On December 7, 2021 BioVaxys Technology Corp. (CSE: BIOV, FRA:5LB,OTCQB:BVAXF) ("BioVaxys" or "Company"), a clinical-stage immunotherapy company developing novel approaches to harness T cells to treat cancer and to detect and prevent emerging infectious diseases, reported that it has entered into a major sponsored research collaboration with The Ohio State University ("Ohio State") to further develop BioVaxys’ haptenized viral antigen platform to create a broadly reactive pan-sarbecovirus vaccine (Press release, BioVaxys Technology, DEC 7, 2021, View Source [SID1234596553]). This is the second research collaboration in the SARS-CoV-2 field between BioVaxys and Ohio State, a leading global academic research institute in the fight against SARS-CoV-2. Ohio State’s Wexner Medical Center serves as a site for SARS-CoV-2 multicenter clinical trials.

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Sarbecoviruses, a subset of the Coronaviridae family, include the emerging SARS2 variants Delta and Omicron. Sarbecoviruses are responsible for two pandemics in less than 20 years including SARS-CoV-1 (SARS1) in 2003 and the current Covid-19 pandemic. Additional SARS-like viruses are continuously being found in nature reservoirs.

Kenneth Kovan, President and Chief Operating Officer of BioVaxys, said, "The repeated emergence of SARS-CoV-2 variants and the potential for new coronaviruses increases the urgency for a universal vaccine. Research suggests that a pan-sarbecovirus vaccine could potentially prevent additional emergent variants and help end the Covid-19 pandemic."

The collaboration will leverage BioVaxys’ proprietary haptenized viral antigen platform to create a broadly reactive pan-sarbecovirus vaccine composed of hapten-modified S-spike protein from SARS-CoV-2 and a hapten-modified S-protein from SARS-CoV-1. Ohio State will conduct animal studies with BVX-0320, BioVaxys’ haptenized SARS-CoV-2 S1 protein vaccine and a new haptenized SARS-CoV-1 S1 protein vaccine from BioVaxys. The study will screen the combination for virus-neutralizing antibodies to SARS-CoV-2, SARS-CoV-1, and other sarbecoviruses, including bat SARS-related CoV and pangolin CoV. Initial data are expected by Spring 2022.

The clinical goal of the program is to stimulate virus cross-reactivity and induce immunity against all or most sarbecoviruses by immunizing people who have convalesced from a documented Covid-19 infection or received a full course of any Covid-19 vaccine, leading to a pan-sarbecovirus vaccine that encompasses current and emerging SARS-CoV-2 variants.

The study will be led by virologist Qiuhong Wang, PhD, Associate Professor, Center for Food Animal Health, Department of Animal Sciences, College of Food, Agricultural, and Environmental Sciences and Department of Veterinary Preventative Medicine at Ohio State. Dr. Wang’s research program focuses on the study of enteric caliciviruses and coronaviruses. She received her Bachelor of Medicine from Beijing Medical University, Master of Science from the University of Tokyo, doctorate from Ohio State University and completed postdoctoral training at the Medical College of Wisconsin.

BioVaxys recently filed a patent application for its haptenized viral antigen vaccine platform to elicit a broad cross-reactive immune response against most or all sarbecoviruses.

For greater certainty, BioVaxys is not making any express or implied claims that the Company can currently treat COVID-19.

On December 7, 2021 Legend Biotech Corporation (NASDAQ: LEGN), a global, clinical-stage biotechnology company developing and manufacturing novel therapies, reported the submission of a New Drug Application (NDA) to the Japanese Ministry of Health, Labour and Welfare (MHLW) for ciltacabtagene autoleucel (cilta-cel) by its collaboration partner, Janssen Pharmaceutical K.K. (Janssen) (Press release, Legend Biotech, DEC 7, 2021, View Source [SID1234596574]). Cilta-cel is an investigational B-cell maturation antigen (BCMA)-directed chimeric antigen receptor (CAR)-T cell therapy for the treatment of adults with relapsed or refractory multiple myeloma who have received at least three prior therapies, including a proteasome inhibitor (PI), an immunomodulatory agent (IMiD), and an anti-CD38 antibody.

