Avid Bioservices Reports Financial Results for Third Quarter of Fiscal Year 2018 and Recent Developments
Company Remains on Target for Full Year Revenue of
Intensified Business Development Effort Results in New Customer Contract and Strengthened Backlog
Highlights Since
"During and subsequent to our third quarter of fiscal year 2018, Avid
completed two primary objectives. We successfully divested the company's lead immuno-oncology assets to an organization with the financial resources and expertise to advance them, and we established a new operational structure that will allow our business to take full advantage of the substantial and growing demand for biologics manufacturing," said
Recent CDMO Developments
- Advanced eight current clients, some with multiple projects, through various stages of development.
- Selected by
Acumen Pharmaceuticals, Inc. to provide process development and clinical manufacturing services in support of ACU193, which is being developed for the treatment of Alzheimer's disease.
° Avid andAcumen will immediately commence process development work with the goal of creating a robust, cost-effective and scalable process to support cGMP manufacture of ACU193.
Recent Corporate Developments and Financial Highlights
- Changed company name from
Peregrine Pharmaceuticals, Inc. toAvid Bioservices, Inc.
° As the Avid name is recognized in the industry for CDMO excellence and biologics manufacturing expertise, the brand is an important asset in the company's transition to a dedicated CDMO business. The company also adopted the new NASDAQ ticker symbol, "CDMO" (NASDAQ:CDMO).
- Reconstituted board of directors
including six independent directors, all with significant CDMO experience.
- Entered into an Asset Assignment and Purchase Agreement with
Oncologie, Inc. for Avid's phosphatidylserine (PS)-targeting program including bavituximab.
° Avid expects to receive an aggregate of $8.0 million in upfront payments over a period of six months and will be eligible to receive up to $95.0 million in development, regulatory and commercialization milestones.
°Oncologie, Inc. will be responsible for all future research, development and commercialization of bavituximab, and related intellectual property costs.
° Avid will receive royalties on net sales that are upward tiering into the mid-teens.
° Oncologie will enter into an agreement with Avid for future contract development and manufacturing activities in support of bavituximab.
- Completed a public offering of 10,294,445 shares of common stock 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.
- The company maintains its manufacturing revenue guidance for the full FY 2018 of $50.0 million - $55.0 million.
- The current manufacturing revenue backlog has increased to $39 million.
- Contract manufacturing revenue from Avid's clinical and commercial biomanufacturing services was
$6.8 million for the third quarter of FY 2018 compared to $10.7 million for the third quarter of FY 2017. The decline was primarily due to lower demand from one of our largest customers.
- Cost of contract
manufacturing increased to
$11.0 million in the third quarter of FY 2018 compared to$8.0 million for the third quarter of FY 2017. The current period increase in cost of manufacturing is primarily attributed to idle capacity costs of$5.3 million due to lower facility and personnel utilization compared to no idle capacity costs reported in the same prior year quarter.
- Selling, general and administrative expenses for the third quarter of FY 2018 were
$4.8 million , compared to$4.4 million for the third quarter of FY 2017. The current period increase in costs was primarily due to legal and other related fees associated with the settlement agreement with certain investors regarding the composition of the company's board of directors and legal and advisory fees associated with the Asset Assignment and Purchase Agreement withOncologie, Inc.
- As of
January 31, 2018 , the company's research and development segment met all the conditions to be classified as a discontinued operation. Accordingly, the operating results of our research and development segment are reported as a loss from discontinued operations for all periods presented.
- Avid's consolidated net loss attributable to common stockholders was
$12.4 million or$0.28 per share, for the third quarter of FY 2018, compared to a net loss attributable to common stockholders of$9.2 million , or$0.25 per share, for the same prior year quarter.
- Avid reported
$17.9 million in cash and cash equivalents as ofJanuary 31, 2018 , compared to$46.8 million at fiscal year endedApril 30, 2017 . Following the completion of a public offering duringFebruary 2018 , the company had cash and cash equivalents of$41.7 million as ofFebruary 28, 2018 .
