Lifecore Biomedical (NASDAQ:LFCR) CEO Paul Josephs told investors at a KeyBanc conference that the company has completed its transition into a “standalone CDMO” after divesting its former food businesses in 2022 and 2023. Josephs said Lifecore is now focused on two primary operations at its single site in Chaska, Minnesota: hyaluronic acid (HA) fermentation and sterile injectable contract manufacturing.
From Landec divestitures to a two-segment CDMO
Josephs said Lifecore was previously part of a food conglomerate that traded under the name Landec. The company divested its food businesses—“avocados and salads”—across 2022 and 2023, leaving Lifecore as a life sciences-focused contract development and manufacturing organization.
The second segment is sterile injectable contract manufacturing, where Lifecore produces sterile injectable products for other pharmaceutical companies across both development and commercial stages. Josephs said the company is now looking to expand into additional modalities and take advantage of what he called a “strong growth” market for injectable CDMO services.
CEO background and near-term market reaction
Josephs said he has spent 35 years in the pharmaceutical industry, including 32 years in the CDMO sector. He said he was drawn to Lifecore because significant capacity investments were already in place, the company had a strong quality track record, and the opportunity was to “fill” capacity and improve profitability.
He also referenced a recent stock market reaction to the company’s near-term earnings, describing it as “one of timing.” Josephs said the company’s view of its underlying commercial business, development portfolio, business development momentum, and margin progress had not changed. He added that Lifecore “reinforced” its mid-term guidance and increased its mid-term revenue range to $212 million to $225 million, citing conviction in the business and a need to execute.
Utilization, capacity planning, and long-term targets
Josephs said Lifecore is currently operating at approximately 20% capacity utilization. Looking to the company’s mid-term planning horizon, he said Lifecore expects to reach about 60% utilization by its 2029 target period, driven by commercial growth and the commercialization of late-stage programs. He said higher utilization should support both revenue growth and margin improvement as the company works toward an EBITDA margin target of greater than 25%.
When asked about what a “fully booked” fill-finish site might look like, Josephs said 80% utilization is a reasonable target, and that approaching that level would prompt longer-term capacity investment planning. He referenced a “site three” greenfield option that could support capacity beyond what he described as roughly $300 million of revenue-generating capacity currently in place.
Josephs reiterated targets first highlighted at an Analyst Day, including:
- 12% revenue CAGR from 2025 through 2029
- EBITDA margin improvement from about 15% at the time of Analyst Day to greater than 25% by 2029
He said Lifecore had improved EBITDA margins to 17% during what he called a “transition period,” and expects further improvement in 2026 on a path toward the 2029 margin goal.
Growth drivers: largest customer, late-stage pipeline, and tech transfers
Josephs outlined three primary factors he said are needed to achieve the company’s longer-term financial goals. First, he said Lifecore anticipates its largest customer will “more than double” fill-finish demand beginning over the next few years and continuing through 2029. Later in the discussion, he specified that the agreement with Alcon contemplates more than doubling fill-finish demand through the end of the decade, with the precise timing of a 2027 ramp to be determined in the coming months.
Second, he pointed to commercialization of Lifecore’s late-stage pipeline. Josephs said the company has 10 programs in late stage (Phase III or equivalent) and is planning based on a “modest conversion rate” of 50%.
Third, he emphasized adding new development programs that could commercialize around the 2029 timeframe, which he said would provide the “next wave of growth” in 2029 and beyond.
On recent commercial site transfer wins, Josephs said Lifecore signed two major tech transfer agreements and described both as having the potential to become top-five customers. He said each could potentially contribute more than $10 million in annualized revenue at peak, and that the timeline from transfer to commercialization is typically 24 to 30 months, with a targeted commercial launch in 2028. He added that one of the two customers is new to Lifecore, while the other is pursuing a second opportunity with the company.
Josephs also said Lifecore is seeing a “real” trend toward regionalization or reshoring of manufacturing to the U.S., and that its site transfer pipeline includes opportunities spanning Asia Pacific, Europe, Israel (citing Middle East unrest), and India for a complex injectable program. He said Lifecore also sees business potentially coming up for bid from facilities acquired by Novo Holdings, noting industry expectations that existing contracts would be honored initially, though he referenced public information about regulatory challenges at the Bloomington site that could accelerate program movement.
Commercial strategy, capabilities, and operational initiatives
Josephs said the company’s business development approach has shifted from what he called a “farming” model to a more aggressive “hunting” strategy for new business, contributing to a broader mix of modalities including biologics. On margins and pricing, he said Lifecore does not compete in low-cost commodity generics exposed to intense price pressure, and instead seeks programs where technical expertise and quality are valued, supporting “good pricing” and margin outcomes.
Regarding GLP-1 opportunities, Josephs said the company has “a select few” opportunities in its pipeline, but emphasized Lifecore does not need meaningful GLP-1 participation to be successful. He said the GLP-1 program Lifecore has today could be meaningful if it gains regulatory approval around the 2029 timeframe.
Josephs said Lifecore’s sales and marketing team totals seven people, including inside support and an outside field force, and he characterized the group as operating at roughly 60% to 70% of its capacity with expectations to ramp through 2026. He said the company does not plan to add more sales representatives, citing the ability to cover more territory post-COVID via remote engagement, while also leaning into partnerships such as PolyPeptide for broader reach, including potential international opportunities.
Operationally, Josephs said Lifecore successfully launched a new ERP system on January 5 or 6, with “no major hiccups,” and expects it to improve productivity and financial management. He said the company has additional cost initiatives embedded in its 2026 operating plan and hired a head of business transformation in the fourth quarter to pursue further process and system improvements beyond “low-hanging fruit.” He also said Lifecore expects to generate more than $10 million in free cash flow in 2026, with some stretch-target upside tied to execution.
On manufacturing mix, Josephs said new development opportunities are trending toward syringes and cartridges more than vials, and he noted vial capacity in the market is “fairly extensive.” He said customer agreements typically run five to 10 years, and highlighted one late-stage program expected to launch in 2027 for which Lifecore signed a 10-year agreement. On tariffs, he said the company has not been exposed to anything meaningful so far, and agreements typically include annual price escalators such as PPI. He added that contracts are denominated in U.S. dollars and the company has no foreign exchange exposure.
Josephs also highlighted a technical differentiator in handling highly viscous products, citing experience with formulations “as thick as honey or molasses,” which he said stems from Lifecore’s HA heritage and supports development and commercial manufacturing across additional programs.
In closing remarks, Josephs acknowledged potential near-term volatility but said Lifecore’s strategy remains centered on executing against a strong commercial base, late-stage pipeline opportunities, business development momentum, and continuing margin improvement.
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.