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The submission is based on results from the Phase 1b/2 CARTITUDE-1 study conducted in the US and Japan, which evaluated the efficacy and safety of cilta-cel for patients with relapsed or refractory multiple myeloma.1 Cilta-cel is currently under regulatory review by several health authorities around the world, including the United States and Europe.

"Today’s submission is an encouraging step in our mission to provide a potentially transformative cell therapy option to patients with multiple myeloma," said Ying Huang, PhD, CEO and CFO of Legend Biotech. "We look forward to closely collaborating with our partner Janssen and the MHLW in order to make cilta-cel available to patients living with relapsed or refractory multiple myeloma, who have exhausted several standard-of-care treatments and are facing poor prognoses."

About Ciltacabtagene Autoleucel

Cilta-cel is an investigational chimeric antigen receptor T cell (CAR-T) therapy, formerly identified as JNJ-4528 in the U.S. and Europe and LCAR-B38M CAR-T cells in China, that is being studied in a comprehensive clinical development program for the treatment of patients with relapsed or refractory multiple myeloma and in earlier lines of treatment. The design consists of a structurally differentiated CAR-T with two BCMA-targeting single domain antibodies. In December 2017, Legend Biotech, Inc. entered into an exclusive worldwide license and collaboration agreement with Janssen Biotech, Inc. (Janssen) to develop and commercialize cilta-cel. In addition to a Breakthrough Therapy Designation (BTD) granted in the U.S. in December 2019, cilta-cel received a Priority Medicines (PRiME) designation from the European Commission in April 2019, and a BTD in China in August 2020. In addition, Orphan Drug Designation was granted for cilta-cel by the U.S. FDA in February 2019, and by the European Commission in February 2020. A Biologics License Application seeking approval of cilta-cel was submitted to the U.S. FDA and a Marketing Authorization Application was submitted to the European Medicines Agency.

About the CARTITUDE-1 Study

CARTITUDE-1 (NCT03548207) is a Phase 1b/2, open-label, multicenter study evaluating the safety and efficacy of cilta-cel in adults with relapsed or refractory with multiple myeloma who have received at least 3 prior lines of therapy or are double refractory to a proteasome inhibitor (PI) and immunomodulatory drug (IMiD), received a PI, an IMiD, and anti-CD38 antibody and documented disease progression within 12 months of starting the most recent therapy.1

About Multiple Myeloma

Multiple myeloma, an incurable blood cancer that starts in the bone marrow and is characterized by an excessive proliferation of plasma cells.2 In Japan, there were more than 7,000 new cases of multiple myeloma and nearly 5,000 deaths.3 Although treatment may result in remission, most patients experience relapse.4 Relapsed myeloma is when the disease has returned after a period of initial, partial or complete remission and does not meet the definition of being refractory.5 Refractory multiple myeloma is when a patient’s disease is non-responsive or progresses within 60 days of their last therapy.6,7 While some patients with multiple myeloma have no symptoms at all, most patients are diagnosed by symptoms that can include bone problems, low blood counts, calcium elevation, kidney problems or infections.8 Patients who relapse after treatment with standard therapies, including protease inhibitors and immunomodulatory agents, have poor prognoses and few treatment options available.9

On December 7, 2021 ISA’s very own Chief Scientific Officer, Cornelis "Kees" Melief, M.D., Ph.D., reported that it will be presenting key learnings in cancer vaccine development in an educational session at the ESMO (Free ESMO Whitepaper) Immune-Oncology Congress 2021, taking place on 8th – 11th December 2021 in Geneva, Switzerland and online (Press release, ISA Pharmaceuticals, DEC 7, 2021, View Source [SID1234596554]).

