday. Hopefully the bottom is in.
Buy volume 362K to sell volume 215K.
Institutional investment rose a little more yesterday to 117.55 up from 117.32.
Green, but 127K wasn’t as much as I hoped.
Last year’s cc was 12/6.
I wonder if we will see an unusually large green trade EOD.
Avid Bioservices Partners With California Institute for Regenerative Medicine (CIRM) to Provide CDMO Services for Cell and Gene Therapy (CGT) Programs
November 8, 2023 at 8:05 AM EST
Download PDF
CIRM-Funded Programs to Receive Access to Avid’s Suite of World-Class CGT CDMO Services to Support Clinical Development Activities
TUSTIN, Calif., Nov. 08, 2023 (GLOBE NEWSWIRE) -- Avid Bioservices, Inc. (NASDAQ:CDMO), 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 a new partnership with the California Institute for Regenerative Medicine (CIRM) Industry Resource Partner Program. The collaboration is designed to support the advancement of manufacturing of adeno-associated adenovirus (AAV), as well as other cell and gene therapy (CGT) programs within the state of California. With $5.5 billion in funding from the state of California, CIRM is accelerating world-class science to deliver transformative regenerative medicine treatments in an equitable manner to a diverse California and world.
Under terms of the partnership, Avid has joined the CIRM Industry Resource Partner Program to provide development and CGMP manufacturing services to CIRM-funded programs. The company will assist CIRM’s partners in accelerating gene therapy development and manufacturing through its suite of CDMO services, which span process and analytical development, cell banking, virus banking, drug substance manufacturing, and fill-finish activities. CIRM-funded programs will be offered access to Avid’s services in order to reduce the timelines required to advance through clinical development. All partnership activities will be performed in Avid’s recently launched, world-class CGT CGMP manufacturing facility in Orange County, California.
“CIRM was established with a mission to provide treatments to patients with unmet medical needs through the promise of cell and gene therapy. As a proud California-based company, Avid Bioservices is excited to be collaborating with CIRM to help fulfill this vision through our strong development capabilities, established quality systems and proven commercial manufacturing experience in support of delivering these treatments to patients in need,” said Drew Brennan, general manager, viral technologies of Avid Bioservices.
“CIRM's Industry Resource Partner Program aims to amplify its impact by partnering with industry leaders who possess the necessary resources, expertise, and experience to accelerate regenerative medicine research projects,” says Shyam Patel, Ph.D., senior director of business development & alliance management at CIRM. “We are thrilled to welcome Avid Bioservices to our network of partners who share our unwavering commitment to advancing transformative regenerative medicine therapies for patients.”
About the California Institute for Regenerative Medicine (CIRM)
At CIRM, we never forget that we were created by the people of California to accelerate stem cell treatments to patients with unmet medical needs, and act with a sense of urgency to succeed in that mission.
To meet this challenge, our team of highly trained and experienced professionals actively partners with both academia and industry in a hands-on, entrepreneurial environment to fast track the development of today’s most promising stem cell technologies.
With $5.5 billion in funding and more than 161 active stem cell programs in our portfolio, CIRM is the world’s largest institution dedicated to helping people by bringing the future of cellular medicine closer to reality.
About?Avid Bioservices, Inc.
Avid Bioservices (NASDAQ:CDMO), an S&P SmallCap 600 company, is a dedicated contract development and manufacturing organization (CDMO) focused on development and CGMP manufacturing of biologics. The company provides a comprehensive range of process development, CGMP clinical and commercial manufacturing services for the biotechnology and biopharmaceutical industries. With 30 years of experience producing biologics, Avid's services include CGMP clinical and commercial drug substance manufacturing, bulk packaging, release and stability testing and regulatory submissions support. For early-stage programs the company provides a variety of process development activities, including cell line development, upstream and downstream development and optimization, analytical methods development, testing and characterization. The scope of our services ranges from standalone process development projects to full development and manufacturing programs through commercialization. www.avidbio.com
Forward-Looking Statements
Statements in this press release which are not purely historical, including statements regarding Avid Bioservices, Inc.'s intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties including, but not limited to, the risk that CIRM-funded awardees determine not to engage the company’s services. Our business could be affected by a number of other factors, including the risk factors listed from time to time in our reports filed with the Securities and Exchange Commission including, but not limited to, our annual report on Form 10-K for the fiscal year ended April 30, 2023, and subsequent quarterly reports on Form 10-Q, as well as any updates to these risk factors filed from time to time in our other filings with the Securities and Exchange Commission. We caution investors not to place undue reliance on the forward-looking statements contained in this press release, and we disclaim any obligation, and do not undertake, to update or revise any forward-looking statements in this press release except as may be required by law.
