Q1 2023 Avid Bioservices Inc Earnings Call

September 6, 2022

Service's first quarter fiscal 2023 financial results conference call. At this time, all participants are in listen-only mode. Later, we'll conduct a question-and-answer session and instructions will follow at that time. As reminded, this call may be recorded.

I would like to hand the conference over to Tim Bronze of Avid Investors Relations Group. Please go ahead. Let's get started.

Thank you. Good afternoon and thank you for joining us. On today's call, we have Nick Green, President and CEO , Dan Hart, Chief Financial Officer, and Matt Quitney-Anne, and the Chief Commercial Officer. I have its Chief Commercial Officer.

Today we will be providing an overview of Avid Bio Services contract development and manufacturing business, including updates on corporate activities and financial results for the quarter ended July 31st, 2022.

After our prepared remarks, we will welcome your questions.

Before we begin, I'd like to caution that comments made during this conference call today, September 6, 2022, will contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

concerning the current belief of the company, which involves a number of assumptions, risks, and uncertainties.

Actual results could differ from these statements, and the company undertakes no obligation to revise or update any statement made today.

I encourage you to review all of the company's filings with the Securities and Exchange Commission concerning these and other matters.

Our earnings press release in this call will include discussion of certain non-GAAP information. You can find our earnings press release, including relevant non-GAAP reconciliations, on our corporate website at AvidBio.com.

With that, I will turn the call over to Nick Green, Abbott's President and CEO .

Thank you Tim and thank you to everyone who has dialed in and to those who are participating today via webcast.

I am pleased to report that the momentum and growth achieved during fiscal 22 continued into the first quarter of fiscal 23.

During the period we achieved the highest quarterly revenue in the company's history. In connection with this achievement, our commercial team had another exceptional quarter, signing multiple new project agreements and as a result pushed our backlog to a new record level.

With respect to our facilities, our expansion work continues to progress according to schedule.

During the first quarter we initiated equipment validation in our Myford South facility and continued to advance construction of our cell and gene therapy facility, which included launching our analytical and process development capabilities for this business. During the period we also announced the expansion of our process development capabilities for the mammalian cell business, which we expect to come online in quarter one of calendar 2023.

Matt and I will provide additional details on the business development and operations for the period following an overview of our first quarter fiscal 23 financial results.

And for that, I'll turn the call over to Dan.

Thank you, Nick. Before I begin, it's an addition to the brief financial overview I'll provide on the call today. Additional details in our first quarter fiscal 2023 financial results are included in our press release as you prior to this call. And in our form 10Q, which was filed today with the FUC.

I'll now provide an overview of our financial results from operations for the first quarter ended July 31, 2022.

Revenue for the first quarter of fiscal 23 for 36.7 million dollars.

representing a 19% increase compared to $30.8 million recorded in the prior year period.

The increase in revenues for the quarter can primarily be attributed to an increase in manufacturing revenues as compared to the prior year period.

Gross margins for the first quarter of fiscal 23 was 25%, compared to a gross margin of 37% for the first quarter of fiscal 22, which benefited from the receipt of unutilized capacity fees of $3.3 million. synchronizationblooded nuance.

Factors impacting the gross margin for the first quarter of fiscal 23 for primarily from increases in cost associated with the growth of our business and our facility expansions including compensation and benefit expenses as well as increases in facility-related expenses partially offset by higher revenues during the period.

Given our ongoing expansions, we believe that margins may continue to be affected in the coming quarters.

including the prior year's margin benefit from unutilized capacity fees, and the current quarter's increase in costs associated with the establishment of our cell and gene therapy business.

and ahead of our momentum past the expansion.

including the company's increasing headcount and incremental depreciation from recently released facility extensions.

our first quarter gross margin was on par with the same period the prior year.

Total SG&E expenses for the first quarter of fiscal 23 were $6.4 million, an increase of 42% compared to $4.5 million recorded in the first quarter of fiscal 22.

The increase in SG&A for the quarter was primarily due to compensation and benefit expenses, facility related expenses, and legal and accounting fees.

For the first quarter of fiscal 23, the company recorded net income of $1.6 million for three cents per basic and two cents per diluted share, which for the first time starting in fiscal 23 includes the provision for income taxes as reported within the company's income statement.

