UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
CURRENT REPORT
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| ITEM 7.01 | REGULATION FD DISCLOSURE |
On December 6, 2023, the Company posted a corporate presentation to its website at https://ir.avidbio.com (the “Corporate Presentation”). A copy of the Corporate Presentation is attached as Exhibit 99.1 to this current report on Form 8-K and is incorporated herein by reference. The Company expects to use the Corporate Presentation, in whole or in part, and possibly with modifications, in connection with presentations to investors, analysts and others. The information contained in the Corporate Presentation is summary information that is intended to be considered in the context of the Company’s Securities and Exchange Commission (“SEC”) filings and other public announcements that the Company may make, by press release or otherwise, from time to time. The Corporate Presentation speaks only as of the date of this current report on Form 8-K. The Company undertakes no duty or obligation to publicly update or revise the information included in the Corporate Presentation, although it may do so from time to time. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or other public disclosure. In addition, the exhibit furnished herewith contains statements intended as “forward-looking statements” that are subject to the cautionary statements about forward-looking statements set forth in such exhibit. By furnishing the information contained in the Corporate Presentation, the Company makes no admission as to the materiality of any information in the Corporate Presentation that is required to be disclosed solely by reason of Regulation FD.
The information contained in this Item 7.01, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for the purposed of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
| ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS |
(d) Exhibits. The following material is filed as an exhibit to this Current Report on Form 8-K:
| Exhibit Number | Description | |
| 99.1 | ||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
| 2 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AVID BIOSERVICES, INC. | |||
| Date: December 6, 2023 | By: | /s/ Daniel R. Hart | |
| Daniel R. Hart | |||
| Chief Financial Officer | |||
| 3 |
Exhibit 99.1
Corporate Presentation December 2023
2 CONFIDENTIAL Safe Harbor Statement Some of the statements in this presentation contain forward - looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These forward - looking statements reflect management’s current views with respect to future events or our financial performance, and involve certain known and unknown risks, uncertainties and other factors, including those identified below, which may cause our or our industry’s actual or future results, levels of activity, performance or achievements to differ materially from those expressed or implied by any forward - looking statements or from historical results. Forward - looking statements include information concerning our possible or assumed future results of operations and statements preceded by, followed by, or that include the words “may,” “will,” “could,” “would,” “should,” “believe,” “expect,” “plan,” “anticipate,” “intend,” “estimate,” “predict,” “potential,” “continue” or similar expressions. Some of the factors that could cause actual results to differ materially from those expressed or implied by the forward - looking statements include, among other things, the risks associated with: the company’s ability to maintain consistent revenue growth; the loss of customers who account for a major portion of revenues; customers obtaining regulatory approval for late - stage products; the uncertainty of initial and continuing demand for products which receive regulatory approval which could negatively impact the company’s future potential revenue; failure to maximize facility capacity utilization; failure to comply with regulatory requirements; adverse developments concerning our customer or suppliers; and other factors to be described in the “Risk Factors” section in our Annual Report on Form 10 - K for the fiscal year ended April 30, 2023, as filed with the Securities and Exchange Commission (the “SEC”) on June 21, 2023. The industry and market data contained in this presentation are based either on our management’s own estimates or on independent industry publications, reports by market research firms or other published independent sources. Although we believe these sources are reliable, we have not independently verified the information and cannot guarantee its accuracy and completeness, as industry and market data are subject to change and cannot always be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey of market shares. Accordingly, you should be aware that the industry and market data contained or incorporated by reference in this presentation, and estimates and beliefs based on such data, may not be reliable. Unless otherwise indicated, all information contained in this presentation concerning our industry in general or any segment thereof, including information regarding our general expectations and market opportunity, is based on management’s estimates using internal data, data from industry related publications, consumer research and marketing studies and other externally obtained data. Projections, assumptions and estimates of our future performance and the future performance of the markets in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those referenced in our note herein concerning f orward - looking statements. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.
