Avid Bioservices Reports Financial Results for Quarter and Fiscal Year Ended April 30, 2018 and Recent Developments
17 July 2018 - 6:05AM
-- Company Records Fiscal Year 2018 Revenue of
$53.6 Million --
Avid Bioservices, Inc. (NASDAQ:CDMO) (NASDAQ:CDMOP), a dedicated
biologics contract development and manufacturing organization
(CDMO) working to improve patient lives by providing high quality
development and manufacturing services to biotechnology and
pharmaceutical companies, today announced financial results for the
fourth quarter and fiscal year (FY) 2018 ended April 30, 2018, and
provided an update on its contract manufacturing operations, and
other corporate highlights.
Highlights Since January 31,
2018
“During fiscal 2018, Avid Bioservices initiated
a transition to a pure play biologics contract development and
manufacturing organization. Today, Avid is a recognized,
established and well-respected service provider to the
biotechnology and pharmaceutical industry,” said Roger Lias, Ph.D.,
president and chief executive officer of Avid Bioservices.
“In recent months we have significantly diversified and expanded
our portfolio of customers. This effort has also fostered a steady
increase in our backlog, which creates a strong foundation as we
diligently pursue our goal to achieve breakeven and positive
EBITDA. We have brought in an impressive new board and established
a cohesive new leadership team with expertise spanning every vital
facet of our business from business development to process
development and finance. We are responding to, and winning,
more requests for proposal than at any time in Avid’s history and
we are filling our available capacity with a product mix consisting
of both earlier phase process development and clinical programs, as
well as late phase clinical and commercial programs. While
fiscal 2018 was an impressive turnaround year for Avid, fiscal 2019
will be our first full year as a focused CDMO business and we are
excited about the market opportunity and the very significant
prospects for growth and market leadership that lie ahead.
“I would like to recognize the tremendous
efforts of the staff at Avid Bioservices. The type of
transition that we have effected is not easy and I remain
incredibly impressed by the dedication and talent of the Avid team
and their commitment to exemplary customer service and continued
industry leading compliance. I would like to very
specifically thank them for their continued support. Our
people remain the backbone of our service offering and our
business.”
Recent CDMO Developments
- Appointed multiple experienced executives to strengthen the
leadership team including:
- Magnus Schroeder, Ph.D., vice president of process
sciences. Dr. Schroeder is an accomplished
scientist with more than 16 years of experience spanning bioprocess
development, cGMP manufacturing, CMC strategy and global project
leadership. Dr. Schroeder most recently served as a
director at AGC Biologics, formerly CMC Biologics, where he
participated in the successful commercial launch of multiple
products.
- Sandra Carbonneau, director, business development,
(eastern region) Ms. Carbonneau brings to Avid more than
26 years of relevant industry experience. Previously with
Lonza Biologics, Ms. Carbonneau oversaw the global mammalian
commercial development business unit, including manufacturing,
quality assurance, compliance and contract management.
- Michael Faughnan, senior director, business development
(western region) Mr. Faughnan joins Avid with more
than 20 years of customer focused sales and management
experience. In particular, Mr. Faughnan has 18 years of
successful biotech and CDMO sales experience with industry leading
companies including Lonza and WuXi Biologics, where he contributed
to significant growth.
- Initiated expansion and optimization of the company’s process
development capabilities and laboratory space, including:
- Expanding the total available process development laboratory
space to more than 6,000 square feet;
- Upgrading the infrastructure and equipment within the existing
process development laboratories;
- Implementing new state-of-the-art technologies and equipment
designed to facilitate efficient, high-throughput development of
upstream and downstream manufacturing processes.The first new
laboratories are expected to be operational during the third
quarter of calendar 2018.
- Signed five new master service agreements (MSAs) in the first
six months of calendar 2018. This is more than Avid signed
during all of calendar 2017. New projects under the MSAs
range from process development to clinical stage
biomanufacturing. All projects will contribute to revenue
during fiscal 2019.
Recent Corporate
Developments
- Entered into an Asset Assignment and Purchase Agreement with
Oncologie, Inc. in February 2018 for Avid's phosphatidylserine
(PS)-targeting program including bavituximab.
- Avid is entitled to receive an aggregate of $8.0
million in upfront payments over a period of six months, of
which $6.0 million has been received according to the contractually
agreed schedule. Avid will also be eligible to receive up
to $95.0 million with Oncologie, Inc.’s successful
achievement of development, regulatory and commercialization
milestones.
