EBS - Earnings call transcript Q1 2018 | Emergent BioSolutions Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Emergent BioSolutions 1Q 2018 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to the company, Emergent BioSolutions.

begin. may You

Bob Burrows

operational and Burrows, Glenda, Thank everyone. name discuss My for quarter for Thank XXXX. President good of Bob the we as Vice us Emergent. financial Investor is results joining first you, today, afternoon, and Relations you for

today's Chief open Officer prepared Participating BioSolutions. team Executive our members is Abdun-Nabi, the the and call participants, and with addition, will to on and be and our Chief President Emergent appointed Chief Other will Lindahl, prepared during Kramer, customary, As Officer. newly of is Bob copyrighted Officer; follow Operating Q&A being by that available all in comments are Dan Rich call recorded call comments. Financial is and is the senior the present

during forward-looking related events evaluating statements. or with compelled or of reliance as periodic this statement identified or our risks law, business, place should Q&A could session, expectations We results any prospects any only the inaccurate forward by looking Before as to in differ call forward our filed comments materially underlying looking our and do unknown regarding from to date not cautionary SEC and statements that except are prove that projections risk on press not new to These any release we speaks undue forward required well therefore future our consider statements make to performance. intentions, materialize, everyone cannot statement expectations. uncertainties update Investors Investors Investor remind forward-looking of other Any guarantee when or undertake today's statements as information, looking prepared future I'm factors caution forward-looking reflect forward-looking beliefs and this our our statement. circumstances. assumptions management our based the be on reports either events; the beginning, future statement realize as to that events. accurate. or should if are actual or will current on may

found well also the as GAAP comments transparency involve certain prepared to regarding of may Please income reconciliations adjustments press refer between to as our our EBITDA today's GAAP non-GAAP and session, we financial in use and order Q&A release and adjusted these Emergent's the in to measures. greater during operating provide tables our figures, During net financial measures non-GAAP regarding financial performance. measures to that refer the

who Emergent X, this to held may replay For to may be then, webcast, during was the the today's of made XXXX. call Since announcements have those May call. on recorded benefit of discussed related a listening and topics

would again turn SEC I BioSolutions' once CEO. filings, our Dan? to like the introduction, which Investors website. You're may home And to to our Abdun-Nabi, the found with and releases that recent most call over be press on of of all refer page to Dan encouraged now Emergent

Dan Abdun Nabi

Well, Bob and joining and our today. thank you you thank everyone call good afternoon for

to Spring Officer. to Nextel in also of experience leadership wealth discussing Chief Nextel for that of many leader Let I our business the am all including make enhance Kramer knowledge has Chief Operating dedicated of welcome CEB, new made Financial has strategy. extensive I Officer. Communications. recent executive pleased further a am promoted MCI that and qualified to operations. changes position our by strong and management and me our execution been to of growth Rich oriented delighted Emergent Emergent begin years aspects President of created public been a as of extremely Bob Corporation, brings with Communications uniquely to Lindahl oversee global Bob companies, him growth large Rich financial

Emergent. team his first pleased earnings the this on present We’re on with and to Rich call call, have

trends recent I'll discuss our today call and growth global provide will serve of health our threat Bob first the Rich strategy market. in to financial and will progress our remarks view guidance. our and performance those financial and quarter our that address details about During threats public focus in market our my operations on finally

and experiences, diseases. way, FY the accounts through medical the at nation. harmonization posed Now by Recently for National million for included topic globe The with address let’s specifically seeing preparedness Special with budget to Most those including from Strategic hand; of countermeasure funding and focus MCM seen, management the place on turn preparedness importance the to Reserve countermeasures the procurement Global to enterprise of posed the horrific omnibus the responsibilities priority and in for actors of $XXX of increase concern and that we Assistant Secretary protecting emerging the public SNS the state in in of need Federal public and elevating the Institute health to increase the the to a threat XXXX increased health for we’re enterprise, Fund both Stockpile, and the the or increase Allergy the strategy spending these bill an the request and all recently meaningful to and develop Emergent’s increased weapons across along these the level chemical of consequences for In U.S. BARDA CBRNE use Diseases. the in response. President's a protect on these of threats are Domestically an threats including the Government have government Bioshield Infectious very stressed across witnessing over by we initiatives funding the enterprise. non-state an of XXXX Moreover National nation and funding continues infectious address threats. threat and stockpile the to threats. of the of countermeasures focus face on medical enhanced importance and medical by

