Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 01, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-33137 | |
Entity Registrant Name | EMERGENT BIOSOLUTIONS INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 14-1902018 | |
Entity Address, Address Line One | 400 Professional Drive Suite 400 | |
Entity Address, City or Town | Gaithersburg, | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 20879 | |
City Area Code | 240 | |
Local Phone Number | 631-3200 | |
Title of 12(b) Security | Common Stock, Par Value $0.001 per share | |
Trading Symbol | EBS | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 49,888,218 | |
Entity Central Index Key | 0001367644 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 240.9 | $ 576.1 |
Restricted cash | 0.1 | 0.2 |
Accounts receivable, net | 191.3 | 274.7 |
Inventories, net | 546.3 | 350.8 |
Prepaid expenses and other current assets | 139.9 | 70.3 |
Total current assets | 1,118.5 | 1,272.1 |
Property, plant and equipment, net | 806.7 | 800.1 |
Intangible assets, net | 722.7 | 604.6 |
Goodwill | 224.9 | 224.9 |
Other assets | 35.7 | 57.3 |
Total assets | 2,908.5 | 2,959 |
Current liabilities: | ||
Accounts payable | 103.8 | 128.9 |
Accrued expenses | 35.9 | 51.7 |
Accrued compensation | 82.5 | 88.7 |
Debt, current portion | 21.2 | 31.6 |
Other current liabilities | 25 | 72.9 |
Total current liabilities | 268.4 | 373.8 |
Debt, net of current portion | 1,032.1 | 809.4 |
Deferred tax liability | 113.8 | 94.9 |
Other liabilities | 44.9 | 61.9 |
Total liabilities | 1,459.2 | 1,340 |
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 15.0 shares authorized, no shares issued or outstanding | 0 | 0 |
Common stock, $0.001 par value; 200.0 shares authorized, 55.5 and 55.1 shares issued; 49.9 and 51.3 shares outstanding, respectively | 0.1 | 0.1 |
Treasury stock, at cost, 5.6 and 3.8 common shares, respectively | (227.7) | (152.2) |
Additional paid-in capital | 860.1 | 829.4 |
Accumulated other comprehensive loss, net | (5.2) | (16.1) |
Retained earnings | 822 | 957.8 |
Total stockholders' equity | 1,449.3 | 1,619 |
Total liabilities and stockholders' equity | $ 2,908.5 | $ 2,959 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 15,000,000 | 15,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 55,500,000 | 55,100,000 |
Common stock, shares outstanding (in shares) | 49,900,000 | 51,300,000 |
Treasury stock (in shares) | 5,600,000 | 3,800,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues: | ||||
Total revenues | $ 240 | $ 329 | $ 790.2 | $ 1,069.5 |
Operating expenses: | ||||
Research and development | 39.2 | 49.6 | 135.4 | 151 |
Selling, general and administrative | 80.2 | 82.1 | 246.1 | 254.2 |
Amortization of intangible assets | 14 | 14.5 | 42 | 44.5 |
Total operating expenses | 282 | 363.7 | 897.8 | 994.3 |
Income (loss) from operations | (42) | (34.7) | (107.6) | 75.2 |
Other income (expense): | ||||
Interest expense | (8.5) | (8.4) | (24.5) | (25.5) |
Other, net | (13.4) | (2.4) | (18.4) | (2.8) |
Total other income (expense), net | (21.9) | (10.8) | (42.9) | (28.3) |
Income (loss) before income taxes | (63.9) | (45.5) | (150.5) | 46.9 |
Income tax benefit (provision) | (11.8) | 12.8 | 14.7 | (5.3) |
Net income (loss) | $ (75.7) | $ (32.7) | $ (135.8) | $ 41.6 |
Net income (loss) per common share | ||||
Basic (in dollars per share) | $ (1.52) | $ (0.61) | $ (2.71) | $ 0.78 |
Diluted (in dollars per share) | $ (1.52) | $ (0.61) | $ (2.71) | $ 0.77 |
Shares used in computing net loss per common share | ||||
Basic (in shares) | 49.9 | 53.7 | 50.2 | 53.6 |
Diluted (in shares) | 49.9 | 53.7 | 50.2 | 54.3 |
Product sales, net | ||||
Revenues: | ||||
Services | $ 186.2 | $ 270.5 | $ 660.5 | $ 589.6 |
Operating expenses: | ||||
Cost of goods and services sold | 85.5 | 103.2 | 256.8 | 237 |
Total CDMO | ||||
Revenues: | ||||
Total CDMO | 36.4 | 41.6 | 95.4 | 416.3 |
Services | ||||
Revenues: | ||||
Services | 36.2 | 112.6 | 90.7 | 283.7 |
Operating expenses: | ||||
Cost of goods and services sold | 63.1 | 114.3 | 217.5 | 307.6 |
Leases | ||||
Revenues: | ||||
Leases | 0.2 | (71) | 4.7 | 132.6 |
Contracts and grants | ||||
Revenues: | ||||
Services | $ 17.4 | $ 16.9 | $ 34.3 | $ 63.6 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (75.7) | $ (32.7) | $ (135.8) | $ 41.6 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustment | (1.3) | 0.3 | (0.4) | (1.4) |
Unrealized gains (losses) on hedging activities | 2.2 | (1) | 11.3 | 3.6 |
Total other comprehensive income (loss), net of tax | 0.9 | (0.7) | 10.9 | 2.2 |
Comprehensive income (loss), net of tax | $ (74.8) | $ (33.4) | $ (124.9) | $ 43.8 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows used in operating activities: | ||
Net income (loss) | $ (135.8) | $ 41.6 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Share-based compensation expense | 33.4 | 32.3 |
Depreciation and amortization | 107.7 | 94.6 |
Adjustment for prior period lease receivables (Note 10) | 0 | 86.1 |
Change in fair value of contingent consideration, net | 2.4 | 2.6 |
Amortization of deferred financing costs | 3.1 | 3.1 |
Deferred income taxes | 23 | 0.6 |
Other | 13 | 5.1 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 76.2 | (114.7) |
Inventories | (112.2) | (58) |
Prepaid expenses and other assets | (29.2) | (54.8) |
Accounts payable | (9) | 3.5 |
Accrued expenses and other liabilities | (98) | (19.3) |
Accrued compensation | (5.7) | (11.1) |
Contract liabilities | 4.2 | (19.5) |
Net cash used in operating activities: | (126.9) | (7.9) |
Cash flows used in investing activities: | ||
Purchases of property, plant and equipment | (92.2) | (178.3) |
Asset acquisitions | (243.7) | 0 |
Net cash used in investing activities: | (335.9) | (178.3) |
Cash flows provided by (used in) financing activities: | ||
Proceeds from revolving credit facility | 238 | 0 |
Purchases of treasury stock | (81.9) | 0 |
Principal payments on term loan facility | (25.3) | (16.9) |
Principal payments on convertible senior notes | 0 | (10.6) |
Proceeds from share-based compensation activity | 3 | 12.5 |
Taxes paid for share-based compensation activity | (5.7) | (13.5) |
Contingent consideration payments | 0 | (2.5) |
Net cash provided by (used in) financing activities: | 128.1 | (31) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (0.6) | (0.3) |
Net change in cash, cash equivalents and restricted cash | (335.3) | (217.5) |
Cash, cash equivalents and restricted cash at beginning of period | 576.3 | 621.5 |
Cash, cash equivalents and restricted cash at end of period | 241 | 404 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest | 26.7 | 27.3 |
Cash paid during the period for income taxes | 23.9 | 57.6 |
Supplemental information on non-cash investing and financing activities: | ||
Purchases of property, plant and equipment unpaid at period end | 10 | 20.6 |
Reconciliation of cash and cash equivalents and restricted cash at September 30, 2022 and December 31, 2021: | ||
Cash and cash equivalents | 240.9 | |
Restricted cash | 0.1 | |
Total | $ 241 | $ 404 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Millions | Total | $0.001 Par Value Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings |
Beginning balance (in shares) at Dec. 31, 2020 | 54,300,000 | |||||
Beginning balance at Dec. 31, 2020 | $ 1,447 | $ 0.1 | $ (39.6) | $ 784.9 | $ (25.3) | $ 726.9 |
Beginning balance (in shares) at Dec. 31, 2020 | (1,200,000) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation activity (in shares) | 600,000 | |||||
Share-based compensation activity | 31.9 | 31.9 | ||||
Net income (loss) | 41.6 | 41.6 | ||||
Other comprehensive income (loss), net of tax | 2.2 | 2.2 | ||||
Ending balance (in shares) at Sep. 30, 2021 | 54,900,000 | |||||
Ending balance (in shares) at Sep. 30, 2021 | (1,200,000) | |||||
Ending balance at Sep. 30, 2021 | 1,522.7 | $ 0.1 | $ (39.6) | 816.8 | (23.1) | 768.5 |
Beginning balance (in shares) at Jun. 30, 2021 | 54,900,000 | |||||
Beginning balance at Jun. 30, 2021 | 1,543.7 | $ 0.1 | $ (39.6) | 804.4 | (22.4) | 801.2 |
Beginning balance (in shares) at Jun. 30, 2021 | (1,200,000) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation activity | 12.4 | 12.4 | ||||
Net income (loss) | (32.7) | (32.7) | ||||
Other comprehensive income (loss), net of tax | (0.7) | (0.7) | ||||
Ending balance (in shares) at Sep. 30, 2021 | 54,900,000 | |||||
Ending balance (in shares) at Sep. 30, 2021 | (1,200,000) | |||||
Ending balance at Sep. 30, 2021 | $ 1,522.7 | $ 0.1 | $ (39.6) | 816.8 | (23.1) | 768.5 |
Beginning balance (in shares) at Dec. 31, 2021 | 51,300,000 | 55,100,000 | ||||
Beginning balance at Dec. 31, 2021 | $ 1,619 | $ 0.1 | $ (152.2) | 829.4 | (16.1) | 957.8 |
Beginning balance (in shares) at Dec. 31, 2021 | (3,800,000) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation activity (in shares) | 400,000 | |||||
Share-based compensation activity | 30.7 | 30.7 | ||||
Net income (loss) | (135.8) | (135.8) | ||||
Repurchases of stock (in shares) | (1,800,000) | |||||
Repurchases of stock | (75.5) | $ (75.5) | ||||
Other comprehensive income (loss), net of tax | $ 10.9 | 10.9 | ||||
Ending balance (in shares) at Sep. 30, 2022 | 49,900,000 | 55,500,000 | ||||
Ending balance (in shares) at Sep. 30, 2022 | (5,600,000) | |||||
Ending balance at Sep. 30, 2022 | $ 1,449.3 | $ 0.1 | $ (227.7) | 860.1 | (5.2) | 822 |
Beginning balance (in shares) at Jun. 30, 2022 | 55,500,000 | |||||
Beginning balance at Jun. 30, 2022 | 1,513.2 | $ 0.1 | $ (227.7) | 849.2 | (6.1) | 897.7 |
Beginning balance (in shares) at Jun. 30, 2022 | (5,600,000) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation activity | 10.9 | 10.9 | ||||
Net income (loss) | (75.7) | (75.7) | ||||
Repurchases of stock (in shares) | 0 | |||||
Repurchases of stock | 0 | |||||
Other comprehensive income (loss), net of tax | $ 0.9 | 0.9 | ||||
Ending balance (in shares) at Sep. 30, 2022 | 49,900,000 | 55,500,000 | ||||
Ending balance (in shares) at Sep. 30, 2022 | (5,600,000) | |||||
Ending balance at Sep. 30, 2022 | $ 1,449.3 | $ 0.1 | $ (227.7) | $ 860.1 | $ (5.2) | $ 822 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Statement of Stockholders' Equity [Abstract] | |||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Business
Business | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | Business Overview Emergent BioSolutions Inc. (“Emergent,” the “Company,” “we,” “us,” and “our”) is a global life sciences company focused on providing innovative preparedness and response solutions addressing accidental, deliberate, and naturally occurring Public Health Threats (PHTs). The Company's solutions include a product portfolio, a product development portfolio, and a contract development and manufacturing (CDMO) services portfolio. The Company is focused on the following five distinct PHT categories: chemical, biological, radiological, nuclear and explosives (CBRNE); emerging infectious diseases (EID); travel health; emerging health crises; and acute/emergency care. The Company has a product portfolio of thirteen products (vaccines, therapeutics and drug-device combination products). The revenue generated by the products comprises a substantial portion of the Company's revenue. The Company also has one product candidate that is procured under special circumstances by the U.S. government (USG), although it is not approved by the U.S. Food and Drug Administration (FDA). The Company structures the business with a focus on markets and customers. As such, the key components of the business structure include the following three business lines: Government - Medical Countermeasures (MCM) Products, Commercial Products, and CDMO Services. The Company operates as two operating segments: 1) a products segment (Products) consisting of the Government - MCM and Commercial business lines and 2) a services segment (Services) focused on CDMO (Note 14, " Segment information" ). The Company's products and services include: Government - MCM Products ▪ AV7909 ® , is a procured product candidate being developed as a next generation anthrax vaccine for post-exposure prophylaxis of disease resulting from suspected or confirmed Bacillus anthracis exposure. The USG has largely switched from procuring BioThrax to AV7909 for the Strategic National Stockpile (SNS) prior to its approval by the FDA; ▪ BioThrax ® , the only vaccine licensed by the FDA, for the general use prophylaxis and post-exposure prophylaxis of anthrax disease; ▪ ACAM2000 ® , the only single-dose smallpox vaccine licensed by the FDA for active immunization against smallpox disease for persons determined to be at high risk for smallpox infection; ▪ BAT ® , the only heptavalent antitoxin licensed by the FDA and Health Canada for the treatment of botulism; ▪ CNJ-016 ® , also referred to as VIGIV, the only polyclonal antibody therapeutic licensed by the FDA and Health Canada to address certain complications from smallpox vaccination; ▪ Raxibacumab injection, a fully human monoclonal antibody therapeutic licensed by the FDA for the treatment and prophylaxis of inhalational anthrax; ▪ Anthrasil ® , the only polyclonal antibody therapeutic licensed by the FDA and Health Canada for the treatment of inhalational anthrax; ▪ RSDL ® , the only medical device cleared by the FDA to remove or neutralize the following chemical warfare agents from the skin: tabun, sarin, soman, cyclohexyl sarin, VR, VX, mustard gas and T-2 toxin; and ▪ Trobigard ® atropine sulfate, obidoxime chloride AUTO-INJECTOR, is a combination drug-device auto-injector procured product candidate that contains atropine sulfate and obidoxime chloride. It has not been approved by the FDA, but it is procured by certain authorized government buyers under special circumstances for potential use as a nerve agent countermeasure. ▪ TEMBEXA ® , an oral antiviral formulated as 100 mg tablets and 10 mg/mL oral suspension dosed once weekly for two weeks. It has been approved by the FDA for the treatment of human smallpox disease caused by variola virus in adult and pediatric patients, including neonates. ▪ Ebanga™ (ansuvimab-zykl, formerly referred to as mAb114) is a monoclonal antibody with antiviral activity provided through a single IV infusion for the treatment of Ebola. Under the terms of a collaboration with Ridgeback Biotherapeutics, Emergent will be responsible for the manufacturing, sale, and distribution of Ebanga™ in the United States and Canada, and Ridgeback Biotherapeutics will serve as the global access partner for Ebanga™. Commercial Products ▪ NARCAN ® (naloxone HCl) Nasal Spray, the first needle-free formulation of naloxone approved by the FDA and Health Canada, for the emergency treatment of known or suspected opioid overdose as manifested by respiratory and/or central nervous system depression; ▪ Vaxchora ® (Cholera Vaccine, Live, Oral), the only single-dose oral vaccine licensed by the FDA and the European Medicines Agency (EMA) for the prevention of cholera; and ▪ Vivotif ® (Typhoid Vaccine Live Oral Ty21a), the only oral vaccine licensed by the FDA for the prevention of typhoid fever. Services - Contract Development and Manufacturing The Company's services line focused on CDMO offerings covers development services, drug substance manufacturing, drug product manufacturing, and when necessary, suite reservations, which depending on facts and circumstances could be considered a lease. These services are provided to customers spanning the pharmaceutical and biotechnology industries as well as the USG and non-governmental organizations. The Company's technology platforms include mammalian, microbial, viral, plasma and advanced therapies utilizing the Company's core capabilities for manufacturing to third parties on a clinical and commercial (small and large) scale. Additional services include fill/finish formulation and analytical development services for injectable and other sterile products, inclusive of process design, technical transfer, manufacturing validations, aseptic filling, lyophilization, final packaging and stability studies, as well as manufacturing of vial and pre-filled syringe formats on multiple platforms. Asset Acquisition During the three months ended September 30, 2022, the Company acquired from Chimerix ("the Seller") the exclusive worldwide rights to brincidofovir, including TEMBEXA® and related assets (the “Transaction”). TEMBEXA is a medical countermeasure for smallpox approved by the FDA in June 2021. Under the terms of the Asset Purchase Agreement (the "Purchase Agreement"), the Company paid $238.0 million upon closing of the Transaction, and is subject to potential milestone payments of up to $124.0 million contingent on the potential exercise by the U.S. government of procurement options. The closing payment and the milestone payments were based on the actual procurement value of the procurement contract (the "BARDA Contract") with the Biomedical Advanced Research and Development Authority (“BARDA”). Each milestone payment is associated with the exercise of future BARDA procurement options of TEMBEXA following the BARDA Contract base period. The Seller is also eligible to receive up to $12.5 million in regulatory milestones associated with the SymBio Pharmaceuticals Ltd. brincidofovir licensing arrangements assumed by the Company in the Transaction. The milestone payments will be recorded when the associated procurement options have been exercised and/or the regulatory milestones have been met and the consideration is paid or becomes payable. |