- Oncologie, Inc. is responsible for all future research,
development and commercialization of bavituximab, and related
intellectual property costs.
- Avid is eligible to receive royalties on net sales that are
upward tiering into the mid-teens.
- Oncologie has entered into an agreement with Avid for future
contract development and manufacturing activities in support of
bavituximab and other potential products.
- Completed a public offering of 10,294,445 shares of common
stock in February 2018 raising gross proceeds of approximately
$23.2 million.
- Avid intends to use the net proceeds from the offering to
support the growth of its contract manufacturing business and
general corporate purposes.
Financial Highlights and
Guidance
- The current revenue backlog increased by 48.2% to $57.8 million
from $39.0 million at the end of the third quarter of FY 2018
(ASC 605).
- The company is providing revenue guidance for the full FY 2019
of $51.0 million - $55.0 million (ASC
606).
- Contract manufacturing revenue from Avid's clinical and
commercial biomanufacturing services was $6.9 million for the
fourth quarter of FY 2018 compared to $17.9 million for the
fourth quarter of FY 2017. Revenue for the full FY 2018 met
guidance at $53.6 million compared to $57.6 million for full FY
2017. The decline in both the fourth quarter and FY
2018 was primarily due to previously announced lower demand from
one of our largest customers.
- Gross margin for the fourth quarter of FY 2018 was negative
28%, and gross margin for full FY 2018 was negative 5%. These
margins are compared to positive 34% for the fourth quarter of FY
2017 and positive 34% for the full FY 2017.
- Selling, general and administrative (S,G&A) expenses for
the fourth quarter of FY 2018 were $4.2 million, compared to $4.5
million for the fourth quarter of FY 2017. For the full FY
2018, total S,G&A expenses were $16.5 million, compared to
$18.1 million for FY 2017. S,G&A expense for the fourth
quarter of FY 2018 included one-time charges totaling $1.2 million
for the write-off of equipment, severance and other one-time
charges. The decreases in both the fourth quarter and FY 2018
were driven primarily by lower headcount and expense
reductions.
- Income from discontinued operations for the fourth quarter of
FY 2018 was $9.2 million, which was primarily due to the gain on
sale of certain assets to Oncologie, Inc.
- For the fourth quarter of FY 2018, the company recorded
consolidated net income attributable to common stockholders of $1.6
million or $0.03 per share, compared to a consolidated net loss
attributable to common stockholders of $6.7 million, or $0.16 per
share, for the fourth quarter of FY 2017. For full FY 2018, the
company recorded a consolidated net loss attributable to common
stockholders of $26.5 million or $0.56 per share, compared to a
consolidated net loss attributable to common stockholders of $32.8
million, or $0.88 per share, for full FY 2017.
- Avid reported $42.3 million in cash and cash equivalents as of
April 30, 2018, compared to $46.8 million on April 30, 2017.
More detailed financial information and analysis
may be found in Avid’s Annual Report on Form 10-K, which will be
filed with the Securities and Exchange Commission today.
Conference Call
Avid will host a conference call and webcast
this afternoon, July 16, 2018, at 4:30 PM EDT (1:30 PM PDT).
To listen to the conference call, please dial
(877) 312-5443 or (253) 237-1126 and request the Avid Bioservices
conference call. To listen to the live webcast, or access the
archived webcast, please visit:
http://ir.avidbio.com/events.cfm.
About Avid Bioservices,
Inc.Avid Bioservices is a dedicated contract development
and manufacturing organization (CDMO) focused on development and
cGMP manufacturing of biopharmaceutical products derived from
mammalian cell culture. The company provides a comprehensive
range of process development, high quality cGMP clinical and
commercial manufacturing services for the biotechnology and
biopharmaceutical industries. With 25 years of experience
producing monoclonal antibodies and recombinant proteins in batch,
fed-batch and perfusion modes, Avid's services include cGMP
clinical and commercial product manufacturing, purification, bulk
packaging, stability testing and regulatory strategy, submission
and support. The company also provides a variety of process
development activities, including cell line development and
optimization, cell culture and feed optimization, analytical
methods development and product characterization.
