Good day, thank you for standing by. Welcome to Lifecore Biomedical Investor Conference Call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automatic message advising your hand is raised. I will now hand the conference over to Stephanie Diaz. Please go ahead.
Good morning, and thank you for joining us today for Lifecore Biomedical's Investor Day, a new era building momentum for sustainable growth. Hosting the call today from Lifecore are Paul Josephs, President and Chief Executive Officer, and Ryan Lake, Chief Financial Officer. Before we begin today, we'd like to remind everyone that certain statements made in the course of this event contain forward-looking statements. It is important to note that the forward-looking statements made during this event reflect management's judgment and analysis only as of today, November 21st, 2024, and the company's actual results could differ materially from those projected in such forward-looking statements.
For a more thorough discussion of risks and uncertainties associated with any forward-looking statements, please see the disclaimer regarding forward-looking statements that is included in our Form 8-K, which was furnished to the SEC today, as well as all our other filings with the Securities and Exchange Commission. Our slides and this call will include discussion of certain non-GAAP information. You can find the relevant non-GAAP reconciliations at the end of the presentation and on our corporate website at lifecore.com. With that, I'd like to turn the call over to Paul Josephs, Chief Executive Officer.
Thank you, Stephanie. Good morning, everybody. Thank you all for joining us today to celebrate both Lifecore's 40th anniversary in healthcare, as well as the new era of the company focusing on building momentum for sustained growth that we believe will help establish Lifecore as an industry leader in the not-too-distant future. If you are tuned in and listening, you are in the right place and on the path to discovering more than what is seen on the surface: a great company that is in a transformational state with a bright future ahead. I could not be more excited to share with you the tremendous opportunity in front of us as we execute this new growth strategy that we believe will create meaningful value for all stakeholders. Before we begin, I would like to thank our board for their support, guidance, and direction.
I would like to also thank our Lifecore team, both in Chaska and elsewhere, for all they do on behalf of our company, our customers, and the patients they serve. Today, I am joined by Ryan Lake, our CFO. Over the next hour, we will share our strategy for growth and the financial and operational objectives we aim to achieve in the coming years. By the end of our time together, you will see Lifecore as a great company with exciting opportunities in a durable industry and a clear path to strong top and bottom-line growth. Moreover, recent market activity surrounding the pending transactions of Catalent and Avid Bioservices transactions underscores the Lifecore's position as an undervalued asset with a compelling investment thesis. As we go through today's presentation, I trust that four key takeaways will be evident.
One, Lifecore Biomedical is an industry leader in the development and manufacturing of complex injectables, with recently expanded capabilities to compete broadly in a large and growing market. Two, the company has an actionable growth strategy to seek and drive growth with a 12% revenue CAGR and increasing EBITDA margins to over 25% in the midterm. Three, we have established and assembled a deep, experienced team that is capable of delivering on this aggressive strategy. And four, finally, we have the infrastructure to support substantial growth with up to approximately $300 million in annual revenue-generating capacity. It's an exciting new era at Lifecore, and we have a terrific opportunity to share with you today. Our agenda for today will quickly take us through the company's history, our current journey, and the exciting markets in which we compete.
The majority of our time, however, will be focused in on our new strategy for achieving midterm and long-term growth, as well as the tactics we will employ to reach our goals. Now, I'd like to tell you a little bit about Lifecore and our journey that led us to this new era. In the past, Lifecore was a company that was embedded within a conglomerate of low-margin food businesses and without a cohesive strategic direction. It has now, with the divestiture of these food businesses, transformed into a standalone integrated CDMO focusing on providing great sterile solutions to the market's development and manufacturing needs. This transformation, however, was not complete with the divestiture of the food businesses, but in some ways, it just started.
Our company has faced significant challenges over the past 18 months or so, but these challenges have created wonderful opportunities, and I'm proud to say that since I've joined the company last May, we've already made significant progress in establishing a stronger, more agile, and competitive Lifecore. We have significantly enhanced our capabilities, strengthened our financial position with our recent equity financing, doubled our revenue-generating capacity, enhanced our business development strategy and resources, overcome significant financial reporting challenges, and regained our Nasdaq filing compliance. And finally, we've completed our leadership transition of both our company and our board of directors.