3 CONFIDENTIAL Experienced management and board with expertise in high - growth, large - scale therapeutic manufacturing with deep understanding of regulatory environment Demonstrated history of investment with recent facility expansions adding world - leading capabilities in mammalian and cell and gene therapy (C>); minimal large - scale investment required in near - to - medium term Installed capacity to support large and growing pipeline and backlog that is being driven by new business acquisition and existing customer/program expansion Leading scale, independent biologics manufacturer with long history of clinical to commercial biologics manufacturing excellence paired with a strong and consistent regulatory track record One of few commercial, pure - play biologics CDMOs offering a comprehensive range of services from cell line and process development through commercial - stage CGMP manufacturing Leader in an attractive biologics market that is benefiting from positive industry tailwinds; market expected to deliver mid - teens growth over the next four years Corporate Highlights: Rapidly Growing, Full - Service, Customer - Centric Biologics CDMO 1 2 3 4 5 6 Big enough to deliver, but small enough to care
4 CONFIDENTIAL Accomplished Leadership Team with Experience to Deliver on Growth Strategy Chief Financial Officer Daniel Hart (experience: 25+ yrs) Chief Commercial Officer Matthew Kwietniak (experience: 30+ yrs) Chief Operations Officer Richard Richieri (experience: 25+ yrs) VP, Quality Ray Marzouk (experience: 25+ yrs) General Manager, Viral Vector Drew Brennan (experience: 30+ yrs) VP, Operations Mike Alston, Jr. (experience: 25+ yrs) VP, Process Development Pramthesh Patel (experience: 25+ yrs) VP, Supply Chain Joseph Scott, Ed.D. (experience: 20+ yrs) VP, People Oksana Lukash (experience: 20+ yrs) President & CEO Nicholas Green (experience: 35+ yrs)
5 CONFIDENTIAL 30 - Year Proven Track Record of Operational Excellence, Success and Investment in the Future Approved manufacturer of products marketed in 90 + c o u n t r i e s 21 Years of successful inspection history 18 Years of CGMP commercial manufacturing 8 Successful pre - approval / pre - license inspections 5 Commercial products manufactured Form 483 observations over the last 5 FDA inspections 0 15 Years of single - use technology across multiple platforms 500+ Batches manufactured 2 Modalities with the new C> offering added to Mammalian Million dollars of investment completed in the past three years 180 200+ Commercial batches produced Million dollars of additional annual capacity added in past three years 280
6 CONFIDENTIAL Long History of Successful Regulatory Inspections + Global Reputation for Quality • Over 200 commercial batches produced • 21 years of successful inspection history • Manufacture commercially approved drug substances that go into drug products that are marketed in over 90 countries • All mammalian facilities successfully inspected by the FDA for commercial manufacturing • Eight positive pre - approval inspections (PAI) in 2005, 2012, 2014, 2015, two in 2017, two in 2021 • 2013, 2015, 2017, 2018, 2021 FDA inspectionswith no 483s • Compliance with FDA, EMA, Canada, Australia, Brazil, Turkey, Japan and other global commercial regulatory requirements • Compliance with customer audits, including large pharma Established Track Record of Success 2011 GMP Inspection 2012 PAI Inspection GMP Inspection 2014 PAI Inspection 2015 PAI Inspection 2017 PAI Inspection 2018 GMP Inspection 2021 (2) PLI Inspections GMP Inspection 2012 GMP Inspection 2016 GMP Inspection 2019 GMP Inspection 2015 GMP Inspection 2013 PAI Inspection 2017 Recent Inspection History
7 CONFIDENTIAL Well Positioned to Serve Fastest Growing Biologics Drug Substance Market Segment Non - Disposable Mammalian Drug Substance Market Disposable Mammalian Drug Substance Market 2022 Actual 2027 Projected Disposable biologics market expected to double by 2027; fastest growing segment of the overall biologics market (15% CAGR) $3.6B $15.7B $21.4B $7.2B William Blair: Initial Coverage report September 28th 2023
