Lifecore Biomedical at Morgan Stanley Conference: Strategic Growth Insights

On Tuesday, 09 September 2025, Lifecore Biomedical (NASDAQ:LFCR) presented at the Morgan Stanley 23rd Annual Global Healthcare Conference. The discussion, led by CEO Paul Josephs, outlined the company’s strategic direction and growth potential in the competitive CDMO market. While Lifecore showcased its strengths in sterile injectables and future growth plans, the company also acknowledged its current market undervaluation compared to peers.

Key Takeaways

• Lifecore is expanding into biologics, GLP-1s, and peptides, with 11 late-stage programs expected to launch between 2025 and 2029.
• The company aims to achieve $200 million in revenue with a 25% EBITDA margin in the midterm.
• New leadership appointments are expected to enhance financial, legal, and operational capabilities.
• Lifecore’s largest commercial customer is projected to more than double demand by 2027.
• The company maintains a strong focus on fill-finish manufacturing with robust regulatory compliance.

Financial Results

• Fiscal year revenue: $129 million
• Adjusted EBITDA: $19.6 million
• Midterm revenue target: $200 million
• Target EBITDA margin: 25%, aiming for $50 million in EBITDA
• Revenue-generating capacity: $300 million
• Annual maintenance and compliance CapEx: $10 million

Operational Updates

• New CFO Ryan Lake brings over 25 years of healthcare experience.
• Tom Salis joins as Chief Legal and Administrative Officer with 20+ years in pharmaceuticals.
• Mark DaFonseca appointed as Chief Commercial Officer to enhance sales and marketing.
• Thomas Goldberger becomes Senior VP of Operations, leveraging 20+ years of experience.
• Sales team restructured with a focus on defined geographies and proactive strategies.
• Successful FDA inspection with a "voluntary action indicated" result.
• Compliance with TGA, EMA, and other major regulatory bodies.

Future Outlook

• Three-pronged strategy: maximize existing business, commercialize late-stage pipeline, add new programs.
• Largest customer to increase demand, supporting capacity expansion for the Asia-Pacific market.
• Lifecore aims for a 50% conversion rate for late-stage programs.
• Continued dedication to fill-finish manufacturing, with openness to strategic opportunities.

Q&A Highlights

• Ideal customers include both large pharma and emerging biopharma.
• Hyaluronic acid (HA) remains a stable core product, providing confidence to partners.
• Product forms focus on vials, prefilled syringes, and cartridges.
• Increased demand for domestic manufacturing, with more potential site transfers.

Lifecore Biomedical’s strategic insights and growth plans were thoroughly discussed at the conference. For further details, please refer to the full transcript.

Full transcript - Morgan Stanley 23rd Annual Global Healthcare Conference:

Daniel Cohen, Managing Director, Morgan Stanley: Good afternoon. Thanks for joining us. I’m Daniel Cohen. I’m a Managing Director at Morgan Stanley. I do have to read a disclosure before we start. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com. If you have any questions, please reach out to your Morgan Stanley sales representative. With that, we will kick it off. Very honored to have my friend Paul Josephs, CEO of Lifecore Biomedical, here with us today. Paul’s coming, you’re coming up on about 18 months in the role, I think. Maybe 16 months, but approaching 18 months.

Paul Josephs, CEO, Lifecore Biomedical: Absolutely.

Daniel Cohen, Managing Director, Morgan Stanley: I thought maybe why don’t we start out by talking a little bit about what Lifecore does as a CDMO, and in particular what area of the market is Lifecore focused on?

Paul Josephs, CEO, Lifecore Biomedical: Sure. Great. Thanks for having me, Daniel. Lifecore Biomedical is a differentiated CDMO competing in what I think is the most exciting part of healthcare manufacturing, and that’s sterile injectables. We’re well known for our ability to solve complex injectable programs from an ophthalmic and orthopedic perspective, tremendous regulatory compliance capability along with technical expertise. As I think about where we’re going in the future, it’s moving into and adventing into a broader range of injectable programs from a biologics perspective, GLP-1s, peptides, etc. We have a tremendous commercial base, a strong commercial base of programs which are projected to grow over the midterm. It’s buoyed in addition by our late-stage development programs of 11 different programs which span a broad range of modalities. At a 50% conversion rate, we expect to generate significant revenue over the midterm. That’s really all about Lifecore Biomedical.