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Key learnings include:

Direct correlation between strength of cancer vaccine-induced immune response and clinical response
Combination therapy of cancer vaccine with standard of care and/or checkpoint blockers necessary for improved outcomes in treatment of late stage cancers
Session: New indications in head and neck (H&N) cancer (incl anaplastic thyroid) (ID 8)
Presentation title: HPV vaccination for H&N cancer therapy (ID 39)
Authors: Cornelis J. Melief
Date & Time: Thursday, 9th December, 15:30pm – 15:50pm CET
Locations: Room C

Kees Melief comments: "Our findings consistently highlight the direct correlation between the strength of the vaccine-induced immune response and the subsequent clinical response in patients with metastatic (HPV16+) cancers, including oropharyngeal cancer (OPC). Moreover, we argue that to overcome the hostile tumour microenvironment in late-stage cancer, combination of SLP-based therapies with platin-based standard of care and/or checkpoint blocking (anti-PD1 in particular) is necessary for improved treatment outcomes."

Gerben Moolhuizen, Chief Executive Officer, said: " We recently announced that we received FDA Fast Track designation for our lead product ISA101b, for treatment of recurrent and metastatic HPV16+ OPC. We are proud to be presenting our compelling findings in cancer vaccine combination therapy development at this influential medical conference, following the start of a next phase 2 clinical trial investigating the combination of ISA101b and Libtayo in advanced HPV16 positive OPC."

On December 7, 2021 Daiichi Sankyo reported that New data from the TROPION-PanTumor01 phase 1 trial of datopotamab deruxtecan (Dato-DXd), a TROP2 directed DXd antibody drug conjugate (ADC) being developed by Daiichi Sankyo Company, Limited (hereafter, Daiichi Sankyo) and AstraZeneca (LSE/STO/Nasdaq: AZN), continue to show encouraging durable tumor response and disease control in patients with metastatic triple negative breast cancer (TNBC) with disease progression following standard treatment (Press release, Daiichi Sankyo, DEC 7, 2021, View Source [SID1234596575]). These data were featured during an oral presentation (GS1-05) at the 2021 San Antonio Breast Cancer Symposium (#SABCS21).

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TNBC accounts for approximately 10 to 15% of breast cancer cases and is associated with higher disease recurrence and worse prognosis compared to other breast cancer subtypes.1,2,3 It is estimated that only 12.2% of patients with metastatic TNBC survive five years and median overall survival is generally less than two years.2,3

An objective response rate (ORR) of 34% was observed in 15 of 44 patients treated with datopotamab deruxtecan (6 mg/kg [n=42] and 8 mg/kg [n=2]) as assessed by blinded independent central review. Fourteen confirmed complete/partial responses (CR/PRs) with one additional CR/PR awaiting confirmation and stable disease in 17 additional patients were reported after a median follow-up of 7.6 months (range, 4 – 13 months). Median duration of response (DOR) was not reached (range, 2.7 – 7.4+ months) with the majority ongoing at the data cut-off of July 30, 2021. A disease control rate (DCR) of 77% was observed.

In a subgroup of 27 patients with measurable disease and previously untreated with a topoisomerase I inhibitor-based ADC, an ORR of 52% was reported with datopotamab deruxtecan. Thirteen confirmed CR/PRs with one additional CR/PR awaiting confirmation and stable disease were reported in nine additional patients after a median follow-up of 8.8 months (range, 4 – 13 months). A DCR of 81% was observed in this subgroup of patients.

"Despite recent advances in the treatment of triple negative breast cancer, a significant need remains to improve patient outcomes, underscoring the importance of developing new and effective therapies," said Ian E. Krop, MD, PhD, Associate Chief, Division of Breast Oncology, Susan F. Smith Center for Women’s Cancers, Dana Farber Cancer Institute. "These preliminary results with datopotamab deruxtecan in pre-treated patients with metastatic triple negative breast cancer are very encouraging and further evaluation of this TROP2 directed ADC is warranted."

The overall safety profile of datopotamab deruxtecan in TNBC in TROPION-PanTumor01 was consistent with what has been previously reported with no new safety signals. Treatment emergent adverse events (TEAEs) occurring in ≥15% of patients included nausea, stomatitis, vomiting, fatigue, alopecia, mucosal inflammation, constipation, headache, decreased lymphocyte count, decreased neutrophil count, pyrexia, anemia, pruritis, hypokalemia, diarrhea and cough. Grade 3 or greater treatment-related TEAEs occurred in 23% of patients. No cases of interstitial lung disease (ILD) were observed.

