BioHarvest Sciences (BHST) Q2 FY26 earnings call: guidance and Q&A

BioHarvest Sciences announced its first CDMO manufacturing and supply agreement with a UAE-based customer for a global luxury rare fragrance. This 20-ton commitment has the potential to generate $20M-$30M in revenue for BioHarvest in the 2027-2028 timeframe. Production is slated to begin in the first half of 2027 in a dedicated section of the facility, with larger bioreactors to be introduced mid-2027 and full production in a new facility by 2028. This deal validates the company's programmable plant cell biology technology for producing consistent, bioavailable, and patent-protected precision botanicals.

The company is accelerating the monetization of developed molecules, shifting focus from proving application breadth to converting high-value opportunities into recurring manufacturing revenue, royalties, and sustainable profitability. This strategy aims to achieve consolidated EBITDA breakeven in 2027 and manage cash carefully to avoid equity-based funding. The CDMO business is prioritizing projects that yield higher value, leading to a tightened revenue forecast but a significant reduction in expected EBITDA loss for FY26.

BioHarvest's CDMO division completed Stage 1 of its multi-stage Safran development agreement, successfully establishing a Safran cell bank for nutraceutical and culinary applications. This triggered advancement to Stage 2, a $1.125M development agreement focused on scaling Safran biomass. BioHarvest retains a 25% ownership in the Safran composition and future manufacturing royalties. The partnership with Tate & Lyle was also expanded to develop several plant-based sweetener molecules, with potential for future manufacturing agreements where Tate & Lyle might build its own facility.

The VINIA D2C business is undergoing optimization, with full-year revenue guidance revised down to $33M-$35M and an expected EBITDA loss of $1.5M-$2.5M. This reflects a deliberate reallocation of spend towards manufacturing capacity and CDMO investments, rather than a deterioration of the underlying business, which remains stable with 95,000 active customers. Strategic moves include a pricing increase of up to 20% for new subscription customers, a shift in brand messaging, and the September launch of single-dose VINIA Daily Chews to improve conversion and retention.

BioHarvest received two non-dilutive grants from the Israel Innovation Authority totaling approximately $1.4M. The first supports integrating advanced data science, machine learning, computer vision, and high-throughput digital sensing into biological development workflows to accelerate plant cell culture progress. The second grant supported scaling the company's manufacturing facility through industrial automation. These investments aim to move plant cell culture from empirical methods to a data-driven optimization framework and enable BioHarvest to own the largest cell bank for valuable and endangered plant species.

The company is in the process of completing the detailed design for a new facility, which will incorporate embedded computer vision and robotics, with production expected to start in early 2028. For 2027, the existing facility, along with a dedicated section for fragrance production, is expected to support demand for VINIA, the fragrance, and potentially one or two additional CDMO products. The goal is to improve gross margins by reducing production costs through modest improvements and multiple suppliers for key elements.