Avid Bioservices Inc (CDMO)

[jakedogman1]

Keep in mind up until the DS hearing last summer, the old regime was going to "limit" the BOD pay to $400k per year and add a BOD member 90 days after bavi was approved in US (with no trials in play for that "approval"). And they added unnecessary BOD members to try to stay in power in the Ronin fight. In other words the old regime thought they had a moat strong enough to keep the invaders out for a long time and no incentive to do anything but pass go every year and collect the $400k (thus the CJ jig folks mentioned). And the carrot salesman was hard at it with the "avid" profitability talk and partner interest BS.

So I am very happy Ronin has come in and cleaned house. The carrot salesman has until 5/22/18 to cash out his carrots given all his carrot options go away per his severance agmt (SK had option exp dates up to 2026 so he was sent packing imo). Reread the amended annual report filed in late August which primary purpose imo was to lock in the gravy train in the event of old regime ouster.

The fixes are straight forward and new mgmt has a good platform in Avid to build from and the right folks are at the helm imo. The CDMO market is consolidating and efficient biologic manufacturing capability is in high demand. And if worse comes to worse, the Avid play could be a bolt on acquisition for a bigger fish and the CDMO ticker could be an easy way out for a private entity wanting to go public. And we have a mgmt team that is not locked into self preservation leech mode which is what we had with the old regime.

The sale of the IP could add a boost to the efforts and if there is value, the timing w/ respect to capital availability and interest in general of BP in gaining an edge in I-O is as good as one can expect.
The IP portfolio was mismanaged as well thanks to a BOD not having any biotech experience to speak off.

As far as Ronin selling some off, look at the Dow and Nasdaq charts. Seem to me they are on spot on w/ market moves and they are a big prop trader (private yet very big) so they know what they want to do with their capital and are probably better informed than I am of where the market is heading. And keep in mind their level of investment in PPHM was geared towards ousting the ES gang and that fight dragged on three months beyond the usual ASM meeting dates which further set back the company from righting the ship.

So bottom line I am very pleased of what Ronin did. It has been roughly just over two months since the ES gang was chased out of town. The last quarterly report was top heavy with throw out the trash restructuring charges so hopefully will help future performance.

Will we see the astronomical rainbow the carrot salesman alluded to? Probably not.... but a nice rebound from the current state of affairs is very possible.