After the U.S. financial markets closed yesterday, biologics contract development and manufacturing organization Avid Bioservices Inc. (CDMO:NASDAQ), announced financial results for the second quarter of fiscal 2020 ended October 31, 2019.
Avid's Interim President and CEO Rick Hancock summarized some of the key operational and financial highlights in the quarter commenting, "During the Q2/20, we strengthened multiple core areas of our business...Operationally, we continue to improve and enhance our equipment, facilities and systems. The opening of our new process development lab, the successful completion of our annual maintenance overhaul, and the planned installation of a new pharmaceutical grade water system in calendar 2020 all reflect the dedication we have to maintaining the highest standards possible...The revenues for this quarter were the highest since Avid transitioned to a pure-play CDMO in January 2018, and we achieved 18% gross margin, which represents a significant increase year-over-year...Productivity and efficiency contributed significantly to Avid's strong second quarter results, and we expect that our financial performance will continue to track positively with these factors. We believe that Avid has turned an important corner, creating a stronger platform from which to achieve sustainable profitability."
The firm reported that revenue in Q2/20 increased 80% to $18.3 million, compared to $10.2 million in Q2/19, and that H1/20 revenue increased 47% to $33.6 million, compared to $22.8 million in H1/19. The firm advised that the increases in each of these periods were due primarily to an increase in the number of in-process and completed manufacturing runs as a result of growing demand from a more diversified client base.
The company stated that the gross margin for the Q2/20 increased significantly to 18%, up from 3% in Q2/19, and for H1/20 was 13% versus 7% in H1/19. For Q2/20, the company recorded net loss of $1.9 million or $0.03 per share, compared to a net loss of $2.9 million or $0.05 per share in Q2/19.
In addition, Avid confirmed its prior revenue guidance by indicating at that for Full-Year 2020 it expects revenue of $64 million to $67 million.
The firm noted that in the quarter it launched its expanded state-of-the-art process development (PD) facility. The company indicated that the expanded facility allows it to expand existing relationships and attract new business by offering support to customers that seek to outsource their PD work.
Avid Bioservices, formerly Peregrine Pharmaceuticals Inc., is a contract development and manufacturing organization (CDMO) headquartered in Tustin, Calif. The company provides a comprehensive range of process development, high quality CGMP clinical and commercial manufacturing services for the biotechnology and biopharmaceutical industries. The firm'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."
Avid Bioservices started off this morning with a market capitalization of about $329 million with approximately 56.24 million shares outstanding and a short interest of around 3.90%. CDMO shares opened today at $6.30 (+$0.45, +7.69%) over yesterday's $5.85 closing price. The firm's stock then reached a new 52-week high price this morning of $7.15/share. The stock has traded between $6.27 to $7.15 per share and is presently trading at $6.98 (+$1.13, +19.32%).
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