Lifecore Biomedical NASDAQ: LFCR reaffirmed its 2026 revenue and adjusted EBITDA guidance while outlining plans to support sharply higher fill-finish demand from its largest customer beginning in 2027.
For the second quarter ended June 30, 2026, the contract development and manufacturing organization reported revenue of $34.2 million, down 6.2% from $36.4 million in the comparable prior-year quarter ended May 25, 2025. The company changed its fiscal year-end to align with the calendar year, affecting the comparison periods it used for the quarter and first half.
President and Chief Executive Officer Paul Josephs said the company remains focused on three growth priorities: expanding its existing commercial business, moving development programs toward commercialization, and adding programs through business development.
Largest Customer Demand Expected to Rise
Josephs said Lifecore’s contractually committed fill-finish demand from its largest customer is expected to double beginning in 2027. Committed demand is expected to increase by more than 200% in 2028 compared with 2026.
The increase is expected to begin early in 2027 and be weighted more heavily toward the latter part of that year, according to management’s response to an analyst question.
Lifecore also said it successfully completed an inspection by Japan’s Pharmaceuticals and Medical Devices Agency, or PMDA, a step that could open the Japanese market for the company’s hyaluronic acid and aseptic fill-finish products for that customer. The company hosted seven audits and inspections during the quarter, including five customer audits and two regulatory inspections, and said all were completed without material issues.
Pipeline and New Business Wins
Lifecore said it has 11 development programs that could potentially commercialize by the end of 2028. During the quarter, the company completed several process performance qualification batches for a customer approaching commercialization in 2027. Josephs cautioned that a PPQ campaign begins a one- to two-year process toward potential regulatory approval and recurring commercial revenue.
The company added six new programs to its pipeline during the second quarter, including two expected to generate commercial revenue in the 2028-2029 timeframe. The agreements include programs with new and existing customers, spanning pre-clinical work through commercial transfers of two currently marketed products.
Three of the six programs were signed in June. Since the end of the quarter, Lifecore also closed a late-stage injectable program with a specialty biopharmaceutical company. The company reported nine year-to-date new business wins through June 30 and 13 wins over the past 12 months.
Josephs said more than 60% of opportunities that Lifecore has competed for since mid-2025 have been late-stage programs or commercial site transfers. He said these opportunities carry less market risk because they have already moved beyond clinical approval risk and have demonstrated commercial demand.
Management cited increased FDA enforcement actions at other contract manufacturers, regionalization of U.S. drug manufacturing, and the prevalence of injectable products in drug development as favorable industry conditions. Josephs said Lifecore has won programs that are being transferred from Europe, Israel and India.
Quarterly Results and Guidance
Second-quarter gross profit fell to $12.1 million from $14 million a year earlier. The company attributed the decline primarily to lower revenue, unfavorable manufacturing costs and a contractual take-or-pay arrangement recognized in the prior-year period, partly offset by favorable hyaluronic acid sales volume.
Selling, general and administrative expense declined 11.2% to $8 million, reflecting lower recurring legal, accounting and compensation costs as well as fewer non-recurring expenses tied primarily to legacy legal matters.
- Net loss was $6.2 million, or $0.19 per diluted share, compared with a net loss of $1.1 million, or $0.06 per diluted share, in the prior-year quarter.
- Adjusted EBITDA was $8.6 million, compared with $9.1 million a year earlier.
- Six-month revenue was $57.4 million, down 19.9% from $71.6 million in the comparable prior-year period.
- Six-month net loss was $21.1 million, or $0.61 per diluted share, compared with a $15.9 million loss, or $0.48 per diluted share, a year earlier.
- Six-month adjusted EBITDA was $9.6 million, down from $14.8 million.
Chief Financial Officer Ryan Lake said the company expects stronger CDMO revenue in the second half, including higher aseptic and development revenue. He said results are expected to be more heavily weighted toward the fourth quarter based on timing of orders already in hand.
Lifecore maintained its 2026 guidance for revenue of $120 million to $125 million and adjusted EBITDA of $20.5 million to $25 million. At the midpoint of those ranges, management indicated that second-half revenue would be about $65 million and adjusted EBITDA would be about $13 million.
Costs, Capacity and Liquidity
Lake said the second quarter marked Lifecore’s fifth consecutive quarter of period-over-period declines in SG&A and research and development expenses, with cumulative reductions of $16.2 million since its cost initiatives began in late 2024. The company is pursuing more than 40 projects intended to reduce costs or improve processes and productivity.
Management said SG&A, excluding one-time items, is expected to trend toward approximately $6 million per quarter beginning sometime in the second half. Lifecore is targeting an adjusted EBITDA margin above 25% by the end of 2029.
Josephs said existing installed capacity would support the company’s midterm targets, with projected utilization of roughly 60% in 2029. The company will evaluate additional capacity options, including its potential Site 3 expansion, as demand grows.
Lifecore ended the quarter with approximately $38.8 million in liquidity, including $17.2 million of cash and $21.6 million of revolving credit availability. Lake said the company began paying a portion of its debt service in cash during the quarter rather than entirely through payment-in-kind interest. Management expects full-year free cash flow generation of roughly $7 million to $10 million, while noting that the outlook depends on legacy matters, capital-expenditure timing and potential payments related to Series A preferred securities.
About Lifecore Biomedical (NASDAQ:LFCR)
Lifecore Biomedical, Inc is a publicly traded specialty biopharmaceutical company headquartered in Chaska, Minnesota. The company focuses on the development, manufacture and commercialization of hyaluronic acid (HA)–based products that address medical and aesthetic needs. Lifecore’s proprietary HA formulations are designed to meet strict regulatory standards for purity, consistency and performance in highly regulated markets.
The company’s product portfolio spans multiple therapeutic areas, including ophthalmology, orthopedics, dermatology and wound care.
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