Investor Relations:
Stephanie DiazVida Strategic Partners
415-675-7401
sdiaz@vidasp.com
Media Relations:
Tim BronsVida Strategic Partners
415-675-7402
tbrons@vidasp.com
Institutional investment went up slightly yesterday from 116.95 to 117.32, equivalent 5o about 230K share increase.
HALO is up over $4.
FWIW, buy volume 322K and sell volume 258K.
So far the market seems happy enough, but not convincing volume yet.
8K filed.
On October 27, 2023, Avid Bioservices, Inc. (the “Borrower” and “Company”), entered into Amendment No. 1 to the Credit Agreement (the “Amendment”) among the Borrower, the Lenders (as defined in the Credit Agreement), and Bank of America, N.A., as administrative agent, which amends the Credit Agreement dated as of March 14, 2023 (the “Credit Agreement”) among the Borrower, the guarantors, the lenders, and Bank of America, N.A., as administrative agent and letter of credit issuer. The Amendment, among other things, (a) extends the maturity date of the revolving credit facility (“Credit Facility”) to October 25, 2024, (b) amends the applicable interest rate applied to loans under the Credit Facility as described below, and (c) increases the aggregate amount of indebtedness the Company can incur at any one time for fixed or capital assets. Other than the foregoing, the material terms of the Credit Agreement remain unchanged.
Loans under the Credit Facility will bear interest on the outstanding principal amount thereof, at either (1) a term SOFR rate for a specified interest period plus a SOFR adjustment (equal to 0.10%) plus a margin of 1.60% or (2) base rate plus a margin of 0.60% at the option of the Borrower.
This summary of the Amendment does not purport to be complete and is qualified in its entirety by reference to the text of the Amendment, a copy of which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits. The following material is filed as an exhibit to this Current Report on Form 8-K:
Exhibit Number Description
10.1
Amendment No. 1 to Credit Agreement, dated as of October 27, 2023, among Avid Bioservices, Inc., as the Borrower, the Lenders party hereto, and Bank of America, N.A., as Administrative Agent.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
AVID BIOSERVICES, INC.
Date: November 2, 2023 By: /s/ Daniel R. Hart
Daniel R. Hart
Chief Financial Officer
AMENDMENT NO. 1 TO CREDIT AGREEMENT
THIS AMENDMENT NO. 1 TO CREDIT AGREEMENT, dated as of October 27, 2023 (this “Amendment”), is by and among AVID BIOSERVICES, INC. (the “Borrower”), the Lenders party hereto, and BANK OF AMERICA, N.A., as administrative agent (in such capacity, the “Administrative Agent”). Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Credit Agreement.
W I T N E S S E T H
WHEREAS, the Borrower, certain of its Affiliates from time to time party thereto, certain banks and financial institutions from time to time party thereto (the “Lenders”) and the Administrative Agent are parties to that certain Credit Agreement dated as of March 14, 2023 (as amended, modified, extended, restated, replaced, or supplemented from time to time, the “Credit Agreement”);
WHEREAS, the Borrower has requested that the Lenders amend certain provisions of the Credit Agreement; and
WHEREAS, the Lenders are willing to make such amendments to the Credit Agreement, in accordance with and subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
AMENDMENTS TO CREDIT AGREEMENT
1.1The definition of “Applicable Rate” set forth in Section 1.01 of the Credit Agreement is hereby amended in its entirety as follows:
“Applicable Rate” means a per annum rate equal to (x) 1.60% for Term SOFR Loans and the Letter of Credit Fee, (y) 0.60% for Base Rate Loans, and (z) .25% for the commitment fee described in Section 2.09(a).