As compared to a net income of $6.3 million or $0.10 per basic individual share for the first quarter of fiscal 22.

For the first quarter, the company achieved an adjusted EBITDA of $6.2 million. The adjusted EBITDA increased 5% sequentially over the fourth quarter of fiscal 22.

Our cash and cash equivalents on July 31, 2022 were $115.1 million compared to $126.2 million on April 30, 2022.

This concludes my financial overview. I'll now turn the call over to Matt for an update on commercial activities during the quarter.

Thanks, Dan.

I am pleased to report that during the 1st quarter, our commercial team continue to be highly productive.

As discussed during the last call, over the last few months we have made substantial changes to our commercial organization, including the doubling of the size of our sales team with additions in both our mammalian and our cell and gene therapy businesses.

This new team is working exceptionally well together.

And focusing on ensuring avid continued growth and success.

During the quarter, our team signed $41 million in new project orders with a significant portion coming from new customers.

As a result of this performance, Avid's backlog again reached a new company high, ending the quarter at $157 million. This backlog represents a 43% increase compared to the backlog of $110 million at the end of the first quarter of fiscal 2022.

We expect to recognize most of our current backlog over the next 12 months, and notably this backlog contains no COVID-related business.

We believe that our success in bringing multiple new customers to AVID during the quarter validates both the investment and our new team.

and the execution of our commercial plan. Our strategy prioritizes the leading biotechnology regions in North America, and we continue to expand our outreach and presence in these key markets.

Our team is active at conferences and is working to promote our industry experience with single use technology, regulatory matters, as well as clinical and commercial manufacturing.

In summary, I am very pleased with the commercial results for the quarter. Our new business wins were strong, further expanding and diversifying our client base, and the company ended the quarter with its highest backlog to date.

We believe this showcases the talent of our team and the promise of our strategy, which we expect to continue to drive the company's growth.

This concludes my overview of commercial activities for the quarter. I will now turn the call back over to Nick for an update on operations and other achievements during the period.

Thanks Matt. Following a very strong fiscal 22, the first quarter of fiscal 23 has established a new high.

As outlined by Dan and Matt, during the period we achieved both the highest quarterly revenue and the highest backlog ever in the company history.

This was driven by our commercial team's success in attracting new business.

as well as the exceptional performance of our manufacturing and operations teams.

in consistently delivering high quality products on time to our customers.

As most of you are aware, the company is midstream in a broad expansion of our facilities and capabilities.

This new capacity is intended to attract new customers as well as support existing customers as their programs continue to mature.

During the period, the expansion work for both our mammalian and our cell and gene therapy businesses advanced according to plan.

During the first quarter, the company achieved an important milestone with respect to our legacy.

with the launch of our analytical and process development capabilities for this business.

This opening marks the first of our cell and gene therapy capabilities to come online.

and we believe it positions as well to begin engaging with prospective customers who are now able to see this exciting business come to life.

Construction of our cell and gene therapy GMP suites continues on schedule and we expect them to be completed in mid-calendar 2023.

Given our current discussions with prospective customers, we believe the opening of these suites will be well timed given the analytical and process development work that we are now anticipating and the potential for these programs to advance the GMP suites shortly after they are completed. Our licenses are now open for view at the various establishments in the and at may pointing free. I hope you can view that right now we are playing closely and we want to make sure we

Turning now to our mammalian cell business.

We are very pleased to announce the recent appointment of Prem Patel as Vice President, Process Development.

Dr Patel is an accomplished biopharmaceutical executive with more than 30 years of experience and a track record of success in developing manufacturing processes for clinical material and commercial supplies.

His career is highlighted by extended tenure supporting research, development and manufacturing activities at GSK and Bristol-Myers Square.

We are delighted to have Prem join our team.

And in addition to his technical acumen, we are excited to have as a new member of our senior team, someone with intimate knowledge of how our customers see Avid's offering.

We believe this perspective can only further enhance our customer-centric offering and the behaviours that support that goal.

With respect to our mammalian cell business facilities, we have come a long way and are fast approaching the finishing line with respect to our ongoing expansions.