"These updated results continue to show the promise of datopotamab deruxtecan as a durable treatment strategy for patients with previously treated triple negative breast cancer, a historically difficult-to-treat form of breast cancer," said Gilles Gallant, BPharm, PhD, FOPQ, Senior Vice President, Global Head, Oncology Development, Oncology R&D, Daiichi Sankyo. "We are committed to further developing datopotamab deruxtecan and establishing where this specifically engineered TROP2 may be most effective in treating triple negative breast cancer."

"Patients with metastatic triple negative breast cancer face rapid disease progression with currently available treatment options and unmet need remains high for these patients," said Cristian Massacesi, MD, Chief Medical Officer and Oncology Chief Development Officer, AstraZeneca. "Based on these encouraging results of datopotamab deruxtecan in the triple negative breast cancer cohort of TROPION-PanTumor01, plans are underway to initiate a registrational phase 3 study."

Patients were treated with a median of three prior therapies in the metastatic setting (range, 1-10), including taxanes (91%), platinum-based chemotherapy (52%), immunotherapy (43%), topoisomerase I inhibitor-based ADCs (30%; sacituzumab govitecan, n=10; trastuzumab deruxtecan, n=2; patritumab deruxtecan, n=1) and PARP inhibitors (16%). As of data cut-off on July 30, 2021, 30% of patients remained on treatment with datopotamab deruxtecan.

Summary of TROPION-PanTumor01 TNBC Results

Efficacy Measure

All TNBC Patients
(n=44)i,

Patients without Prior Topoisomerase I-Based ADC and with Measurable Disease
(n=27)ii

ORR, %

34% (n=15)

52% (n=14)

(CR/PR) (confirmed)

n=14

n=13

(CR/PR) (pending confirmation)

n=1iii

n=1iii

SD, %

39% (n=17)

33% (n=9)

PD, %

18% (n=8)

15% (n=4)

DCR, %

77% (n=34)

81% (n=22)

CR; complete response; DCR, disease control rate; ORR, objective response rate; PD, progressive disease; PR, partial response; SD, stable disease

i Includes response evaluable patients who had ≥1 postbaseline tumor assessment or discontinued treatment. Postbaseline tumor assessments were not yet available for 2 patients at the data cut-off. Three patients were not confirmed to have a target lesion per BICR and therefore had a best overall response of non-CR/non-PD.

ii Includes response evaluable patients who had ≥1 postbaseline tumor assessment or discontinued treatment. Postbaseline tumor assessments were not

yet available for 1 patient at the data cut-off.

iii Includes patients with an unconfirmed response but are ongoing treatment.

About TROPION-PanTumor01
TROPION-PanTumor01 is a first-in-human, open-label, two-part, multicenter phase 1 trial evaluating the safety, tolerability and preliminary efficacy of datopotamab deruxtecan in patients with advanced solid tumors refractory to or relapsed from standard treatment or for whom no standard treatment is available, including non-small cell lung cancer (NSCLC), TNBC, hormone receptor (HR) positive/HER2 negative breast cancer, small cell lung cancer, urothelial, gastric and esophageal cancer.

The dose escalation part of the study, which was limited to patients with NSCLC, assessed the safety and tolerability of increasing doses of datopotamab deruxtecan to determine the maximum tolerated dose and/or recommended dose for expansion. The dose expansion part of the study further assessed the safety and tolerability of datopotamab deruxtecan in patients with additional solid tumors. Based on the preliminary efficacy and safety profile, the 6 mg/kg dose has been chosen for further development.4,5

Safety endpoints include dose limiting toxicities and serious adverse events. Efficacy endpoints include ORR, DCR, DOR, time to response, progression-free survival and overall survival. Pharmacokinetic, biomarker and immunogenicity endpoints also are being evaluated.