Basis of presentation and princ
Basis of presentation and principles of consolidation | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation and principles of consolidation | Basis of presentation and principles of consolidation Basis of presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Emergent and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements included herein have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X issued by the SEC. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC. All adjustments contained in the accompanying unaudited condensed consolidated financial statements are of a normal recurring nature and are necessary to present fairly the financial position of the Company as of September 30, 2022. Interim results are not necessarily indicative of results that may be expected for any other interim period or for an entire year. Going Concern As of September 30, 2022, there is $238.0 million outstanding on the revolver loan and $371.3 million on the term loan that matures in October 2023, which is within one year of the date that the consolidated financial statements are issued for the quarter ended September 30, 2022. The Company determined that there is substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. This evaluation considered the potential mitigating effect of management’s plans that have not been fully implemented. Management may evaluate the mitigating effect of its plans to determine if it is probable that (1) the plans will be effectively implemented within one year after the date the financial statements are issued, and (2) when implemented, the plans will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. The Company's plan to alleviate the substantial doubt includes amending its existing revolver loan and term loan that are due October 2023. While the Company is in the process of and expects to replace the current credit facility before it matures, management cannot make the assumption that it is probable that the Company will be able to obtain such debt refinancing on commercially reasonable terms or at all until the new credit facility is in place. The Company is currently working with its lenders and expects to refinance the credit facility with revised terms and conditions. The extent to which the Company will be able to affect such refinancing, replacement or maturity extension on terms that are favorable or at all is dependent on a number of uncertain factors, including then-prevailing credit and other market conditions, economic conditions, particularly in the pharmaceutical and biotechnology industry, disruptions or volatility caused by factors such as COVID-19, regional conflicts, inflation, and supply chain disruptions. In addition, rising interest rates could limit our ability to refinance our existing credit facility when it matures or cause us to pay higher interest rates upon refinancing. As the replacement of the Company’s current debt facility is conditional upon the execution of agreements with new or existing third parties, which are considered outside of the Company’s control, until such time as they are completed, the refinancing cannot be considered to be probable to occur as of the date of this report. The Condensed Consolidated Financial Statements have been prepared assuming the Company will continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Significant accounting policies During the nine months ended September 30, 2022, there have been no significant changes to the Company's summary of significant accounting policies contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC that have materially impacted the presentation of the Company's financial statements. During the nine months ended September 30, 2022 , the Company revised the reporting that the chief operating decision maker ("the CODM") reviews in order to assess Company performance. The CODM manages the business with a focus on two reportable segments: 1) Products segment consisting of the Government - MCM and Commercial business lines and 2) Services segment focused on CDMO. This change is further outlined in Note 14, "Segment information". Fair value measurements Separate disclosure is required for assets and liabilities measured at fair value on a recurring basis from those measured at fair value on a non-recurring basis. The Company has cash held in money market accounts (level 1) and time deposits (level 2), contingent purchase consideration (level 3) and interest rate swaps arrangements (level 2) that are measured at fair value on a recurring basis (Note 7, "Fair value measurements" and Note 8, "Derivative instruments and hedging activities"). On a non-recurring basis, the Company measures its long-lived assets as part of impairment evaluations using fair value measurements. Goodwill is allocated to the Company's reporting units, which are one level below its operating segments. The Company evaluates goodwill and other indefinite-lived intangible assets for impairment annually as of October 1 and earlier if an event or other circumstance indicates that the carrying value of the asset may not be recoverable. If the Company believes that as a result of its qualitative assessment it is more likely than not that the fair value of a reporting unit or other indefinite-lived intangible asset is greater than its carrying amount, the quantitative impairment test is not required. If however it is determined that it is not more likely than not that the fair value of a reporting unit or other indefinite-lived intangible asset is greater than its carrying amount, a quantitative test is required. Long-lived assets such as intangible assets and property, plant and equipment are not required to be tested for impairment annually. Instead, long-lived assets are tested for impairment whenever circumstances indicate that the carrying amount of the asset may not be recoverable, such as when there is an adverse change in the market relating to those related assets. The impairment test first requires a comparison of undiscounted future cash flows to the carrying value of the asset. Determining the need for a detailed impairment analysis requires the exercise of judgment about several business factors, including the timing of expected future cash flows and assumptions about the economic environment. As of September 30, 2022 and December 31, 2021, the Company had no other significant assets or liabilities that were measured at fair value. Recently issued accounting standards From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) that the Company adopts as of the pronouncement's specified effective date. Unless otherwise discussed below, the Company does not believe that the adoption of recently issued standards have or may have a material impact on the consolidated financial statements or disclosures. Recently Adopted ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting In March 2020, the FASB issued Topic 848, which was further amended in January 2021. Topic 848 provides relief for impacted areas as it relates to impending reference rate reform. It contains optional expedients and exceptions to debt arrangements, contracts, hedging relationships, and other areas or transactions that are impacted by reference rate reform. This guidance is effective upon issuance for all entities and elections of certain optional expedients are required to apply the provisions of the guidance. As of September 30, 2022, the Company adopted this ASU with no material impact to our consolidated financial statements . |
Inventories, net
Inventories, net | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories, net | Inventories, net Inventories, net consisted of the following: September 30, 2022 December 31, 2021 Raw materials and supplies $ 277.4 $ 217.5 Work-in-process 138.3 95.8 Finished goods 130.6 37.5 Total inventories, net (1) $ 546.3 $ 350.8 (1) During the three months ended September 30, 2022, the Company acquired certain assets through an asset acquisition, the Transaction, and the related inventories of $84.8 million were included in our inventories balances as of September 30, 2022. Inventories, net is stated at the lower of cost or net realizable value |
Property, plant and equipment,
Property, plant and equipment, net | 9 Months Ended |
Sep. 30, 2022 | |
Property Plant and Equipment Income Statement Disclosures [Abstract] | |
Property, plant and equipment, net | Property, plant and equipment, net Property, plant and equipment, net consisted of the following: September 30, 2022 December 31, 2021 Land and improvements $ 53.5 $ 52.1 Buildings, building improvements and leasehold improvements 321.9 269.7 Furniture and equipment 551.2 513.5 Software 65.3 60.7 Construction-in-progress 181.0 223.2 Property, plant and equipment, gross $ 1,172.9 $ 1,119.2 Less: Accumulated depreciation & amortization (366.2) (319.1) Total property, plant and equipment, net $ 806.7 $ 800.1 As of September 30, 2022 and December 31, 2021 , construction-in-progress primarily included costs incurred related to construction to advance the Company's CDMO capabilities. Property, plant and equipment, net is stated at cost, less accumulated depreciation and amortization. During the nine months ended September 30, 2022, the Company recorded accelerated depreciation of $12.7 million reflecting a shortening of the useful life of certain property, plant and equipment which were to be used in the manufacturing process to fulfill the manufacturing services agreement with Janssen. For additional information related to the termination of the Agreement, refer to Note 10, "Revenue recognition". |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Leases | Leases The Company is the lessee for operating leases for offices, research and development facilities and manufacturing facilities. The Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use (ROU) assets and liabilities. For a discussion of lessor activities, see Note 10, "Revenue recognition". The components of lease expense were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Operating lease cost: Amortization of right-of-use assets $ 1.4 $ 1.4 $ 4.2 $ 4.2 Interest on lease liabilities 0.3 0.3 0.8 1.0 Total operating lease cost $ 1.7 $ 1.7 $ 5.0 $ 5.2 Operating lease costs are reflected as components of cost of product sales, cost of contract development and manufacturing, research and development expense and selling, general and administrative expense. Supplemental balance sheet information related to lessee activities is as follows: (In millions, except lease term and discount rate) Balance Sheet Location September 30, 2022 December 31, 2021 Operating lease right-of-use assets Other assets $ 20.5 $ 28.3 Operating lease liabilities, current portion Other current liabilities 5.7 5.8 Operating lease liabilities Other liabilities 15.8 24.2 Total operating lease liabilities $ 21.5 $ 30.0 Operating leases: Weighted average remaining lease term (years) 5.9 7.0 Weighted average discount rate 4.0 % 4.1 % |
Intangible assets
Intangible assets | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible assets The Company's intangible assets consist of products acquired via business combinations or asset acquisitions. The following table summarizes the Company's Intangible assets, net: September 30, 2022 December 31, 2021 Asset Type Estimated Life Cost Accumulated Amortization Net Cost Accumulated Amortization Net Products (1) 8-22 years $ 958.1 $ 235.4 $ 722.7 $ 798.0 $ 193.5 $ 604.5 CDMO 8 years 5.5 5.5 — 5.5 5.4 0.1 Total intangible assets $ 963.6 $ 240.9 $ 722.7 $ 803.5 $ 198.9 $ 604.6 (1) During the three months ended September 30, 2022, we acquired certain assets through asset acquisitions, and the related intangible assets were assigned to the "Products" asset type, of which $154.7 million was related to the Transaction. Amortization expense associated with the Company's intangible assets was recorded as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Amortization Expense $ 14.0 $ 14.5 $ 42.0 $ 44.5 As of September 30, 2022, the weighted average amortization period remaining for intangible assets was 11.4 years. The table below summarizes the changes in the carrying amount of the Company's goodwill balance: Goodwill, December 31, 2021 $ 224.9 Foreign currency translation adjustments — Goodwill, September 30, 2022 $ 224.9 The carrying amount of goodwill included accumulated impairments of $41.7 million as of September 30, 2022 and December 31, 2021, respectively. The Company has $224.9 million of total goodwill which is composed of our Products and Services segments. There is the risk of future impairments in our reporting units as any further deterioration in their performance compared to forecast, changes in order volumes or delivery schedules for major customers, as well as any changes in economic forecasts and expected recovery in the biopharmaceutical industry, may require the Company to complete additional impairment tests in future quarters and could result in the reporting unit’s fair value falling below carrying value in subsequent quarters. In the event the Company experiences factors that it believes indicate a decline in fair value, including negative changes to long-term growth rates or if discount rates increase, we may be required to record impairments of goodwill and other identified intangible assets. Further, if the composition of the Company’s reporting unit’s assets and liabilities were to change and result in an increase in the reporting unit’s carrying value, it could lead to additional impairment testing and further impairment losses. |