The second phase of this project is ongoing and we remain on track to have Myford South expansion complete by the end of course of 1, calendar 2023.

The manufacturing suites in Miford South are nearing completion.

and equipment has already been put in place.

In fact, as we speak, much of the downstream equipment has been located in the facility and validation of this equipment is already underway.

During Q2 we expect to receive much if not all of the upstream equipment which will in turn be added to the schedule in terms of getting it ready for operational release.

A few weeks ago, we also announced another expansion of our process development capacity.

to provide additional space to onboard future clients ultimately seeking to utilise the new micro capacity.

This expansion is now underway and we anticipate both of these expansions to be complete somewhere during the first quarter of calendar 2023.

Undertaking this scale of expansion has been no small feat.

It continues to acquire close coordination and execution by numerous vendors, partners, and other agencies as well as our internal team.

I would again like to mention

that despite all of the potential for disruption, our team has continued to perform diligently and are now not only delivering the state-of-the-art facilities on time, but are also maintaining the delivery of products to the highest standards with respect to quality, yield, and schedule.

which is something avid clients have come to expect.

I continue to be impressed by our incredible employees across all areas of the business.

and I am grateful for their dedication and reliably excellent performance.

As we continue to expand, so too will our team.

We anticipate continuing to increase our headcount through fiscal year end to both stand up and appropriately staff our new capabilities and capacities.

As Dan stated earlier, these expenses, current and future, continue to place pressure on our margins.

However, we do believe that this downward pressure is temporary.

Importantly, we are delighted to be in a position to bring online new capacity to support the continued growth of the business.

As we start to fill this capacity, we believe that our margins will be restored and further strengthened as the capacity utilisation increases.

In the near term, it is also important to note that as usual in fiscal quarter 2, we will undertake the company's annual maintenance shutdown.

which will result in reduced available capacity for the quarter.

Once complete this will of course be restored throughout the rest of the year.

I am also pleased to report that during this month we will be vacating the Michel Corporate Office.

and relocating personnel to the new office space in the MIFOD facility.

This space is larger than our current location and I'm excited at the prospect of being able to bring most of our operations and administrative teams together in a single location.

In closing, I wish to reiterate how pleased I am with the progress achieved on all fronts during this quarter.

both top-line revenues and backlog hit new company highs.

A clear extension of the growth trajectory established in fiscal 2022.

Our commercial development team continues to execute, signing new orders for $41 million during the quarter and expanding our organizational outreach and visibility throughout North America.

And finally, our facilities and capabilities expansions continue to advance according to the schedule.

As a result, we feel optimistic about the future and look forward to delivering value to our clients and in turn, building the new capacity we will soon have available.

This concludes my prepared remarks for today and we can now open up the call for questions.

Operator.

Thank you. Thank you.

Ladies and gentlemen, if you'd like to ask a question, please press star 1 1 on your touch tone telephone. Again, to ask a question, please press star 1 1.

Our first question comes from Sean Dodge of RBC Capital Market. Mr. Dodge, your line is open.

This is Thomas Keller, on for Sean. Thank you for taking the questions.

So starting off on bookings and congrats to the commercial team on another strong quarter. Still doesn't appear that you are being materially impacted by a slowdown in biotech funding. Is this an accurate assessment or have you seen any changes in selling activity or timelines or anything like that since the close of the quarter?

This is Matt. I'll take that.

We're seeing a little bit of a blip in the summer, but I think the positive around that is...

It's actually a higher rate of issuance versus prior year. So I guess to answer the question, in typical summer, slow down, but improve performance over prior years. I think we're encouraged, really in the last few months, issuance has consistently been strong both in count as well as dollars.

Okay, that's helpful. Thank you. And then, could you guys talk a little bit about the visibility you have on the fiscal 2023 guidance? I know you reiterated the revenue. Have there been any changes in terms of quarterly cadence or maybe mix of revenue coming out of backlog versus your initial outlook?

Hello? Hello? Can you hear me much?

Model.

Yeah, go ahead.

Thank you.

Hello, can you hear me?

Yeah.

Nick, we can hear you.

