CGT demand stabilization to drive margin uptick for Avid

For the fiscal year ending April 30 2024, contract development and manufacturing organization (CDMO) Avid reported revenues of $140 million, compared to $149 million the year prior. The bottom line saw a net loss of $141 million versus $259,000 in FY2023.

Gross margin for Avid’s fourth quarter, meanwhile, stood at 13% compared to 21% year-on-year. And for the full year, it was just 5% compared to 21% in fiscal year 2023 – $7.3 million vs $31.5 million in terms of gross profit. The CDMO attributed the fall to fewer manufacturing runs, a reduction in process development services, and an increase in costs related to expansions of both capacity and technical capabilities.

However, CEO Nick Green told stakeholders both sales and margins are set to improve as capital expenditure projects come online, with the cell and gene therapy space being a major driver.

“With respect to capacity, our utilization is expected to increase as we onboard and execute new programs in both our mammalian and CGT facilities,” he said on his firm’s Q4 FY2024 financial call last week.

“This expected increase in utilization should improve our margins, and we are pleased to see an approximate doubling of our gross margin in quarter four as compared to quarter three of this year.”

In October 2023, Avid completed construction of a viral vector development and GMP manufacturing facility in Costa Mesa, California. The facility – built at a cost of between $65 million to $75 million – came online earlier this year and offers customers suspension culture batches of up to 3,000 L, as well as adherent cultures using fixed bed bioreactors. The facility is expected to contribute approximately $80 million to Avid’s projected $400 million of revenue-generating capacity across its manufacturing network.

“In terms of interest and activity in that area, I think it continues to be where we've seen it in the past. It's lagging the mammalian by a few months, probably a quarter, maybe 1.5 quarters, but certainly picking up. I think we've seen some very encouraging signs in the last quarter in terms of interactions with clients,” Green said.

“The best way I could categorize it is about four to five months behind the mammalian side, but picking up nicely, which we started to see that pick up in November, December last year in the mammalian side.”

Avid’s traditional biologics heritage received a boost in early 2023 through the expansion of two GMP mammalian cell suites at its Myford facility in Tustin, California.