Matt Kwietniak: That is an early-stage project, yes. And it’s in our PD group and that’s where it’s going to span currently. There’s potential in the future for that to grow, obviously, but the only piece that they’ve contracted for at this point until further development is the early phase work.
Matt Hewitt: Got it. Thank you. And then…
Nick Green: It didn’t come through CIRM, Matt, either. It was independent of CIRM.
Matt Kwietniak: That’s right. That’s right. Sorry.
Matt Hewitt: Okay. I was going to say that was really quick when it came through the new partnership. All right. And then, Nick, last quarter, I think you said that you had actually won a competitive displacement. Those are my words. But you had won some business from a competitor from a large pharma customer and I’m curious, how has that business progressed? Is that opening up doors for other opportunities?
Nick Green: I’m trying to remember a competitor. We’ve certainly won business from large pharma and from competitors, but I don’t know that we’ve won a large pharma bid from a competitor. I’m trying to think what that might have been. But, no, I don’t remember it being from a big pharma, Matt. I think we’ve done both of those, but not together.
Matt Hewitt: Understood.
Nick Green: All I can say is that all our business with the ones that we’ve been winning have continued to progress well. So no issues on any of those.
Matt Hewitt: Okay. Thank you.
Nick Green: Thanks, Matt.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Paul Knight from KeyBanc. Your question please.
Paul Knight: Yeah. Dan, did you mention $2 million of CapEx remaining in the fiscal year?
Dan Hart: I did. Yes, Paul.
Paul Knight: Okay.
Dan Hart: And if I can break that down for you. So in the first half, we’ve spent $21 million on CapEx and we’ve incurred $8 million, which has now been spent. But outside of those dollars, we have an additional $2 to incur.
Paul Knight: What’s maintenance CapEx after this fiscal year?
Dan Hart: It’s going to be really low. There’s going to be some systems that we’re going to need to continue to invest into. But as far as the assets, most of the assets are brand new. So we would likely be 2%-ish, maybe sub 2% of revenues.
Paul Knight: And your line of credit, the size on that?
Dan Hart: The size of our line of credit is $50 million.
Paul Knight: Okay. And then, Nick, on the cell and gene therapy portion of the business, Alliance Regenerative Medicine is showing finally some sequential growth in trial activity. Are you seeing that?
Nick Green: Yeah. I mean, we literally have just opened the GMP assets, Paul. So it’s probably a little early to say that we are seeing — what we’re saying is reflective of the market. I think we’ve seen some good engagement and I think probably a lot of that is because we’re here now and we’ve got the assets as opposed to a market indication. But we certainly have seen a good flurry of activity. Obviously, signing another client there is a meaningful one. It’s also quite encouraging as we come out of the gate and we have an ongoing engagement with a number of clients. So I’m certainly hoping that that’s not going to be the last in the near future. So we are encouraged by what we generally hear in the marketplace. But I think we’re hoping to see a lot more of that as we go forward, for sure.
Paul Knight: And, Nick, I think, obviously, the industry issue for Avid has been centered around the lower level of early-stage biotech financing. Are there any other features that stand out like in a positive or a negative way? Is the capacity opening up globally, is that bad for you or does it not matter and we’ve got a lot of approvals this year? I mean, what are the other factors that — and the last thing I would, like, I think we all think about is, is there more insuring? So excluding biotech financing, do you think the market dynamics are better or worse for you right now?
Nick Green: So it’s interesting. That’s a good question and thanks for asking that one, Paul. But it’s — just trying to look at how I’m looking at the marketplace as we sit today. I remember a few six months ago, sort of sat there at the end of a really good year where we were feeling really positive about what we’d just done. And then I was looking forward at what was going on in the marketplace, and obviously, I had to report lower guidance going forward for the following year for the first time. As I sit here today, we’re clearly not happy with the last quarter and I don’t think anybody around here is going to make any other calls on that one. But contrary to that position that we had last year, at the beginning of the year, I actually feel more positive now about what’s coming forward.
So we’ve captured a good number of late phase programs. A lot of those are coming to us from other CDMOs, which sort of says that we’re doing the right things. We’ve got those because we’ve got the capacity. I can’t control what happens in terms of FDA approval. I only wish I could. So I wish I could sit here and tell you which ones of those are going to go forward. But the number of Phase 3 programs I’ve got is not a lot different from the number of Phase 1 programs. I don’t — in my 40 years, I’ve never known that happen. So we’re very buoyed by that. Again, I think, Matt, highlighted that in our signings that we would say, that we’d seen some early phase signings which were completely devoid of the leading quarter one, which is, again, another positive sign and we kind of have some leading indicators in the conversations and the pipeline that we see behind that and we’ve started to see some positivity there.