Sorry about that. We've had some technical difficulties there. I apologize for that. Can you just reiterate the question again there? Sorry.

Yeah, sure. I was just wondering if you could talk a little bit more about some of the visibility you have on the 2023 revenue guidance. If there are any changes you'd like to note around quarterly cadence or how much of the revenue is coming out of backlog versus the previous outlook.

Yeah, I think backlog frankly is the outlook for the full year remains pretty much where we were last quarter or the beginning of this financial year. Obviously, we've had a good start to the year which is not totally uncommon. We've seen, I think as I just heard Matt allude to, a good up-taking in comparison with last year in terms of value.

and we've obviously seen reduced investment into biotech and the like and that always provides some degree of concern for the whole year. But what we've seen so far is that at least in the case of Avid the value proposition seems to be maintaining its attraction to the marketplace and continuing the interest.

You know, as I mentioned, obviously during my remarks, we do have the shutdown coming up this year, this next quarter, which obviously means our capacity is lower for the quarter, which typically we end up with a lower revenue in that second quarter. And then obviously pick our way back up to complete the full year in quarters three and four. But at the moment, no reason to have any concerns over where we feel the year will end up as we were from three months ago.

All right, great. Thank you very much. That's all for me.

Thank you.

Thank you. Our next question comes from Jacob Johnson of Stevens. Your line is open. Okay.

Maybe a question on the cell and gene therapy side with the PD lab there now online. I started thinking about the CGMP manufacturing coming online next year. Maybe one, latest thoughts on business development trends now that the PD lab is open. Two, any thoughts around the business model here? Are customers coming to you already looking to book suites?

Would you be interested in sweet reservation peas or something like that? Just kind of thoughts around the business model for cell and gene therapy and business development trends there. Yes they are and they were open

Yeah, hi Jacob, it's obviously a brand new business for us and we literally brought on the AD and PD capacities literally a few weeks ago. I am delighted to say that we actually have already signed our first client, so that's, I think in any new business finding your first client is always the hardest.

And we've already completed that one, so hats off to the team in achieving that. And again, that kind of, we're in numerous discussions with other parties. I think, as I mentioned again last quarter, it's always good to have the facility there, even if it's not all of it, to actually be able to showcase what we've got and obviously the people that are employed in delivering those services.

So, you know, with our reservation fees, our business always has a form of reservation fees in the structure of our agreements. So yes, we, you know, we will be looking to design new business and to the wonderful better word reservation fees or deposits against that and start building some analytical and process development capabilities. Thank you.

ahead of bringing the GMP suites on at the middle of next calendar year. Thanks, Redneck. And then just follow up.

On the, on the expense side of things, Nick, you mentioned, you know, you're continuing to hire continue to add to head count. Yeah, as we think about that, certainly some of that headcount is going to go to the actual manufacturing facilities and I think impact gross margins, but maybe kind of comments on increasing headcount as it relates to gross margin impact. And then also. On the side of things.

Yeah, I mean, I'll hand it over to Dan in a second if he wants to add anything, but I mean, very simply, we're bringing on quite a significant amount of capacity, the analytical development and process development we just talked about in gene cell therapy. Obviously, in order to attract a client, just having an empty building is not going to cut it. So we obviously brought on the staffing that we're able to win that business and obviously we're in discussions and preparing proposals for…

for other business. So those are some of the costs that come online and equally in the mammalian business. We've got a significant bowlers of capacity coming online in January or quarter one rather of calendar 23. And we've got to start staffing up to ensure that we can utilize that capacity. Again, very encouraging signs with quarter over quarter backlog up 40% I think it was with the man alluded to.

And I think in terms of the, no surprise to anybody, I don't think that the margins are tighter as a result of bringing that capability online and the people to run it. What was very encouraging was the comment that Dan had made, I think, which is that if you take off the capacity fees from last year and the cost associated with that, then our margins are continuing to remain pretty much on a path.

That, as we've always felt, I think the business model we proved last year and the year before quite clearly works. But you can't build new capacity and not staff it without spending some money. And that's exactly what we've done. We built it because we felt we could find new customers and again our backlog is ahead of, quite significantly from where it was last year. So again, all in line with what we were hoping to see.

jison.