While this journey has been arduous, we are thrilled to be entering a new era with new leadership that joins a talented and committed team in Chaska and elsewhere, new capabilities highlighted by our five-head isolator filler, a new strategic plan for growth, and significant renewed optimism for the future. A critical part of this successful transformation is our management team. Our proven leadership team has a combined industry experience approaching 150 years and is comprised of proven leaders who are incumbents at Lifecore, along with new, capable, and driven leaders who recently joined our organization. The team has evolved significantly over the past few months, with myself joining in May, Ryan Lake and Birsel Thompson both joining in September, and Thomas Goldegger, our newest member of the leadership team, joining us earlier this month.
Personally, I have successfully implemented and executed similar growth strategies across multiple companies over my 30 years in the CDMO industry. Given this experience, I know firsthand what is achievable. I know what best-in-class looks like, and I have a long track record of successful execution. It is going to be a lot of challenging work, but I have great confidence we can do this together. I joined Lifecore because I could see through the organization's recent challenges to the compelling opportunity on the other side, and I am confident in our ability to maximize the inherent value in our newly transforming company to put Lifecore on a path to success. Ryan has tremendous public company experience, and I couldn't be more excited to partner with him. And he's also been a CFO in this industry previously.
He has helped shape high-quality organizations, built strong teams, and has several M&A transactions under his belt. I believe that we've assembled an incredibly talented, engaged, and proven team of CDMO executives who, combined with a highly talented group of incumbent leaders at Lifecore, will guide our company as we strive to exceed ambitious set of objectives in both the mid and long term, and perhaps more importantly, a team that has the resolve and toughness to work through the inevitable challenges that we will face along this journey. Here, we are providing a snapshot of our company today. For those of you who are new to the company, we are celebrating our 40th year in healthcare. With 450 employees, Lifecore is a fully integrated contract development and manufacturing organization that offers highly differentiated capabilities in the development and fill finish of sterile injectable products.
We are a leader in the manufacture of sodium hyaluronate, or HA, with global regulatory capabilities, and our guidance for fiscal 2025, as it relates to our financials, includes projected revenues between $126.5 million and $130 million, and $19 million to $21 million in adjusted EBITDA. We have three state-of-the-art facilities with a combined 248,000 sq ft, and these sites are all located within two miles of one another and regulated under one FDA registration number. Our multi-compendial regulatory system allows us to produce product that is distributed in most of the major markets in the world. Our organization's mission, which you can read here, drives our commitment to excellence, quality, performance, and culture. We live this mission daily because it's what our customers expect and, more importantly, what their patients need. It means that we are a solution-driven organization. We don't see problems; we see opportunities.
I am always amazed at the breakthroughs that we make in healthcare and the key role that CDMOs have played in this area and the trust in the partnerships that have made this possible. I'm proud of the impact we have made at Lifecore and, more importantly, the meaningful contributions we will continue to make to patient care tomorrow and beyond. At the heart of what we do is we combine science, precision, and service to create solutions that make an impact. It's how we become a trusted partner, not just to our customers, but to the patients they serve. Our missions drive the decisions we make, from the investments we've made into our state-of-the-art filler that is now GMP-ready to the relentless pursuit of our quality standards. We are building a future where we contribute to improved healthcare outcomes, one product at a time.
To our shareholders, this is what sets us apart. You're not just investing in a company. You're investing in a purpose-driven organization that's focused on delivering for all our customers and that will continue to deliver value over time. Together, our goal is to set the standard for what it means to be a quality CDMO. Through bold solutions, tireless dedication, and the incredible talent of our people, we are ready to lead. Lifecore's mission, which I stated, we take seriously. It translates into our commitment to all our stakeholders. For our shareholders, we are driven to generate a strong financial track record and consistently generate value over time. For our customers, we are committed to being a complementary, value-added partner that provides not only a set of hands - capacity is how I see it - but also the brains to develop and implement the best solutions to your development and manufacturing needs.
To all our associates, we aspire to be a fantastic place to work with a performance-driven culture that is inclusive and has a great desire and determination to do the best to serve our customers. I will now turn it over to Ryan to discuss the exciting markets in which we compete and the vast opportunity that we have in front of us. Ryan?
Thanks, Paul. Our confidence in our midterm objectives is buoyed by the vast and growing markets we serve, along with strong, favorable industry tailwinds. The global CDMO market is projected to grow by high single digits per year, and the $10 billion injectables portion of the industry, where our capabilities and strengths fit, is the fastest-growing segment of this market with a double-digit CAGR, and we expect to grow faster than the market.
