Avid Bioservices Inc. kicked off the first phase of an internal expansion at its Tustin headquarters along Myford Ave. this month.
The nearly $650 million-valued firm (Nasdaq: CDMO), which has changed its focus from developing its own drugs to contract manufacturing for other drugmakers over the past two years, cited increased customer demand for its services. The company has won five new contracts in the past six months.
The first phase of the expansion entails adding a second downstream processing suite to the company’s Myford North facility, which is expected to increase its annual revenue-generating capability up to $170 million.
That represents a big jump in business for Avid; it earned $21.1 million in revenue last quarter.
Avid closed a public offering of common stock on Dec. 14, raising $34.5 million in proceeds to fund the estimated $15 million project, which is expected to be complete as soon as Dec. 2021.
A larger, second phase of expansion at its local facilities would see the addition of both upstream and downstream processing suites to the company’s Myford South facility; the estimated $45 million to $55 million project would increase annual revenue-generating capacity by about an additional $100 million.
A timeline for the second phase of the project has not been disclosed.
The company, which employs about 210 workers, said it did not have immediate plans to hire additional talent.
Avid leases some 158,000 square feet of office, manufacturing, laboratory, and warehouse space in four buildings between Myford Ave. and Franklin Ave. in Tustin, not far from the intersection of Jamboree Road and the Santa Ana (5) Freeway and the new headquarters of electric vehicle maker Rivian.
Strong Q2
News of the expansion came along with Avid’s results for its fiscal 2021 second quarter ended Dec. 3.
The company reported revenue was up 15% compared to the same period a year ago. Avid said it signed new orders worth $28 million from one new customer and one existing customer.
It recorded cash flow generation of $10 million, and it said its backlog grew from $60 million to $67 million.
Avid Chief Executive Nicholas Green noted COVID-related manufacturing activities and a desire to in-source manufacturing into the U.S. contributed to the company’s increased workload.
The company currently has processes in place for monoclonal antibody manufacturing, and said it hasn’t ruled out the possibility of expanding its capabilities to include mRNA or cell and gene therapy manufacturing.
Avid increased its annual revenue guidance from between $76 million and $81 million to between $84 million and $88 million. Analysts expect $86 million in its fiscal year.
Avid’s shares rose 22% to a 52-week high of $11.55 in the three trading days following its Q2 results; shares have since settled around $11 at press time.