8 CONFIDENTIAL Powerful Tailwinds Driving Market to Avid Growing Biologics Demand Decreasing Reactor Size Requirements Increased Outsourcing Avid Well Positioned with New State - of - the - Art Mammalian and C> Capacity Built on a Disposable Platform • Disposables forecast to be the fastest growing segment of rapidly expanding biologics drug substance market - Mammalian drug substance market expected to grow from $19B in 2022 to almost $29B by 2027 (1) • Emerging C> market adding significantly to demand - Already 1,700+ clinical assets and ramping rapidly (1) • Titer Increase – Industry - wide 7X increase since 2000 (2) • Smaller indications: • 44% growth in projects for <100 kg antibody volumes projected from 2022 to 2028 (2) • ~90% of antibody projects ≤ 300 kg volumes in 2022 (2) • Big pharma capacity levels stagnant through 2028 (1) • Emerging biopharmas increasingly keeping assets through late - phase development and commercialization (2) • U.S. manufacture increasingly favored (1) William Blair: Initial Coverage report September 28 th 2023 (2) Bernstein: “Global CDMOs: Bottom - up estimates for biomanufacturing supply - demand supportive of secular industry growth.” Feb 21, 2023
9 CONFIDENTIAL Broad Spectrum of Service Offerings and Capabilities One of the few CDMOs offering a comprehensive range of services from cell line and process development through commercial - stage CGMP manufacturing Customer - Focused Approach Agile & Collaborative Industry - Leading Track Record Areas of Competitive Differentiation Location Capacity and Scale Customer - focused approach leads to tailored development and manufacturing services Outstanding regulatory track record; Strong commercial pedigree; Cutting - edge disposable facilities Headquarters & facilities conveniently located in Orange County, CA, a hub for biotech talent & innovation One of a small number of players with more than 20,000 liters of disposable reactors and available capacity Proactive and flexible project management accelerates development timelines, leading to strong customer satisfaction and retention Start phase appropriate CGMP manufacturing Process validation Full CGMP manufacturing Fully validated process Commercial manufacture Process monitoring Analytical & process development PHASE III / COMMERCIAL DEVELOPMENT PHASE I / II PRE - CLINICAL AND CLINICAL DEVELOPMENT COMMERCIAL LAUNCH Quality Strong focus on quality in everything we do
10 CONFIDENTIAL $400M+ of Revenue - Generating Capacity Sets Stage for Continued Growth Avid deployed more than $180 million of capital from 2020 – 2023 into expansions of both revenue - generating capacity and technical capabilities Note: Dollar amounts represent total estimated revenue - generating capacity, net of utilization; actual figures dependent on product mix Mammalian AD/PD $50M Mammalian CGMP $270M CGT AD/PD $15M CGT CGMP $65M
11 CONFIDENTIAL Key Growth Drivers Dynamic Growth Engine Driven by Customer Acquisition and Expansion Activities: Designed to Accelerate Growth in Attractive and Expanding Market Growing reputation and outreach continues to add to growing customer base Customers’ clinical success drives future and typically increasing clinical demands Successful execution encourages customers to bring additional assets to Avid Acquisition of new clinical customers Clinical customers advancing to next clinical phase Additional pipeline assets from existing customers Clinical customers advancing to commercial stage Increased demands from commercial customers Significant increase in project size required to support BLA filing Market penetration typically drives significant increase in commercial demand New Customer Acquisition Existing Customer Expansion Driven by business execution Made possible by industry - leading quality processes and regulatory compliance coupled with aggressive investment in world - class capacity Supported by increased BD representation Key Facilitators:
12 CONFIDENTIAL 58% $34.4M 28% $16.7M 14% $8.6M Established Track Record of Growth: 150% Increase Over Past Three Years FY 2020 $60M in Revenue FY 2023 $149M in Revenue 26% $38.5M 45% $67.8M Commercial Late - Stage Clinical Other Clinical 29% $42.9M Late - stage + commercial 42% $25M Clinical 72% $43M Late - stage + commercial 74% $111M Clinical 55% $81M 150% GROWTH Note: Dollar amounts and totals may not match due to rounding of individual parts.
13 CONFIDENTIAL Diversified, Growing and Maturing Portfolio Across Mammalian Modalities 49% 13% 12% 11% 9% 6% Monoclonal Antibody ADC intermediate Fusion Protein/ Bispecific Antibody Enzyme Recombinant Protein Vaccine 2018 2019 2020 Calendar Year 2021 2022 Phase 3/Pre - Commercial Phase 2 Pre - Clinical/Phase 1 Cumulative Project Wins Since 2018 Avid increasingly recognized as a world - class biologics manufacturer
14 CONFIDENTIAL Increase in Later - Stage Pipeline with Significant Recurring Commercial Revenue Potential P1 PII PIII P1 PII PIII P1 PII PIII P1 PII PIII P1 PII PIII 2018 2019 2020 2021 2022 Calendar Year Number of Projects P1 PII PIII P1 PII PIII P1 PII PIII P1 PII PIII P1 PII PIII 2018 2019 2020 2021 2022 Calendar Year Basic Value Index Cumulative number of projects signed by phase each year Represents short - term value of portfolio (project number x project value) (1) Assuming industry average approval rates and product demand(s); Average probability of BLA approval for Mab’s (2 Phase 1: 12%; Phase II: 22%; Phase III: 65%; Bio, Pharma Intelligence Informa, QLS – Clinical development success rates 2011 - 2020 Avid’s pipeline is well positioned to utilize significant portion of new capacity P1 PII PIII P1 PII PIII P1 PII PIII P1 PII PIII P1 PII PIII 2022 2021 2020 2019 2018 Probability Value Index Current late - phase projects have potential to deliver recurring revenues of $100M – 200M per year post - approval (1) Calendar Year Adjusts Basic Value Index to reflect probability of project reaching commercial approval (Basic Value Index x probability of approval) = +
15 CONFIDENTIAL High Level of Revenue Visibility as Backlog Outstrips Revenue Growth with Increasing Number of Later - Phase Programs Revenue Growth Backlog Growth $52M $84M $99M $125M $8M $12M $20M $24M FY 2020 FY 2021 FY2022 FY2023 Manufacturing Process Development $65M $118M $153M $191M FY 2020 FY 2021 FY 2022 FY2023 $120M $96M $60M $149M Backlog represents, as of a point in time, expected future revenue from work not yet completed under signed contracts.
16 CONFIDENTIAL Strong Financial Position: Positive Forward - Looking Trajectory with Low Capital Requirements Recent facility expansion completions fundamentally change the company’s go - forward business and financial position Business: • Increased revenue - generating capacity to $400M+ • Provides path to continued growth including conversion of growing backlog Financial Position: • Profitable + significant cash - generating potential • Minimal CapEx required to grow business 150 % • Positioned for dramatic increases in gross margins and EBITDA in line with increasing capacity utilization Revenue Gross Margin Adj EBITDA Margin (1) $149M 21% 15% FY’23 $400M 40%+ 30%+ At Capacity (2) In ~5 Years @ 20% CAGR In ~4 Years @ 25% CAGR In ~6 Years @ 15% CAGR CapEx as approximate % of revenue (1) Adjusted EBITDA excludes non - cash operating charges for stock - based compensation, depreciation, and amortization as well as non - operating items such as interest income, interest expense, and income tax expense or benefit. (2) “At Capacity” figures are estimates. 50% 5% 20% 2% FY’23 FY’24 FY’25 In ~3 Years @ 36% CAGR Primarily Maintenance Capital Primarily Growth Capital
17 CONFIDENTIAL Experienced management and board with expertise in high - growth, large - scale therapeutic manufacturing with deep understanding of regulatory environment Demonstrated history of investment with recent facility expansions adding world - leading capabilities in mammalian and cell and gene therapy (C>); minimal large - scale investment required in near - to - medium term Installed capacity to support large and growing pipeline and backlog that is being driven by new business acquisition and existing customer/program expansion Leading scale, independent biologics manufacturer with long history of clinical to commercial biologics manufacturing excellence paired with a strong and consistent regulatory track record One of few commercial, pure - play biologics CDMOs offering a comprehensive range of services from cell line and process development through commercial - stage CGMP manufacturing Leader in an attractive biologics market that is benefiting from positive industry tailwinds; market expected to deliver mid - teens growth over the next four years 1 2 3 4 5 6 Corporate Highlights: Rapidly Growing, Full - Service, Customer - Centric Biologics CDMO Big enough to deliver, but small enough to care
Thank You December 2023