Though no date has been set, Avid Bioservices says it is undertaking pre-engineering and design work on a long-awaited facility aimed at supporting soaring demand for biomanufacturing services.
For a while, contract development and manufacturing organization (CDMO) Avid Bioservices has been pushing to build out its Myford, California production facility to prepare for continued high demand from the biologics sector.
But on its latest financial call, management said the firm is readying itself for the expansion in preparation for growth opportunities ahead.
â€śWhile specific kick-off date has not been set for this expansion, we recognize that construction may take between 18 months and 24 months to complete. For that reason, we are undertaking the pre-engineering, design, and permitting work required to allow us to break ground on this project at the appropriate time,â€ť Richard Hancock, interim president and CEO, told stakeholders.
â€śOur customer relationships are strong and forecasted demand is growing. Combined with our expanded business development activity, which we expect to generate an increasing number of projects from both existing and new customers, we believe that we are on a path to significantly increased capacity utilization. Accordingly, we are readying to kick-off an expansion that will allow us to meet the increasing demand of our ever-growing customer list. This concludes my prepared remarks for today.â€ť
CFO Daniel Hart added that these initial steps require a low outlay of capital expenditure but does allow the CDMO to pull the trigger on construction at any moment.
â€śOnce we find the right time and move forward toward building out, at that time, we’ll look at any financing options that we feel are appropriate when the time presents itself.â€ť
However, Timothy Compton, chief commercial officer, responded to a question saying that â€śthe overall build-out would be somewhere around $30 million to $40 million all-inâ€ť and would take 18 to 24 months to be completed.
For the full fiscal year 2020, ending April 30, Avid reported revenues of $59.7 million, up 11% on the previous year. The fourth quarter also saw the firm achieve a record backlog of $65 million.