In general, the CDMO industry is a great industry with sticky customers as a result of the regulatory requirements and high switching costs. It is characterized by high growth rates, good margins at scale, and provides investors with an opportunity where you can bet on the pharma industry without taking binary risks related to a single asset and increase your chances with more shots on goal. Separately, the HA market is also close to a $10 billion market, which is projected to grow at approximately 7% per year. These key market opportunities are fortified by the expectation that the Biosecure Act will be favorable to U.S. pharmaceutical manufacturing. We also expect tailwinds due to the ongoing trend that shows more than 50% of drug approvals are injectable products, underpinned by growing biologics and GLP-1 drugs.
Finally, the explosion of GLP-1 demand has further tied up a significant amount of the industry's capacity, opening a door for Lifecore, especially given the company's new capabilities. Even if we do not meaningfully participate in some of these therapeutic areas, we believe the expected increases in demand will absorb capacity in the industry and should provide more opportunities for Lifecore. With that background, I'd like to turn it back over to Paul to address the specifics of our growth strategy and how it will make Lifecore bigger, stronger, and more impactful.
Thanks, Ryan. As you can see here, we have three areas of focus as we work to achieve our midterm growth targets. These include maximizing our existing customer business, advancing programs within our development pipeline towards commercialization, and finally, driving new business to our site through expanded business development efforts.
It is our belief that success in these three growth areas will result in an increase of approximately 40% to 60% in revenues in the midterm, which we define as the next 36 to 48 months. This would absorb only 40% of our current capacity, leaving significant room for further growth as we work aggressively over the long term to fill our $300 million of maximum revenue-generating capacity created with the recent addition of our five-head filler. First, let's talk about our existing customers and how we will continue to be a great partner to them and take steps to maximizing and expanding our scope of work for each of them as their needs grow.
It's typically easier to get more work from existing customers than acquiring new customers as they have already had a positive experience with us, trust our services, and hence are more likely to purchase additional products or services from us. Going forward, we will be more intentional about our customer service focus, driving more robust relationships while ensuring our partners understand our capabilities and prioritize us for additional opportunities. Supporting this initiative is Lifecore's unique record for establishing long relationships. Today, Lifecore has multiple customers who have been with us for more than 20 years, with running relationships approaching 40 years. We believe this speaks to the strong trust that our clients place in us as a result of our track record in quality and excellence in execution. This also illustrates how sticky our customer relationships can be once a partnership has been established.
Our existing customer business can be broken into two segments: fill and finish and sodium hyaluronate, or HA fermentation. Here, we have a snapshot of our fill finish projections for organic growth and contractual guaranteed minimums. As you can see, we expect to double the commercial units produced for our customers in the next 36 to 48 months. More than 50% of this increase is expected to be associated with minimum volume commitments that we have within our customer agreements and does not contemplate any of the potential upside from the additional capacity that our customers have requested to be available over the midterm. With respect to HA fermentation, Lifecore currently manufactures more than 20 commercially approved injectable products containing HA, with over 150 million doses sold worldwide to date. Lifecore's HA is a premium pharmaceutical injectable-grade product used in a broad range of applications.
Today, we continue to see strong and steady demand for our HA product and believe that there may be continued upside for this business. Our legacy in HA fermentation and advent into sterile fill finish of highly complex and viscous programs is a key differentiator for us and will remain an important part of our future going forward. The second objective that will be critical to achieving our growth objectives is advancing development programs towards commercialization. Our current pipeline is comprised of 25 development programs with the potential to generate an incremental $100 to $200 million in commercial revenue. 10 of these programs are in late-stage development. Of the 10 existing late-stage programs, all have the potential to achieve commercial approval status by 2028.
While there is no guarantee that they will all reach the finish line, even a modest subset of this group would generate substantial and impactful growth for the company in the midterm. In our midterm estimates, we have risk-adjusted the revenue potential from these programs by greater than 60%, realizing that among other factors, there will be clinical attrition and/or our customers' market expectations may not be realized. Three of these programs have the potential to generate greater than $10 million per year based on our customers' projected sales and our expected selling price. We are excited and highly motivated by these projects. Importantly, these 10 programs represent 10 unique and distinct customer relationships, and we have worked closely with each of these companies for years, bringing them to this late stage of development.