1.2The definition of “Maturity Date” set forth in Section 1.01 of the Credit Agreement is hereby amended in its entirety as follows:
“Maturity Date” means October 25, 2024; provided, however, that, if such date is not a Business Day, the Maturity Date shall be the next preceding Business Day.
1.3Section 7.02(c) of the Credit Agreement is hereby amended in its entirety as follows:
(c)Indebtedness in respect of Capitalized Leases, Synthetic Lease Obligations and purchase money obligations for fixed or capital assets within the limitations set forth in Section 7.01(i); provided, however, that the aggregate amount of all such Indebtedness at any one time outstanding shall not exceed $10,000,000;
1
ARTICLE II
CONDITIONS TO EFFECTIVENESS
2.1Closing Conditions. This Amendment shall become effective as of the day and year first set forth above (the “Amendment Effective Date”) upon satisfaction (or waiver) of the following conditions (in each case, in form and substance reasonably acceptable to the Administrative Agent):
(a)Executed Amendment. The Administrative Agent shall have received a copy of this Amendment duly executed by each of the Borrower, the Lenders and the Administrative Agent.
(b)Default. After giving effect to this Amendment, no Default or Event of Default shall exist.
(c)Fees and Expenses. The Administrative Agent shall have received from the Borrower such fees and expenses that are payable in connection with the consummation of the transactions contemplated hereby and counsel for the Administrative Agent shall have received from the Borrower payment of all outstanding fees and expenses previously incurred and all fees and expenses incurred in connection with this Amendment.
(d)Miscellaneous. All other documents and legal matters in connection with the transactions contemplated by this Amendment shall be reasonably satisfactory in form and substance to the Administrative Agent and its counsel.
ARTICLE III
MISCELLANEOUS
3.1Amended Terms. On and after the Amendment Effective Date, all references to the Credit Agreement in each of the Loan Documents shall hereafter mean the Credit Agreement as amended by this Amendment. Except as specifically amended hereby or otherwise agreed, the Credit Agreement is hereby ratified and confirmed and shall remain in full force and effect according to its terms.
3.2Representations and Warranties of the Borrower. The Borrower represents and warrants as follows:
(a)It has taken all necessary action to authorize the execution, delivery and performance of this Amendment.
(b)This Amendment has been duly executed and delivered by such Person and constitutes such Person’s legal, valid and binding obligation, enforceable in accordance with its terms, except as such enforceability may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).
(c)No consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is required in connection with the execution, delivery or performance by such Person of this Amendment.
(d)The representations and warranties set forth in Article V of the Credit Agreement are true and correct as of the date hereof (except for those which expressly relate to an earlier date).
(e)After giving effect to this Amendment, no event has occurred and is continuing which constitutes a Default or an Event of Default.
(f)The Collateral Documents continue to create a valid security interest in, and Lien upon, the Collateral, in favor of the Administrative Agent, for the benefit of the Lenders, which security interests and Liens are perfected in accordance with the terms of the Collateral Documents and prior to all Liens other than Permitted Liens.
(g)The Obligations are not reduced or modified by this Amendment and are not subject to any offsets, defenses or counterclaims.
2
3.3Reaffirmation of Obligations. The Borrower hereby ratifies the Credit Agreement and acknowledges and reaffirms (a) that it is bound by all terms of the Credit Agreement applicable to it and (b) that it is responsible for the observance and full performance of its respective Obligations.
3.4Loan Document. This Amendment shall constitute a Loan Document under the terms of the Credit Agreement.
3.5Expenses. The Borrower agrees to pay all reasonable costs and expenses of the Administrative Agent in connection with the preparation, execution and delivery of this Amendment, including without limitation the reasonable fees and expenses of the Administrative Agent’s legal counsel.
3.6Further Assurances. The Loan Parties agree to promptly take such action, upon the request of the Administrative Agent, as is necessary to carry out the intent of this Amendment.
3.7Entirety. This Amendment and the other Loan Documents embody the entire agreement among the parties hereto and supersede all prior agreements and understandings, oral or written, if any, relating to the subject matter hereof.