www.avidbio.com
Forward-Looking
StatementsStatements in this press release which are not
purely historical, including statements regarding Avid Bioservices'
intentions, hopes, beliefs, expectations, representations,
projections, plans or predictions of the future, are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. The forward-looking
statements involve risks and uncertainties including, but not
limited to, the risk the company may experience delays in engaging
new clients, the risk that the company may experience technical
difficulties in processing customer orders which could delay
delivery of products to customers, revenue recognition and receipt
of payment or the loss of the customer, the risk that one or more
existing customers terminates its contract prior to completion or
reduces or delays its demand for development or manufacturing
services, and the risk that the company may need to use the
majority of its cash to fund operations, thereby delaying the
contemplated upgrade to its process development capabilities and
expansion plans. Our business could be affected by a number of
other factors, including the risk factors listed from time to time
in our reports filed with the Securities and Exchange
Commission including, but not limited to, our annual report on
Form 10-K for the fiscal year ended April 30, 2018, as well as
any updates to these risk factors filed from time to time in our
other filings with the Securities and Exchange Commission. We
caution investors not to place undue reliance on the
forward-looking statements contained in this press release, and we
disclaim any obligation, and do not undertake, to update or revise
any forward-looking statements in this press release except as may
be required by law.
|
AVID BIOSERVICES, INC. |
|
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS |
|
|
Three Months Ended April
30, |
|
Twelve Months Ended April
30, |
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
Contract manufacturing
revenue |
$ |
6,943,000 |
|
|
$ |
17,904,000 |
|
|
$ |
53,621,000 |
|
|
$ |
57,630,000 |
|
Cost of contract
manufacturing |
|
8,904,000 |
|
|
|
11,782,000 |
|
|
|
56,545,000 |
|
|
|
38,259,000 |
|
Gross
profit (loss) |
|
(1,961,000 |
) |
|
|
6,122,000 |
|
|
|
(2,924,000 |
) |
|
|
19,371,000 |
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
Selling,
general and administrative |
|
4,183,000 |
|
|
|
4,477,000 |
|
|
|
16,456,000 |
|
|
|
18,079,000 |
|
Restructuring charges |
|
— |
|
|
|
— |
|
|
|
1,258,000 |
|
|
|
— |
|
Total
operating expenses |
|
4,183,000 |
|
|
|
4,477,000 |
|
|
|
17,714,000 |
|
|
|
18,079,000 |
|
|
|
|
|
|
|
|
|
Operating income
(loss) |
|
(6,144,000 |
) |
|
|
1,645,000 |
|
|
|
(20,638,000 |
) |
|
|
1,292,000 |
|
|
|
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
|
|
Interest
and other income |
|
19,000 |
|
|
|
37,000 |
|
|
|
102,000 |
|
|
|
108,000 |
|
Interest
and other expense |
|
(9,000 |
) |
|
|
(5,000 |
) |
|
|
(27,000 |
) |
|
|
(7,000 |
) |
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations |
$ |
(6,134,000 |
) |
|
$ |
1,677,000 |
|
|
$ |
(20,563,000 |
) |
|
$ |
1,393,000 |
|
Income (loss) from
discontinued operations |
|
9,154,000 |
|
|
|
(6,949,000 |
) |
|
|
(1,250,000 |
) |
|
|
(29,552,000 |
) |
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
3,020,000 |
|
|
$ |
(5,272,000 |
) |
|
$ |
(21,813,000 |
) |
|
$ |
(28,159,000 |
) |
|
|
|
|
|
|
|
|
Comprehensive income
(loss) |
$ |
3,020,000 |
|
|
$ |
(5,272,000 |
) |
|
$ |
(21,813,000 |
) |
|
$ |
(28,159,000 |
) |
|
|
|
|
|
|
|
|
Series E preferred
stock accumulated dividends |
|
(1,442,000 |
) |
|
|
(1,442,000 |
) |
|
|
(4,686,000 |
) |
|
|
(4,640,000 |
) |
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common stockholders |