Fair value measurements
Fair value measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | Fair value measurements The table below presents information about the Company's assets and liabilities that are regularly measured and carried at fair value and indicates the level within the fair value hierarchy of the valuation techniques the Company utilized to determine fair value: September 30, 2022 December 31, 2021 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Assets: Money market accounts $ 25.3 $ 25.3 $ — $ — $ 152.4 $ 152.4 $ — $ — Time deposits 50.4 — 50.4 — 200.0 — 200.0 — Derivative instruments — — — — — — — — Total $ 75.7 $ 25.3 $ 50.4 $ — $ 352.4 $ 152.4 $ 200.0 $ — Liabilities: Contingent consideration $ 7.8 $ — $ — $ 7.8 $ 37.2 $ — $ — $ 37.2 Derivative instruments — — — — 6.1 — 6.1 — Total $ 7.8 $ — $ — $ 7.8 $ 43.3 $ — $ 6.1 $ 37.2 Contingent consideration Contingent consideration liabilities associated with business combinations are measured at fair value. These liabilities represent an obligation of the Company to transfer additional assets to the selling shareholders and owners if future events occur or conditions are met. These liabilities associated with business combinations are measured at fair value at inception and at each subsequent reporting date. The changes in the fair value are primarily due to the expected amount and timing of future net sales, which are inputs that have no observable market. Any changes in fair value for the contingent consideration liabilities related to the Company’s products are classified in the Company's statement of operations as cost of product sales. The table below is a reconciliation of the beginning and ending balance of the Company's contingent consideration liability: Liability for Contingent Consideration Balance at December 31, 2021 $ 37.2 Change in fair value 2.4 Settlements (31.8) Balance at September 30, 2022 $ 7.8 As of September 30, 2022 and December 31, 2021, the current portion of the contingent consideration liability was $3.5 million and $32.7 million, respectively, and was included in other current liabilities on the condensed consolidated balance sheets. The non-current portion of the contingent consideration liability is included in other liabilities on the condensed consolidated balance sheets. The recurring Level 3 fair value measurements for the Company's contingent consideration liability include the following significant unobservable inputs: Contingent Consideration Liability Fair Value as of September 30, 2022 Valuation Technique Unobservable Input Range Weighted Average Revenue milestone and royalty based 7.8 Discounted cash flow Discount rate 10.1% 10.1% Probability of payment 25% - 50% 40.0% Projected year of payment 2022 - 2028 2024 Derivative instruments Refer to Note 8, "Derivative instruments and hedging activities" for more information about the Company's derivative instruments. Non-variable rate debt As of September 30, 2022 and December 31, 2021, t he fair value of the Company's 3.875% Senior Unsecured Notes was $299.9 million and $433.3 million, respectively. The fair value was determined through market sources, which are level 2 inputs and directly observable. The carrying amounts of the Company’s other long-term variable interest rate debt arrangements approximate their fair values (see Note 9, "Debt"). |
Derivative instruments and hedg
Derivative instruments and hedging activities | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative instruments and hedging activities | Derivative instruments and hedging activities Risk management objective of using derivatives The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity and credit risk primarily by managing the amount, sources and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company has entered into interest rate swaps to manage exposures that arise from payments of variable interest rate debt associated with the Company's senior secured credit agreements. If current fair values of designated interest rate swaps remained static over the next twelve months, the Company would reclassify $9.0 million of net deferred gains from accumulated other comprehensive loss into the condensed consolidated statement of operations over the next twelve-month period. All outstanding cash flow hedges mature in October 2023. As of September 30, 2022, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk: (in millions, except number of instruments) Number of Instruments Notional Interest rate swaps 7 $350.0 The table below presents the fair value of the Company’s derivative financial instruments designated as hedges as well as their classification on the balance sheets: Asset Derivatives Liability Derivatives September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Balance Sheet Location Fair Value Balance Sheet Location Fair Value Interest Rate Swaps Other Current Assets $ 8.9 Other Current Assets $ — Other Current Liabilities $ — Other Current Liabilities $ 4.5 Other Assets $ 0.4 Other Assets $ — Other Liabilities $ — Other Liabilities $ 1.6 The valuation of the interest rate swaps is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each interest rate swap. This analysis reflects the contractual terms of the interest rate swaps, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. We incorporate credit valuation adjustments in the fair value measurements to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk. These credit valuation adjustments were not significant inputs for the fair value calculations for the periods presented. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as the posting of collateral, thresholds, mutual puts and guarantees. The valuation of interest rate swaps fall into Level 2 in the fair value hierarchy. The table below presents the effect of cash flow hedge accounting on accumulated other comprehensive loss. Cumulative Amount of Gain/(Loss) Recognized in OCI on Derivatives Location of Loss Reclassified from Amount of Loss Reclassified from Accumulated OCL into Income (Loss) September 30, December 31, Accumulated OCL into Income (Loss) Nine Months Ended September 30, 2022 2021 2022 2021 Interest Rate Swaps $ 9.3 $ (6.1) Interest expense $ (1.9) $ (4.3) |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt The components of debt were as follows: September 30, 2022 December 31, 2021 Senior secured credit agreement - Term loan due 2023 $ 371.3 $ 396.6 Senior secured credit agreement - Revolver loan due 2023 238.0 — 3.875% Senior Unsecured Notes due 2028 450.0 450.0 Other 3.0 3.0 Total debt $ 1,062.3 $ 849.6 Current portion of long-term debt, net of debt issuance costs (21.2) (31.6) Unamortized debt issuance costs (9.0) (8.5) Non-current portion of debt $ 1,032.1 $ 809.4 As of September 30, 2022 and December 31, 2021 there was $238.0 million and no outstanding revolver balance, respectively. The Company classifies debt issuance costs associated with the revolver loan as other current assets and other assets on the Company's consolidated balance sheets. As of September 30, 2022, the Company had $4.1 million and $4.9 million of debt issuance costs associated with the revolver loan classified as other current assets and other assets, respectively. As of December 31, 2021, the Company had approximately $2.0 million and $1.6 million of debt issuance costs associated with the revolver loan that were classified as other current assets and other assets, respectively. 3.875% Senior Unsecured Notes due 2028 On August 7, 2020, the Company completed its offering of $450.0 million aggregate principal amount of 3.875% Senior Unsecured Notes due 2028 (the 2028 Notes) of which the majority of the net proceeds were used to pay down the Revolving Credit Facility (as defined below). Interest on the 2028 Notes is payable on February 15th and August 15th of each year until maturity, beginning on February 15, 2021. The 2028 Notes will mature on August 15, 2028. On or after August 15, 2023, the Company may redeem the 2028 Notes, in whole or in part, at the redemption prices set forth in the related Indenture, plus accrued and unpaid interest. Prior to August 15, 2023 the Company may redeem all or a portion of the 2028 Notes at a redemption price equal to 100% of the principal amount of the 2028 Notes plus a “make-whole” premium and accrued and unpaid interest. Prior to August 15, 2023, the Company may redeem up to 40% of the aggregate principal amount of the 2028 Notes using the net cash proceeds of certain equity offerings at the redemption price set forth in the related Indenture. Upon the occurrence of a change of control, the Company must offer to repurchase the 2028 Notes at a purchase price of 101% of the principal amount of such 2028 Notes plus accrued and unpaid interest. Negative covenants in the Indenture governing the 2028 Notes, among other things, limit the ability of the Company to incur indebtedness and liens, dispose of assets, make investments, enter into certain merger or consolidation transactions and make restricted payments. Senior secured credit agreement Also on August 7, 2020, the Company entered into a Second Amendment (the “Credit Agreement Amendment”) to its senior secured credit agreement, dated October 15, 2018, with multiple lending institutions relating to the Company’s senior secured credit facilities (the “Credit Agreement,” and as amended, the “Amended Credit Agreement”), consisting of a senior revolving credit facility (the “Revolving Credit Facility”) and senior term loan facility (the “Term Loan Facility,” and together with the Revolving Credit Facility, the “Senior Secured Credit Facilities”). The Credit Agreement Amendment amended, among other things, the definition of incremental facilities limit, the consolidated net leverage ratio financial covenant by increasing the maximum level, increased the permissible applicable margins based on the Company’s consolidated net leverage ratio and increased the commitment fee that the Company is required to pay in respect of the average daily unused commitments under the Revolving Credit Facility, depending on the Company’s consolidated net leverage ratio. The Amended Credit Agreement includes (i) a Revolving Credit Facility of $600.0 million and (ii) a Term Loan Facility with a principal amount of $450.0 million. The Company may request incremental term loan facilities or increases in the Revolving Credit Facility (each an "Incremental Loan") as long as certain requirements involving the Company's net leverage ratio will be maintained on a pro forma basis. Borrowings under the Revolving Credit Facility and the Term Loan Facility bear interest at a rate per annum equal to (a) a eurocurrency rate plus a margin ranging from 1.25% to 2.25% per annum, depending on the Company's consolidated net leverage ratio or (b) a base rate (which is the highest of the prime rate, the federal funds rate plus 0.50%, and a eurocurrency rate for an interest period of one month plus 1% plus a margin ranging from 0.25% to 1.25%, depending on the Company's consolidated net leverage ratio). The Company is required to make quarterly payments on the last business day of each calendar quarter under the Amended Credit Agreement for accrued and unpaid interest on the outstanding principal balance, based on the above interest rates. In addition, the Company is required to pay commitment fees ranging from 0.15% to 0.35% per annum, depending on the Company's consolidated net leverage ratio, for the average daily unused commitments under the Revolving Credit Facility. The Company is to repay the outstanding principal amount of the Term Loan Facility in quarterly installments on the last business day of each calendar quarter based on an annual percentage equal to 2.5% of the original principal amount of the Term Loan Facility during each of the first two years of the Term Loan Facility, 5% of the original principal amount of the Term Loan Facility during the third year of the Term Loan Facility and 7.5% of the original principal amount of the Term Loan Facility during each year of the remainder of the term of the Term Loan Facility until the maturity date of the Term Loan Facility, at which time the entire unpaid principal balance of the Term Loan Facility will be due and payable. The Company has the right to prepay the Term Loan Facility without premium or penalty. The Revolving Credit Facility and the Term Loan Facility mature on October 13, 2023. The Amended Credit Agreement also requires mandatory prepayments of the Term Loan Facility in the event the Company or its Subsidiaries (a) incur indebtedness not otherwise permitted under the Amended Credit Agreement or (b) receive cash proceeds in excess of $100.0 million during the term of the Credit Agreement from certain dispositions of property or from casualty events involving their property, subject to certain reinvestment rights. The financial covenants under the Amended Credit Agreement currently require the quarterly presentation of a minimum consolidated 12-month rolling debt service coverage ratio of 2.50 to 1.00, and a maximum consolidated net leverage ratio of 4.50 to 1.00 (subject to an increase to 5.00 to 1.00 for an applicable four quarter period, at the election of the Company, in connection with a permitted acquisition having an aggregate consideration in excess of $75.0 million). Negative covenants in the Amended Credit Agreement, among other things, limit the ability of the Company to incur indebtedness and liens, dispose of assets, make investments, enter into certain merger or consolidation transactions and make restricted payments. As of the date of these financial statements, the Company is in compliance with all affirmative and negative covenants. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition The Company operates as two operating segments (Note 14, "Segment information " ). The Company's revenues disaggregated by the major sources were as follows: Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 U.S. Government Non-U.S. Government Total U.S. Government Non-U.S. Government Total Product sales, net $ 33.4 $ 152.8 $ 186.2 $ 129.9 $ 140.6 $ 270.5 CDMO: Services — 36.2 36.2 — 112.6 112.6 Leases — 0.2 0.2 (86.0) 15.0 (71.0) Total CDMO $ — $ 36.4 $ 36.4 $ (86.0) $ 127.6 $ 41.6 Contracts and grants 16.4 1.0 17.4 16.3 0.6 16.9 Total revenues $ 49.8 $ 190.2 $ 240.0 $ 60.2 $ 268.8 $ 329.0 Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 U.S. Non-U.S. Total U.S. Non-U.S. Total Product sales, net $ 255.0 $ 405.5 $ 660.5 $ 252.6 $ 337.0 $ 589.6 CDMO: Services — 90.7 90.7 — 283.7 283.7 Leases — 4.7 4.7 81.9 50.7 132.6 Total CDMO $ — $ 95.4 $ 95.4 $ 81.9 $ 334.4 $ 416.3 Contracts and grants 31.7 2.6 34.3 60.7 2.9 63.6 Total revenues $ 286.7 $ 503.5 $ 790.2 $ 395.2 $ 674.3 $ 1,069.5 Termination of manufacturing services agreement with Janssen Pharmaceuticals, Inc. On July 2, 2020, the Company, through its wholly-owned subsidiary, Emergent Manufacturing Operations Baltimore, LLC, entered into a manufacturing services agreement with Janssen, one of the Janssen Pharmaceutical Companies of Johnson & Johnson, for large-scale drug substance manufacturing of Johnson & Johnson’s investigational SARS-CoV-2 vaccine, Ad26.COV2-S, recombinant based on the AdVac technology (the “Product”). On June 6, 2022, the Company provided to Janssen a notice (the “Notice”) of material breach of the Agreement for, among other things, failure by Janssen (i) to provide the Company the requisite forecasts of the required quantity of Product to be purchased by Janssen under the Agreement and (ii) to confirm Janssen’s intent to not purchase the requisite minimum quantity of the Product pursuant to the Agreement and instead, wind-down the Agreement ahead of fulfilling these minimum requirements. Later on June 6, 2022, the Company received from Janssen a purported written notice of termination (the “Janssen Notice”) of the Agreement for asserted material breaches of the Agreement by the Company, including alleged failure by the Company to perform its obligations in compliance with current good manufacturing practices ("cGMP") or other applicable laws and regulations and alleged failure by the Company to supply Janssen with the Product. Janssen alleged that the Company’s breaches were not curable and that, therefore, termination of the Agreement would be effective as of July 6, 2022. The Company disputes Janssen's assertions and allegations, including Janssen's ability to effect termination pursuant to the Janssen Notice. The Company and Janssen disagree on the monetary amounts that are due to the Company as a result of termination by any means. The Company believes the amounts due to the Company include, but are not limited to, compensation for services provided, reimbursement for raw materials purchased and non-cancelable orders, and fees for early termination. Janssen has alleged that no additional amount is due to the Company and that the Company should pay Janssen an unspecified amount as a result of the Company's alleged failure to perform under the Agreement. The Company has not recorded any contingent liabilities related to Janssen's allegations as the Company believes they are without merit and intends to vigorously defend the Company's position during the dispute resolution process including through mediation and/or arbitration. During the three months ended September 30, 2022, there were no impacts on previously recognized revenue or depreciation related to the conclusion of the Agreement. As of September 30, 2022, the Company has no billed or unbilled net accounts receivable related to the Agreement. The Company has $131.0 million of raw materials inventory recorded in its condensed consolidated balance sheet as of September 30, 2022, representing materials purchased for the Agreement which Janssen has not reimbursed. The Company evaluated the net realizable value of this inventory as of September 30, 2022, concluding that because the Agreement specifies the Company is entitled to, among other things, reimbursement of raw materials and non-cancelable orders in the event of a contract termination for any reason, the Company is entitled to payment from Janssen for these raw materials. Therefore, this inventory remains an asset on the condensed consolidated balance sheet as of September 30, 2022. Additionally, the Company has an immaterial amount of non-cancelable orders as of September 30, 2022 which have not been received and Janssen has not reimbursed. The Company also recorded approximately $13.6 million to other assets, which relates to termination penalties and certain inventory related items. BARDA COVID-19 Development Public-Private Partnership In 2020, the Company announced the issuance of a task order under its existing Center for Innovation in Advanced Development and Manufacturing ("CIADM") agreement with BARDA for COVID-19 vaccine development and manufacturing (the "BARDA COVID-19 Development Public Private Partnership"). The BARDA COVID-19 Development Public Private Partnership is considered a lease and is accounted for under ASC 842. The initial task order had a contract value of up to $628.2 million and included the reservation of manufacturing capacity and accelerated expansion of fill/finish capacity valued at $542.7 million and $85.5 million, respectively. Subsequently, the task order was expanded to include incremental capital activities which increased the value to $650.8 million. On November 1, 2021, the Compa ny and BARDA mutually agreed to the completion of the Company's CIADM contract and associated task orders, including the BARDA COVID-19 Development Public Private Partnership. The Company did not recognize lease revenues under this arrangement during the three and nine months ended September 30, 2022. During the three and nine months ended September 30, 2021, the Company reversed lease revenues of $86.0 million and recognized lease revenues of $81.9 million, respectively, related to this arrangement. CDMO operating leases Certain multi-year CDMO service arrangements with commercial customers include operating leases whereby the customer has the right to direct the use of and obtain substantially all of the economic benefits of specific manufacturing suites operated by the Company. The associated revenue is recognized on a straight-line basis over the term of the lease. The remaining term on the Company's operating lease components approximates 2.5 years. The Company utilizes a cost-plus model to determine the stand-alone selling price of the lease component to allocate contract consideration between the lease and non-lease components . Excluding future amounts related to the Janssen Agreement as discussed above, the Company estimates future operating lease revenues to be $0.2 million in the remainder of 2022, $5.1 million in 2023, $0.9 million in 2024, $0.9 million in 2025 and $2.7 million in years beyon d 2025. Transaction price allocated to remaining performance obligations As of September 30, 2022, the Company has future contract value on unsatisfied performance obligations of approximately $453.9 million associated with all arrangements entered into by the Company. The Company expects to recognize a majority of the $453.9 million of unsatisfied performance obligations within the next 24 months. The amount and timing of revenue recognition for unsatisfied performance obligations can change. The future revenues associat ed with unsatisfied performance obligations exclude the value of unexercised option periods in the Company’s revenue arrangements. Often the timing of manufacturing activities changes based on customer needs and resource availability. Government funding appropriations can impact the timing of product deliveries. The success of the Company's development activities that receive development funding support from the USG under development contracts can also impact the timing of revenue recognition. Contract assets The Company considers accounts receivable and deferred costs associated with revenue generating contracts, which are not included in inventory or property, plant and equipment and the Company does not currently have a contractual right to bill, to be contract assets. As of September 30, 2022 and December 31, 2021, the Company had $33.9 million and $21.5 million, respectively, of contract assets recorded within accounts receivable, net on the condensed consolidated balance sheets. Contract liabilities When performance obligations are not transferred to a customer at the end of a reporting period, cash received associated with amounts allocated to those performance obligations is reflected as contract liabilities on the condensed consolidated balance sheets and is deferred until control of these performance obligations is transferred to the customer. The following table presents the roll forward of the contract liability balances: December 31, 2021 $ 16.4 Deferral of revenue 30.4 Revenue recognized (16.5) September 30, 2022 $ 30.3 As of September 30, 2022 and December 31, 2021, the current portion of contract liabilities was $24.8 million and $11.7 million, respectively, and was included in other current liabilities on the balance sheet. Accounts receivable Accounts receivable, including unbilled accounts receivable contract assets, consist of the following: September 30, 2022 December 31, 2021 Billed, net $ 119.0 $ 224.9 Unbilled 72.3 49.8 Total accounts receivable, net $ 191.3 $ 274.7 As of September 30, 2022 and December 31, 2021, the allowances for doubtful accounts was $0.7 million and $3.2 million, respectively. |
Income taxes
Income taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes The estimated effective annual tax rate as of September 30, 2022 and 2021 for the years ended December 31, 2022 and 2021, excluding the impact of discrete adjustments, was 3% and 24%, respectively . The decrease in the estimated effective annual tax rate is primarily due to decreased profitability, the impact of certain permanent adjustments, and a valuation allowance charge. The Company recorded discrete tax benefits of $10.9 million and $10.3 million for the three and nine months ended September 30, 2022, respectively, and $1.7 million and $7.2 million, for the three and nine months ended September 30, 2021, respectively. The discrete tax benefit in 2022 was primarily due to return to provision adjustments and the benefit of the release of an indemnified uncertain tax position offset by share-based compensation activity. The net discrete benefits in 2021 were primarily due to share-based compensation activity. The Company establishes valuation allowances for deferred income tax assets in accordance with U.S. GAAP, which provides that such valuation allowances shall be established unless realization of the income tax benefits is more likely than not. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. At each reporting period, the Company considers the scheduled reversal of deferred tax liabilities and assets, available taxes in carryback periods, tax planning strategies and projected future taxable income in making this assessment. As of September 30, 2022, the Company determined that it was more likely than not that deferred tax assets in the U.S. would not be realized due to reductions in estimates of future profitability in the U.S. Accordingly, the Company recorded a provision of $19.2 million associated with the establishment of a valuation allowance on those deferred tax assets. |
Net Income (loss) per share
Net Income (loss) per share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Net Income (loss) per share | Net income (loss) per share The following table presents the calculation of basic and diluted net income (loss) per share: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Numerator: Net income (loss) $ (75.7) $ (32.7) $ (135.8) $ 41.6 Denominator: Weighted-average number of shares—basic 49.9 53.7 50.2 53.6 Dilutive securities—equity awards — — — 0.7 Weighted-average number of shares—diluted 49.9 53.7 50.2 54.3 Net income (loss) per share - basic $ (1.52) $ (0.61) $ (2.71) $ 0.78 Net income (loss) per share - diluted $ (1.52) $ (0.61) $ (2.71) $ 0.77 Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed using the treasury method by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period, adjusted for the potential dilutive effect of other securities if such securities were converted or exercised and are not anti-dilutive. No adjustment for the potential dilutive effect of dilutive securities is reported for the three and nine months ended September 30, 2022 as the effect would have been anti-dilutive due to the Company's net loss. In certain instances, awards may be anti-dilutive even if the average market price exceeds the exercise price when the sum of the assumed proceeds exceeds the difference between the market price and the exercise price. The following table presents the share-based awards that are not considered in the diluted income (loss) per share calculation generally because the exercise price of the awards was greater than the average per share closing price during the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Anti-dilutive stock awards 3.3 1.4 2.6 0.6 |
Equity
Equity | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Equity | Equity Repurchase programs On November 11, 2021, the Company announced that its Board of Directors authorized management to repurchase up to an aggregate of $250.0 million of Common Stock under a board-approved Share Repurchase Program, of which $187.9 million has been utilized to purchase 4.4 million shares as of September 30, 2022. During the three months ended September 30, 2022, there were no shares repurchased. During the nine months ended September 30, 2022, the Company has utilized $75.5 million to purchase 1.8 million shares. The Share Repurchase Program does not obligate the Company to acquire any specific number of shares. Repurchased shares will be available for use in connection with the Company's stock plans and for other corporate purposes. Share-based compensation During the nine months ended September 30, 2022, the Company granted stock options to purchase 0.7 million shares of common stock and 1.5 million restricted and performance stock units under the Emergent BioSolutions Inc. Stock Incentive Plan. Typically, the stock option and restricted stock unit grants vest over three equal annual installments beginning on the day prior to the anniversary of the grant date. The performance stock units settle in stock at the end of the three-year performance period based on the Company's results compared to the performance criteria. Share-based compensation expense was recorded in the following financial statement line items: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Cost of product sales $ 1.8 $ 1.3 $ 5.4 $ 4.5 Cost of CDMO 0.4 0.3 1.4 0.8 Research and development 1.3 1.4 3.9 4.5 Selling, general and administrative 7.7 7.4 22.7 22.5 Total share-based compensation expense $ 11.2 $ 10.4 $ 33.4 $ 32.3 Accumulated other comprehensive loss, net of tax The following table includes changes in accumulated other comprehensive loss, net of tax by component: Defined Benefit Pension Plan Derivative Instruments Foreign Currency Translation Adjustments Total Balance, December 31, 2021 $ (4.0) $ (4.5) $ (7.6) $ (16.1) Other comprehensive income (loss) before reclassifications — 9.4 (0.4) 9.0 Amounts reclassified from accumulated other comprehensive loss — 1.9 — 1.9 Net current period other comprehensive income (loss) — 11.3 (0.4) 10.9 Balance, September 30, 2022 $ (4.0) $ 6.8 $ (8.0) $ (5.2) Balance, June 30, 2022 $ (4.0) $ 4.6 $ (6.7) $ (6.1) Other comprehensive income (loss) before reclassifications — 2.6 (1.3) 1.3 Amounts reclassified from accumulated other comprehensive loss — (0.4) — (0.4) Net current period other comprehensive income (loss) — 2.2 (1.3) 0.9 Balance, September 30, 2022 $ (4.0) $ 6.8 $ (8.0) $ (5.2) Balance, December 31, 2020 $ (7.7) $ (11.0) $ (6.6) $ (25.3) Other comprehensive loss before reclassifications — (0.7) (1.4) (2.1) Amounts reclassified from accumulated other comprehensive loss — 4.3 — 4.3 Net current period other comprehensive income (loss) — 3.6 (1.4) 2.2 Balance, September 30, 2021 $ (7.7) $ (7.4) $ (8.0) $ (23.1) Balance, June 30, 2021 $ (7.7) $ (6.4) $ (8.3) $ (22.4) Other comprehensive income (loss) before reclassifications — (2.3) 0.3 (2.0) Amounts reclassified from accumulated other comprehensive loss — 1.3 — 1.3 Net current period other comprehensive income (loss) — (1.0) 0.3 (0.7) Balance, September 30, 2021 $ (7.7) $ (7.4) $ (8.0) $ (23.1) The tables below present the tax effects related to each component of other comprehensive income (loss): Three Months Ended September 30, 2022 2021 Pretax Tax Expense Net of tax Pretax Tax Expense Net of tax Derivative instruments $ 3.0 $ (0.8) $ 2.2 $ 1.3 $ (2.3) $ (1.0) Foreign currency translation adjustments 0.1 (1.4) (1.3) 0.3 — 0.3 Total adjustments $ 3.1 $ (2.2) $ 0.9 $ 1.6 $ (2.3) $ (0.7) Nine Months Ended September 30, 2022 2021 Pretax Tax Expense Net of tax Pretax Tax Expense Net of tax Derivative instruments $ 15.4 $ (4.1) $ 11.3 $ 4.9 $ (1.3) $ 3.6 Foreign currency translation adjustments 2.1 (2.5) (0.4) (1.4) — (1.4) Total adjustments $ 17.5 $ (6.6) $ 10.9 $ 3.5 $ (1.3) $ 2.2 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Segment InformationThe Company reports segment information based on the internal reporting used by management for making decisions and assessing performance. During the first quarter of 2022, the Company revised the reporting that the CODM reviews in order to assess Company performance. The CODM manages the business with a focus on two reportable segments: 1) Products segment consisting of the Government - MCM and Commercial business lines and 2) Services segment focused on CDMO. The Company evaluates the performance of these reportable segments based on revenue and adjusted gross margin. Segment revenue includes external customer sales, but it does not include inter-segment services. Adjusted gross margin for each segment is segment revenue less segment cost of sales reduced for significant one-time events. We do not allocate research and development, selling, general and administrative costs, amortization of intangibles assets, interest and other income (expense) or taxes to operating segments in the management reporting reviewed by the CODM. The accounting policies for segment reporting are the same as for the Company as a whole. The Company has recast the related historical information for consistency. The following tables include segment revenues and a reconciliation of the Company's segment adjusted gross margin to the condensed consolidated statement of operations for each of the Company's reporting segments: Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 Products Services Other Consolidated Products Services (1) Other Consolidated Revenues $ 186.2 $ 36.4 $ 17.4 $ 240.0 $ 270.5 $ 41.6 $ 16.9 $ 329.0 Less: Contracts and grants revenue — — (17.4) (17.4) — — (16.9) (16.9) Cost of product sales (85.5) — — (85.5) (103.2) — — (103.2) Cost of CDMO — (63.1) — (63.1) — (114.3) — (114.3) Gross margin 100.7 (26.7) — 74.0 167.3 (72.7) — 94.6 Changes in fair value of contingent consideration 0.6 — — 0.6 0.9 — — 0.9 Adjusted gross margin $ 101.3 $ (26.7) $ — $ 74.6 $ 168.2 $ (72.7) $ — $ 95.5 (1) Services revenue and Services adjusted gross margin for the three months ended September 30, 2021 includes the impact of the reversal of $86.0 million of CDMO leases revenues related to the BARDA COVID-19 Development Public Private Partnership which ended in November 2021. Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 Products Services Other Consolidated Products Services (1) Other Consolidated Revenues $ 660.5 $ 95.4 $ 34.3 $ 790.2 $ 589.6 $ 416.3 $ 63.6 $ 1,069.5 Less: Contracts and grants revenue — — (34.3) (34.3) — — (63.6) (63.6) Cost of product sales (256.8) — — (256.8) (237.0) — — (237.0) Cost of CDMO — (217.5) — (217.5) — (307.6) — (307.6) Gross margin 403.7 (122.1) — 281.6 352.6 108.7 — 461.3 Changes in fair value of contingent consideration 2.4 — — 2.4 2.6 — — 2.6 Adjusted gross margin $ 406.1 $ (122.1) $ — $ 284.0 $ 355.2 $ 108.7 $ — $ 463.9 (1) Services revenue and Services adjusted gross margin for the nine months ended September 30, 2021 includes the impact of $81.9 million of CDMO leases revenues related to the BARDA COVID-19 Development Public Private Partnership which ended in November 2021. The following table includes depreciation expense for each segment: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Depreciation: Products $ 11.5 $ 5.0 $ 25.6 $ 20.9 Services 5.6 8.4 34.2 21.3 Other 3.3 1.0 5.7 4.3 Total $ 20.4 $ 14.4 $ 65.5 $ 46.5 The Company manages its assets on a total company basis, not by operating segment, as the Company's operating assets are shared or commingled. Therefore, the Company's CODM does not regularly review any asset information by operating segment and, accordingly, the Company does not report asset information by operating segment. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Securities and shareholder litigation With respect to the specific legal proceedings and claims described below, unless otherwise noted, the amount or range of possible losses is not reasonably estimable. There can be no assurance that the settlement, resolution, or other outcome of one or more matters, including the matters set forth below, during any subsequent reporting period will not have a material adverse effect on the Company's results of operations or cash flows for that period or on the Company's financial condition. On April 20, 2021, May 14, 2021, and June 2, 2021, putative class action lawsuits were filed against the Company and certain of its current and former senior officers in the United States District Court for the District of Maryland on behalf of purchasers of the Company’s common stock, seeking to pursue remedies under the Securities Exchange Act of 1934. These complaints were filed by Palm Tran, Inc. – Amalgamated Transit Union Local 1577 Pension Plan; Alan I. Roth; and Stephen M. Weiss, respectively. The complaints allege, among other things, that the defendants made false and misleading statements about the Company's manufacturing capabilities with respect to COVID-19 vaccine bulk drug substance (referred to herein as "CDMO Manufacturing Capabilities"). These cases were consolidated on December 23, 2021, under the caption In re Emergent BioSolutions Inc. Securities Litigation , No. 8:21-cv-00955-PWG (the "Federal Securities Class Action"). The Lead Plaintiffs in the consolidated matter are Nova Scotia Health Employees’ Pension Plan and The City of Fort Lauderdale Police & Firefighters’ Retirement System. The defendants filed a motion to dismiss on May 19, 2022 and the Lead Plaintiff filed an opposition to that motion on July 19, 2022. The defendants believe that the allegations in the complaints are without merit and intend to defend the matters vigorously. Given the uncertainty of litigation, the preliminary stage of the cases, and the legal standards that must be met for, among other things, class certification and success on the merits, the Company cannot reasonably estimate the possible loss or range of loss, if any, that may result from the consolidated action. On June 29, 2021, Lincolnshire Police Pension Fund (“Lincolnshire”), and on August 16, 2021, Pooja Sayal, filed putative shareholder derivative lawsuits in the United States District Court for the District of Maryland on behalf of the Company against certain of the Company's current and former officers and directors for breach of fiduciary duties, waste of corporate assets, and unjust enrichment, each allegation related to the CDMO Manufacturing Capabilities. In addition to monetary damages, the complaints seek the implementation of multiple corporate governance and internal policy changes. On November 16, 2021, the cases were consolidated under the caption In re Emergent BioSolutions Inc. Stockholder Derivative Litigation, Master Case No. 8:21-cv-01595-PWG. On January 3, 2022, the Lincolnshire complaint was designated as the operative complaint in the consolidated action. On April 13, 2022 the Court approved the parties joint stipulation to and stay of the proceedings and discovery until the close of fact discovery in the Federal Securities Class Action. The defendants believe that the allegations in the complaints are without merit and intend to defend the matter vigorously. On September 15, 2021, September 16, 2021 and November 12, 2021, putative shareholder derivative lawsuits were filed by Chang Kyum Kim, Mark Nevins and Employees Retirement System of the State of Rhode Island, North Collier Fire Control and Rescue District Firefighters Pension Plan, and Pembroke Pines Firefighters & Police Officers Pension Fund, respectively, in The Court of Chancery of the State of Delaware on behalf of the Company against certain of its current and former officers and directors for breach of fiduciary duties, unjust enrichment and insider trading, each allegation related to the CDMO Manufacturing Capabilities. In addition to monetary damages, the complaints seek the implementation of multiple corporate governance and internal policy changes. On February 2, 2022, the cases were consolidated under the caption In re Emergent BioSolutions, Inc. Derivative Litigation , C.A. No. 2021-0974-MTZ with the institutional investors as co-lead plaintiffs. On March 4, 2022, the defendants’ filed a motion to dismiss the complaint. Ruling on this motion is stayed pursuant to a March 29, 2022 order staying all proceedings pending a final, non-appealable judgment in the Federal Securities Class Action. On December 3, 2021, December 22, 2021 and January 18, 2022, putative shareholder derivative lawsuits were filed by Zachary Elton, Eric White and Jeffrey Reynolds in the Circuit Court for Montgomery County, Maryland on behalf of the Company against certain of its current and former officers and directors for breach of fiduciary duty, unjust enrichment, waste of corporate assets, failing to maintain internal controls, making or causing to be made false and/or misleading statements and material omissions, insider trading and otherwise violating the federal securities laws, each allegation related to the CDMO Manufacturing Capabilities. The complaints seek monetary and punitive damages. On February 22, 2022, the Court entered an order consolidating these actions under case number C-15-21-CV-000496. On March 9, 2022, the parties filed a Joint Stipulation of Stay of Proceedings and Discovery, pursuant to which the parties agreed to stay all proceedings until 30 calendar days after a ruling on the defendants’ motion to dismiss the Federal Securities Class Action. The Court approved the Joint Stipulation on March 14, 2022. In addition to the above actions, the Company has received preliminary inquiries and subpoenas to produce documents related to these matters from Representative Carolyn Maloney and Representative Jim Clyburn, members of the House Committee on Oversight and Reform and the Select Subcommittee on the Coronavirus Crisis, Senator Murray of the Committee on Health, Education, Labor and Pensions, the Department of Justice, the SEC, the Maryland Attorney General’s Office, and the New York Attorney General’s Office. The Company is producing and has produced documents as required in response and will continue to cooperate with these government inquiries. Intellectual property ANDA litigation - Teva 2mg |
Basis of presentation and pri_2
Basis of presentation and principles of consolidation (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | The accompanying unaudited condensed consolidated financial statements include the accounts of Emergent and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements included herein have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X issued by the SEC. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC.All adjustments contained in the accompanying unaudited condensed consolidated financial statements are of a normal recurring nature and are necessary to present fairly the financial position of the Company as of September 30, 2022. Interim results are not necessarily indicative of results that may be expected for any other interim period or for an entire year. |
Fair value measurements | Separate disclosure is required for assets and liabilities measured at fair value on a recurring basis from those measured at fair value on a non-recurring basis. The Company has cash held in money market accounts (level 1) and time deposits (level 2), contingent purchase consideration (level 3) and interest rate swaps arrangements (level 2) that are measured at fair value on a recurring basis (Note 7, "Fair value measurements" and Note 8, "Derivative instruments and hedging activities"). On a non-recurring basis, the Company measures its long-lived assets as part of impairment evaluations using fair value measurements. Goodwill is allocated to the Company's reporting units, which are one level below its operating segments. The Company evaluates goodwill and other indefinite-lived intangible assets for impairment annually as of October 1 and earlier if an event or other circumstance indicates that the carrying value of the asset may not be recoverable. If the Company believes that as a result of its qualitative assessment it is more likely than not that the fair value of a reporting unit or other indefinite-lived intangible asset is greater than its carrying amount, the quantitative impairment test is not required. If however it is determined that it is not more likely than not that the fair value of a reporting unit or other indefinite-lived intangible asset is greater than its carrying amount, a quantitative test is required. Long-lived assets such as intangible assets and property, plant and equipment are not required to be tested for impairment annually. Instead, long-lived assets are tested for impairment whenever circumstances indicate that the carrying amount of the asset may not be recoverable, such as when there is an adverse change in the market relating to those related assets. The impairment test first requires a comparison of undiscounted future cash flows to the carrying value of the asset. Determining the need for a detailed impairment analysis requires the exercise of judgment about several business factors, including the timing of expected future cash flows and assumptions about the economic environment. |
Recently issued accounting standards | Recently Adopted ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting In March 2020, the FASB issued Topic 848, which was further amended in January 2021. Topic 848 provides relief for impacted areas as it relates to impending reference rate reform. It contains optional expedients and exceptions to debt arrangements, contracts, hedging relationships, and other areas or transactions that are impacted by reference rate reform. This guidance is effective upon issuance for all entities and elections of certain optional expedients are required to apply the provisions of the guidance. As of September 30, 2022, the Company adopted this ASU with no material impact to our consolidated financial statements . |
