Avid expansion to triple process development capacity, says CEO
Avid Bioservices has experienced a transformative 12 months, after it shed its former name of Peregrine Pharmaceuticals and decided to focus on its contract manufacturing and development organisation (CDMO) capabilities.
The transition has seen Avid divest lead monoclonal antibody (mAb) drug candidate, bavituximab, for $103m (€90.3m) and raise a further $20m from a public offering of common stock. Now, the company plans to triple its process development capacity and attract a number of new clients in the year to come.
BioPharma-Reporter (BPR) spoke to CEO, Roger Lias (RL), about how to the investment will fund an expansion of the company’s capabilities.
BPR: Avid has had a busy 12 months, could you walk us through the changes?
RL: Avid has been in existence since 2002, formerly as a subsidiary of Peregrine Pharmaceuticals – a biologics manufacturing organisation – offering excess capacity to third-party players. There was a lot of shareholder activism to focus on Avid, which was a very well run manufacturing organisation. I came in a little over 12 months ago to bring about the transition to focus on being a biologics contract manufacturing and development organisation (CDMO). In essence, this entailed closing down Peregrine, changing the name to Avid as well as the stock ticker at Nasdaq to CDMO.
BPR: How did beginning as a subsidiary of a biopharma company impact the structure of Avid?
RL: As a CDMO, we are somewhat upside down, in my experience – usually, you start with early-stage work and, over time, you build experience in clinical manufacturing and then fully grow to get to the commercial side of manufacturing. We are upside down in that we do a very good job of commercial manufacturing and we release products to 18 different countries over the world. However, we do not have the width at the base of the company.
BPR: What has Avid been working on to widen that base?
RL: We're now entering the major phase of this programme, we've already opened some new downstream purification development laboratories and, in the same building, there will be a space that will become our cell culture laboratories; of course, we already have some but these will be new spaces. We are roughly tripling our capabilities in our process development on the cell culture-side. In addition to having completely new laboratories, we will be having new equipment and new people, as well. We are hiring and expanding the headcount in the area pretty aggressively right now.
BPR: What kind of equipment will be brought in?
RL: In terms of equipment, the bioreactors that we are bringing in now are state-of-the-art, though we have not yet announced which systems we will be using. This allows us to have more throughput but with fewer people, thereby being more efficient. We are looking at a lot of high throughput technologies for both upstream and downstream process development, but that takes a little longer to get on board and get people trained up on.
BPR: How long will the timeline be for this expansion?
RL: This current phase of expansion will be completed at the end of this calendar year but there are subsequent phases that will continue for the first six months of the next year. We can't disrupt current projects, obviously, but we inherited Peregrine labs so we can move between labs – we can knock one apart, transition people over and then start working on the next one, so it's a phased approach.
BPR: How will it change the business model?
RL: Previously, Avid was reliant on important customers but did not have a lot of pure numbers; now that we're a dedicated CDMO, we're adding customers and expanding capacity for onboarding new products. This year, we are working with about a dozen companies and next year plan for that to increase to about two dozen. In my experience, roughly a third of biologics CDMOs’ revenues come from process development, so this expansion has good revenue potential for us. We are really going to start looking more like a traditional CDMO.
BPR: What has been the reaction to the change of business?
RL: There has been a positive reaction, we are a public company so, first of all, Wall Street has reacted well to it. Beyond that, the legacy clients, that were already in, are extremely pleased with the transition. I think clients are happy to be working with a company that has a sole mission to support them and their projects. In addition, with a number of clients we've brought on this year, they are happy to have another option in the marketplace.
Roger Lias has been president and CEO of Avid Bioservices since September 2017. He most recently served as executive director, head of global biologics business development for Allergan, where he was responsible for developing and executing strategies designed to support the company’s business development activities related to innovative biologics, biosimilars and complex injectable products.