to response critically the needed of Importantly of countermeasures. the months Congress reauthorize Hazards including year the billion advance which stockpiling working past preparedness five houses of pandemic a $X.X over Act and medical All And been few include development the to have both country’s Preparedness could funding capability

by this growing the a and health market We are year. countermeasures awareness completed to medical we states basis includes health mechanism that acquire countermeasures. joint expect to legislation a populations. provided increasing CBRNE of Commission later threats specifically to preparedness states for stockpile health to European which EU be that an and Internationally In this was protect seeing capacity civilian critical and building a together public to and directives risks a these procurement allows series on the military those a European was framework. In on The to EU a response EU and seen Union to border EU combating medical threats countermeasures, address stronger procure to stockpile to That and Commission protect medical member procure strengthen security their directive improve health emergencies. terrorism followed focused to serious directive threats we’ve member to of on coordinated cross response XXXX adopted stockpile need populations. mandating civilian European come decision

to XXXX addition In enhance action the to against European security an published risks. plan preparedness CBRNE Commission

similar a awareness the Middle-East of of other level witnessing and regions in concern and the are We Asia. globe, including

within we recognition health growth the key growing To plan market end, five diversification strategy. global authorization public of from procedure is threat component concerned is of and EU. the this Our mutual market that announced in focused our of year, addressing earlier a on member this completion space BioThrax the XXXX

as these and worldwide Poland, be count We countries, which been will we our expect than issued UK XX approval, customers the the impact that list Based regulatory to on more by include shortly national countries look and Italy, further Netherlands, within now the France. forward has EU expanding licenses this we growing. and

FDA establishing we ACAMXXXX contract year, our remain authorization the achieve completed plan the for multi-year XXXX follow-on new Turning by the enable threats on with this continued emergency to EU’s to track supply including our a be to of advancing we SNS expect goals, for which to to an filing and year-end.

tangible pipeline product first our in have the advance and progress and to continue we made quarter. real Finally

On front months be an accretive generate XX goal we a set that will revenue acquisition of within closing. the this of and for executing M&A year have

and product in infectious including are and market We opportunities application. emerging acquisition health dual potential especially market, diseases, with threats focusing public on CBRNE for the in threats business

the opportunities. pipeline this given While we is of believe goal, timing we target uncertain, our M&A transaction always any of can achieve

So in are health public growing. threats summary global

our a is we call you on that my us Emergent many operational experience uniquely that of details That threats these of that on our updating concerns Bob and to progress, and goals as prepared to now to for portfolio our and on Kramer towards medical term of we the believe forward our fulfillment positioned turn and of U.S. look broad and the development allied based all address our government expertise I concludes will enhance life. growing partnering to enable contracting the over protect and and mission our longer While work is of to to decades performance. I capabilities. Bob? in countermeasures, governments remarks. manufacturing deep