About Triple Negative Breast Cancer
Approximately 10 to 15% of breast cancers are considered triple negative, a breast cancer subtype that is defined by tumors that test negative for estrogen and progesterone hormone receptors (HRs) as well as human epidermal growth factor 2 receptor (HER2).1,2,6 An estimated 260,000 new cases of TNBC were reported globally in 2018 with it being more common in younger women and those who are Black.1,2,7 Compared to patients with other breast cancer subtypes, prognosis for patients with metastatic TNBC is generally worse and the disease is more likely to recur following treatment with initial chemotherapy.1,3 Five-year survival of metastatic TNBC is estimated at 12.2% and median overall survival is generally less than two years.2,3

About TROP2
TROP2 (trophoblast cell-surface antigen 2) is a transmembrane glycoprotein overexpressed in several types of solid tumors, including breast cancer.8 TROP2 overexpression has been detected in multiple breast cancer subtypes, including approximately 80% of patients with TNBC.9,10,11 High TROP2 expression is an unfavorable prognostic factor for overall survival in all types of breast cancer.12

About Datopotamab Deruxtecan (Dato-DXd)
Datopotamab deruxtecan (Dato-DXd) is an investigational TROP2 directed ADC. Designed using Daiichi Sankyo’s proprietary DXd ADC technology, datopotamab deruxtecan is one of three lead ADCs in the oncology pipeline of Daiichi Sankyo, and one of the most advanced programs in AstraZeneca’s ADC scientific platform. Datopotamab deruxtecan is comprised of a humanized anti-TROP2 IgG13 monoclonal antibody, developed in collaboration with Sapporo Medical University, attached to a topoisomerase I inhibitor payload, an exatecan derivative, via a tetrapeptide-based cleavable linker.13

A comprehensive development program called TROPION is underway globally with trials evaluating the efficacy and safety of datopotamab deruxtecan across multiple solid tumors, including NSCLC, TNBC, HR positive/HER2 negative breast cancer, small cell lung cancer, urothelial, gastric and esophageal cancer. Trials in combination with other anticancer treatments, such as immunotherapy, are also underway.

About the Daiichi Sankyo and AstraZeneca Collaboration
Daiichi Sankyo and AstraZeneca entered into a global collaboration to jointly develop and commercialize datopotamab deruxtecan in July 2020, except in Japan where Daiichi Sankyo maintains exclusive rights. Daiichi Sankyo is responsible for the manufacturing and supply of datopotamab deruxtecan.

About Daiichi Sankyo in Oncology
The oncology portfolio of Daiichi Sankyo is powered by our team of world-class scientists that push beyond traditional thinking to create transformative medicines for people with cancer. Anchored by our DXd antibody drug conjugate (ADC) technology, our research engines include biologics, medicinal chemistry, modality and other research laboratories in Japan, and Plexxikon Inc., our small molecule structure-guided R&D center in the U.S. We also work alongside leading academic and business collaborators to further advance the understanding of cancer as Daiichi Sankyo builds towards our ambitious goal of becoming a global leader in oncology by 2025.

On December 7, 2021 Avid Bioservices, Inc. (NASDAQ:CDMO), a dedicated biologics contract development and manufacturing organization (CDMO) working to improve patient lives by providing high quality development and manufacturing services to biotechnology and pharmaceutical companies, reported financial results for the second quarter of fiscal 2022, ended October 31, 2021 (Press release, Avid Bioservices, DEC 7, 2021, View Source [SID1234596555]).

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Highlights Since July 31, 2021

"The second quarter was highly productive and a transformative time for Avid. The company’s financial status is increasingly strong, supported by year-over-year revenue growth, continued new business wins and a substantial backlog. Our business development team continues to perform, signing $36 million in new business during the quarter, and ending the period with a backlog of $120 million," stated Nicholas Green, president and chief executive officer of Avid Bioservices.

"Leveraging the company’s strengths in quality manufacturing, regulatory compliance and customer engagement, we announced during the quarter our expansion into viral vector development and manufacturing for the cell and gene therapy market. We believe we are uniquely qualified to establish an industry-leading viral vector CDMO business, and we are actively building the team and facilities required to drive our success and expand our revenue generating capacity. Regarding mammalian cell operations, we have successfully completed our annual maintenance shutdown, completed the build-out of our second downstream processing suite in our Myford North facility, and initiated construction for the new Myford South facility. Each of these steps is an essential part of Avid’s strategy to meet the growing demand of our expanding customer base, and we continue to execute this expansion on time and on budget.