3.8Counterparts; Electronic Signatures. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Amendment or any other document required to be delivered hereunder, by fax transmission or e-mail transmission (e.g. “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Agreement. Without limiting the foregoing, upon the request of any party, such fax transmission or e-mail transmission shall be promptly followed by such manually executed counterpart. Section 11.18 of the Credit Agreement is hereby incorporated by reference herein and is made a part hereof.
3.9No Actions, Claims, Etc. As of the date hereof, the Borrower hereby acknowledges and confirms that it has no knowledge of any actions, causes of action, claims, demands, damages and liabilities of whatever kind or nature, in law or in equity, against the Administrative Agent, the Lenders, or the Administrative Agent’s or the Lenders’ respective officers, employees, representatives, agents, counsel or directors arising from any action by such Persons, or failure of such Persons to act under the Credit Agreement on or prior to the date hereof.
3.10GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
3.11Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
3.12Consent to Jurisdiction; Service of Process; Waiver of Jury Trial. The jurisdiction, service of process and waiver of jury trial provisions set forth in Sections 11.14 and 11.15 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
3
IN WITNESS WHEREOF the parties hereto have caused this Amendment to be duly executed on the date first above written.
BORROWER: AVID BIOSERVICES, INC.
By: /s/ Daniel Hart
Name: Daniel Hart
Title: Chief Financial Officer
Some larger green trades
11/01/2023 14:43:36 EDT V 5.86 60800 NDD
11/01/2023 14:43:34 EDT I 5.855 36 NDD
11/01/2023 14:43:34 EDT 5.855 100 NDD
11/01/2023 14:43:34 EDT I 5.855 37 NDD
11/01/2023 14:43:28 EDT V 5.86 81100 NDD
11/01/2023 14:43:21 EDT V 5.86 141900 NDD
Crazy.
You may be right, but institutional ownership remains at 118%+.
Institutional Shares (Long) 74,631,139 - 118.25% (ex 13D/G) - change of shares - change of % MRQ
Thanks for that deep dive. Much appreciated.
It was a 1 share trade.
23/2023 19:21:29 EDT I 35.15 1 ARCA
Another Seeking Alpha article. I don’t have premium subscription so this is only part of the article.
Avid Bioservices: A 2024 Story
Oct. 22, 2023 9:27 AM ETAvid Bioservices, Inc. (CDMO)
Bret Jensen profile picture
Bret Jensen
Investing Group Leader
Summary
Today, we take a deeper look at a biologic contract development and manufacturing organization called Avid Bioservices.
CDMO stock has been chopped in half in 2023 even as the company is building a large new facility that will greatly expand capacity in the near future.
The new facility should power much higher sales growth in the years ahead. Time to buy the dip? An analysis follows in the paragraphs below.
I am Bret Jensen, an analyst with over 13 years of experience in the biotech sector. I lead the investing group The Biotech Forum where we focus on proprietary, breaking research on biotech and biopharma stocks.
Female employee in a pharmaceutical laboratory seen while controlling the process of drugs manufacturing
EXTREME-PHOTOGRAPHER
The future is a hundred thousand threads, but the past is a fabric that can never be rewoven."? Orson Scott Card
Today, we put Avid Bioservices (NASDAQ:CDMO) in the spotlight. The stock has been cut in half so far here in 2023. This fiscal year looks like it will be a 'transitional' one for the company as Avid shifts to a higher growth future. Time to buy the dip in the shares in front of coming improvements to the company's fortunes? An analysis follows below.
This article was written by
Bret Jensen profile picture
Bret Jensen
47.74K Followers
Bret Jensen has over 13 years as a market analyst, helping investors find big winners in the biotech sector. Bret specializes in high beta sectors with potentially large investor returns.
Bret leads the investing group The Biotech Forum, in which he and his team offer a model portfolio with their favorite 12-20 high upside biotech stocks, live chat to discuss trade ideas, and weekly research and option trades. The group also provides market commentary and a portfolio update every weekend. Learn more.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
https://seekingalpha.com/article/4642463-avid-bioservices-2024-story?
