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Can This 'Avid' Learn To Fly Again?


  • Today we look at Avid Biosciences, a company that has largely destroyed shareholder value over the years.
  • However, the company has recently transitioned to a completely different business model.
  • Is there hope for this small cap concern ahead?  Some insiders have made some small purchases recently.
  • We provide a detailed investment analysis in the paragraphs below.

History is much more the product of chaos than of conspiracy”― Zbigniew Brzeziński

Today, we take a look at small cap concern that is the middle of a transition to what it hopes will be a more beneficial business model. Will this work out for its long-suffering shareholders? Insiders bought a chunk of a recent secondary offering, which is encouraging. We take a look in the paragraphs below.

Company Overview:

Avid Biosciences (NASDAQ:CDMO) is a California-based firm that describes itself as transitioning into its new position as a dedicated contract development and manufacturing organization. Consistent with this new focus the company is taking steps to wind down research and development endeavors and expand service offerings in addition to improving manufacturing infrastructure. It previously was known as Peregrine Pharmaceuticals. The shares currently trade for under $2.50 a share and have a market cap slightly south of $150 million.

Management believes the market they are attracting is highly attractive as demand for contract manufacturing to support clinical and commercial scale products continues to trend in the right direction. Valuations of similar businesses have approached 15 to 20 times EBITDA, a clear sign of optimism in the space.


The firm in its current form offers a wide variety of commercial and clinical stage services which are able to meet clients´ needs as they progress drug candidates from preclinical all the way up to late stage studies and commercialization.

Source: Company Presentation

The company possesses two commercial facilities that have the potential to do revenue exceeding $100 million, the Franklin facility and their Myford facility. The first has been involved in cGMP manufacturing since 1993, has over 12,000 square feet and bioreactors with capacity of up to 1,000 liters. The latter was commissioned in 2016, has 42,000 square feet and single use bioreactors of up to 2,000 liters of

This article was written by

The Insiders Forum profile picture

We are a team of analysts led by Bret Jensen, Chief Investment Strategist at Simplified Asset Management.

We run the investing group The Insiders Forum where we specialize in small and mid-cap stocks that insiders are buying. The Insiders Forum portfolio managed by Bret Jensen consists of 12-25 top stocks in different sectors of the market that are attractively valued and have had some significant and recent insider purchases. Our goal is to outperform the Russell 2000 (the benchmark) over time.

Analyst’s Disclosure: I am/we are long admp, cdmo. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (2)

Busted IPO Forum profile picture
Avid Bioservices (NASDAQ:CDMO) gained ~34% on Tuesday to reach the highest level in over four months after the contract manufacturer reported better-than-expected financials for Q3 FY23, prompting KeyBanc to upgrade the stock.
I_like_preferreds profile picture
yep. I agree. ADMP is full of hope (Symjepi, other pipeline). On the other hand CDMO is a manufacturing business that still has to turn into profitability before we can see a bright future. I am long ADMP, and preferred CDMOP.
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