Replies to post #322568 on Avid Bioservices Inc (CDMO)

[Bluerinse]

Thank you Cj!
It is shocking to see Paul Lyttles name in that presentation. The fact he is there still.does not give me.much confidence in our new team.
Imo

[peregr]

CJ, thanks for posting. Very interesting read that now answers a lot of questions.

The reason to transition as quickly as possible, and be known as a pure play CDMO- valuations of 15x-20x EBITDA (this is really a different perspective from the prior Board who said 5x-7x sales as they knew they were having problems achieving material EBITDA).

Revenue potential with current facilities of $100 million (and that is probably conservative). If I recall, Ronin mentioned EBITDA margins could be above 60%. This could get us above $20-the low hanging fruit.

This is before any bolt on acquisitions or expansion.

Then they noted the upside potential for investors with the licensing/sale of the R&D.

This should help one's individual analysis of the business model.

Potential for a lot of value here.

[sulaco]

Lias' presentation can calm the Ronin-bears


20x EBITDA? And projected Avid earnings $100 million? Whoa.
That's 2 Billion right there and gives a share price of $44.
Not "astronomical", but likely to turn a few frowns into smiles.

Lias' slide #4 states sale of IP offers "potential upside for stockholders."

More observations:

1 - Myford has capacity to go to (9!) 2000 liter tanks (slide 15). The "butterfly layout" can handle it. Double whoa. Obviously, if AvidBio runs (9) 2000 L tanks, the stock price won't be 4 bucks.

2 - A quick look at the BOD short bios (slide 10) shows 5 CEOs and an EVP. Why have they chosen to sign on at CDMO? Why?

3 - The CDMO sector is consolidating and the last 2016 estimate put it at a $62 Billion industry. Probably $100 billion in 5 years+ as biopharma moves increasingly to biologics.

Now, wouldn't it be funny if the real shareholder value comes from an industry buyout of AVID and not Bavi?

Really. The Big Boys will find it easier to bring a stand-alone CDMO into their house, then build one themselves. Buyout. Avid Buyout. It could very well be the long-term plan. All along.

Build it up, then sell at a premium.

It all adds up to shareholder value. Ronin has serious skin in the game. Take a deep breath. We're moving in the right direction. Big time.


Best,

Joe Six Pack

[north40000]

Thanks, CJG. We have printed a copy as a reference point for our trip to Tustin via John Wayne next Wednesday and ASM on Thursday. The Avid facility looks quite enhanced since our last trip/tour in October 2016.

[eastcoastguy]

Thank you CJ for posting the Biotech presentation. Good start for Lias in front of institutional investors. Clear plan to build revenues.

The CEO gave us a footprint for valuing CDMO, 15-20X EBITDA. We have some wood to chop before we get to 100M EBITDA but with new management and an experienced BOD we have the team (I hope) that will bring the new business in.

S-3 filing Friday might explain some of the softness last week. The bull in me would like to believe they want the authorization in place because once the IP is sold/licensed and the SP increases we'll have some shares available to sell and limit dilution. Though our institutional investor % is around 40, our retail holders are rabid and if they haven't sold through all the nonsense they probably won't sell south of 12. Let's hope for a money deal that drives the SP. If it's a good deal and the stock runs my wish would be to sell 10M shares at 10-12. I know it's not Christmas but a long, long can wish. With 100-120M we could buy in the preferred, spend 30M on the internal expansion and still have $ available for a bolt on location. All depends on the IP value.

Great playoff games today,
eastcoastguy