Avid Bioservices Inc (CDMO)

[RRdog]

What are the implications of a 2% world?(i.e. the US ten year bond yields 1.8%):

1. PPHM's Avid division ought to be able to sell debt at 10% vs
free cash flow
2. Avid is throwing off at least 8mm/ year in free cash flow and
heading towards 10mm
3. Avid could easily support 50-80mm in debt even if the
assets of Avid had to be used for collateral (without
leveraging PPHM as a whole or encumbering clinical IP)
4. Avid alone is worth approx the current market value of PPHM
5. More attention should be payed to the free cash flow growth
of Avid.
6. PPHM, contrary to popular opinion is not financially
constrained.
7. PPHM mgmt has a viable limited liability option to ATM
8. PPHM has little downside versus the value of sum of the parts
9. PPHM is currently valued at approx 90mm
10 PPHM has traded as high as 3-400mm market value
11 PPHM is currently much stronger at Avid, much stronger in
clinical and regulatory mgmt, much stronger in the science
re MOA, much further along in clinicals than when the stock
traded at much higher valuation.
12 PPHM still lacks a market catalytic deal, but, that may
change.
13 Negativity in PPHM is near all time highs as confirmed by
market value.
14 If PPHM BOD and mgmt continue serious dilution at levels close
to the value of Avid and 10-20% of analytic future discounted
value adjusted for risk, without reduction of expenses and
without a full exploration of alternate means of financing--
they are approaching "dereliction of duty" under the Delaware
laws of incorporation.

IMO I would continue to accumulate the stock.

Regards,
RRdog