Dive Brief:
- CDMO Avid Bioservices Inc. said on April 24 it will expand its facility in Orange County, California, to more than 6,000 square feet. The company will also update its equipment in its existing labs.
- The first labs in the new space, which will be up and running by the third quarter of 2018, will allow Avid to further develop cell lines and make improvements to its expression system. Though it has already begun renovations, the CDMO said it will phase the upgrades so that ongoing client work will not be negatively affected.
- The expansion, to be supported by completion of a financing round of $23.2 million, is part of Avid's long-term strategy of harnessing processing upgrades to lure new types of drug development clients.
Dive Insight:
Building on previous work in the process development space, Avid Bioservices is pouring more capital into its existing location, betting a focus on the development part of its CDMO service offerings will attract future clients.
"They're not just making overflow demand or producing for regional/local markets as some of the major CMOs do, but rather, [are] focusing on biosimilars and other challenging biomolecules that require more intensive process development work," Shawn Smith, a former bioprocessing consultant of 25 years, said in an email.
Avid said it has four new clients interested in accelerating development of their biologic-based candidates. Though the company did not identify the clients, it said it is helping them develop drug candidates "for application in certain cell therapy, respiratory and oncology indications."
"In just a few months, we have already matched the total new client wins for all of calendar 2017, and we are continuing to work to convert a strong pipeline of additional opportunities," said Avid CEO Roger Lias in a statement.
The company is pursuing both early-stage programs, "which are immediately revenue generating," and late-stage projects, representing more of a long-term play, he added.
This immediate revenue may be key — contract manufacturing revenue from Avid's clinical and commercial biomanufacturing services was down approximately 36% from the third quarter of fiscal year 2018 from the same period a year earlier, dropping to $6.8 million, which the company attributed to lower demand from a single client.
When Lias joined the company in late 2017, he pushed an operational shift centered on landing a more varied mix of customer types and projects to boost profitability.
With Lias came a company rebranding in 2018 (the company was formerly a subsidiary of Peregrine Pharmaceuticals Inc.) and a commitment to focus on its CDMO activities. As part of its restructuring, the company completed the divestiture of its lead R&D assets in immuno-oncology to "take full advantage of the substantial and growing demand for biologics manufacturing," Lias said in a March 12 quarterly earnings statement.
Bringing Lias onboard was in itself a strategic company move as he previously held senior management positions at several other CDMOs including Cytovance Biologics, Inc., KBI BioPharma Inc., Diosynth RTP, and Lonza Group AG.
Avid has slowly been ramping up its capabilities over the past few years in anticipation of an increase in the demand for biologics capacity.
Correction: This update corrects the square footage total and timing of the expansion.