We look forward to continuing to partner with these customers to successfully launch these products going forward. We are deploying a new sales strategy to expand our target market, capitalizing on investments we have made in technology and creating a more agile organization to support our expanding pipeline. To this end, we have also opened up our addressable target market to increase our focus on large multinational pharmaceutical companies, which has led to a more robust and growing business development pipeline. Further, as previously announced, we have recently installed a five-head isolator filler, which has significantly expanded our capacity, increased our investment in sales and marketing to support expanded visibility, and expanded our business development team with new sales talent who will focus on key drug development geographies in the United States. As mentioned earlier, our legacy in manufacturing complex, highly viscous injectables is well known.
As an executive at a large multinational organization told me during a recent call, Lifecore's technical capabilities are world-class. These technical capabilities, combined with the capacity investments and expanded BD strategy, provide us the ability to expand our efforts into large and growing markets across many modalities. A market that contemplates not only emerging specialty pharmaceutical companies but to also be a meaningful partner to large multinational pharmaceutical companies. The expansion of our target market has led to a growing and diverse business development pipeline of greater than 50 potential new business opportunities that our team is working aggressively to qualify and advance. It is our hope that we will ultimately bring these opportunities to successful closure, allowing us to expand our development pipeline of 25 active projects and help fuel our growth for both the mid and the long term.
I believe this growth will significantly increase and diversify our customer base to include additional specialty pharmaceutical companies as well as large multinational pharmaceutical companies. Importantly, we believe it allows us to increase our capacity utilization, strengthen our revenues, and significantly improve our margins. As we reported in September of this year, the company has installed a five-head multipurpose isolator filler that is now GMP-ready and operational. This filler, which has the capacity and capability to fill vials, syringes, and cartridges, has significantly expanded our available capacity and expands the range of project opportunities we can support. This isolator technology is state-of-the-art and what the world's leading pharmaceutical companies expect and demand in terms of capability and compliance. In supporting this new business strategy, we'll be a team approach to driving new business, including engagement at the highest levels of our organization.
Prior to joining Lifecore, I had 30 years in the CDMO. I've had 30 years in the CDMO industry with deep commercial experience and relationships. Looking forward, it is my intent to partner closely with our business development team to strengthen and expand our BD platform and brand awareness across the market. Everyone at Lifecore sells. It will be critical for our leadership team to ensure that we are not only meeting the supply chain needs of our customers but ensuring that at a strategic level, we continue to add value and are positioned well to be considered for new opportunities as the needs arise. In addition, we have increased our investment in business development and have added two proven industry veterans to our business development team.
We are confident that these new resources, combined with our existing talented team, will help accelerate and drive new programs to our business in both the near and the long term. Finally, we have better aligned our internal resources to lead and manage existing and new customer relationships, freeing our business development team to maximize their time on selling activities to drive new programs into our organization. It is an exciting time as we initiate these aggressive steps to grow our business. As we do so, it's equally important that we execute against our organizational strategies, which will enable growth. For this, I will turn it over to Ryan.
As we build momentum and generate growth, we are investing in organizational strategies that are critical to support that growth, specifically retention, development, and recruitment of top talent to our performance-driven culture, reducing operational expenses as a percent of revenues, and sustaining the highest standards for quality in the markets we serve. Upon arriving at Lifecore, one of Paul's first acts as CEO was to conduct a comprehensive review of all aspects of the company's operations, including headcount. As part of this process, it became clear to him that our company's headcount was oversized for our current business. While such decisions are never easy, a reduction in force was necessary to align our organization with our current business needs. While unfortunate, we believe this decision was a key, as a first step to achieving our goal of improved efficiencies and creating a more agile, responsive, and competitive organization.
Looking forward, under the leadership of Thomas, our new VP of Operations, and myself, we will seek to support the creation of additional value through execution, procurement, and leverage of our overhead structure. Spending reductions in other areas are also being addressed in an effort to achieve this goal, including overhead costs, professional fees associated with legal, accounting, and consulting spend, and through the establishment of a Value Creation Initiative, we're looking at all areas of the business, like labor utilization, cross-training employees to leverage manufacturing cycles, reviewing inventory safety stock levels, vendor spend, and negotiation on things like gowning and insurance, and ensuring that we are aligning our goals to drive performance on manufacturing yields and scrap rates.