"Also during the quarter, we were pleased to have our progress, as measured in the value created for shareholders, recognized as the company’s stock was named for the first time to the S&P SmallCap 600 Index. We are honored to join this index and believe that it speaks to the collective effort of everyone at Avid, while building greater visibility for the company with investors and the industry alike. We are pleased with our recent achievements, and believe that each of the accomplishments during the quarter will facilitate growth and move us toward our overarching goal of establishing Avid as a best-in-class CDMO focused on biologics."

Financial Highlights and Guidance

The company is confirming revenue guidance for the full fiscal year 2022 of $115 million to $117 million.
Revenues for the second quarter of fiscal 2022 were $26.1 million, representing a 24% increase compared to $21.1 million recorded in the prior year period. The increase in revenues can primarily be attributed to fees received from a customer during the current-year period for unutilized reserved capacity combined with an increase in process development revenues primarily associated with services provided to new customers. For the first six months of fiscal 2022, revenues were $56.9 million, a 22% increase compared to $46.5 million in the prior year period. The increase in revenues for the first six months of fiscal 2022 can primarily be attributed to an increase in fees received from customers for unutilized reserved capacity combined with an increase in process development revenues primarily associated with services provided to new customers.
As of October 31, 2021, revenue backlog was $120 million, an increase of 79% compared to $67 million at the end of the same quarter last year. The company expects to recognize the majority of this backlog over the next twelve months.
Gross margin for the second quarter of fiscal 2022 was 35%, compared to a gross margin of 30% for the second quarter of fiscal 2021. Gross margin for the first six months of fiscal 2022 was 36% compared to 32% for the prior year period. The increases in gross margin for the quarter and the first six months were primarily from higher manufacturing and process development revenues during the periods.
Selling, general and administrative expenses ("SG&A") for the second quarter of fiscal 2022 were $5 million, an increase of 21% compared to $4.2 million recorded for the second quarter of fiscal 2021. For the first six months of fiscal 2022, SG&A expenses were $9.5 million as compared to $8 million for the prior year period. The increase in SG&A during the quarter and six months was primarily due to increases in stock-based compensation, facility and related expenses and advertising costs, partially offset by a decrease in payroll and benefit related expenses.
For the second quarter of fiscal 2022, we recorded net income attributable to common stockholders of approximately $3.5 million or $0.06 per basic and diluted share, as compared to net income attributable to common stockholders of $0.8 million or $0.01 per basic and diluted share, for the second quarter of fiscal 2021. For the first six months of fiscal 2022, the company recorded a consolidated net income attributable to common stockholders of $9.8 million or $0.16 and $0.15 per basic and diluted share, respectively, compared to a consolidated net income attributable to common stockholders of $4.5 million or $0.08 per basic and diluted share, for the fiscal 2021 period.
Avid reported $163.7 million in cash and cash equivalents as of October 31, 2021 compared to $169.9 million as of the prior fiscal year ended April 30, 2021.
More detailed financial information and analysis may be found in Avid Bioservices’ Quarterly Report on Form 10-Q, which will be filed with the Securities and Exchange Commission today.