More detailed financial information and analysis may be found in Avid's Quarterly Report on Form 10-Q, which will be filed with the
Conference Call
Avid will host a conference call and webcast this afternoon,
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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
| Three Months Ended |
Nine Months Ended | ||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||||
| Contract manufacturing revenue | $ | 6,819,000 | $ | 10,747,000 | $ | 46,678,000 | $ | 39,726,000 | |||||||||
| Cost of contract manufacturing | 10,951,000 | 7,974,000 | 47,641,000 | 26,477,000 | |||||||||||||
| Gross profit (loss) | (4,132,000 | ) | 2,773,000 | (963,000 | ) | 13,249,000 | |||||||||||
| Operating expenses: | |||||||||||||||||
| Selling, general and administrative | 4,824,000 | 4,365,000 | 12,273,000 | 13,602,000 | |||||||||||||
| Restructuring charges | — | — | 1,258,000 | — | |||||||||||||
| Total operating expenses | 4,824,000 | 4,365,000 | 13,531,000 | 13,602,000 | |||||||||||||
| Operating loss | (8,956,000 | ) | (1,592,000 | ) | (14,494,000 | ) | (353,000 | ) | |||||||||
| Other income (expense): | |||||||||||||||||
| Interest and other income | 42,000 | 25,000 | 83,000 | 71,000 | |||||||||||||
| Interest and other expense | (14,000 | ) | (2,000 | ) | (18,000 | ) | (2,000 | ) | |||||||||
| Loss from continuing operations | $ | (8,928,000 | ) | $ | (1,569,000 | ) | $ | (14,429,000 | ) | $ | (284,000 | ) | |||||
| Loss from discontinued operations | (2,076,000 | ) | (6,205,000 | ) | (10,404,000 | ) | (22,603,000 | ) | |||||||||
| Net loss | $ | (11,004,000 | ) | $ | (7,774,000 | ) | $ | (24,833,000 | ) | $ | (22,887,000 | ) | |||||
| Comprehensive loss | $ | (11,004,000 | ) | $ | (7,774,000 | ) | $ | (24,833,000 | ) | $ | (22,887,000 | ) | |||||
| Series E preferred stock accumulated dividends | (1,442,000 | ) | (1,442,000 | ) | (3,604,000 | ) | (3,558,000 | ) | |||||||||
| Net loss attributable to common stockholders | $ | (12,446,000 | ) | $ | (9,216,000 | ) | $ | (28,437,000 | ) | $ | (26,445,000 | ) | |||||
| Basic and diluted weighted average common shares outstanding(1): | 45,225,804 | 37,258,794 | 45,032,335 | 35,486,782 | |||||||||||||
| Basic and diluted net loss per common share attributable to common stockholders (1): | |||||||||||||||||
| Continuing operations | $ | (0.23 | ) | $ | (0.08 | ) | $ | (0.40 | ) | $ | (0.11 | ) | |||||
| Discontinued operations | $ | (0.05 | ) | $ | (0.17 | ) | $ | (0.23 | ) | $ | (0.64 | ) | |||||
| Net loss per share attributable to common stockholders | $ | (0.28 | ) | $ | (0.25 | ) | $ | (0.63 | ) | $ | (0.75 | ) | |||||
| (1) All share and per share amounts of our common stock for all prior fiscal year periods presented have been retroactively adjusted to reflect the one-for-seven reverse stock split of our issued and outstanding common stock, which took effect on | |||||||||||||||||
- continued -
CONDENSED CONSOLIDATED BALANCE SHEETS
2018 | 2017 | ||||||||
| Unaudited | |||||||||
| ASSETS | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 17,938,000 | $ | 46,799,000 | |||||
| Trade and other receivables | 7,967,000 | 7,742,000 | |||||||
| Inventories | 14,218,000 | 33,099,000 | |||||||
| Prepaid expenses | 906,000 | 1,460,000 | |||||||
| Total current assets | 41,029,000 | 89,100,000 | |||||||
| Property and equipment, net | 26,325,000 | 26,515,000 | |||||||
| Restricted cash | 1,150,000 | 1,150,000 | |||||||
| Other assets | 1,353,000 | 1,347,000 | |||||||
| Total assets | $ | 69,857,000 | $ | 118,112,000 | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
| Current liabilities: | |||||||||
| Accounts payable | $ | 1,911,000 | $ | 5,779,000 | |||||
| Accrued clinical trial and related fees | 5,503,000 | 4,558,000 | |||||||
| Accrued payroll and related costs | 3,876,000 | 6,084,000 | |||||||
| Deferred revenue | 6,633,000 | 28,500,000 | |||||||
| Customer deposits | 17,602,000 | 17,017,000 | |||||||
| Other current liabilities | 749,000 | 993,000 | |||||||
| Total current liabilities | 36,274,000 | 62,931,000 | |||||||
| Deferred rent, less current portion | 2,064,000 | 1,599,000 | |||||||
| Commitments and contingencies | |||||||||
| Stockholders' equity: | |||||||||
| Preferred stock—$0.001 par value; authorized 5,000,000 shares; 1,647,760 issued and outstanding at | 2,000 | 2,000 | |||||||
| Common stock—$0.001 par value; authorized 500,000,000 shares; 45,257,180 and 44,014,040 issued and outstanding at | 45,000 | 44,000 | |||||||
| Additional paid-in capital | 593,621,000 | 590,971,000 | |||||||
| Accumulated deficit | (562,149,000 | ) | (537,435,000 | ) | |||||
| Total stockholders' equity | 31,519,000 | 53,582,000 | |||||||
| Total liabilities and stockholders' equity | $ | 69,857,000 | $ | 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
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