Avid Bioservices Inc (CDMO)

[bfiest]

It’s been a very tough market for financing of new biotechs for the past 2 years culminating in the worst stats for such in the first half of 2023. Avid has been executing on expansion for the majority of that time. Yes it would be great had they had companies lining up prior to the completion of expansion. They may have had promissory notes likely with contingencies. They may have not seen such a downturn in investment. When contingencies are not met the promissory notes terminate without any payments being made. The point is the downturn timing was tough and likely caught the entire industry by surprise. The key is although the tough market continues there are signs of improvement in this second half of 2023. Maybe they will have the opportunity to revisit some of those companies that they could have had contingent promissory notes with prior the downturn. And had they been done with expansion at the inception of the downturn instead of what appears to be the end of the downturn we would likely be having a much more difficult conversation. The experts see this turning in the second half of 2023 going into 2024. Do your own research.

Excuses are not of any value when building businesses. But Nick and company should be afforded a little extra time to deal with the potential curve ball thrown to the entire industry. The experts see things improving and possibly significantly going into 2024. It is what it is. IMHO I side with the experts. improvement is coming.