When combining these anticipated efficiencies along with the revenue growth that Paul has discussed, as well as the increased capacity utilization that we project, we expect to significantly improve our EBITDA margins over the midterm from 15% to 25%. At Lifecore, we are committed to a high-performance culture driven by exceptional talent, one where we are data-driven, have eight players in all strategic roles, and where incentives are better aligned with our shareholders. We will have a team that is not only capable but willing to persevere and do what is necessary to accomplish our company and customers' goals, a company which is not just busy but highly productive, where we employ the right labor and have an efficient overhead structure that can be leveraged as we grow over the midterm. Our organization cannot be successful without an absolute commitment to quality in all we do.
We maintain the highest level of quality in every aspect of our work and in our relationships with customers and regulatory agencies alike. Finally, we have a strong 40-year history and reputation of having a world-class quality and regulatory system that can support multiple global regulatory bodies. I do hope that we have successfully conveyed the significant opportunity that lies ahead for us here at Lifecore Biomedical. Assuming the successful closure of the Catalent and Avid transactions, Lifecore will be the only pure-play publicly traded CDMO remaining. Given this consolidated environment, we know that there will be increased scrutiny on our performance, and we plan to impress all of you: our shareholders, our customers, and our talented and committed associates. It's no secret that our company's past was challenging.
However, since the spring, we've made significant and great strides in remedying most of the prior tactical hurdles, including establishing a new leadership team with a specific commercial skill set required to elevate Lifecore at this unique time, installing a five-head filler that allows us to substantially expand our capacity and new business opportunities. We've regained compliance with Nasdaq and other regulatory regulations. We've aligned our workforce with our business and strengthened our financial position. Looking ahead, we are confident in our ability to achieve strong growth by implementing the key pillars of our strategy. We are ready to drive meaningful growth, expand margins, and solidify our position as a leading world-class CDMO. In closing, I'd like to reiterate our four key takeaways from today's presentation. We are a leader in contract development and manufacturing of complex injectables with expanded capabilities to compete in a growing market.
Our growth strategy targets a 12%+ revenue CAGR and over 25% EBITDA margins over the midterm. Our deeply experienced team is capable of delivering on this ambitious and exciting vision. And finally, we have the ability to support long-term growth with up to $300 million in annual revenue-generating capacity. Lifecore Biomedical is a great company with great potential, and we look forward to all our stakeholders joining us on this journey. Thank you to everyone for your attention today. At this point, we are going to take a quick break while we play a short video produced by our team. At the conclusion of this video, we will begin our Q&A session. Thank you.
At this time, we will begin our Q&A session. To ask a question, you will need to press star one one on your telephone and wait for your name to be announced.
Please stand by while we compile the Q&A roster. And we have a question from Matthew Hewitt with Craig-Hallum Capital Group. Your line i s now open.
Good morning, and thank you for taking the questions and for hosting this event today. It's great to hear the transition that's underway here. Maybe first up, I think Paul, you mentioned you've got a new heightened focus on large multinational pharmaceutical companies. What is the typical sales process with those types of companies? And are you looking to get in on the development end with those partners, or would you look to maybe come in as a commercial partner? And if so, how should we be thinking about the ramp of those types of opportunities?
Matt, good morning, and thank you for the question. The way I'd articulate it is it's an and equation for us.
We want to partner with large multinational pharmaceutical companies not only on development programs but also late-stage programs along with commercial site transfers. It's hard to predict commercial site transfers, but it's critically important that we establish strong relationships with those customers to ensure that when those opportunistic programs become available, that we have a seat at the table. As it relates to the selling cycle, it's certainly longer than I would say your specialty pharmaceutical companies who maybe have a less complex buying process, but it's worthwhile. Certainly, I would characterize it anywhere from a six to 18-month sort of process.
Okay. That's helpful. Thank you. And then you touched on it briefly, but the Biosecure Act. What are your thoughts? Or what are you hearing from customers or pharmaceutical companies in the space?
Is this something that you expect to transition relatively soon, even though it isn't law yet, but you see the transitions now, or do you think it's going to be something that just kind of builds over time given the eight-year grandfather period?
Again, thank you for the question. I look at it as probably overstated in the short term, Matt, but understated in the long term, so we are probably seeing some uptick with regard to RFPs, etc., requests for proposals, but it's hard to know if those are driven by the Biosecure Act, but as you articulated, the eight-year sunset on this initiative or legislation, I do expect as you move into 2027, 2028, you'll start to see more commercial site transfers become available as customers look to exit the Chinese market. Again, that's helpful.
Thank you very much. I'll hop back into queue.
Thank you.
Thank you.
