Avid Bioservices Inc (CDMO)

[bfiest]

Bottom line this is tough if we focus on how far the share price has fallen. But I see this as a reset. I see this company in a much stronger situation today than it was in when the share price peaked. And had they not gone through multiple expansions could you imagine where the company would have been currently. Yes their debt incurred through such expansions would be wiped out but their backlog would have suffered greatly. Their potential would be limited. Their attraction to new companies would be non existent. Those companies with later stage products that recently contracted with Avid would not even have looked their way. The current BLA they are enjoying would likely benefit some other company. Their contracts would primarily be early stage where the money had all but dried up. Their equipment would be dated and they likely would have been in a downward spiral to — at best — long term mediocrity with little hope to change business dynamics.

The market forced them to change course and seek out later stage product accounts that can only grow the business more efficiently over time. They are refining their tactics and gaining win win partnerships that will only deliver new business to them far into the future. Because of that their product mix is more diversified with greater potential for growth. They now have new state of the art equipment and greater technical expertise that will benefit them well into the future. The market is beginning to loosen up and funding is finding new products once again.

Yes I too wish the biotech industry did not go through tough times as the Avid expansions were being completed. But it seems Avid management met the challenge by changing strategy and making the best of a very tough situation. That is what winning companies do! They change course when necessary and poise themselves for significant growth as market conditions improve.

Yes we are at square one again but much stronger with a significantly more attractive story to tell new potential customers in a market that is turning positive once again. I believe those that hold or increase their positions will be greatly rewarded in the hopefully not too distant future and we will look back on this day as a positive turning point for everyone who stayed the course. I can believe it. I can see it. Hopefully you can too.