Avid Bioservices (CDMO) reported a narrower net loss for the second quarter of 2019, helped by a sharp decline in costs. Revenues, meanwhile, declined and missed estimates. The company also reaffirmed its full-year revenue guidance.
Net loss narrowed to $2.89 million or $0.05 per share from $14.07 million or $0.31 per share in the second quarter of 2018. Analysts had forecast a wider loss. During the quarter, manufacturing cost declined 40% to $9.8 million.
Revenues of the Tustin, California-based biotech contract manufacturer dropped 20% year-on-year to $10.18 million and fell short of expectations. The top line performance was dragged by maintenance shutdowns of manufacturing facilities and a decline in demand from two lead customers.
The top line performance was dragged by maintenance shutdowns of manufacturing facilities and a decline in demand from two lead customers
The management also reaffirmed its full-year 2019 revenue outlook in the range of $51 million to $55 million, encouraged by the progress in the implementation of various turnaround initiatives that helped the company move closer to achieving optimum capacity utilization and cash flow.
“Collectively our significant operational and commercial progress, along with diligent management of our financial resources position Avid Bioservices well for transition to cash generation and positive EBITDA,” said CEO Roger Lias. Echoing Lias’ views, market watchers had forecast that the company’s top-line will bounce back, in the long run, helped by its turnaround initiatives and new contract wins.
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Avid Bioservices received mixed ratings from analysts in the recent weeks, with the majority recommending buy and setting a price target of $8.33. The healthcare contract manufacturing sector stands to benefit from the growing demand for medical devices and pharmaceutical products, including generic drugs.
The company’s shares have declined about 35% in the past twelve months. The stock closed Monday’s trading session up 1%.