Thank you.

Our next question comes from Matthew at Craig Hallam. Your line is open.

on the strong quarter. Maybe, and this is, I guess, maybe a little bit more high level, but what do you think is the driving force behind the success that you're having with new customer wins? Is it the excess capacity that you're bringing online? Is it your process and analytical development teams and the ability to kind of work hand in hand with those teams? You know, what is the driving force there?

Hi Matt, I think it's a number of factors. I think there's no question about it. I think investing ahead of time, I've said this all along, is that most of our clients, I believe, timeline is a critical success factor for them. You can have all the best offerings in the world, but if you haven't got a bioreactor available for them, it's not what's used in maintaining timeline. We've proactively gone and invested in that capacity to make sure that our existing clients

don't have to, oh, I don't have to turn around to an existing client and let them know that we're gonna delay their next clinical phase because we haven't got a bioreactor available. In fact, quite the opposite, we always have that. So that's one critical one. I think another fundamental, which for me is paramount in this industry, is the quality of track record and the GMP manufacturing experience. Avid's got 18 years of manufacturing commercial drug substance and...

That's one of the longest out there and the quality team do a super job of ensuring we manufacture that commercial product to the highest standards. So I think that's another significant attribute. And then there's that really sort of boring but essential thing which is delivering product on time in full in spec, day in day out. Internally we have a phrase, we're only as good as the last batch and we continue to focus on making every single batch the best we possibly can.

I think the teams have been doing a super job in execution. And ultimately, clients like their product delivering on time in full in spec. And word gets around that that's what you get when you come to Avid. So we could do that. So it's a combination of a whole host of factors. And I could probably go on with at least half a dozen other elements that make that.

But the guys are just doing a really good job of delivering on their promise.

That's really helpful. And then maybe a follow up question for Matt. I think you mentioned in your prepared remarks that you've doubled the size of the sales team. Could you remind us what the what the size of that team is today and whether or not you plan to add any more headcount to that group, like I say, over the remainder of the year?

Yeah, I think we're right sized for now. Currently we have

three on the mammalian side and then another one focused on the cell and gene therapy.

All right, thank you so much.

Thank you. Our next question comes from Paul Knight of KeyBank. Your line is open.

question's kind of been asked around a bit, but the analytical and process development expansion that you're talking about, is that necessary to win business? Or does that make the likelihood of winning business higher?

I mean, it's an essential element. Most projects require a large component of analytical in that space. And obviously process development as well. A lot of people are building projects or coming with projects for preclinical, clinical manufacture and developing the process and refining the process is a key element of that. Kind of the onboarding component for the business where things normally start and then obviously

as one hones down the process and has something that you can scale up to GMP, it moves into the GMP suite. So it's an essential component of the business where clients come on board.

And then lastly, did the experience that customers went through during COVID create more demand for single use technology?

That's a good question. I'm not I think it's a difficult one to I mean there was certainly an increased demand for single-use technology during COVID I put that as much based on the fact that you know finding the disposable components throughout the industry during the last two years has been extremely tight considering the and that's just about in every component of of disposable at some point during that period so it had to have an enormous impact in terms of the

The search for our mammalian cell requirements in the disposable. I don't think it's as big as one might look at, for example, fill finish every vial no matter what the therapy was probably put every product was no matter what the therapy was put into a vial during COVID. But not every every therapy required mammalian cell culture to manufacture it in fact very few so relatively speaking to the amount of vaccine that was actually delivered out there. So.

Yes, a large increase in the demand for disposable, but not so much in the same demand for mammalian activities as it was on the equipment.

Okay, thanks. Thank you. I'm showing no further questions at this time.

Thank you operator and thank you to everybody participating on today's call. In closing, I'd like to thank Avid's customers, partners and investors for their ongoing collaboration. As always, I would like once again to acknowledge Avid's extraordinary employees who together are driving the company's success.

Thank you again for participating on the call and thank you for your continued support of Ovid Bioservices.

Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day.

The conference will begin shortly. To raise your hand during Q&A, you can dial star 11. The conference will begin shortly. To raise your hand during Q&A, you can dial star 11.

