CDMO - Avid Bioservices: A Unique Growth Story With Many Tailwinds And Catalysts

2024-05-16 07:29:48 ET

Summary

• Although Avid is 30+ years old, the story has become much more exciting due to the shift to a pure-play biologics CDMO, pharma increasingly outsourcing biologics, and record revenue-generating capacity.
• Avid has an economic moat with its mission-critical, leading role in specialty manufacturing, the long-term stability and predictability in its cash flows, and high barriers to entry & exit.
• I present many potential catalysts, such as CTLT's sale to Novo, the BIOSECURE Act, commercialization of former assets, improved funding conditions, and a potential take-private.

The pharma services space in recent years has been one of the most attractive industries in the private markets , with over 80% of the pharma services market being privately owned. With everything going on in the industry, from the largest CDMO, Catalent being sold for nearly $17bn to pharma companies increasingly outsourcing manufacturing, I’ve come across what I believe to be a truly unique opportunity in the industry and in the public markets, Avid Bioservices, Inc ( CDMO ).

While Avid has been manufacturing biologics since 1993, recent developments have made its story much more exciting. In 2018, Avid transitioned to a pure-play CDMO . Since then, the company has adopted a service-oriented approach, actively expanded its sales team, and built a management team with a strong focus on manufacturing....

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