Avid Bioservices Reports Financial Results for Quarter and Fiscal Year Ended April 30, 2018 and Recent Developments
-- Company Records Fiscal Year 2018 Revenue of
-- Committed Backlog Increases to
-- Customer Base Expanded and Diversified --
-- Key Appointments Strengthen CDMO Leadership Team --
Highlights Since
“During fiscal 2018,
“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 includingLonza andWuXi 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. inFebruary 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.
- Avid is entitled to receive an aggregate of $8.0 million in upfront payments over a period of six months, of which
- 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 toOncologie, 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 ofApril 30, 2018 , compared to$46.8 million onApril 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
Conference Call
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To listen to the conference call, please dial (877) 312-5443 or (253) 237-1126 and request the
About
Forward-Looking Statements
Statements in this press release which are not purely historical, including statements regarding
| AVID BIOSERVICES, INC. | |||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | |||||||||||||||
| Three Months Ended April 30, |
Twelve Months Ended April 30, |
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| 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.comTim Brons (Media)Vida Strategic Partners 415-675-7402 tbrons@vidasp.com
Source: Avid Bioservices, Inc