Bob Kramer

Dan. And afternoon you, you joining for everyone. the Thank good Thank call. to

my state-of-art I going structure business we that adopted to XXXX. emphasis focus with on comments April current For in unit operations, the am today, on our an of

structure business as Just focus unit encompasses the a the four areas. reminder following

and Vaccines by First basis interim currently Anti-Infectives Adam run Havey. on an

by run Saward. Antibiotic Next Business is Therapeutic Laura Doctor our unit

run run Unit Device contract the manufacturing or Sean Services unit Doug development finally Kirk. and is by Next And White. Business our by CDMO

finance, Importantly sales supported functions wide resources, human by these and enterprise quality units including others. all are marketing, business and regulatory, legal,

business progress of and in in me benefits operations to some our the steady make to accomplishments, specific structure. of expect business continue highlight continue to that aligning quarter. unit, during the first the lines across With these overview, let realize We each

anti-infectives. Let’s vaccines start and with

from bio of facilities completed license and CDC reminder NuThrax, to development and well Stockpile. live the Sanofi portfolio a for flu the the a we brought of as acquisition Zika ACAMXXXX As and viral anti-infective and Last vaccine the candidates. the threats delivery programs, well the vaccines as unit manufacturing as National fill/finish Strategic business ACAMXXXX the of ACAMXXXX a vaccines business contract consists year which our and anti-infectives and smallpox as notably with of

as is the place can SNS. part to to up our discussions Rock procured who, we smallpox now populations by civilian with expect and the this the to of threat and have Our which support strategy operations the a against essentially year previously government's smallpox. in ramped military to the we have vaccine this we end of anticipated government supply ACAMXXXX the for global U.S. the new attention protect needed of Maryland U.S. have turn our the stockpiling Massachusetts Canton like contract their of critically complete Similarly integration and countermeasure of in to customers acquired medical Hill, ongoing planning

up add program, NuThrax, to the delivery we generation SNS enable $X.X year. that and this development by progress next to BARDA our of this EUA successful XXXX NuThrax continue to in If our procurement for existing contract end will will For submission the procure billion. Anthrax toward to under

centered activity quarter of of continued First manufacturing will required lots runs, support submission. which initiation for the PPQ engineering on the [ph]

authorization of neutral As look These our of the Paul-Ehrlich-Institut. achieved of the mentioned, our from France. with to we completion Netherlands, excess the granted within goal countries, the revenue success leverage of on this market XXXX. in further product markets generating year BioThrax Dan Germany, execute the successful of as on basis licensure by of expanded We recognition authorization We existing the outside in for in XX% sales BioThrax U.S. which EU was procedure by market five longer UK the our term EU. concerned total other BioThrax we across the a number states and this Italy, include Poland of

partnership in validated or million safety using data XXXX. from and candidate expect doses in virus. DLAXXXX, of States X under finally of Valneva's Valneva, exercised evaluate or against expression therapeutic late this platform vaccine initiated our antibiotic our X Reduction option the to oral we our candidates This early of leverages a Next we and Zika United XXXX immunogenicity existing to trial in with Threat clinical the an the series fund GCO-XX Defense trial, an molecules. contract Agency the And DTRA development [ph] Phase

BU. the Next therapeutic antibiotic let’s to turn

and of acquisition XXXX. GSK next programs year completed from development product years. this business a unit as Last with the of consists Anthrasil, we as and the As the with well is to therapeutics product BARDA to Raxibacumab supply through acting November two hyper flu BIGIV our a as candidates. multi-year immune the CMO Zika Raxi over a along the GSK contract portfolio of their BAT notably SNS antibiotic of for of reminder

to our plan continue During to first on the Bayview of this we the site. manufacturing quarter to our execute tech CIADM product transfer

treatment globulin During immune for will open influenza completed initiated the serious an in expected was immune in Study pharmacokinetics initiated The infection of first Phase being clinical season. the evaluate patients to second study anti study to our and clinical by we to quarter a flu influenza IGIV, X a as safety and hospitalized patient successfully illness platform. developed is intravenous XXXX XXXX. hyper dosed A enrollment first with benefit developed and and influenza our on continue be in remain caused

we as contract smallpox small the Lastly the of million complications you $XX with and were indicated DIGIV a CDC vaccination pox awarded the treatment of due one DIGIV U.S. continuing a component critical year supply stockpile. strategy the is to national into know is government plan. of preparedness for