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At this time, all participants are in listen-only mode. Later, we'll conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this call may be recorded. I would like to hand the conference over to Tim Robbins of AVID Investors Relations Group. Please go ahead.

Thank you. Good afternoon and thank you for joining us on today's call. We have Nick green president and CEO . Dan Hart chief financial officer and Matt quit the. Avid's chief commercial officer.

After our prepared remarks, we will welcome your questions.

Before we begin, I'd like to caution that comments made during this conference call today, September 6th, 2022, will contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, concerning the current belief of the company, which involves a number of assumptions, risks, and uncertainties.

Actual results could differ from these statements, and the company undertakes no obligation to revise or update any statement made today.

I encourage you to review all of the company's filings with the Securities and Exchange Commission concerning these and other matters.

With that, I will turn the call over to Nick Green at its president and CEO .

Thank you Tim and thank you to everyone who has dialed in and to those who are participating today via webcast.

I am pleased to report that the momentum and growth achieved during fiscal 22 continued into the first quarter of fiscal 23.

and as a result pushed our backlog to a new record level.

With respect to our facilities, our expansion work continues to progress according to schedule.

During the first quarter we initiated equipment validation in our Myford South facility and continue to advance construction of our Cell and Gene Therapy facility.

which included launching our analytical and process development capabilities for this business.

During the period we also announced the expansion of our process development capabilities for the mammalian cell business.

which we expect to come online in Quarter 1 of Calendar 2023.

Matt and I will provide additional details on the business development and operations for the period following an overview of our first quarter fiscal 23 financial results.

additional details on the business development and operations for the period following an overview of our first quarter fiscal 23 financial results and for that I'll turn the call over to Dan.

Thank you, Nick. Before I begin, in addition to the brief financial overview, I'll provide on the call today. Additional details in our first quarter fiscal 2023 financial results are included in our press release issued prior to this call and in our form 10Q, which was filed today with the SEC.

I'll now provide an overview of our financial results from operations for the first quarter into July 31, 2022.

Revenue for the 1st quarter fiscal 23 for 36.7M dollars.

representing a 19% increase compared to $30.8 million recorded in the prior year period.

The increase in revenues for the quarter can primarily be attributed to an increase in manufacturing revenues as compared to the prior year period.

Gross margin for the first quarter of fiscal 23 was 25 percent compared to a gross margin of 37 percent for the first quarter of fiscal 22, which benefited from the receipt of unutilized capacity fees of 3.3 million. Factors impacting the gross margin for the first quarter of fiscal 23 were primarily from increases in costs associated with the growth of our business and our facility expansions including compensation and benefit expenses.

as well as increases in facility and related expenses partially offset by higher revenues during the period. Given our ongoing expansions, we believe that margins and continue to be affected in the coming quarters.

Excluding the prior year's margin benefit from unutilized capacity fees and the current quarter's increase in costs associated with the establishment of our selling gene therapy business.

and ahead of our mammalian capacity expansion.

including the company's increasing head count and incremental depreciation from recently released facility extensions.

Our first quarter gross margin was on par.

quarter gross margin was on par with the same period the prior year.

Total SG&A expenses for the first quarter of fiscal 23 were $6.4 million, an increase of 42 percent compared to $4.5 million recorded in the first quarter of fiscal 22. The increase in SG&A for the quarter was primarily due to compensation and benefit expenses, facility-related expenses, and legal and accounting fees. For the first quarter of fiscal 23, the company recorded a net income of $1.6 million, and

for three cents per basic and two cents per diluted share, which for the first time starting in fiscal 23 includes the provision for income taxes as reported within the company's income statement.

As compared to a net income of $6.3 million or $0.10 per basic and dilutive share for the first quarter of fiscal 22.

For the first quarter, the company achieved an adjusted EBITDA of $6.2 million. The adjusted EBITDA increased 5% sequentially over the fourth quarter of fiscal 22. Our cash and cash equivalents on July 31, 2022 were $115.1 million compared to $126.2 million on April 30, 2022. This concludes my financial overview. I'll now turn the call over to Matt for an update on commercial activities during the quarter.