Recent Corporate Developments

The company announced the expansion of its CDMO service offerings into the rapidly growing cell and gene therapy market. This decision was driven by continued strong growth in this market combined with the CDMO industry’s overall lack of proven, high-quality CGMP manufacturing expertise and capacity for viral vectors. The company believes that the addition of viral vector services is a natural extension of its existing traditional biologics offering and provides another attractive avenue for growth.
The company appointed Matthew Kwietniak as chief commercial officer with responsibility for continuing the current growth trajectory of Avid’s CDMO business through the ongoing expansion of the company’s commercial and clinical client base. Mr. Kwietniak most recently served as head of drug product sales for the Americas within the pharma services group at Thermo Fisher Scientific. In this role, he led the North America team of sales leaders and business development executives for the company’s pharmaceutical development and commercial manufacturing business.
The company appointed Drew Brennan, an experienced CDMO business development executive, as general manager of viral vector technologies to lead the company’s expansion into the cell and gene therapy market. Mr. Brennan will be responsible for overseeing all business activities related to Avid’s expansion into this market. He most recently spent more than a decade in senior sales and operations positions at Novasep, a leading provider of viral vector development and manufacturing services to the cell and gene therapy market, as well as a provider of equipment and services in the fields of both small molecule production and purification for the life science and chemical industries.
The company appointed Elie G. Hanania, Ph.D., as vice president, process development, viral vector technologies. Dr. Hanania is a seasoned life science industry executive with more than 30 years of experience in the field of cell and gene therapy. Prior to joining Avid, Dr. Hanania most recently served as director, upstream process development for Fujifilm Diosynth Biotechnologies, where he led the process development team in charge of upstream production of all viral vectors and therapeutic proteins.
The company’s business development team signed multiple new orders during the second quarter, totaling approximately $36 million. These projects span all areas of the business, from process development to commercial manufacturing.
The two-part expansion of the Myford facility continues to progress according to plan. The first phase of the expansion, which was initiated during the second quarter of fiscal 2021, is mechanically complete, adding a second downstream processing suite to the company’s existing Myford North facility. The company expects to have this equipment validated and operational in the coming months. The second phase, which was initiated during the fourth quarter of fiscal 2021, is designed to further expand capacity through the build out of a second manufacturing train, including both upstream and downstream processing suites within Myford South. During the second quarter of fiscal 2022, the new construction phase of this expansion was initiated.
Combined, the company estimates that the first and second phases of this expansion will result in a total revenue generating capacity of up to approximately $270 million for the mammalian cell business annually. It is anticipated that total annual revenue generating capacity will increase to approximately $350 million with the addition of the viral vector business. While the company believes that these expansions are critical to its ability to service the future needs of its customers, Avid presently has adequate capacity to accommodate current demand.

The company’s stock (NASDAQ:CDMO), was named to the S&P SmallCap 600 Index, effective, October 29, 2021.
Statement Regarding Use of Non-GAAP Financial Measures

The company uses certain non-GAAP financial measures such as non-GAAP adjusted net income, free cash flow, as well as adjusted EBITDA. The company uses these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. The company believes that they provide useful information about operating results, enhance the overall understanding of our operating performance and future prospects, and allow for greater transparency with respect to key metrics used by management in our financial and operational decision making. These non-GAAP financial measures exclude amounts that the company does not consider part of ongoing operating results when planning and forecasting and when assessing the performance of the organization and our senior management. The company computes non-GAAP financial measures using the same consistent method from quarter to quarter and year to year, and may consider whether other significant items that arise in the future should be excluded from our non-GAAP financial measures.

The company reports non-GAAP financial measures in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. generally accepted accounting principles (GAAP). These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles, differ from GAAP measures with the same names, and may differ from non-GAAP financial measures with the same or similar names that are used by other companies. The company believes that non-GAAP financial measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP financial measures, and encourages investors to carefully consider our results under GAAP, as well as the supplemental non-GAAP information and the reconciliations between these presentations, to more fully understand our business.

Non-GAAP net income excludes stock-based compensation; business transition and related costs including corporate initiatives into new business activities such as consulting and other costs directly associated with such activities, and severance and related expenses; and non-cash interest expense on senior convertible notes for the accretion of the debt issuance costs associated with our senior convertible notes. Adjusted EBITDA excludes non-cash operating charges for stock-based compensation, depreciation and amortization as well as non-operating items such as interest income, interest expense, and income tax expense or benefit. For the reasons explained above, adjusted EBITDA also excludes certain business transition and related costs. The company also uses measures such as free cash flow, which represents cash flow from operations less cash used in the acquisition and disposition of capital.

Additionally, non-GAAP net income and adjusted EBITDA are key components of the financial metrics utilized by the company’s compensation committee to measure, in part, management’s performance and determine significant elements of management’s compensation. The company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Reconciliations between GAAP and non-GAAP financial measures included at the end of this press release.

Conference Call

Avid will host a conference call and webcast this afternoon, December 7, 2021, at 4:30 PM EST (1:30 PM PST).

To listen to the conference call, please dial (877) 312-5443 or (253) 237-1126 and request the Avid Bioservices conference call. To listen to the live webcast, or access the archived webcast, please visit: View Source