Minnesota-based Lifecore Biomedical says contractual fill-finish demand from its largest customer is expected to double beginning in 2027 compared to this year, reaching a significant inflection point for the contract development and manufacturing organization (CDMO) specializing in sterile injectables. 

Triple-digit growth is projected to continue in 2028, when contractually committed fill-finish demand from Lifecore’s largest customer is estimated to grow by more than 200% versus 2026 — with potential upside to contractual minimums.

“We now have clear understanding of how this inflection point in demand with our partner will be effectuated,” CEO Paul Josephs told analysts on Wednesday’s second-quarter earnings call. “We are in the process of ensuring that we are operationally ready to successfully execute this important milestone.”

Lifecore operates a high-speed, Good Manufacturing Practice (GMP)-ready five-head isolator filler — designed for fill-finish activities for vials, cartridges, and pre-filled syringes — that more than doubled the CDMO’s sterile injectable production capacity.

The company stands to benefit from strong demand for fill-finish capacity in the U.S.

Lifecore’s current and anticipated capacity utilization is meant help drive mid-term growth, according to Josephs, who told analysts in March the CDMO has utilized about 20% of its 45-million-unit capacity but expects utilization to increase to about 60% by 2029 — as new programs scale and volume commitments with its largest customer go into effect.

Regulatory inspections, customer audits

As part of the growth in demand from its largest customer, Josephs on Wednesday told analysts that Lifecore will be entering new markets including Japan. He noted a successful inspection conducted by the Japanese Pharmaceuticals and Medical Devices Agency (PMDA) “marking a critical step in opening a future new market” for Lifecore’s hyaluronic acid and aseptic fill-finish products for this customer.

During the second quarter of 2026, Lifecore reported that it successfully completed five existing and new customer audits and two regulatory inspections, representing one of the highest numbers of audits performed in a single quarter for the company.

“We believe that 11 existing development programs have the potential to commercialize by the end of 2028,” Josephs said, adding that “a highlight of the second quarter was Lifecore’s successful completion of several process performance qualification (PPQ) batches for a customer approaching commercialization in 2027.”

At the same time, he cautioned that the execution of a PPQ campaign is the “beginning of a one- to two-year journey towards a potential regulatory approval and subsequent recurring commercial revenue.”     

Customer agreements continue to amass

On Wednesday, Lifecore reported that it signed six new programs in the second quarter of 2026, including two commercial stage programs, while signing a total of 13 programs over the last year including eight late-stage programs.

Last month, Lifecore announced it signed three new customer agreements. One of the deals established a new customer relationship for a late-stage development program in regenerative medicine, including technology transfer, engineering support, GMP readiness activities, as well as PPQ services to prepare the product for future commercialization.

The two other agreements are also with new customers — both companies are early-stage programs, including one with a company developing a novel medical device platform. Under this agreement, Lifecore will provide formulation optimization and development support, leveraging its expertise in specialized biomaterial formulations to advance the customer’s early-stage technology.

All three programs are expected to contribute to Lifecore’s 2028 revenue.

However, Laughing Water Capital in a letter to investors last month called Lifecore an “under-utilized” fill-finish CDMO that “continues to win new business at an impressive rate, and the market continues to not care.” The firm has previously noted the time between “winning new business to generating meaningful cash flows from that business is measured in years in the CDMO world.”

Still, when the new business wins translate into revenue, the “operating leverage will be massive, and Lifecore will generate significant cash,” according to the firm.

Josephs said on Wednesday that current industry tailwinds that could potentially benefit Lifecore are an “increase in FDA enforcement actions” against other CDMOs and the “ongoing trend of regionalized drug manufacturing” in the U.S. He also noted that 50% of annual U.S. drug approvals are injectables.