Lifecore Biomedical reports quarterly revenue decline, stock drops more than 25%
Lifecore Biomedical announced financial results for its third quarter of fiscal 2025 with revenues of $35.2 million, a decrease of 2% compared to the prior year period, which was primarily due to a $1.5 million decrease in CDMO revenues. The company’s stock dropped more than 25% on Friday morning.
The Minnesota-based contract manufacturer reported $1.7 million of lower sales volume from a customer termination and $1.5 million lower development revenue “due to completion of discrete project life cycles and timing of customer projects, partially offset by $1.1 million of value focused customer pricing initiatives and a $0.9 million contractual take-or-pay arrangement.”
On the positive side of the ledger, Lifecore’s hyaluronic acid manufacturing revenues increased $1 million, which was mainly attributed to increased demand from a single customer due to their supply chain initiatives.
In January, Lifecore sold a high-speed, multi-purpose 10-head isolator filler to an undisclosed “non-competitive buyer” for $17 million to strengthen the company’s financial position and eliminate excess capital equipment.
CEO Paul Josephs, who last year took the reins of the company, told analysts on a Thursday earnings call that Lifecore continues to be “pleased with the progress and composition of our pipeline.” The key, he said, is “to move those programs through the various stages of the sales process towards closure.”
Barrington Research analyst Michael Petusky in a Friday note to investors said that while Lifecore delivered “generally solid” results in the quarter, the company’s leverage and valuation both remain concerns.
As a result, Petusky said Barrington Research is maintaining its “market perform” rating for Lifecore’s shares due to the company’s “significant leverage (over 8x) and valuation.” He added that a “premium valuation still seems inappropriate to us, particularly given the current macro environment for stocks (due to tariff concerns).”
Asked during Thursday’s earnings call about tariffs and the Trump administration’s efforts to bring manufacturing back to the U.S., Josephs said Lifecore generated increased interest at last month’s Drug, Chemical & Associated Technologies (DCAT) Week in New York City from large, multinational pharmaceutical companies.
According to Josephs, the discussions at DCAT Week involved the “importance of domestic manufacturing” and were driven by ongoing “administrative uncertainty” in the industry.
Earlier this year, Josephs told Pharma Manufacturing that Lifecore has been turning its attention to business development to drive revenue and take advantage of its new capabilities and capacity.
Last month, Lifecore announced that it was selected by Humanetics Corporation to provide CDMO services for BIO 300, Humanetics’ radioprotective agent in development for the prevention of acute radiation syndrome. Under the agreement, Lifecore will oversee the technology transfer of the drug’s fill-finish process, conduct gap assessments, and provide a pilot batch.
In December 2024, Lifecore announced a teaming with biotech company Nirsum Laboratories to provide CDMO services supporting Nirsum’s clinical development of its lead development candidate, NRS-033, a novel treatment for opioid use disorder and alcohol use disorder. The work will include the assessment and technology transfer of the fill and finish process for NRS-033, which is currently entering Phase 2.