Laughing Water Capital - Avid Bioservices: Worth Stomaching The Volatility
Oct. 22, 2023 7:10 AM ETAvid Bioservices, Inc. (CDMO)
Fund Letter Stock Ideas profile picture
Fund Letter Stock Ideas
10.9K Followers
Summary
Avid Bioservices' investment has decreased due to disappointing near-term guidance, but the long-term outlook remains positive.
The company is at a pivot point and expected to generate significant free cash flow in the future.
Uncertainty around timing makes it difficult to predict when Avid's facilities will reach capacity, but there is potential for significant returns in the next few years.
Antibody Molecule
cdascher
The following segment was excerpted from this fund letter.
Avid Bioservices (NASDAQ:CDMO)
Our investment in Avid Bioservices, our biologic contract drug manufacturer, has been cut in half over the last few months after issuing disappointing near-term guidance tied to a slow down in biotech spending on early-stage projects. The near term is admittedly uncertain, but the bigger picture remains unchanged. There is still a very favorable de novo biologic drug pipeline, still a very favorable patent cliff/biosimilar pipeline, still a very favorable industry supply vs. demand dynamic, still a very favorable trend toward outsourcing among large pharma, and still very favorable forecasts from existing large customers.i
Further, simply zooming out a little bit shows that after a few years of cash going out the door to fund capacity expansion, Avid is now at a pivot point, and cash should shortly be coming in the door as that capacity has been built. That cash will come with tremendous operating leverage.
The intermediate term analysis here is thus a very simple exercise. When the new capacity is filled, how much free cash flow will be generated, and what multiple will it deserve? In my estimation, before long Avid will be generating something around $100M in free cash, which is attractive vs. its quarter end enterprise value of ~$700M. Looking at M&A transactions and public competitors, it seems as if the market thinks businesses such as Avid (when mature) deserve to trade at 20x-30x free cash flow, which suggests a very bright future for CDMO stock (even If multiples compress), and the potential for returns of 200-400% over the next few years.ii
The problem?
I can tell you with near certainty that Avid’s facilities will be filled, but I cannot tell you when. That uncertainty around timing – the unknown duration – is very difficult to overcome in a market that only cares about what the macro picture will look like next week or next month.
My best guess is that it will take 4 to 5 years to reach capacity, and that the market will mostly price in success 12-18 months in advance. One may ask, “if success here is likely years away, then why not wait on the sidelines for a few years?” The answer is that there are likely to be step function advances along the way as Avid announces increases to backlog and new customer wins, and those could happen at any moment. Additionally, Avid does not even have an investor presentation. Now that they are at a clear pivot point, I think this is likely to change in the near future, which should increase interest in the name. Lastly, when the cash flow statement flips from negative to positive, surely quant based investors will take note.
If we were playing month to month or quarter to quarter stock market games, we could not own a stock like CDMO. However, as we are investing in businesses with a 3 to 5+ year view, it is worth stomaching the volatility along the way in order to capture ultimate upside that I believe is extremely likely to be realized. Insiders at Avid seem to agree, as the recent selloff has been met with insider buying.
Footnotes
i See commentary from RBC’s 2023 CDMO conference, company conference calls, and HALO projections.
