Avid Bioservices Inc. in 2020 hired Nick Green as its CEO when it was pivoting from a failed clinical developer of cancer drugs to being a full-time drug contract manufacturer.
At the time, he told the Business Journal that he’s grown revenue at least 20% compounded annual growth rate at every prior firm he led. How has Avid done in the past three years?
“Fabulous,” Green quipped to the Business Journal.
“The company’s grown 250% in that time. I’ve doubled the size of the workforce. We’ve spent about $180 million on new equipment and capabilities. We made it profitable.
“It’s the best job in the world in the best location.”
With 350 employees, Avid ranks No. 2 on the Business Journal’s annual list of drugmakers with operations in Orange County (see list, page 26).
Green spoke at the 30th anniversary celebration of a company where there were doubts about its survival as recently as 2017.
The company began in 1993 as Peregrine Pharmceuticals developing biologics. In 2002, it formed Avid Bioservices as a wholly owned subsidiary to make biologics, signing its first client for manufacturing services a year later.
By 2017, it became clear its clinical trials for a cancer drug had failed and it was losing tens of millions of dollars annually.
Shareholders called for the company to shed its clinical development activities to focus on contract manufacturing. By fiscal 2020, before Green arrived, it reported an annual loss of $15.2 million on sales of $59.7 million.
Green has turned around the company, which reported profits in both fiscal 2021 and 2022. Analysts are expecting sales to climb 24% this fiscal year to $148.4 million.
The share price (Nasdaq: CDMO) has responded, jumping fivefold since Green’s arrival to $20.93 each and a roughly $1.3 billion market cap as of last week.
The concern caused by COVID-19 and China manufacturing many of the drugs used in the U.S. has helped Avid in its efforts to build manufacturing facilities here.
“We’ve certainly seen a turnaround in people’s focus on what’s manufactured here,” Green said.
“We’ve seen more business than we would have. COVID has certainly change people’s mind about the supply chain and supply chain security.”
Last year, Avid completed the first phase of its $75 million, 53,000-square-foot manufacturing facility in Costa Mesa, only eight months after announcing its plans. Earlier this month, Avid completed two expansions within the company’s mammalian cell facilities in Tustin.
Now it has approximately 213,000 square feet spanning two campuses, including its mammalian protein process development facility, two mammalian protein commercial manufacturing facilities, a cell and gene therapy facility and corporate offices. With the expansion—all in Orange County—Avid says it has capacity to reach $400 million in annual sales.
It is considering adding more space.
“If these guys keep growing the business, then we’ll keep adding capacity,” Green said.
The question is where it would next build. Green, a native of Britain, likes Orange County, citing “a wonderful climate, lots of talented people, a good work-life balance.”
“At the end of the day, we all like to enjoy ourselves,” he said. “ You can ski in the morning and surf in the afternoon.
“There are serious decisions to be made over where the next phase goes, here or whether we try to venture further afield. Proximity is always a benefit.
“The East Coast of the United States wouldn’t be a bad thing for us. But we love it here. Whatever we do, we have to make sure we service our clients well.”