Avid Bioservices Inc (CDMO)

[bfiest]

Why can Avid still outperform our expectations?

:: interest rates should continue to trend downward through 2025 making the investment environment in the entire industry more robust from the small biotech to the large pharmaceutical company. That in turn will boost the entire CDMO industry. Avid should benefit.

:: The American Made Pharmaceuticals Act would incentivize domestic production of critical medicines and help prevent drug shortages by securing the pharmaceutical supply chain here in the US. That will result in more demand for US manufacturing. Avid should benefit.

:: CDMOs will likely remain key partners for pharmaceutical companies and are expected to gain further relevance through their increasing technological expertise and know-how along the value chain. Avid should benefit.

:: Expansion is now complete and the focus can now return to growing the business. The expansion complexity, by all accounts, was managed pretty well. Not an easy process. So now all that energy can turn back to filling capacity.

:: Avid has indicated that they secured contracts with 6 or 7 companies with later stage products that can commercialize upon any or all of them being approved. Much higher volume potential for these products. Time will tell. And it does take time.

:: Avid has stated that they have secured at least 2 recent larger pharmaceutical company contracts that can potentially result in further draw down of capacity.

;; Success tends to be get more success. As momentum gains occur stability will attract further contracts. It happens in every business.

Yes there have been bumps in the road. Investment dried up at an inopportune time. Yes they have made at least one egregious mistake. But the tailwinds are once again at their backs. They can turn this around. We have every right to question. We have every right to critique. And we should also not lose sight of the potential future in our investment. They can out-perform our expectations. I, for one, still believe this ship will be turned around.