aibioLifecore Biomedical sells unused filling equipment for $17 million, $7 million paid so far
Tickers LFCR
The contract manufacturer received $7 million at closing and expects the rest in three tranches over 18 months. It says current capacity supports up to $300 million in annual revenue.
Key facts
- Company
- Lifecore Biomedical, Inc. (NASDAQ: LFCR)
- News type
- Financings
- Primary source
- Lifecore Biomedical, Inc. 8-K (2025-01-07)
Lifecore Biomedical, Inc. has agreed to sell a piece of manufacturing equipment it bought but never installed, for an aggregate purchase price of $17 million.
The company announced the deal on January 7, 2025. The buyer, described only as a non-competitive buyer, is purchasing Lifecore's high-speed, multi-purpose 10-head isolator filler. Lifecore received $7 million at closing. It expects the remaining payments in three tranches over the next 18 months.
Lifecore is a contract development and manufacturing organization, or CDMO. It fills and finishes sterile injectable drugs for other pharmaceutical and biotechnology companies.
Chief financial officer Ryan Lake said the company recently installed a high-speed 5-head filler, which gives it $300 million of revenue-generating capacity. "Accordingly, we felt that the sale of the 10-head filler, which we believe represented excess capital equipment, represented a compelling opportunity to monetize unused equipment and enhance our financial position," he said.
Lake added that the company will keep reviewing equipment spending so that future capital investments match projected operating needs.
Lifecore said in September that it had installed and qualified the 5-head filler, which doubled its available capacity. The company is now in talks with customers about using it.
Lifecore lists the receipt of the payments required by the sales agreement among the risks in its forward-looking statements.