Our company achieved an adjusted EBITDA of $6.2 million. The adjusted EBITDA increased 5% sequentially over the fourth quarter of fiscal 2022. Our cash and cash equivalents on July 31, 2022 were $115.1 million compared to $126.2 million on April 30, 2022. This concludes my financial overview. I'll now turn the call over to Matt for an update on commercial activities during the quarter. Thanks, Dan.

I am pleased to report that during the first quarter our commercial team continued to be highly productive. As discussed during the last call, over the last few months we have made substantial changes to our commercial organization, including the doubling of the size of our sales team, with additions in both our mammalian and our cell and gene therapy businesses.

This new team is working exceptionally well together.

and focusing on ensuring AVID's continued growth and success.

During the quarter, our team signed $41 million in new project orders with a significant portion coming from new customers. As a result of this performance, Avid's backlog again reached a new company high, ending the quarter at $157 million. This backlog represents a 43% increase compared to the backlog of $110 million at the end of the first quarter of fiscal 2022.

We expect to recognize most of our current backlog over the next 12 months, and notably this backlog contains no COVID-related business.

We believe that our success in bringing multiple new customers to AVID during the quarter validates both the investment and our new team.

and the execution of our commercial plan. Our strategy prioritizes the leading biotechnology regions in North America, and we continue to expand our outreach and presence in these key markets.

Our team is active at conferences and is working to promote our industry experience with single use technology, regulatory matters, as well as clinical and commercial manufacturing.

We believe this showcases the talent of our team and the promise of our strategy, which we expect to continue to drive the company's growth.

This concludes my overview of commercial activities for the quarter. I will now turn the call back over to Nick for an update on operations and other achievements during the period.

Thanks Matt. Following a very strong fiscal 22, the first quarter of fiscal 23 established a new high.

As outlined by Dan and Matt during the period, we achieved both the highest quarterly revenue and the highest backlog ever in the company history. This was driven by our commercial team's success in attracting new business.

as well as the exceptional performance of our manufacturing and operations team.

in consistently delivering high quality products on time to our customers.

As most of you are aware, the company is midstream in a broad expansion of our facilities and capabilities.

This new capacity is intended to attract new customers as well as support existing customers as their programs continue to mature.

During the period, the expansion work for both our mammalian and our cell and gene therapy businesses advanced according to plan.

During the first quarter, the company achieved an important milestone with respect to our technology and therapy expansion.

with the launch of our analytical and process development capabilities for this business.

This opening marks the first of our cell and gene therapy capabilities to come online.

and we believe it positions as well to begin engaging with prospective customers who are now able to see this exciting business come to life.

Construction of our Cell and Gene Therapy GMP suites continues on schedule and we expect them to be completed in mid-calendar 2023.

Turning now to our mammalian cell business.

We are very pleased to announce the recent appointment of Prem Patel as Vice President, Process Development.

His career is highlighted by extended tenure supporting research, development and manufacturing activities at GSK and Bristol-Myers Square.

We are delighted to have Prem join our team.

And in addition to his technical acumen, we are excited to have as a new member of our senior team, someone with intimate knowledge of how our customers see Avid's offering.

We believe this perspective can only further enhance our customer-centric offering and the behaviours that support that goal.

With respect to our mammalian cell business facilities, we have come a long way and are fast approaching the finishing line with respect to our ongoing expansions.

The second phase of this project is ongoing and we remain on track to have Myford South expansion complete by the end of course of 1, calendar 2023.

The manufacturing suites in Myford South are nearing completion and equipment has already been put in place.

In fact, as we speak, much of the downstream equipment has been located in the facility and validation of this equipment is already underway.

During Q2 we expect to receive much if not all of the upstream equipment which will in turn be added to the schedule in terms of getting it ready for operational release.

A few weeks ago, we also announced another expansion of our process development capacity.

to provide additional space to onboard future clients, ultimately seeking to utilise the new Mysphere capacity.

This expansion is now underway and we anticipate both of these expansions to be complete somewhere during the first quarter of calendar 2023.

Undertaking this scale of expansion has been no small feat.

It continues to acquire close coordination and execution by numerous vendors, partners, local agencies as well as our internal team.

I would again like to mention

which is something that its clients have come to expect.