$ |
1,578,000 |
|
|
$ |
(6,714,000 |
) |
|
$ |
(26,499,000 |
) |
|
$ |
(32,799,000 |
) |
|
|
|
|
|
|
|
|
Basic and diluted
weighted average common shares outstanding: |
|
53,360,424 |
|
|
|
42,141,720 |
|
|
|
47,063,020 |
|
|
|
37,109,493 |
|
|
|
|
|
|
|
|
|
Basic and diluted net
income (loss) per common share attributable to common
stockholders: |
|
|
|
|
|
|
|
Continuing operations |
$ |
(0.14 |
) |
|
$ |
0.01 |
|
|
$ |
(0.53 |
) |
|
$ |
(0.09 |
) |
Discontinued operations |
$ |
0.17 |
|
|
$ |
(0.17 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.79 |
) |
Net
income (loss) per share attributable to common stockholders |
$ |
0.03 |
|
|
$ |
(0.16 |
) |
|
$ |
(0.56 |
) |
|
$ |
(0.88 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- continued -
|
AVID BIOSERVICES, INC. |
|
CONSOLIDATED BALANCE
SHEETS AS OF APRIL 30, 2018 AND
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
ASSETS |
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
Cash and cash
equivalents |
$ |
42,265,000 |
|
|
$ |
46,799,000 |
|
Trade and other
receivables |
|
3,754,000 |
|
|
|
7,742,000 |
|
Inventories |
|
16,129,000 |
|
|
|
33,099,000 |
|
Prepaid expenses |
|
679,000 |
|
|
|
808,000 |
|
Assets of discontinued
operations |
|
5,000,000 |
|
|
|
1,426,000 |
|
|
|
|
|
Total
current assets |
|
67,827,000 |
|
|
|
89,874,000 |
|
|
|
|
|
PROPERTY AND EQUIPMENT: |
|
|
|
Leasehold improvements |
|
20,686,000 |
|
|
|
20,098,000 |
|
Laboratory equipment |
|
10,258,000 |
|
|
|
10,229,000 |
|
Furniture, fixtures, office equipment and software |
|
4,597,000 |
|
|
|
4,385,000 |
|
Construction-in-progress |
|
3,310,000 |
|
|
|
2,841,000 |
|
|
|
|
|
|
|
38,851,000 |
|
|
|
37,553,000 |
|
Less
accumulated depreciation and amortization |
|
(12,372,000 |
) |
|
|
(11,508,000 |
) |
|
|
|
|
Property
and equipment, net |
|
26,479,000 |
|
|
|
26,045,000 |
|
|
|
|
|
Restricted cash |
|
1,150,000 |
|
|
|
1,150,000 |
|
Other
assets |
|
304,000 |
|
|
|
1,043,000 |
|
|
|
|
|
TOTAL ASSETS |
$ |
95,760,000 |
|
|
$ |
118,112,000 |
|
|
|
|
|
- continued -
|
AVID BIOSERVICES, INC. |
|
CONSOLIDATED BALANCE
SHEETS AS OF APRIL 30, 2018 AND
2017 (continued) |
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
|
2017 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
Accounts payable |
$ |
1,909,000 |
|
|
$ |
3,000,000 |
|
Accrued payroll and
related costs |
|
2,564,000 |
|
|
|
5,055,000 |
|
Deferred revenue |
|
10,922,000 |
|
|
|
28,500,000 |
|
Customer deposits |
|
17,013,000 |
|
|
|
17,017,000 |
|
Other current
liabilities |
|
905,000 |
|
|
|
636,000 |
|
Liabilities of
discontinued operations |
|
4,550,000 |
|
|
|
8,723,000 |
|
|
|
|
|
Total
current liabilities |
|
37,863,000 |
|
|
|
62,931,000 |
|
|
|
|
|
Deferred rent, less current portion |
|
2,159,000 |
|
|
|
1,599,000 |
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY: |
|
|
|
Preferred stock - $.001
par value; authorized 5,000,000 shares; 1,647,760 shares issued and
outstanding at April 30, 2018 and 2017, respectively |
|
2,000 |
|
|
|
2,000 |
|
Common stock - $.001
par value; authorized 500,000,000 shares; 55,689,222 and 44,014,040
shares issued and outstanding at April 30, 2018 and 2017,
respectively |
|
55,000 |
|
|
|
44,000 |
|
Additional
paid-in-capital |
|
614,810,000 |
|
|
|
590,971,000 |
|
Accumulated
deficit |
|
(559,129,000 |
) |
|
|
(537,435,000 |
) |
|
|
|
|
Total
stockholders' equity |
|
55,738,000 |
|
|
|
53,582,000 |
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
95,760,000 |
|
|
$ |
118,112,000 |
|
|
|
|
|
Contacts:
Stephanie Diaz (Investors)
Vida Strategic Partners
415-675-7401
sdiaz@vidasp.com
Tim Brons (Media)
Vida Strategic Partners
415-675-7402
tbrons@vidasp.com
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