Avid Bioservices dives after convertible deal, preliminary results

Avid Bioservices

07/03/2024 16:45

(Updates, recasts throughout)
    ** Shares of Avid Bioservices  CDMO.O  dive on Thurs after
contract drugmaker prices convertible notes deal and releases
preliminary qtrly results
    ** CDMO falls as much as 32.9% to $5.90, lowest since Jan 5.
Trading volume of ~7.3 mln shares compares to stock's 10-DMA of
about 967k, per LSEG
    ** Co late Weds announced pricing private placement of $160
mln 7% convertible bonds (CBs) due 2029 with several purchasers
    ** Initial conversion price of $9.89 represents 12.5%
premium to stock's last close
    ** Co plans to use net offering proceeds to repurchase
portion of its 1.25% exchangeable notes due 2026
    ** Avid late Weds also released preliminary results for
fiscal Q3, including rev of $33.8 mln, down 11% yr/yr, and
maintained rev guidance for FY24 of $137-$147 mln
    ** CBs are securities that can convert into stock or cash if
certain conditions are met
    ** A slew of firms have raised capital in CB deals in recent
weeks as they are expected to refinance near-term debt
maturities
    ** CDMO last down 26.1% at $6.50. Stock has shed about 60%
over the past 12 months and has current market cap of about $400
mln, according to LSEG
    ** 5 analysts cover CDMO with avg rating of "buy". Median PT
is $14.50 ranging from $7 to $16

 (Lance Tupper is a Reuters market analyst. The views expressed
are his own)
 ((lance.tupper@thomsonreuters.com
lance.tupper@tr.com 1-646-279-6380))