Derivatives | The valuation of the interest rate swaps is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each interest rate swap. This analysis reflects the contractual terms of the interest rate swaps, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. We incorporate credit valuation adjustments in the fair value measurements to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk. These credit valuation adjustments were not significant inputs for the fair value calculations for the periods presented. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as the posting of collateral, thresholds, mutual puts and guarantees. The valuation of interest rate swaps fall into Level 2 in the fair value hierarchy. |
Segment Information | The Company reports segment information based on the internal reporting used by management for making decisions and assessing performance. During the first quarter of 2022, the Company revised the reporting that the CODM reviews in order to assess Company performance. The CODM manages the business with a focus on two reportable segments: 1) Products segment consisting of the Government - MCM and Commercial business lines and 2) Services segment focused on CDMO. The Company evaluates the performance of these reportable segments based on revenue and adjusted gross margin. Segment revenue includes external customer sales, but it does not include inter-segment services. Adjusted gross margin for each segment is segment revenue less segment cost of sales reduced for significant one-time events. We do not allocate research and development, selling, general and administrative costs, amortization of intangibles assets, interest and other income (expense) or taxes to operating segments in the management reporting reviewed by the CODM. The accounting policies for segment reporting are the same as for the Company as a whole. The Company has recast the related historical information for consistency. |
Inventories, net (Tables)
Inventories, net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories, net consisted of the following: September 30, 2022 December 31, 2021 Raw materials and supplies $ 277.4 $ 217.5 Work-in-process 138.3 95.8 Finished goods 130.6 37.5 Total inventories, net (1) $ 546.3 $ 350.8 (1) During the three months ended September 30, 2022, the Company acquired certain assets through an asset acquisition, the Transaction, and the related inventories of $84.8 million were included in our inventories balances as of September 30, 2022. |
Property, plant and equipment_2
Property, plant and equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property Plant and Equipment Income Statement Disclosures [Abstract] | |
Property, plant and equipment | Property, plant and equipment, net consisted of the following: September 30, 2022 December 31, 2021 Land and improvements $ 53.5 $ 52.1 Buildings, building improvements and leasehold improvements 321.9 269.7 Furniture and equipment 551.2 513.5 Software 65.3 60.7 Construction-in-progress 181.0 223.2 Property, plant and equipment, gross $ 1,172.9 $ 1,119.2 Less: Accumulated depreciation & amortization (366.2) (319.1) Total property, plant and equipment, net $ 806.7 $ 800.1 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Lease, Cost | The components of lease expense were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Operating lease cost: Amortization of right-of-use assets $ 1.4 $ 1.4 $ 4.2 $ 4.2 Interest on lease liabilities 0.3 0.3 0.8 1.0 Total operating lease cost $ 1.7 $ 1.7 $ 5.0 $ 5.2 |
Schedule of Leases Supplemental Balance Sheets | Supplemental balance sheet information related to lessee activities is as follows: (In millions, except lease term and discount rate) Balance Sheet Location September 30, 2022 December 31, 2021 Operating lease right-of-use assets Other assets $ 20.5 $ 28.3 Operating lease liabilities, current portion Other current liabilities 5.7 5.8 Operating lease liabilities Other liabilities 15.8 24.2 Total operating lease liabilities $ 21.5 $ 30.0 Operating leases: Weighted average remaining lease term (years) 5.9 7.0 Weighted average discount rate 4.0 % 4.1 % |
Intangible assets (Tables)
Intangible assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The following table summarizes the Company's Intangible assets, net: September 30, 2022 December 31, 2021 Asset Type Estimated Life Cost Accumulated Amortization Net Cost Accumulated Amortization Net Products (1) 8-22 years $ 958.1 $ 235.4 $ 722.7 $ 798.0 $ 193.5 $ 604.5 CDMO 8 years 5.5 5.5 — 5.5 5.4 0.1 Total intangible assets $ 963.6 $ 240.9 $ 722.7 $ 803.5 $ 198.9 $ 604.6 (1) During the three months ended September 30, 2022, we acquired certain assets through asset acquisitions, and the related intangible assets were assigned to the "Products" asset type, of which $154.7 million was related to the Transaction. |
Finite-lived Intangible Assets Amortization Expense | Amortization expense associated with the Company's intangible assets was recorded as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Amortization Expense $ 14.0 $ 14.5 $ 42.0 $ 44.5 |
Schedule of Goodwill | The table below summarizes the changes in the carrying amount of the Company's goodwill balance: Goodwill, December 31, 2021 $ 224.9 Foreign currency translation adjustments — Goodwill, September 30, 2022 $ 224.9 |
Fair value measurements (Tables
Fair value measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Recurring and Nonrecurring | The table below presents information about the Company's assets and liabilities that are regularly measured and carried at fair value and indicates the level within the fair value hierarchy of the valuation techniques the Company utilized to determine fair value: September 30, 2022 December 31, 2021 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Assets: Money market accounts $ 25.3 $ 25.3 $ — $ — $ 152.4 $ 152.4 $ — $ — Time deposits 50.4 — 50.4 — 200.0 — 200.0 — Derivative instruments — — — — — — — — Total $ 75.7 $ 25.3 $ 50.4 $ — $ 352.4 $ 152.4 $ 200.0 $ — Liabilities: Contingent consideration $ 7.8 $ — $ — $ 7.8 $ 37.2 $ — $ — $ 37.2 Derivative instruments — — — — 6.1 — 6.1 — Total $ 7.8 $ — $ — $ 7.8 $ 43.3 $ — $ 6.1 $ 37.2 |
Reconciliation of Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) | The table below is a reconciliation of the beginning and ending balance of the Company's contingent consideration liability: Liability for Contingent Consideration Balance at December 31, 2021 $ 37.2 Change in fair value 2.4 Settlements (31.8) Balance at September 30, 2022 $ 7.8 |
Fair Value Measurement Inputs and Valuation Techniques | The recurring Level 3 fair value measurements for the Company's contingent consideration liability include the following significant unobservable inputs: Contingent Consideration Liability Fair Value as of September 30, 2022 Valuation Technique Unobservable Input Range Weighted Average Revenue milestone and royalty based 7.8 Discounted cash flow Discount rate 10.1% 10.1% Probability of payment 25% - 50% 40.0% Projected year of payment 2022 - 2028 2024 |
Derivative instruments and he_2
Derivative instruments and hedging activities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | As of September 30, 2022, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk: (in millions, except number of instruments) Number of Instruments Notional Interest rate swaps 7 $350.0 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The table below presents the fair value of the Company’s derivative financial instruments designated as hedges as well as their classification on the balance sheets: Asset Derivatives Liability Derivatives September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Balance Sheet Location Fair Value Balance Sheet Location Fair Value Interest Rate Swaps Other Current Assets $ 8.9 Other Current Assets $ — Other Current Liabilities $ — Other Current Liabilities $ 4.5 Other Assets $ 0.4 Other Assets $ — Other Liabilities $ — Other Liabilities $ 1.6 |
Derivative Instruments, Gain (Loss) | The table below presents the effect of cash flow hedge accounting on accumulated other comprehensive loss. Cumulative Amount of Gain/(Loss) Recognized in OCI on Derivatives Location of Loss Reclassified from Amount of Loss Reclassified from Accumulated OCL into Income (Loss) September 30, December 31, Accumulated OCL into Income (Loss) Nine Months Ended September 30, 2022 2021 2022 2021 Interest Rate Swaps $ 9.3 $ (6.1) Interest expense $ (1.9) $ (4.3) |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The components of debt were as follows: September 30, 2022 December 31, 2021 Senior secured credit agreement - Term loan due 2023 $ 371.3 $ 396.6 Senior secured credit agreement - Revolver loan due 2023 238.0 — 3.875% Senior Unsecured Notes due 2028 450.0 450.0 Other 3.0 3.0 Total debt $ 1,062.3 $ 849.6 Current portion of long-term debt, net of debt issuance costs (21.2) (31.6) Unamortized debt issuance costs (9.0) (8.5) Non-current portion of debt $ 1,032.1 $ 809.4 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The Company's revenues disaggregated by the major sources were as follows: Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 U.S. Government Non-U.S. Government Total U.S. Government Non-U.S. Government Total Product sales, net $ 33.4 $ 152.8 $ 186.2 $ 129.9 $ 140.6 $ 270.5 CDMO: Services — 36.2 36.2 — 112.6 112.6 Leases — 0.2 0.2 (86.0) 15.0 (71.0) Total CDMO $ — $ 36.4 $ 36.4 $ (86.0) $ 127.6 $ 41.6 Contracts and grants 16.4 1.0 17.4 16.3 0.6 16.9 Total revenues $ 49.8 $ 190.2 $ 240.0 $ 60.2 $ 268.8 $ 329.0 Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 U.S. Non-U.S. Total U.S. Non-U.S. Total Product sales, net $ 255.0 $ 405.5 $ 660.5 $ 252.6 $ 337.0 $ 589.6 CDMO: Services — 90.7 90.7 — 283.7 283.7 Leases — 4.7 4.7 81.9 50.7 132.6 Total CDMO $ — $ 95.4 $ 95.4 $ 81.9 $ 334.4 $ 416.3 Contracts and grants 31.7 2.6 34.3 60.7 2.9 63.6 Total revenues $ 286.7 $ 503.5 $ 790.2 $ 395.2 $ 674.3 $ 1,069.5 |
Rollforward of Contract Liabilities | The following table presents the roll forward of the contract liability balances: December 31, 2021 $ 16.4 Deferral of revenue 30.4 Revenue recognized (16.5) September 30, 2022 $ 30.3 |
Schedule of Accounts Receivable, Net | Accounts receivable, including unbilled accounts receivable contract assets, consist of the following: September 30, 2022 December 31, 2021 Billed, net $ 119.0 $ 224.9 Unbilled 72.3 49.8 Total accounts receivable, net $ 191.3 $ 274.7 |
Net Income (loss) per share (Ta
Net Income (loss) per share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Income per Share | The following table presents the calculation of basic and diluted net income (loss) per share: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Numerator: Net income (loss) $ (75.7) $ (32.7) $ (135.8) $ 41.6 Denominator: Weighted-average number of shares—basic 49.9 53.7 50.2 53.6 Dilutive securities—equity awards — — — 0.7 Weighted-average number of shares—diluted 49.9 53.7 50.2 54.3 Net income (loss) per share - basic $ (1.52) $ (0.61) $ (2.71) $ 0.78 Net income (loss) per share - diluted $ (1.52) $ (0.61) $ (2.71) $ 0.77 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table presents the share-based awards that are not considered in the diluted income (loss) per share calculation generally because the exercise price of the awards was greater than the average per share closing price during the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Anti-dilutive stock awards 3.3 1.4 2.6 0.6 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount | Share-based compensation expense was recorded in the following financial statement line items: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Cost of product sales $ 1.8 $ 1.3 $ 5.4 $ 4.5 Cost of CDMO 0.4 0.3 1.4 0.8 Research and development 1.3 1.4 3.9 4.5 Selling, general and administrative 7.7 7.4 22.7 22.5 Total share-based compensation expense $ 11.2 $ 10.4 $ 33.4 $ 32.3 |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table includes changes in accumulated other comprehensive loss, net of tax by component: Defined Benefit Pension Plan Derivative Instruments Foreign Currency Translation Adjustments Total Balance, December 31, 2021 $ (4.0) $ (4.5) $ (7.6) $ (16.1) Other comprehensive income (loss) before reclassifications — 9.4 (0.4) 9.0 Amounts reclassified from accumulated other comprehensive loss — 1.9 — 1.9 Net current period other comprehensive income (loss) — 11.3 (0.4) 10.9 Balance, September 30, 2022 $ (4.0) $ 6.8 $ (8.0) $ (5.2) Balance, June 30, 2022 $ (4.0) $ 4.6 $ (6.7) $ (6.1) Other comprehensive income (loss) before reclassifications — 2.6 (1.3) 1.3 Amounts reclassified from accumulated other comprehensive loss — (0.4) — (0.4) Net current period other comprehensive income (loss) — 2.2 (1.3) 0.9 Balance, September 30, 2022 $ (4.0) $ 6.8 $ (8.0) $ (5.2) Balance, December 31, 2020 $ (7.7) $ (11.0) $ (6.6) $ (25.3) Other comprehensive loss before reclassifications — (0.7) (1.4) (2.1) Amounts reclassified from accumulated other comprehensive loss — 4.3 — 4.3 Net current period other comprehensive income (loss) — 3.6 (1.4) 2.2 Balance, September 30, 2021 $ (7.7) $ (7.4) $ (8.0) $ (23.1) Balance, June 30, 2021 $ (7.7) $ (6.4) $ (8.3) $ (22.4) Other comprehensive income (loss) before reclassifications — (2.3) 0.3 (2.0) Amounts reclassified from accumulated other comprehensive loss — 1.3 — 1.3 Net current period other comprehensive income (loss) — (1.0) 0.3 (0.7) Balance, September 30, 2021 $ (7.7) $ (7.4) $ (8.0) $ (23.1) |
Comprehensive Income (Loss) | The tables below present the tax effects related to each component of other comprehensive income (loss): Three Months Ended September 30, 2022 2021 Pretax Tax Expense Net of tax Pretax Tax Expense Net of tax Derivative instruments $ 3.0 $ (0.8) $ 2.2 $ 1.3 $ (2.3) $ (1.0) Foreign currency translation adjustments 0.1 (1.4) (1.3) 0.3 — 0.3 Total adjustments $ 3.1 $ (2.2) $ 0.9 $ 1.6 $ (2.3) $ (0.7) Nine Months Ended September 30, 2022 2021 Pretax Tax Expense Net of tax Pretax Tax Expense Net of tax Derivative instruments $ 15.4 $ (4.1) $ 11.3 $ 4.9 $ (1.3) $ 3.6 Foreign currency translation adjustments 2.1 (2.5) (0.4) (1.4) — (1.4) Total adjustments $ 17.5 $ (6.6) $ 10.9 $ 3.5 $ (1.3) $ 2.2 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | The following tables include segment revenues and a reconciliation of the Company's segment adjusted gross margin to the condensed consolidated statement of operations for each of the Company's reporting segments: Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 Products Services Other Consolidated Products Services (1) Other Consolidated Revenues $ 186.2 $ 36.4 $ 17.4 $ 240.0 $ 270.5 $ 41.6 $ 16.9 $ 329.0 Less: Contracts and grants revenue — — (17.4) (17.4) — — (16.9) (16.9) Cost of product sales (85.5) — — (85.5) (103.2) — — (103.2) Cost of CDMO — (63.1) — (63.1) — (114.3) — (114.3) Gross margin 100.7 (26.7) — 74.0 167.3 (72.7) — 94.6 Changes in fair value of contingent consideration 0.6 — — 0.6 0.9 — — 0.9 Adjusted gross margin $ 101.3 $ (26.7) $ — $ 74.6 $ 168.2 $ (72.7) $ — $ 95.5 (1) Services revenue and Services adjusted gross margin for the three months ended September 30, 2021 includes the impact of the reversal of $86.0 million of CDMO leases revenues related to the BARDA COVID-19 Development Public Private Partnership which ended in November 2021. Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 Products Services Other Consolidated Products Services (1) Other Consolidated Revenues $ 660.5 $ 95.4 $ 34.3 $ 790.2 $ 589.6 $ 416.3 $ 63.6 $ 1,069.5 Less: Contracts and grants revenue — — (34.3) (34.3) — — (63.6) (63.6) Cost of product sales (256.8) — — (256.8) (237.0) — — (237.0) Cost of CDMO — (217.5) — (217.5) — (307.6) — (307.6) Gross margin 403.7 (122.1) — 281.6 352.6 108.7 — 461.3 Changes in fair value of contingent consideration 2.4 — — 2.4 2.6 — — 2.6 Adjusted gross margin $ 406.1 $ (122.1) $ — $ 284.0 $ 355.2 $ 108.7 $ — $ 463.9 (1) Services revenue and Services adjusted gross margin for the nine months ended September 30, 2021 includes the impact of $81.9 million of CDMO leases revenues related to the BARDA COVID-19 Development Public Private Partnership which ended in November 2021. |
