Avid Bioservices (CDMO) reported a narrower net loss for the third quarter of 2019, aided by a sharp increase in revenues and lower expenses. The results also topped analysts’ expectations. The company’s stock jumped about 4% during the extended trading session Monday following the announcement.
The Tustin, California-based biotech contract manufacturer reported a net loss attributable to common stockholders of $2.6 million or $0.05 per share for the third quarter, compared to a loss of $12.4 million or $0.28 per share a year earlier. Analysts had forecast a wider loss for the most recent quarter. Boosting the turnaround, selling, general & administrative expenses dropped 33% to $3.2 million.
Contract manufacturing revenues more than doubled to $13.8 million – far exceeding expectations – reflecting higher demand from a more diversified client base. The improved topline performance translated into positive gross margins, which recovered from a negative 61% to a positive 15% helped by a favorable product mix and higher volumes.
The improved topline performance translated into an improvement in gross margins helped by a favorable product mix and higher volumes.
During the three-month period, the management expanded several ongoing projects. The company said it is firmly on-track towards achieving profitability in the near term. The management currently expects to end the fiscal year within the lower half of its revenue guidance of $51-$55 million.
“The third quarter was busy and productive as reflected by our strong financial results. Our process development group is increasingly busy, now contributing over 20% of revenues. With respect to new projects, we continue to see growth in the number of RFPs received,” said CEO Roger Lias.
Also see: Avid Bioservices Q3 2019 Earnings Conference Call Transcript
Recently, Abbott Laboratories (ABT) reported a net profit for the fourth quarter compared to a loss last year, helped by lower tax expense. The biotech firm swung to a profit of $0.37 per share even as worldwide sales moved up 2.3% aided by a strong performance by the Medical Devices and Diagnostics businesses.
Shares of Avid Bioservices closed Monday’s regular session sharply higher and gained further in the after-hours session, reversing the trend seen since the beginning of the year. The stock rose about 56% in the past twelve months but often underperformed the sector.