OTC:PBSV
Pharma-Bio Serv, Inc.
A North American pharmaceutical services provider facing steep revenue decline and profitability issues as of 2025.
Key Metrics
Investment Thesis
Bull Case
The stock may be attractive for deep value investors seeking a turnaround story at an extremely low market capitalization given the negative net profit and significant retained earnings deficit. If management can successfully secure new long-term contracts, the company's specialized manufacturing capabilities could provide a path to recovery. The lack of debt and zero long-term liabilities offers some balance sheet resilience during the transition period.
Bear Case
The steep five-year revenue decline from $19.4M to $9.0M signals a deteriorating business model with no visible catalyst for growth. A net loss of -$100k combined with negative operating cash flow indicates the company is unable to generate sustainable profitability without external capital injections. The growing retained earnings deficit of $10.5M represents a significant equity erosion that could lead to further dilution if financing rounds are required.
About Pharma-Bio Serv, Inc.
Pharma-Bio Serv, Inc. provides pharmaceutical and biotechnology services, including contract manufacturing and development solutions, primarily serving the North American market. The company generates revenue through specialized CDMO operations supporting clients in various therapeutic areas, though recent data shows a significant contraction in top-line sales. Key financial metrics for 2025 indicate declining revenue of $9.0M alongside a net loss of -$100k, reflecting ongoing operational challenges.
Analysis
Management Discussion
Management has struggled to arrest the decline in revenue, which fell nearly 53% over three years while net income turned negative in 2025. Operating expenses remained elevated at $3.5M despite lower revenue, suggesting difficulty in cost control or scaling down operations effectively. The company burned through $3.4M in cash with minimal non-cash adjustments to offset the operating deficit.
Industry Overview
The pharmaceutical services industry is competitive and cyclical, heavily dependent on R&D spending by biotech firms which has fluctuated significantly in recent years. Companies in this space face pressure from margin compression as larger pharma entities bring manufacturing in-house or negotiate stricter contract terms. Success requires maintaining specialized technical capabilities while managing cash flow volatility inherent to project-based service models.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $19.4M | $17.0M | $9.5M | $9.0M |
| Cost of Revenue | $14.5M | $11.9M | $7.0M | $6.1M |
| Gross Profit | $4.9M | $5.1M | $2.5M | $2.9M |
| Operating Expenses | $3.7M | $3.9M | $3.8M | $3.5M |
| Operating Income | $1.2M | $1.1M | $-1.3M | $-637.7K |
| G&A | $3.7M | $3.9M | $3.8M | $3.5M |
| Stock-Based Comp | $71.6K | $45.1K | $47.5K | $35.1K |
| D&A | $51.1K | $48.1K | $23.3K | $59.9K |
| Other OpEx | $0 | $0 | $0 | $0 |
| Non-Operating Income | $13.4K | $570.1K | $532.1K | $543.4K |
| Interest Income | — | $320.1K | $245.8K | $37.5K |
| Pre-Tax Income | $1.2M | $1.7M | $-755.4K | $-94.3K |
| Income Tax | $181.7K | $377.3K | $22.2K | $6.2K |
| Continuing Ops | $1.0M | $1.1M | $-1.3M | $-637.7K |
| Discontinued Ops | $0 | $192.8K | $2.1M | $537.2K |
| Net Income | $1.0M | $1.3M | $777.6K | $-100.5K |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $1.0M | $1.3M | $777.6K | $-100.5K |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $19.9M | $19.4M | $15.7M | $13.4M |
| Cash & Equivalents | $14.5M | — | — | — |
| Marketable Securities | — | $4.5M | $6.0M | $7.5M |
| Accounts Receivable | $5.0M | $3.9M | $2.5M | $2.4M |
| Other Current Assets | $498.4K | $10.9M | $7.2M | $3.6M |
| Long-Term Assets | $707.2K | $501.0K | $593.5K | $266.2K |
| PP&E (Net) | $73.7K | $32.8K | $169.3K | $116.1K |
| Operating Leases | $502.7K | $356.4K | $198.6K | $29.4K |
| Other LT Assets | $130.9K | $111.7K | $225.6K | $120.8K |
| Total Assets | $20.7M | $19.9M | $16.3M | $13.7M |
| Current Liabilities | $2.1M | $2.2M | $1.9M | $1.7M |
| Current Leases | $140.9K | $152.5K | $165.2K | $28.8K |
| Taxes Payable | $337.3K | $533.8K | $594.3K | $718.8K |
| Other Current Liab | $1.6M | $1.5M | $1.1M | $991.2K |
| Long-Term Liabilities | $2.0M | $1.6M | $689.7K | $0 |
| LT Operating Leases | $346.5K | $194.0K | $28.8K | $0 |
| Other LT Liab | $1.6M | $1.4M | $660.9K | $0 |
| Total Liabilities | $4.1M | $3.8M | $2.6M | $1.7M |
| Shareholders' Equity | $16.6M | $16.1M | $13.7M | $11.9M |
| Paid-In Capital | $1.6M | $1.6M | $1.6M | $1.7M |
| Retained Earnings | $15.3M | $14.9M | $12.4M | $10.5M |
| AOCI | $238.2K | $210.3K | $262.4K | $278.0K |
| Treasury Stock | $502.2K | $536.6K | $547.8K | $579.3K |
| Total L&E | $20.7M | $19.9M | $16.3M | $13.7M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $1.0M | $1.3M | $777.6K | $-100.5K |
| Non-Cash Adjustments | $844.4K | $-80.7K | $1.3M | $1.3M |
| Working Capital Changes | $-1.3M | $661.5K | $-2.6M | $-1.4M |
| Cash from Operations | $592.5K | $1.9M | $-566.7K | $-214.9K |
| Capital Expenditures | $19.3K | $7.3K | $159.7K | $6.6K |
| Cash from Investing | $-19.3K | $-4.2M | $-1.4M | $-1.5M |
| Share Buybacks | $82.0K | $34.3K | $11.3K | $31.4K |
| Dividends Paid | $3.4M | $1.7M | $1.7M | $1.7M |
| Cash from Financing | $-3.5M | $-1.8M | $-1.7M | $-1.8M |
| FX Effect | $-50.2K | $68.9K | $-17.6K | $44.5K |
| Net Change in Cash | $-3.0M | $-4.0M | $-3.7M | $-3.4M |
| Beginning Cash | $17.5M | $14.5M | $10.4M | $6.8M |
| Ending Cash | $14.5M | $10.4M | $6.8M | $3.4M |
Frequently Asked Questions
How does Pharma-Bio Serv, Inc. make money?
The company operates primarily through contract development and manufacturing organization (CDMO) services, offering specialized production capabilities for small-molecule drugs, biologics, or combination products. Revenue streams are derived from project-based manufacturing contracts and process development fees rather than proprietary product sales. The financials suggest a focus on B2B service delivery with limited diversification into consumer-facing segments.
What are the main risks for PBSV?
Severe revenue contraction from $19.4M in 2022 down to $9.0M in 2025 indicating potential loss of major contracts or market share. Persistent operating losses with negative cash flow from operations of -$215k and a growing retained earnings deficit of $10.5M. High accounts receivable relative to cash reserves creating liquidity pressure. Dependence on a limited client base without clear proprietary IP to drive future growth.
What is PBSV's competitive advantage?
Specialized technical expertise in niche pharmaceutical manufacturing processes that smaller competitors may lack. Established relationships with established biotech clients seeking outsourced production capabilities. Flexible operational model allowing the company to pivot between different therapeutic area projects quickly.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.