Schedule of Segment Reporting Information, by Segment | The following table includes depreciation expense for each segment: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Depreciation: Products $ 11.5 $ 5.0 $ 25.6 $ 20.9 Services 5.6 8.4 34.2 21.3 Other 3.3 1.0 5.7 4.3 Total $ 20.4 $ 14.4 $ 65.5 $ 46.5 |
Business (Details)
Business (Details) treatmentCourse in Millions, $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 USD ($) treatmentCourse | Sep. 30, 2022 category segment businessLine product productCandidate | |
Asset Acquisition [Line Items] | ||
Number of categories of public health threats | category | 5 | |
Number of revenue generating products | product | 13 | |
Number of product candidates | productCandidate | 1 | |
Number of business lines | businessLine | 3 | |
Number of operating segments | segment | 2 | |
Chimerix Asset Acquisition | ||
Asset Acquisition [Line Items] | ||
Payments to acquire productive assets | $ 238 | |
Asset acquisition, domestic royalty percentage | 20% | |
Asset acquisition, treatment volume threshold | treatmentCourse | 1.7 | |
Asset acquisition, international royalty percentage | 15% | |
Chimerix Asset Acquisition | Milestone Payments | ||
Asset Acquisition [Line Items] | ||
Asset acquisition, consideration transferred, contingent consideration | $ 124 | |
Chimerix Asset Acquisition | Regulatory Milestones | ||
Asset Acquisition [Line Items] | ||
Asset acquisition, consideration transferred, contingent consideration | $ 12.5 |
Basis of presentation and pri_3
Basis of presentation and principles of consolidation (Details) | 9 Months Ended | |
Sep. 30, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | ||
Long-term debt | $ 1,062,300,000 | $ 849,600,000 |
Number of reportable segments | segment | 2 | |
Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 371,300,000 | 396,600,000 |
Senior secured credit agreement - Revolver loan due 2023 | Line of Credit | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 238,000,000 | $ 0 |
Inventories, net - Schedule of
Inventories, net - Schedule of Inventory (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory [Line Items] | ||
Raw materials and supplies | $ 277.4 | $ 217.5 |
Work-in-process | 138.3 | 95.8 |
Finished goods | 130.6 | 37.5 |
Total inventories, net | 546.3 | $ 350.8 |
Chimerix Asset Acquisition | ||
Inventory [Line Items] | ||
Asset acquisition, inventory acquired | $ 84.8 |
Property, plant and equipment_3
Property, plant and equipment, net - Schedule of Property, Plant, and Equipment (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment, gross | $ 1,172.9 | $ 1,119.2 |
Less: Accumulated depreciation & amortization | (366.2) | (319.1) |
Total property, plant and equipment, net | 806.7 | 800.1 |
Land and improvements | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment, gross | 53.5 | 52.1 |
Buildings, building improvements and leasehold improvements | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment, gross | 321.9 | 269.7 |
Furniture and equipment | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment, gross | 551.2 | 513.5 |
Software | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment, gross | 65.3 | 60.7 |
Construction-in-progress | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment, gross | $ 181 | $ 223.2 |
Property, plant and equipment -
Property, plant and equipment - Narrative (Details) - Services - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Line Items] | ||||
Cost of goods and services sold | $ 63.1 | $ 114.3 | $ 217.5 | $ 307.6 |
Jansen Pharmaceuticals, Inc. | ||||
Property, Plant and Equipment [Line Items] | ||||
Cost of goods and services sold | $ 12.7 |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Operating lease cost: | ||||
Amortization of right-of-use assets | $ 1.4 | $ 1.4 | $ 4.2 | $ 4.2 |
Interest on lease liabilities | 0.3 | 0.3 | 0.8 | 1 |
Total operating lease cost | $ 1.7 | $ 1.7 | $ 5 | $ 5.2 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Operating Leases | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other assets | Other assets |
Operating lease right-of-use assets | $ 20.5 | $ 28.3 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other current liabilities | Other current liabilities |
Operating lease liabilities, current portion | $ 5.7 | $ 5.8 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other liabilities | Other liabilities |
Operating lease liabilities | $ 15.8 | $ 24.2 |
Total operating lease liabilities | $ 21.5 | $ 30 |
Operating leases: | ||
Weighted average remaining lease term (years) | 5 years 10 months 24 days | 7 years |
Weighted average discount rate | 4% | 4.10% |
Leases - Narrative (Details)
Leases - Narrative (Details) - Rockville Manufacturing Facility $ in Millions | 3 Months Ended |
Sep. 30, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | |
Operating lease right-of-use asset removal | $ 3.5 |
Operating lease liability removal | $ 3.4 |
Intangible assets - Schedule of
Intangible assets - Schedule of Finite-lived Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Cost | $ 963.6 | $ 963.6 | $ 803.5 |
Accumulated Amortization | 240.9 | 240.9 | 198.9 |
Net | 722.7 | 722.7 | 604.6 |
Chimerix Asset Acquisition | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets acquired | 154.7 | ||
Products | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 958.1 | 958.1 | 798 |
Accumulated Amortization | 235.4 | 235.4 | 193.5 |
Net | 722.7 | $ 722.7 | 604.5 |
Products | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Life | 8 years | ||
Products | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Life | 22 years | ||
CDMO | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Life | 8 years | ||
Cost | 5.5 | $ 5.5 | 5.5 |
Accumulated Amortization | 5.5 | 5.5 | 5.4 |
Net | $ 0 | $ 0 | $ 0.1 |
Intangible assets - Finite-live
Intangible assets - Finite-lived Intangible Assets Amortization Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization Expense | $ 14 | $ 14.5 | $ 42 | $ 44.5 |
Intangible assets - Narrative (
Intangible assets - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Weighted average amortization period | 11 years 4 months 24 days | |
Goodwill, impaired, accumulated impairment loss | $ 41.7 | $ 41.7 |
Goodwill | $ 224.9 | $ 224.9 |
Intangible assets - Goodwill Ro
Intangible assets - Goodwill Roll Forward (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, December 31, 2021 | $ 224.9 |
Foreign currency translation adjustments | 0 |
Goodwill, September 30, 2022 | $ 224.9 |
Fair value measurements - Fair
Fair value measurements - Fair Value Hierarchy of Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments | $ 0 | $ 0 |
Total | 75.7 | 352.4 |
Contingent consideration | 7.8 | 37.2 |
Derivative instruments | 0 | 6.1 |
Total | 7.8 | 43.3 |
Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments | 0 | 0 |
Total | 25.3 | 152.4 |
Contingent consideration | 0 | 0 |
Derivative instruments | 0 | 0 |
Total | 0 | 0 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments | 0 | 0 |
Total | 50.4 | 200 |
Contingent consideration | 0 | 0 |
Derivative instruments | 0 | 6.1 |
Total | 0 | 6.1 |
Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments | 0 | 0 |
Total | 0 | 0 |
Contingent consideration | 7.8 | 37.2 |
Derivative instruments | 0 | 0 |
Total | 7.8 | 37.2 |
Money market accounts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 25.3 | 152.4 |
Money market accounts | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 25.3 | 152.4 |
Money market accounts | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Money market accounts | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Time deposits | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 50.4 | 200 |
Time deposits | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Time deposits | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 50.4 | 200 |
Time deposits | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 0 | $ 0 |
Fair value measurements - Conti
Fair value measurements - Contingent Consideration Roll Forward (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Unobservable Input Reconciliation [Roll Forward] | ||||
Balance, beginning of period | $ 37.2 | |||
Change in fair value | $ 0.6 | $ 0.9 | 2.4 | $ 2.6 |
Settlements | (31.8) | |||
Balance, end of period | $ 7.8 | $ 7.8 |
Fair value measurements - Addit
Fair value measurements - Additional Information (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | Aug. 07, 2020 |
Debt Instrument [Line Items] | |||
Business combination, contingent consideration, liability, current | $ 3.5 | $ 32.7 | |
3.875% Senior Unsecured Notes due 2028 | Senior Notes | |||
Debt Instrument [Line Items] | |||
Stated percentage | 3.875% | 3.875% | 3.875% |
Long-term debt, fair value | $ 299.9 | $ 433.3 |
Fair value measurements - Fai_2
Fair value measurements - Fair Value Level 3 of Significant Unobservable Inputs (Details) $ in Millions | Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value of contingent purchase consideration | $ 7.8 | $ 37.2 |
Fair Value, Inputs, Level 3 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value of contingent purchase consideration | 7.8 | $ 37.2 |
Fair Value, Inputs, Level 3 | Fair Value, Recurring | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value of contingent purchase consideration | $ 7.8 | |
Discounted cash flow | Fair Value, Inputs, Level 3 | Fair Value, Recurring | Discount rate | Maximum | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Business combination, contingent consideration, liability, measurement input | 0.101 | |
Discounted cash flow | Fair Value, Inputs, Level 3 | Fair Value, Recurring | Discount rate | Weighted Average | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Business combination, contingent consideration, liability, measurement input | 0.101 | |
Discounted cash flow | Fair Value, Inputs, Level 3 | Fair Value, Recurring | Probability of payment | Minimum | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Business combination, contingent consideration, liability, measurement input | 0.25 | |
Discounted cash flow | Fair Value, Inputs, Level 3 | Fair Value, Recurring | Probability of payment | Maximum | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Business combination, contingent consideration, liability, measurement input | 0.50 | |
Discounted cash flow | Fair Value, Inputs, Level 3 | Fair Value, Recurring | Probability of payment | Weighted Average | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Business combination, contingent consideration, liability, measurement input | 0.400 |
Derivative instruments and he_3
Derivative instruments and hedging activities - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Interest rate swaps | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Net deferred losses from accumulated other comprehensive loss | $ 9 |
Derivative instruments and he_4
Derivative instruments and hedging activities - Derivative Designated as Cash Flow Hedges (Details) - Designated as Hedging Instrument - Interest rate swaps $ in Millions | Sep. 30, 2022 USD ($) instrument |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Number of Instruments | instrument | 7 |
Notional | $ | $ 350 |
Derivative instruments and he_5
Derivative instruments and hedging activities - Fair Value by Balance Sheet Location (Details) - Interest rate swaps - Designated as Hedging Instrument - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | $ 8.9 | $ 0 |
Other Assets | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 0.4 | 0 |
Other Current Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives | 0 | 4.5 |
Other Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives | $ 0 | $ 1.6 |
Derivative instruments and he_6
Derivative instruments and hedging activities - Cash Flow Hedging on AOCI (Details) - Interest rate swaps - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Amount of Loss Reclassified from Accumulated OCL into Income (Loss) | $ 9.3 | $ (6.1) | |
Cash Flow Hedging | Interest expense | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Amount of Loss Reclassified from Accumulated OCL into Income (Loss) | $ (1.9) | $ (4.3) |
Debt - Schedule (Details)
Debt - Schedule (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | Aug. 07, 2020 |
Debt Instrument [Line Items] | |||
Total debt | $ 1,062.3 | $ 849.6 | |
Current portion of long-term debt, net of debt issuance costs | (21.2) | (31.6) | |
Unamortized debt issuance costs | (9) | (8.5) | |
Non-current portion of debt | 1,032.1 | 809.4 | |
Term Loan | |||
Debt Instrument [Line Items] | |||
Total debt | $ 371.3 | $ 396.6 | |
3.875% Senior Unsecured Notes due 2028 | Senior Notes | |||
Debt Instrument [Line Items] | |||
Stated percentage | 3.875% | 3.875% | 3.875% |
Total debt | $ 450 | $ 450 | $ 450 |
Other | |||
Debt Instrument [Line Items] | |||
Total debt | $ 3 | $ 3 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Aug. 07, 2020 | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | |||
Long-term debt | $ 1,062,300,000 | $ 849,600,000 | |
Debt issuance costs, current, net | 2,000,000 | ||
Debt issuance costs, net | 1,600,000 | ||
Debt instrument, covenant, net leverage ratio rolling period | 12 months | ||
Debt instrument, covenant, net leverage ratio adjustment period | 12 months | ||
Other Current Assets | |||
Debt Instrument [Line Items] | |||
Debt issuance costs, current, net | 4,100,000 | ||
Other Assets | |||
Debt Instrument [Line Items] | |||
Debt issuance costs, net | 4,900,000 | ||
3.875% Senior Unsecured Notes due 2028 | Prior to August 15, 2023 | |||
Debt Instrument [Line Items] | |||
Debt instrument, redemption price, percentage | 100% | ||
3.875% Senior Unsecured Notes due 2028 | Senior Notes | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 450,000,000 | $ 450,000,000 | $ 450,000,000 |
Stated percentage | 3.875% | 3.875% | 3.875% |
3.875% Senior Unsecured Notes due 2028 | Maximum | Prior to August 15, 2023 | |||
Debt Instrument [Line Items] | |||
Debt instrument, redemption price, percentage | 40% | ||
3.875% Senior Unsecured Notes due 2028 | Maximum | Upon the occurrence of a change in control | |||
Debt Instrument [Line Items] | |||
Debt instrument, redemption price, percentage | 101% | ||
Amended Credit Agreement | Minimum | |||
Debt Instrument [Line Items] | |||
Commitment fee percentage | 0.15% | ||
Debt covenant, consolidated debt service coverage ratio, minimum | 2.50 | ||
Amended Credit Agreement | Maximum | |||
Debt Instrument [Line Items] | |||
Commitment fee percentage | 0.35% | ||
Debt instrument, covenant, net leverage ratio, maximum | 4.50 | ||
Debt instrument, covenant, net leverage ratio, adjustment | 5 | ||