One moment for our next question. And our next question coming from the lineup, Jacob Johnson with Stephens. Your line is now open.
Hey, thanks. Good morning, guys, and thanks for the content. I guess a couple of questions just on the growth outlook. Just on the 12% growth, maybe the first one, how do you think about growth in terms of HA versus Fill/Finish? I assume given the capacity on the Fill/Finish side, that that's going to probably be growing faster than that 12%. But if you want to put any numbers around how we should think about the growth outlook for those two product lines. And maybe Paul, similarly, talking about adding talent on the BD side of things. Again, I would assume that's on the Fill/Finish side, but I figured I'd check. Thanks.
Thanks, Jacob. Good morning. Yes.
As it relates to HA, we see strong and steady demand. I would say modest growth over the midterm, low single digits, and where the majority of our growth would be coming from is the Fill/Finish side. The legacy of Lifecore was an HA manufacturer who competed in the sterile Fill/Finish market. We are transitioning into a sterile Fill/Finish organization that has been built on the legacy of our HA business.
Got it. Thanks for that, Paul, and maybe a follow-up on the growth outlook. I think we all would like these business models to be linear and up and to the right, but that's not always the case in the CDMO industry, so as we're thinking about that kind of 12%, the path to the medium-term targets and the 12%+ growth outlook.
As I look at the pipeline of opportunities, it does seem some of these are going to hit more in 2027, 2028. Should we think about maybe growth picking up more so in the out years as some of those come online? Just any thoughts around that?
Jacob, this is Ryan. Just looking at, as an example, our slide 18 that we had in the deck, I mean, some pretty tremendous growth, right? As you noted, about 12% CAGR over the midterm is roughly, if I just use simple math, about a $50 million increase in revenue. So where we're expecting that growth to come from is across not only, I mean, roughly about 40% of it, right, is going to come from increased contractual minimums that we have, guaranteed minimums from some of our largest existing customers.
Then the other 60% is broken up between the late-stage commercial products and the new business development growth. So when you look at slide 23, which was those late-stage or near-commercial programs, Paul had mentioned this during his remarks, but what we have done is we have assumed effectively six of those 10 projects. We've risk-adjusted those by 60% in achieving that $50 million of growth that we're anticipating in our revenue. So we have significantly adjusted that. And you can get a sense of how that buildup is going to occur based on the timing of these expected commercial launches of these products. You can see the majority of these are later in 2027 and 2028. So that is where you would expect to see more of a meaningful pickup from a revenue contribution perspective.
Got it. Super helpful, Ryan.
Maybe if I can just stick one last one in. Just Paul, I think you talked about bringing in top talent. I think Ryan mentioned bringing in A-players. Just Paul, where do you think you are on kind of assembling the team to embark on this journey? Do you have the people you need today, or there's still some additions coming?
We're really excited, Jacob, so I think we're closing in on the end of the transition as it relates to transforming our finance team, transforming our business development team, and filling out our leadership team. There's a great group of leaders here as well, of incumbent leaders, and I'm just so excited about combining the new talent with the strong existing talent we have. I think we have something special that we're building here at Lifecore.
Got it. Thanks for that, Paul. Thanks for getting the questions.
Thank you.
Thank you. And our next question, coming from the lineup, Michael Petusky with Barrington Research. Your line s s now open. Michael Petusky, Your line i s now open. Please check your mute button.
Oh, sorry. Sorry. Just want to echo everybody else's compliments on the investor day and the information shared. So I thought it was an interesting question or an interesting comment on the GLPs where essentially you said, "Hey, we're either going to participate or really hopeful that all that business will be absorbed, and that'll give us other opportunities to do other things." And I'm just curious, what are the gating factors of why you might not participate there? Is it maybe it's a lot of volume but not great margin, or is there something in your capacity that doesn't fit with that?
Or can you just talk about, I guess, the opportunity and the gating factor around you guys participating and wanting to participate in GLP-1? Thanks.
Mike, good morning, and thank you for the question. Obviously, we can do GLP-1s. We have a number within our business development type pipeline that we're aggressively working to advance within the pipeline and ultimately close. And I think what our V.P. was articulating is that with what's going on in the market today and, I would say, the explosion of GLP-1s and what it's done to prefilled syringe capacity, it just creates follow-on opportunities for us because you have potentially more demand than you have available capacity. Now, we feel that we're very confident that we can support major players with regard to GLP-1s. And again, we're at the table in discussions with a number of different parties at this time.
