BioHarvest Sciences (NASDAQ:BHST) reported lower third-quarter revenue and a wider loss as it scaled back customer acquisition spending for its VINIA products and shifted development resources toward a fragrance manufacturing program.
The company also revised its 2026 revenue outlook and said preserving cash is its foremost near-term priority. Chief Executive Officer and Chairman Zaki Rakib said BioHarvest plans to expand manufacturing capacity more gradually while concentrating on programs it believes can reach production sooner.
Revenue and margins declined
Third-quarter revenue fell to $7.9 million from $9.1 million a year earlier. Chief Financial Officer Bar Dichter attributed the decline to the company’s planned shift toward profitable growth in its product business and the timing of contract development and manufacturing organization, or CDMO, revenue.
Gross profit declined to $4.2 million, or 54% of revenue, from $5.6 million, or 61% of revenue. Dichter said the change reflected a greater weighting toward product revenue and a lower contribution from higher-margin CDMO development work.
Research and development expenses rose to $1.8 million from $1.4 million, primarily because of spending to accelerate the rare fragrance program. General and administrative expenses increased to $1.5 million from $900,000; Dichter said the prior-year figure had been offset by $400,000 in one-time income.
BioHarvest reported a net loss of $3.3 million, or $0.15 per basic and diluted share, compared with a loss of $2.5 million, or $0.14 per share, a year earlier. Adjusted EBITDA loss widened to $2 million from $400,000. Adjusted EBITDA is a non-IFRS measure.
Cash and cash equivalents, together with bank deposits, totaled $12.5 million as of Sept. 30, 2026, compared with $11 million a year earlier.
VINIA strategy shifts toward profitability
Rakib said BioHarvest began changing its VINIA marketing and sales strategy toward the end of the second quarter, reducing customer acquisition activity where returns fell short of its objectives. The company is seeking to improve retention and assess marketing spending against contribution margin, he said.
Management anticipated a moderate revenue decline during the transition and expects the benefits of the changes, along with revenue growth, to begin becoming evident in the first quarter of 2027. BioHarvest also launched single-dose VINIA Daily Chews in September.
Asked whether the fourth quarter would mark a low point for product revenue, Rakib said he expected direct-to-consumer revenue to be somewhat higher than the approximately $7 million implied by analyst Matt Hewitt’s question. He confirmed that the company is planning for a return to growth in the first quarter of 2027.
Fragrance program takes priority
BioHarvest prioritized a rare fragrance program over other development projects during the quarter, contributing to limited external development revenue, Rakib said. The company signed its CDMO division’s first manufacturing and supply agreement in August for the plant-based fragrance ingredient.
Rakib said the agreement provides for anticipated production of 20 tons of fragrance composition. Limited production could begin in the first half of 2027 if development is completed successfully, and the agreement could generate an estimated $20 million to $30 million in revenue over 2027 and 2028. He cautioned that the timing and amount depend on development and commercial execution.
During the question-and-answer session, Rakib said BioHarvest expects fragrance manufacturing revenue in the second half of 2027 but was not ready to provide a specific amount. He also cited potential development revenue from existing programs and licensing revenue from an already-developed molecule.
The company’s 2027 priorities include completing development of the fragrance ingredient, a saffron compound and a natural sweetener molecule for Tate & Lyle, Rakib said.
Updated outlook and cash spending
BioHarvest revised its full-year 2026 VINIA direct-to-consumer revenue guidance to $31 million to $32 million. Rakib said the direct-to-consumer adjusted EBITDA outlook remained unchanged.
The company now expects external CDMO revenue of $1 million to $1.5 million and a CDMO adjusted EBITDA loss of $4 million to $5 million. Consolidated revenue is expected to be $32 million to $33.5 million, with an adjusted EBITDA loss of $5.5 million to $7.5 million.
Rakib said cash preservation would come primarily from slowing the pace of capacity expansion and making greater use of the existing facility. BioHarvest is also planning to reduce fixed operating costs, including through development-site consolidation in 2027. The company is seeking to keep 2027 capital expenditures below $5 million, he said.
Asked by Roth Capital Partners analyst Sean McGowan about share repurchases after the quarter, Rakib described the activity so far as “very, very moderate.” He said the company did not intend to deploy substantial resources for buybacks, consistent with its cash-preservation strategy.
About BioHarvest Sciences (NASDAQ:BHST)
BioHarvest Sciences Inc. is a biotechnology company developing health and wellness products through its proprietary Botanical Synthesis technology. The platform is designed to produce plant-based compounds in controlled environments without relying on conventional agricultural cultivation of the whole plant, with the goal of preserving targeted botanical molecules and improving production consistency. The company’s primary commercial product is VINIA, a dietary supplement made from a proprietary red grape cell culture and marketed for its polyphenol content and potential cardiovascular and general wellness benefits.