Amended Credit Agreement | Eurocurrency | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 1% | ||
Amended Credit Agreement | Eurocurrency | Minimum | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 1.25% | ||
Amended Credit Agreement | Eurocurrency | Maximum | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 2.25% | ||
Amended Credit Agreement | Federal Funds Rate | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 0.50% | ||
Amended Credit Agreement | Base Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 0.25% | ||
Amended Credit Agreement | Base Rate | Maximum | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 1.25% | ||
Revolving Credit Facility | Line of Credit | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 238,000,000 | $ 0 | |
Revolving Credit Facility | Amended Credit Agreement | |||
Debt Instrument [Line Items] | |||
Current borrowing capacity | $ 600,000,000 | ||
Term Loan Facility | Amended Credit Agreement | |||
Debt Instrument [Line Items] | |||
Current borrowing capacity | $ 450,000,000 | ||
Percentage of original principal amount required to repay in the first two years | 2.50% | ||
Percentage of original principal amount required to repay during the third year | 5% | ||
Percentage of original principal amount required to repay remaining year | 7.50% | ||
Cash proceeds excess amount from dispositions of property or casualty events subject to certain reinvestment right | $ 100,000,000 | ||
Debt instrument, covenant, consideration threshold | $ 75,000,000 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) segment | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | Oct. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Disaggregation of Revenue [Line Items] | |||||||
Number of operating segments | segment | 2 | ||||||
Other assets | $ 35,700,000 | $ 35,700,000 | $ 57,300,000 | ||||
Revenue, remaining performance obligation, amount | 453,900,000 | 453,900,000 | |||||
Contract with customer, asset, noncurrent | 33,900,000 | 33,900,000 | 21,500,000 | ||||
Current portion of contract liabilities | 24,800,000 | 24,800,000 | 11,700,000 | ||||
Allowance for doubtful accounts receivable | 700,000 | 700,000 | $ 3,200,000 | ||||
Leases | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Lease revenue | 200,000 | $ (71,000,000) | 4,700,000 | $ 132,600,000 | |||
Jansen Pharmaceuticals, Inc. | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Inventory, raw materials, net of reserves | 131,000,000 | 131,000,000 | |||||
Other assets | 13,600,000 | 13,600,000 | |||||
BARDA | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Lessor, operating lease, payments to be received | $ 650,800,000 | $ 628,200,000 | |||||
U.S. Government | Leases | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Lease revenue | $ 0 | (86,000,000) | $ 0 | 81,900,000 | |||
Non-U.S. Government | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Lessee, operating lease, remaining lease term | 2 years 6 months | 2 years 6 months | |||||
Non-U.S. Government | Leases | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Lease revenue | $ 200,000 | $ 15,000,000 | $ 4,700,000 | $ 50,700,000 | |||
Reservation Of Manufacturing Capacity | BARDA | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Lessor, operating lease, payments to be received | 542,700,000 | ||||||
Accelerated Expansion Of Fill/Finish Capacity | BARDA | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Lessor, operating lease, payments to be received | $ 85,500,000 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 240,000,000 | $ 329,000,000 | $ 790,200,000 | $ 1,069,500,000 |
U.S. Government | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 49,800,000 | 60,200,000 | 286,700,000 | 395,200,000 |
Non-U.S. Government | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 190,200,000 | 268,800,000 | 503,500,000 | 674,300,000 |
Product sales, net | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 186,200,000 | 270,500,000 | 660,500,000 | 589,600,000 |
Product sales, net | U.S. Government | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 33,400,000 | 129,900,000 | 255,000,000 | 252,600,000 |
Product sales, net | Non-U.S. Government | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 152,800,000 | 140,600,000 | 405,500,000 | 337,000,000 |
Total CDMO | ||||
Disaggregation of Revenue [Line Items] | ||||
Total CDMO | 36,400,000 | 41,600,000 | 95,400,000 | 416,300,000 |
Total CDMO | U.S. Government | ||||
Disaggregation of Revenue [Line Items] | ||||
Total CDMO | 0 | (86,000,000) | 0 | 81,900,000 |
Total CDMO | Non-U.S. Government | ||||
Disaggregation of Revenue [Line Items] | ||||
Total CDMO | 36,400,000 | 127,600,000 | 95,400,000 | 334,400,000 |
Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 36,200,000 | 112,600,000 | 90,700,000 | 283,700,000 |
Services | U.S. Government | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Services | Non-U.S. Government | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 36,200,000 | 112,600,000 | 90,700,000 | 283,700,000 |
Leases | ||||
Disaggregation of Revenue [Line Items] | ||||
Leases | 200,000 | (71,000,000) | 4,700,000 | 132,600,000 |
Leases | U.S. Government | ||||
Disaggregation of Revenue [Line Items] | ||||
Leases | 0 | (86,000,000) | 0 | 81,900,000 |
Leases | Non-U.S. Government | ||||
Disaggregation of Revenue [Line Items] | ||||
Leases | 200,000 | 15,000,000 | 4,700,000 | 50,700,000 |
Contracts and grants | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 17,400,000 | 16,900,000 | 34,300,000 | 63,600,000 |
Contracts and grants | U.S. Government | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 16,400,000 | 16,300,000 | 31,700,000 | 60,700,000 |
Contracts and grants | Non-U.S. Government | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 1,000,000 | $ 600,000 | $ 2,600,000 | $ 2,900,000 |
Revenue Recognition - Performan
Revenue Recognition - Performance Obligations (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 453.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 24 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | Leases | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 0.2 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Leases | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 5.1 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Leases | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 0.9 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Leases | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 0.9 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Leases | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 2.7 |
Revenue, remaining performance obligation, expected timing of satisfaction, period |
Revenue Recognition - Remaining
Revenue Recognition - Remaining Performance Obligation (Details) | Sep. 30, 2022 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 24 months |
Revenue Recognition - Contract
Revenue Recognition - Contract Liabilities (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Change in Contract With Customer, Liability [Roll Forward] | |
Beginning of period | $ 16.4 |
Deferral of revenue | 30.4 |
Revenue recognized | (16.5) |
End of period | $ 30.3 |
Revenue Recognition - Accounts
Revenue Recognition - Accounts Receivable (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Billed, net | $ 119 | $ 224.9 |
Unbilled | 72.3 | 49.8 |
Total accounts receivable, net | $ 191.3 | $ 274.7 |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes [Line Items] | ||||||
Effective annual tax rate | 24% | |||||
Discrete tax expense (benefits) | $ (10.9) | $ 1.7 | $ (10.3) | $ 7.2 | ||
Deferred tax assets, valuation allowance | $ 19.2 | $ 19.2 | ||||
Forecast | ||||||
Income Taxes [Line Items] | ||||||
Effective annual tax rate | 3% |
Net Income (loss) per share (De
Net Income (loss) per share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator: | ||||
Net income (loss) | $ (75.7) | $ (32.7) | $ (135.8) | $ 41.6 |
Denominator: | ||||
Weighted-average number of shares-basic (in shares) | 49.9 | 53.7 | 50.2 | 53.6 |
Dilutive securities-equity awards (in shares) | 0 | 0 | 0 | 0.7 |
Weighted-average number of shares-diluted (in shares) | 49.9 | 53.7 | 50.2 | 54.3 |
Net income per share - basic (in dollars per share) | $ (1.52) | $ (0.61) | $ (2.71) | $ 0.78 |
Net income per share - diluted (in dollars per share) | $ (1.52) | $ (0.61) | $ (2.71) | $ 0.77 |
Anti-dilutive stock awards (in shares) | 3.3 | 1.4 | 2.6 | 0.6 |
Equity - Narrative (Details)
Equity - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 11 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | Nov. 11, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock repurchase program, authorized amount | $ 250 | |||
Repurchases of stock | $ 0 | $ 75.5 | ||
Treasury Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Repurchases of stock | $ 75.5 | $ 187.9 | ||
Stock repurchased during period, shares (in shares) | 0 | 1,800,000 | 4,400,000 | |
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options granted (in shares) | 700,000 | |||
Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock units granted (in shares) | 1,500,000 | |||
Award vesting period | 3 years | |||
Tranche One | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting rights, percentage | 33.33% | |||
Tranche One | Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting rights, percentage | 33.33% | |||
Tranche Two | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting rights, percentage | 33.33% | |||
Tranche Two | Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting rights, percentage | 33.33% | |||
Tranche Three | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting rights, percentage | 33.33% | |||
Tranche Three | Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting rights, percentage | 33.33% |
Equity - Schedule of Stock-base
Equity - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | $ 11.2 | $ 10.4 | $ 33.4 | $ 32.3 |
Cost of product sales | Products | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | 1.8 | 1.3 | 5.4 | 4.5 |
Cost of product sales | Services | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | 0.4 | 0.3 | 1.4 | 0.8 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | 1.3 | 1.4 | 3.9 | 4.5 |
Selling, general and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | $ 7.7 | $ 7.4 | $ 22.7 | $ 22.5 |
Equity - Changes in Accumulated
Equity - Changes in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 1,513.2 | $ 1,543.7 | $ 1,619 | $ 1,447 |
Other comprehensive income (loss) before reclassifications | 1.3 | (2) | 9 | (2.1) |
Amounts reclassified from accumulated other comprehensive loss | (0.4) | 1.3 | 1.9 | 4.3 |
Total other comprehensive income (loss), net of tax | 0.9 | (0.7) | 10.9 | 2.2 |
Ending balance | 1,449.3 | 1,522.7 | 1,449.3 | 1,522.7 |
Total | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (6.1) | (22.4) | (16.1) | (25.3) |
Total other comprehensive income (loss), net of tax | 0.9 | (0.7) | 10.9 | 2.2 |
Ending balance | (5.2) | (23.1) | (5.2) | (23.1) |
Defined Benefit Pension Plan | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (4) | (7.7) | (4) | (7.7) |
Total other comprehensive income (loss), net of tax | 0 | 0 | 0 | (7.7) |
Ending balance | (4) | (7.7) | (4) | (7.7) |
Derivative instruments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 4.6 | (6.4) | (4.5) | (11) |
Other comprehensive income (loss) before reclassifications | 2.6 | (2.3) | 9.4 | (0.7) |
Amounts reclassified from accumulated other comprehensive loss | (0.4) | 1.3 | 1.9 | 4.3 |
Total other comprehensive income (loss), net of tax | 2.2 | (1) | 11.3 | 3.6 |
Ending balance | 6.8 | (7.4) | 6.8 | (7.4) |
Foreign currency translation adjustments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (6.7) | (8.3) | (7.6) | (6.6) |
Other comprehensive income (loss) before reclassifications | (1.3) | 0.3 | (0.4) | (1.4) |
Total other comprehensive income (loss), net of tax | (1.3) | 0.3 | (0.4) | (1.4) |
Ending balance | $ (8) | $ (8) | $ (8) | $ (8) |
Equity - Tax Effects Related to
Equity - Tax Effects Related to Each Component of Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Pretax | $ 3.1 | $ 1.6 | $ 17.5 | $ 3.5 |
Tax Expense | (2.2) | (2.3) | (6.6) | (1.3) |
Total other comprehensive income (loss), net of tax | 0.9 | (0.7) | 10.9 | 2.2 |
Derivative instruments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Pretax | 3 | 1.3 | 15.4 | 4.9 |
Tax Expense | (0.8) | (2.3) | (4.1) | (1.3) |
Total other comprehensive income (loss), net of tax | 2.2 | (1) | 11.3 | 3.6 |
Foreign currency translation adjustments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Pretax | 0.1 | 0.3 | 2.1 | (1.4) |
Tax Expense | (1.4) | 0 | (2.5) | 0 |
Total other comprehensive income (loss), net of tax | $ (1.3) | $ 0.3 | $ (0.4) | $ (1.4) |
Segment Information - Narrative
Segment Information - Narrative (Details) | 9 Months Ended |
Sep. 30, 2022 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Information - Reconcili
Segment Information - Reconciliation of Operating Profit (Loss) from Segments to Consolidated (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total revenues | $ 240 | $ 329 | $ 790.2 | $ 1,069.5 |
Gross margin | 74 | 94.6 | 281.6 | 461.3 |
Changes in fair value of contingent consideration | 0.6 | 0.9 | 2.4 | 2.6 |
Adjusted gross margin | 74.6 | 95.5 | 284 | 463.9 |
Other | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Revenues | 17.4 | 16.9 | 34.3 | 63.6 |
Gross margin | 0 | 0 | 0 | 0 |
Adjusted gross margin | 0 | 0 | 0 | 0 |
Contracts and grants | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Revenues | 17.4 | 16.9 | 34.3 | 63.6 |
Contracts and grants | Other | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Revenues | 17.4 | 16.9 | 34.3 | 63.6 |
Product sales, net | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Revenues | 186.2 | 270.5 | 660.5 | 589.6 |
Cost of goods and services sold | (85.5) | (103.2) | (256.8) | (237) |
Services | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Revenues | 36.2 | 112.6 | 90.7 | 283.7 |
Cost of goods and services sold | (63.1) | (114.3) | (217.5) | (307.6) |
Products | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Revenues | 186.2 | 270.5 | 660.5 | 589.6 |
Gross margin | 100.7 | 167.3 | 403.7 | 352.6 |
Changes in fair value of contingent consideration | 0.6 | 0.9 | 2.4 | 2.6 |
Adjusted gross margin | 101.3 | 168.2 | 406.1 | 355.2 |
Products | Product sales, net | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Cost of goods and services sold | (85.5) | (103.2) | (256.8) | (237) |
Services | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Gross margin | (26.7) | (72.7) | (122.1) | 108.7 |
Adjusted gross margin | (26.7) | (72.7) | (122.1) | 108.7 |
Revenues | 36.4 | 41.6 | 95.4 | 416.3 |
Services | Services | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Cost of goods and services sold | $ (63.1) | $ (114.3) | $ (217.5) | $ (307.6) |
Segment Information - Schedule
Segment Information - Schedule of Segment Reporting Information, by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Depreciation: | ||||
Total | $ 20.4 | $ 14.4 | $ 65.5 | $ 46.5 |
Other | ||||
Depreciation: | ||||
Total | 3.3 | 1 | 5.7 | 4.3 |
Products | ||||
Depreciation: | ||||
Total | 11.5 | 5 | 25.6 | 20.9 |
Services | ||||
Depreciation: | ||||
Total | $ 5.6 | $ 8.4 | $ 34.2 | $ 21.3 |