Daniel Cohen, Managing Director, Morgan Stanley: Great. Thank you. You’ve had a career, spent time in the CDMO space for many years, different types of CDMOs. Maybe tell us a little bit about as you have come into the role, gotten your feet under you, what do you, you know, what’s surprised you perhaps on the positive and perhaps what’s been more challenging for you as you’ve embarked on your transformation at Lifecore Biomedical?

Paul Josephs, CEO, Lifecore Biomedical: Yeah, it’s been a strong combination, I think, or unique combination of strength and opportunity. On the what did I learn, I was tremendously impressed with the technical capability of our team here at Lifecore. I didn’t fully appreciate that technical capability. A large multinational pharmaceutical company told me earlier this year that after a visit that our technical capability is world-class. What that’s done is really allow and give confidence to prospects and existing customers to invest in their program at Lifecore. That’s been a great learning for me, that technical capability, that can-do attitude of the group. I think from a surprising perspective, and therein lies the opportunity, is just the market awareness of Lifecore’s broad capabilities.

The investments that were made prior to my joining with the five-head filler, which has opened up a wider spectrum of opportunities for us to go after and compete on, the aforementioned biologics, peptides, GLP-1s, etc. The market, there’s a level of market awareness that we had to generate within the CDMO industry. I think the team’s done a great job thus far, and we’ve made great progress in the first 15 months.

Daniel Cohen, Managing Director, Morgan Stanley: Maybe talking a little bit about the market, you’ve mentioned different modalities like GLP-1s and biologics. What is the dynamic in the market right now? Obviously, over the last, I mean, really probably going back to COVID, we’ve had, it’s been a very dynamic market as it relates to injectable fill-finish CDMOs and perhaps pharma companies as well. The most recent, you know, there have been transactions involving companies that have perhaps taken some capacity out of the market. What do you see in the market today? Is the dynamic still one of a shortage of qualified suppliers? Does that apply to only specific parts of the market? How does that, you know, cross over where Lifecore Biomedical has capability?

Paul Josephs, CEO, Lifecore Biomedical: Yeah, I think it’s hard to replicate what we have, the strong technical capability, the great regulatory compliance that we have, and then the capacity. I think all those provide a unique and compelling value proposition to our customers. From an investment perspective, I don’t think it’s fully appreciated, the durability of the business we have today and the great growth potential we have in front of us. I think about recent transactions that have had, with the go privates, maybe the things that you’re alluding to, whether it’s 6x sales or 11x sales from a valuation perspective. Lifecore Biomedical is an organization that’s trading on, you know, 3x revenue, so you know, half the value of previous transactions. I don’t think the market fully appreciates who we are and what we do today, but maybe more importantly, where we’re going to tomorrow.

Daniel Cohen, Managing Director, Morgan Stanley: That leads me to my next question, which is really about strategy. Obviously, as a new CEO, you have unveiled a three-pronged strategy. Maybe talk a little bit about that strategy and where you are today and what the outlook looks for the next few years.

Paul Josephs, CEO, Lifecore Biomedical: Yeah, great question. I think with the three-prong strategy, it really focuses on key areas around maximizing our existing commercial business. Two is the commercialization of our late-stage development pipeline, and three is the addition of new and impactful programs into the site. The underpinning of number one is we have contractual minimums-based commitments built into many of our commercial agreements, the most important one being our largest commercial customer who’s projected to more than double their volume or demand in 2027. That will be a significant part of our growth over the midterm. You tie that to our late-stage development pipeline of 11 programs with launches between 2025 and 2029, spanning modalities including GLP-1s, medical devices, ophthalmic products at a conversion rate of 50%. We believe we’ll provide meaningful demand and meaningful revenue growth over the midterm as well.

The third part of that strategy is the addition of new and impactful business to our site. One of the first things that I did is evaluate the sales and marketing team, and while a high-quality team, the competencies of that team were a little bit different. It was more of what I characterize as a farming mentality where we mine our existing customer base and look to grow within that base. Yes, we want to continue to do that, but in order for us to meet the aggressive goals that we do have and maximize the overall market, I knew we needed to make a change. We have completely rebuilt that team. We have a proven industry leader who’s been very successful in the private equity side of the business, Mark DaFonseca, who joined us as our Chief Commercial Officer.

He understands, being in the private equity side, the immediate urgency of now. He’s really driving improvements and, I will always say, the right metrics from a sales and marketing perspective. We, in turn, turned over the entire sales team to a group of hunters. We have a set and defined geography to mine, and they’re the CEOs of their territories. We’ve changed our compensation plan also to reward them for their results. I’m really excited about what they’ve done over the past 90 to 120 days. We see if we’re able to keep up these leading indicators, the success of this to come.

Daniel Cohen, Managing Director, Morgan Stanley: What is the right, you know, what’s the ideal customer for Lifecore? Is it large pharma? Is it emerging biopharma? Is it both?

Paul Josephs, CEO, Lifecore Biomedical: I think it’s both. I think that what we provide for specialty pharma, Daniel, is the hands and the brain. The hands is the equipment, but the brain is that technical expertise to solve problems for our customers because regardless of the opportunity that comes in, whether it’s big pharma or small pharma, they’re coming to us with a problem. They have a problem with regard to capacity support, or they have a problem about whether it’s the method or the formulation that they need to solve to get to market. Our technical expertise, combined with our capacity, and add on our regulatory expertise, provide a great complement to specialty pharma.

From a large pharma perspective, we’re big enough to compete against your larger players, whether they’re Catalent or Symtra or Thermo Fisher, but we also provide that unique technical or entrepreneurial ability to tailor our solutions to our customers’ manufacturing or development needs. I think that’s what makes us attractive to large pharma, that ability to tailor our solutions to them and be very responsive and have access to senior leadership at a moment’s notice. To specialty pharma, again, to provide both the hands and the brain.

Daniel Cohen, Managing Director, Morgan Stanley: Thank you. You mentioned a new Chief Commercial Officer that you’re very excited about, and it has had an impact on the business. Were there other functions that required change, and maybe talk about your leadership team and how that’s evolved?

Paul Josephs, CEO, Lifecore Biomedical: Yeah, we turned over virtually the entire leadership team, Daniel. Starting with Ryan Lake, who’s in the audience today. Ryan is a well-experienced and proven Chief Financial Officer. He has over 25 years of healthcare experience. He joined me in September of last year. He’s been a great partner in rebuilding the entire finance department and making finance a true complement to the rest of the organization. We brought in Tom Salis, who’s our Chief Legal and Administrative Officer, to support us both from a legal and HR perspective. Tom has well over 20 years of experience in the pharmaceutical industry, can help us also from a strategy perspective. He was in the boardroom at Viatris. For him to join our organization is just a great addition as well.

I talked about Mark, the other final person we brought on board, and maybe most importantly, or equally as importantly, is Thomas Goldberger, who is our Senior Vice President of Operations. Thomas joined us from a Novo Holdings subsidiary. He has well over 20 years of experience in the pharmaceutical industry, finance background, OpEx background, running and leading a site in Denmark. He had enough confidence in Lifecore and what we were trying to build to move his family from Denmark to join us in Minneapolis because he believes in the growth story that we have in front of us. I love the team we put in place, and you know we also rebuilt the sales team. We’ve done and accomplished a lot in the first 15 months. I’m very proud of what the group has done.

Daniel Cohen, Managing Director, Morgan Stanley: I apologize for bouncing around a little bit. It just came to me. The question came to me as you were talking. You know, one of the positives of the CDMO industry is that products tend to be sticky. On the flip side, one of the negatives of the CDMO industry is that products tend to be sticky. As a company that’s looking to bring on new products to your funnel, can you talk a little bit about the KPIs that investors should be watching in terms of how do investors measure progress on bringing new products? You talked about 2027 being an important year for one customer, but I imagine that there’s, and you have a new sales team that’s focused on bringing out new products. How long does that take? How do we measure that?

Paul Josephs, CEO, Lifecore Biomedical: Yeah, we’ll be very vocal with regard to our sales success as we close more and more deals and gain successes down the road. I would continue to look at the evolution of our late-stage pipeline in terms of numbers and launch years and the valuation for those opportunities. We’ll also communicate as we make progress with regard to the expansion project with our largest customers as we look to double that demand by 2027. When you ask how long it takes, one of the things that is clear in the macroeconomic environment now is that I’ve been in this business for 30 years and a little over 30. There’s never been, in my opinion, a greater demand for domestic manufacturing. We feel as though, and we see it in our pipeline, we have more potential commercial site transfers to our site.

Those are products that are commercially approved, just like this water, moving it from a site in Europe to Lifecore. We see more of those types of products in our pipeline than we ever have, or we have heretofore. It takes about two years from the time that we sign one of those commercial site transfers to move it into our site and commercially manufacture. It’s critically important because, yes, we’ll make one-time revenue along the way, but it’s all about recurring revenue and generating that commercial revenue down the road.

Daniel Cohen, Managing Director, Morgan Stanley: Okay. Good. Thank you. Could you talk about, you mentioned your lead product, lead customer. Can you talk a little bit about, you know, you’re somewhat unique in that you are also making a substance in addition to the fill-finish. Can you talk about the HA part of your business and the strategic importance of that to your business and the outlook for it? Yeah.

Paul Josephs, CEO, Lifecore Biomedical: I would say the HA side of the business, the hyaluronic acid, think of it as a lubricant that’s used in pharmaceutical products as a natural lubricant within your body. It’s critically important because it provides a stable, that HA base or that sub-API substance, as we call it, serves as a stable core in our long-term future. It’ll always be a critical component of our overall business. Where we see the growth is in that, in the sterile fill-finish. What does HA do as an advantage for us? Really, what it does, it gives confidence to our partners, whether they have HA in a product or not, they know that we can solve complex problems because HA-related injectables are probably the hardest injectables to make. If we can make HA-based sterile injectable products, there’s no doubt that we can make a GLP-1, a peptide, a biologic, etc.

It serves not only a quantitative importance, but also to a certain extent, a qualitative importance in our future.

Daniel Cohen, Managing Director, Morgan Stanley: Are your products, like what form are you filling them into? Is it into vials or prefilled syringes?

Paul Josephs, CEO, Lifecore Biomedical: Vials and prefilled syringes, and we also have the ability to do cartridges as well. We span the gamut of all sterile injectables. I would say that our pipeline right now, Daniel, is leaning more to what I would say cartridges and prefilled syringes. I feel like the market itself, and we were, I think you were alluding to this earlier, on the vial side, post-COVID, great capacity there. Where there is, I would say, the ability or a demand need is really in the prefilled syringes and cartridges.

Daniel Cohen, Managing Director, Morgan Stanley: Got it. Maybe talk a little bit about the financials of Lifecore, maybe current revenue margin structure versus, you know, optimized or, you know, future.

Paul Josephs, CEO, Lifecore Biomedical: We just finished our fiscal year in May of this year, and we’re transitioning to a calendar fiscal year, a traditional with 95% of the rest of the industrial world. Coming off our last fiscal year, approximately $129 million in revenue, $19.6 million in adjusted EBITDA. We have a midterm strategy that will take us the midpoint, about $200 million, with expanding EBITDA margins of 25%. That would put us at about $50 million in EBITDA. Our total revenue-generating capacity, with the addition of the five-head filler and the improvements we made, we see a $300 million in revenue-generating capacity. Our belief is that we have the opportunity to continue to improve EBITDA margins beyond the 25% as we continue to go up that revenue scale.

Daniel Cohen, Managing Director, Morgan Stanley: Can you talk a little bit about capital intensity?

Paul Josephs, CEO, Lifecore Biomedical: The big investments have been made. The addition of the five-head filler, that build-out, all has been made. Our annual, I would say, maintenance and compliance-related, maybe some minor growth CapEx in that neighborhood of about $10 million or so. If there was a transformational deal, we would anticipate that one of our customers would meaningfully participate in that. We’re budgeting for that $10 million range on a go-forward because of the capacity investments that have already been made. A great example of that, if I could, is we have a late-stage program that is projected to get regulatory approval in 2027. It’s a major program for us. We couldn’t be more excited about that. I think it’s with a large multinational partner. I think it’s an example of the tailored solutions we can provide. They made a multimillion-dollar investment in a specialized production line within our site.

We were allowed, we were afforded, based on our size, the ability to dedicate space to them to support that exciting program. That customer also is committed to a seven-figure development program to scale up and get ready to commercialize that program. The reason we’re so excited about the program is because of the investments that they’re making in that program.

Daniel Cohen, Managing Director, Morgan Stanley: Our products like that, opportunities like that, do they tend to be only working with you, or do you know if they’re working with multiple CDMOs, or how is that the dual versus single-source nature?

Paul Josephs, CEO, Lifecore Biomedical: At this point, we believe we’re exclusive, and we were in discussions with this partner too about even a second line, if they’re able to meet their projections. On a broader scale, I would say that in today’s environment, companies are dual sourcing more so now than they ever have. At the same time, I think based on the team that we have, my commercial experience of more than 30 years in the industry, Ryan’s of 25 plus, Tom Salis, who’s on the legal side, we have, I think, a tremendous playbook where we’ll be able to protect our floor and raise our ceiling as we look to negotiate agreements with customers.

Daniel Cohen, Managing Director, Morgan Stanley: Are there any other areas of this pharma manufacturing that you think about, or are you pretty dedicated to fill-finish manufacturing?

Paul Josephs, CEO, Lifecore Biomedical: Dedicated to fill-finish manufacturing right now. At the same time, are there things, you know, we’re head down executing against our organic strategy. At the same time, there’s a lot going on in the market, as you know. We’ll always keep our eye open for things, but we’ll only consider those things that allow us to advance our midterm strategy. That is non-negotiable. It has to be something that either increases our chance of its success, accelerates, or even increases it. That’s how I think about it. I haven’t seen anything yet that piques my interest, but again, I’m excited about our organic strategy.

Daniel Cohen, Managing Director, Morgan Stanley: Yeah. I mean, you’ve been around a long time in this industry. How would you characterize the CDMO industry right now relative to where you’ve seen it in the past? Is this an exciting time? Is it a stable time of growth? How do you see the?

Paul Josephs, CEO, Lifecore Biomedical: Exciting time. Most exciting time. It’s funny that when I entered this industry, I was 29 or so. Now I just turned 60, and I’ve never been more excited about the industry. We are competing in a $10 billion market that’s growing at double digits. The valuations of CDMOs have never been higher. Thirty years ago, generic companies were trading at CDMO multiples, and CDMOs were trading at low single-digit multiples. Now it’s really reversed. I never thought I’d see a CDMO like Catalent trade at 11 times multiple to go private or Abbott at six times multiple to go private. It’s just a different and exciting time.

Daniel Cohen, Managing Director, Morgan Stanley: Revenue.

Paul Josephs, CEO, Lifecore Biomedical: Revenue. Sorry, revenue. Did I say EBITDA?

Daniel Cohen, Managing Director, Morgan Stanley: No, you did.

Clarifying revenue.

Paul Josephs, CEO, Lifecore Biomedical: Yeah, revenue. It’s never been a more exciting time. I think from a pharmaceutical industry as well, just in general, if I think about it, you know, CDMOs were tactical back in the 1990s, purchasing-related. Now it’s strategic from a pharmaceutical perspective. There are departments built around external manufacturing versus it just being a side job for, you know, somebody in purchasing within pharmaceuticals. This business is resilient. It’s here to stay, and it’s growing at double digits, which makes it very exciting for a quality organization such as ourselves.

Daniel Cohen, Managing Director, Morgan Stanley: Do you see that in the, have you seen an evolution in terms of who you talk to at the pharma company, whether procurement versus someone else in the organization, or has that changed?

Paul Josephs, CEO, Lifecore Biomedical: 100%. Yeah. When I think about when I started in this business, it was hard to get above, you know, a Purchasing Manager to a Director. Now you could be speaking to the CEO or the CFO, depending on the size and the scope of the company, because, again, this was a strategic initiative for a lot of organizations. Decisions that are being made about sourcing—I was actually trading emails today with a senior-level external manager at a large multinational who’s making CEO decisions on sourcing. That’s a different world from what it was before when you were just talking about maybe tactical decisions to outsource, you know, a specific amount of volume.

Daniel Cohen, Managing Director, Morgan Stanley: I didn’t specifically ask it, but can you just address the quality track record of Lifecore and where the company’s been? Has it been a good track record historically, and where is it today?

Paul Josephs, CEO, Lifecore Biomedical: Great track record. Critically important from my perspective. We’re just coming off a March, unannounced, two-week general inspection of our facility. The results were phenomenal, very favorable for us. The audit has been closed, and it resulted in what they characterize as VAI, voluntary action indicated. We couldn’t be more pleased with the result. From a customer perspective, they couldn’t be more happy. Those who are with us, it gives them confidence to continue. For those prospects that we’re talking to, it checks that box, which is critically important. The other thing that I’ll say just in general is beyond just the FDA, we are regulatory compliant with what I would characterize as, figuratively speaking, most of the industrial world. Our expansion project with our largest customer, we’re going to be producing for the Asia-Pacific market shortly.

We have the ability to support TGA, so Australia, New Zealand, EMA, Europe, Canada, United States, Brazil. Our ability to reach multiple geographies is also a key value proposition for our customers because the ability to source out of one site also provides a lot of advantages for our customers on a go-forward basis.

Daniel Cohen, Managing Director, Morgan Stanley: Yeah, I mean, clearly, the quality track record is critical. It’s not always the case, as we’ve seen in, you know, in news stories around companies in this space. Obviously, you’re doing what’s probably the hardest part of the CDMO sector, which is sterile manufacturing. The bedrock of having a solid quality organization is critical.

Paul Josephs, CEO, Lifecore Biomedical: You mentioned earlier one of the things about the things that maybe not surprised me, that I was pleased with, was the quality track record. I knew it was good on the surface, but to come into the organization, experience it, spend time with the team, go through our quality management reviews, tremendous, really, really high quality. That’s why you have some of the leading pharmaceutical companies in the world outsourcing with Lifecore.

Daniel Cohen, Managing Director, Morgan Stanley: It’s amazing. That’s great. What else? Is there anything that I should have asked you that I didn’t? I’ll open it to you, Paul.

Paul Josephs, CEO, Lifecore Biomedical: I think the one thing I would say, I think that we have one thing I’d leave you with is a strong commercial base with predictable revenue growth over the midterm, promising late-stage development pipeline that even on a conservative conversion rate will provide meaningful growth for our organization. I think an undervalued opportunity based on some of the things we talked about, about recent transactions and valuations. I couldn’t be more excited about the future at Lifecore. I’m proud to be part of it, and I love what we’re doing day in, day out in Minneapolis.

Daniel Cohen, Managing Director, Morgan Stanley: It’s certainly an exciting time in the CDMO space, particularly in the sterile fill-finish space. Congrats on the success you’ve had and the outlook ahead of you.

Paul Josephs, CEO, Lifecore Biomedical: Thanks for having me.

Daniel Cohen, Managing Director, Morgan Stanley: Thank you. Thanks for doing it.

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