Okay. All right. Great. And then on the comments, which I thought were really helpful around the commercial opportunities and the late-stage products, I think there were three that were $10 million+. I mean, is that sort of $10 to 25? Is that $10 to $100 million? If you wouldn't mind, I mean, are there some really big commercial opportunities within those three $10 million+ commercial projects?
I'd characterize it as $10 to $20, Mike, is what I would say.
Okay. All right. Great. And then one quick one for Ryan. So obviously, you talked a bunch about the opportunities, the cost savings, efficiency capture. Would you mind, Ryan, characterizing maybe two or three of the areas that are sort of the low-hanging fruit where you feel like, "Hey, we can find some dollars in this area, that area," or just in terms of streamlining processes?
Or can you just talk about maybe one, two, three areas where you say, "Hey, yeah, we can really get a few dollars in these areas"? Thanks.
Yeah, and I think if we turn to Slide 32 just to see where we're expecting significant improvement in our EBITDA margins over time. Our overhead costs that we've already begun to address, the professional fees, particularly associated with legal, accounting, and consulting spend are significant. We're working through addressing those items. I also made a remark about what we call a VCI or Value Creation Initiative, but that's where we have instituted kind of a management operating review meeting where we dig into KPIs to a significant degree, not only revenue and EBITDA but also OTIF or on-time in-full , right first time, looking at volume or units by employee, looking at hours earned versus hours paid.
So we're looking at efficiencies, looking at our inventory safety stock levels. So it's really a myriad of things, but I would characterize it more as managing, measuring what you want to manage to from a business perspective, and really ingraining into the culture, the performance-driven culture to make improvements in areas as we grow so that we're more efficient as we grow.
Yeah. Mike, I would just add and echo what Ryan said and say that heretofore, our Lifecore was an organization that didn't necessarily measure the items that Ryan articulated and did not set, I would say, improvement targets on a consistent or strategic basis. And that's something we've implemented very quickly. And the partnership that Ryan mentioned between himself and Thomas will be critical to our long-term success.
Again, Thomas comes with an outstanding background, OpEx, finance, has run a fill-finish site a little larger than ours from a contract manufacturing. I think he's going to serve as a great partner to Ryan going forward.
Just lastly on this slide that's up too, it's pretty tremendous EBITDA growth from 15% to 25%. I mean, that's roughly $19 million to $20 million. I'm just using round numbers based on the projections here, but to $50 million. So when you think about the area where those improvements are coming from, based on the slide that's up, almost 40% of that is coming from not only those increased volumes and the leverage we'll get from that from those contractual commitments of escalating minimums, as well as those operating efficiency areas that we've talked about.
And then the other 60% is coming from that growth, that growth in new business, as well as the late-stage commercial projects.
If I could just sneak sort of a Part B into that question, some of these cost savings and efficiency capture you want to get to, I mean, are those the kind of things that you can sort of get to more like in 2025, and then they sort of start to impact 2026, 2027? Are they multi-year sort of projects to get at the bulk of the efficiencies? I guess what I'm asking is the cadence of the efficiency capture and the cost savings, is that sort of front-end loaded when you think about the midterm, or it's more sort of gradual things?
Yeah. I think it is a little bit more front-loaded into 2025 into 2026.
But certainly, as I mentioned, it's going to be ingrained in everything we do on a go-forward basis so that we're always looking for those efficiencies so it will continue throughout the midterm.
Okay. All right. Final comment. Love this presentation. Would love to do it in Chaska next year, but maybe like August, September, November. Thanks.
I'm with you on that, Mike. Thank you.
Thank you. And I'm showing there are no further questions in the queue. I will now turn the call back over to Mr. Paul Josephs for any final remarks.
Thank you, Operator. As we conclude today's Investor Day, I want to thank each of you for your time, your trust, and your belief in our vision. A new era, building momentum for sustainable growth isn't just a theme for us. It's a declaration of how we're positioning ourselves for the future.
Together, we are embracing new strategies, maximizing new opportunities, and setting new, actionable, and aggressive targets, always with a focus on long-term sustainable value. I strongly believe our momentum is growing stronger every day. Our strategy is clear, and our commitment to delivering for all stakeholders has never been greater. We look forward with confidence and purpose, knowing that Lifecore's best days are ahead. Thank you again, and we look forward to staying connected down the road. Have a great day.
Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect.