Avid Bioservices(US:CDMO)2024-09-09 23:04Financial Data and Key Metrics Changes - Revenues for Q1 2025 were $40.2 million, a 6% increase from $37.7 million in Q1 2024, primarily due to increased process development revenues [4] - Gross profit for Q1 2025 was $5.7 million, representing a 14% gross margin compared to $4.1 million and 11% gross margin in Q1 2024 [5] - Net loss for Q1 2025 was $5.5 million or $0.09 per share, compared to a net loss of $2.1 million or $0.03 per share in Q1 2024 [6] - Adjusted EBITDA for Q1 2025 was $3 million, with cash and cash equivalents at $33.4 million, down from $38.1 million on April 30, 2024 [6] Business Line Data and Key Metrics Changes - The company signed $66 million in new project agreements during Q1 2025, resulting in a record backlog of $219 million [7] - The new project signings included a significant majority from new customers, including a large pharmaceutical client [7] - The mix of new signings included both early and late-stage programs, with a focus on late-stage programs [8] Market Data and Key Metrics Changes - The company reported a strong demand from large pharma clients, with a balanced mix of early and late-stage programs contributing to revenue growth [8][11] - The company noted that the sales cycle with large pharma is generally long, but recent signings indicate a positive trend in customer engagement [7][11] Company Strategy and Development Direction - The company aims to fill remaining capacity and expects revenues and capacity utilization to increase, leading to stronger margins [12] - Investments in infrastructure and capabilities are attracting new business and diversifying the customer base [11] - The company is focused on maintaining high standards of service to both large pharma and smaller biotech companies [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong revenues and new business signings as key drivers for growth [11][12] - The company is closely monitoring the impact of the BIOSECURE Act and its potential influence on customer behavior and market dynamics [27][40] - Management acknowledged that while there is a long sales cycle, the strategy for large pharma is progressing in line with expectations [20] Other Important Information - The company is experiencing a shift in customer behavior due to the BIOSECURE Act, with increased interest from clients looking to move away from China [26][40] - The company is not currently seeing significant changes in demand from large pharma clients despite recent industry challenges [20] Q&A Session Summary Question: How will the new bookings affect backlog burn rate? - Management indicated that the new bookings will likely accelerate the backlog burn rate slightly due to a better proportion of early-phase clients [14] Question: Can you provide details on the two PPQ campaigns won? - One campaign involves a commercial product being outsourced from internal manufacture, while the other is from another CDMO in Phase 3 [16] Question: How is the large pharma strategy progressing? - Management stated that the strategy is on track, with no recent changes in demand from large pharma clients [20] Question: What is the outlook for cell and gene therapy demand? - Management noted that cell and gene therapy demand has not yet caught up with traditional biologics, but there are ongoing conversations that may lead to future orders [22] Question: Any impact from the BIOSECURE Act on customer behavior? - Management observed an increase in conversations regarding moving away from China, particularly among later-phase clinical candidates [41] Question: What is the visibility into Halozyme revenue for fiscal 2025? - Management emphasized a strong relationship with Halozyme and expressed hope for continued growth, while noting that Halozyme's revenue is becoming a smaller proportion of overall business [44]