ii LWC estimates
Disclaimer
This document, which is being provided on a confidential basis, shall not constitute an offer to sell or the solicitation of any offer to buy which may only be made at the time a qualified offeree receives a confidential private offering memorandum (“CPOM”) / confidential explanatory memorandum (“CEM”), which contains important information (including investment objective, policies, risk factors, fees, tax implications and relevant qualifications), and only in those jurisdictions where permitted by law. In the case of any inconsistency between the descriptions or terms in this document and the CPOM/CEM, the CPOM/CEM shall control. These securities shall not be offered or sold in any jurisdiction in which such offer, solicitation or sale would be unlawful until the requirements of the laws of such jurisdiction have been satisfied. This document is not intended for public use or distribution. While all the information prepared in this document is believed to be accurate, Laughing Water Capital, LP , Laughing Water Capital II LP and LW Capital Management, LLC make no express warranty as to the completeness or accuracy, nor can they accept responsibility for errors appearing in the document. An investment in the fund/partnership is speculative and involves a high degree of risk. Opportunities for withdrawal/redemption and transferability of interests are restricted, so investors may not have access to capital when it is needed. There is no secondary market for the interests and none is expected to develop. The portfolio is under the sole trading authority of the general partner/investment manager. Any projections, market outlooks or estimates in this document are forward-looking statements and are based upon certain assumptions. Other events which were not taken into account may occur and may significantly affect the returns or performance of the fund/partnership. Any projections, outlooks or assumptions should not be construed to be indicative of the actual events which will occur. The enclosed material is confidential and not to be reproduced or redistributed in whole or in part without the prior written consent of LW Capital Management, LLC. The information in this material is only current as of the date indicated, and may be superseded by subsequent market events or for other reasons. Statements concerning financial market trends are based on current market conditions, which will fluctuate. Any statements of opinion constitute only current opinions of Laughing Water Capital LP and Laughing Water Capital II LP, which are subject to change and which Laughing Water Capital LP and Laughing Water Capital II LP do not undertake to update. Due to, among other things, the volatile nature of the markets, an investment in the fund/partnership may only be suitable for certain investors. Parties should independently investigate any investment strategy or manager, and should consult with qualified investment, legal and tax professionals before making any investment. The fund/partnership is not registered under the investment company act of 1940, as amended, in reliance on an exemption there under. Interests in the fund/partnership have not been registered under the securities act of 1933, as amended, or the securities laws of any state and are being offered and sold in reliance on exemptions from the registration requirements of said act and laws. The S&P 500 and Russell 2000 are indices of US equities. They are included for informational purposes only and may not be representative of the type of investments made by the fund.
https://seekingalpha.com/article/4642448-avid-bioservices-worth-stomaching-the-volatility?
The buy volume resulted from a green final trade of 152K. Are they selling all day and buying back EOD at a lower price?
Here is the filing you referenced.
ITEM 5.03 AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL YEAR.
On June 19, 2023, the Board of Directors (the “Board”) of Avid Bioservices, Inc. (the “Company”), based on the recommendation of the Corporate Governance Committee of the Board, approved an amendment and restatement of the Company’s Amended and Restated Bylaws (the “Amended and Restated Bylaws”), effective immediately. The Amended and Restated Bylaws include the following amendments:
Article II, Section 6 has been amended to (i) create an exception to the default voting standard, for matters other than the election of directors, to allow the Company to use for stock exchange or other regulatory votes the standard prescribed by the rules and regulations of such stock exchange or other regulatory body and (ii) affirm that the voting standard for the election of directors is a plurality of the votes of shares present in person or by proxy and entitled to vote on the matter.
Article II, Section 8 has been amended to eliminate the requirement that the Company’s stock list be made available during the whole time of a meeting of stockholders.
Article VI, Section 1 has been amended to clarify that the Company’s former directors and officers are only indemnified for actions taken before they ceased to be directors and officers.
Article VII, Section 9 has been amended to clarify that the forum selection clause for internal corporate claims does not apply to actions arising under the Securities Exchange Act of 1934, as amended, or under the Securities Act of 1933, as amended.
In addition, the Amended and Restated Bylaws include certain technical, conforming, modernizing and clarifying changes.
The Amended and Restated Bylaws are filed herewith as Exhibit 3.2. The foregoing description of the changes contained in the Amended and Restated Bylaws does not purport to be complete and is qualified in its entirety by reference to the full text of the Amended and Restated Bylaws, which is incorporated herein by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits. The following material is filed as an exhibit to this Current Report on Form 8-K:
Exhibit Number Description
3.2
Amended and Restated Bylaws of Avid Bioservices, Inc. adopted on June 19, 2023.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
AVID BIOSERVICES, INC.
Date: June 23, 2023 By: /s/ Daniel R. Hart
Daniel R. Hart
Chief Financial Officer
Buy volume 291K sell volume 257K.
I don’t recall making price predictions.
His/her target is $4. We aren’t there yet. I give no props to someone who takes delight in the financial pain caused by this drop.
Avid Bioservices Completes Construction of New, World-Class Cell and Gene Therapy Development and Manufacturing Facility
October 17, 2023 at 8:05 AM EDT
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Newly Launched CGMP Manufacturing Suites Undergoing Final Environmental Monitoring and Performance Qualification with Grand Opening Planned for January 2024
Completion of CGT Facility Brings Company’s Total Revenue Generating Capacity to up to Approximately $400 Million Annually
TUSTIN, Calif., Oct. 17, 2023 (GLOBE NEWSWIRE) -- Avid Bioservices, Inc. (NASDAQ:CDMO), 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 that it has completed construction of CGMP manufacturing suites within its new, world-class cell and gene therapy (CGT) development and CGMP manufacturing facility as scheduled. The newly launched CGMP manufacturing suites are currently undergoing final environmental monitoring and performance qualification. With the completion of this latest and final expansion project, Avid estimates that its combined facilities now have a potential total revenue generating capacity of up to approximately $400 million annually.
The purpose-built 53,000 square foot CGT development and manufacturing facility will support early-stage development through commercial manufacturing and is located in Orange County, CA, just five miles from Avid’s mammalian development and manufacturing operations. The recently completed manufacturing suites join the CGT facility’s analytical and process development labs, which were launched in 2022. Avid plans to commemorate the completion of the CGT facility by hosting a celebratory grand opening in January 2024.
“Over the past few years, we have implemented a strategic expansion plan designed to grow both our capacity and capabilities to align with the demands of the evolving biopharmaceutical market. With the completion of our CGT facility and launch of its CGMP manufacturing suites, we have now completed all phases of that expansion plan and find ourselves strongly positioned to meet the needs of our current and future customers,” said Nick Green, president and chief executive officer of Avid Bioservices. “The completion of this expansion is another example of the Avid team’s ability to execute. The facility’s completion comes only 24 months after we first broke ground and, when allied with the other activities and expansions undertaken by the team during this period, represents a significant achievement. We look forward to engaging with customers and offering them the full range of capabilities necessary to serve their needs along with Avid’s significant experience of operating CGMP-compliant facilities.”
Avid’s CGT facility will have the capability to produce suspension culture batches of up to 3,000 liters, as well as adherent cultures utilizing fixed bed bioreactors. Additionally, the manufacturing suites are designed to produce drug product with the use of state-of-the-art filling and capping machinery performed under isolator. With over 6,000 square feet dedicated to quality control laboratory space, the facility will be fully equipped to support both clinical and commercial CGT products.
“As more and more clinical successes are achieved in the cell and gene therapy space, we will continue to see increasing demand for CDMOs with extensive commercial manufacturing experience and mature, well-tested quality systems. Avid Bioservices is very well positioned through our new CGT facility and experienced team to produce these life-saving therapies for the benefit of patients around the world,” said Drew Brennan, general manager of viral vector technologies of Avid Bioservices.
About?Avid Bioservices, Inc.
Avid Bioservices (NASDAQ:CDMO), an S&P SmallCap 600 company, is a dedicated contract development and manufacturing organization (CDMO) focused on development and CGMP manufacturing of biologics. The company provides a comprehensive range of process development, CGMP clinical and commercial manufacturing services for the biotechnology and biopharmaceutical industries. With 30 years of experience producing biologics, Avid's services include CGMP clinical and commercial drug substance manufacturing, bulk packaging, release and stability testing and regulatory submissions support. For early-stage programs the company provides a variety of process development activities, including cell line development, upstream and downstream development and optimization, analytical methods development, testing and characterization. The scope of our services ranges from standalone process development projects to full development and manufacturing programs through commercialization. www.avidbio.com
Low AH volume. The EOD trade was green for 161,692 shares. Buy volume was 321K vs 190K sell volume.
Institutional Owners 417 total, 410 long only, 4 short only, 3 long/short - change of % MRQ
Average Portfolio Allocation % - change of % MRQ
Shares Outstanding shares (source: Capital IQ)
Institutional Shares (Long) 74,566,734 - 118.15% (ex 13D/G) - change of shares - change of % MRQ
Institutional Value (Long) $ 958,898 USD ($1000)
4 Form i4’s filed
https://ir.avidbio.com/sec-filings
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