at business look device Next unit. the let’s

the the generation end consists as TROBIGARD of injector a BU As portfolio and development devices other auto well programs, various notably and reminder of a RSDL constructs. as high device

by and customers. working products new are continue deliver RSDL procurement to these and We government contracts against existing of on actively both TROBIGARD

incremental During our or DoD. BARDA dual our being salient progress the continue funding make injector developed funding to and DX on chamber developed from device quarter being from we with auto with

contract Lastly manufacturing business and unit or is the CDMO. development

update response me through business. on in at is component Let partnership with needs expansion a our pandemic U.S. the investment CIADM disease capabilities establishing site. our and joint this pilot condition the government you We infectious customer. of advanced debut government in key the plant the support This general facility at emerging our of of site the core of

growing addition summary successfully our operational those year. Camden We supply this prepared and on my of for progress running though, along continue through enable positioned on operations internal current capabilities to commercial product customers. Emergent expansion will and steady and In of our also unit the success with our and potential capacity remarks. well to smoothly to the financial of continue effort as are This both concludes needs are potential, and support plans. growth requirements deliver as That external well lastly And business and make the continued as our our goals fill/finish clients.

turn it numbers. who Rich I'll the colleague through over Lindahl to take my Now you will Rich?

Richard Lindahl

and for Emergent’s vision. earnings afternoon objectives here our is as everyone There deal on our new Thank joining good colleagues joining a And thrilled look thank you in pursuit I as call mission I'm great first to and with be as call. Emergent Bob. new well my business you to working forward going CFO. my at closely and of the

to second quarter with walk capital I on results, For quarter the look the P&L year the will first balance state my of guidance. XXXX. prepared first comments today the through starting and sheet comments structure with our for the shift and that With and performance first of quarter let's our and up at finish full

as revenue end disclosed see our this quarter. results the timing otherwise the can no XX, said revenue timing profitability one complete to in Despite to the guidance. first of a reflected ACAMXXXX press BioThrax year impact That earnings of our second start February on our these you our the shipment. second as solid quarter delay our expect the full As the is year in release we quarter, in we deliveries previously in deliveries, execution the well impacted delay in shift clearly as which reflected quarter and to quarter guidance by has of and on first second deliveries the of

the to the follows. higher year. as Total revenues Turning the numbers. were $XXX the highlights are same Compared slightly prior than revenue QX XXXX, in now million, to period

product were year. to quarter and the in attributable First, to acquired BioThrax both of sales, million, product sales the in fourth BAT increase $XX sales. quarter of Product by due ACAMXXXX sales an partially of Raxibacumab, which last X% sales, offset principally down during were lower and principally other

reflection mix was at services. due came shipments due third manufacturing and development over product the a ended CMO delayed XX% just million, in Lansing to $XX influenced margin million, during in primarily at the the discussed. which the our contract expansion down XX%, largely were grant X% was grants. that funded milestone related revenues to Contracting a to $XX And Gross by the of capabilities manufacturing up of completion quarter certain contract of BioThrax Second, contracting revenue XXXX. site. specific programs ACAMXXXX of

to expect of second increase completion revenue. as from the gross margin in benefits these in improve product the the quarter related deliveries and We mix the product

that and revenue spend grants for This less operating which revenue. expenses R&D adjusting million, portfolio After a stock million well million to costs. services up our XX%. $XX and in to true over a calculated Turning or compensation investments net contracting additional professional the up gross SG&A $XX revenue development was of research XX% total as driven for were described few reflects our $X net related was expenses as $XX is quarter primarily million, minutes revenue contracting the Bob up spending grants as by expense ago.

expect first be percentage our a year revenue. less XXXX of as expenses SG&A were in quarter than XXXX's XX% with full to total revenue, of While XX% eighteen we ratio goal of line

QX the million $X.X million compensation rate of resulting $X.X XX%. tax to dollars discrete amount includes effective benefit activity in of For related an tax a XXXX benefit the of stock in

effective benefit discrete rate XX%. the the Excluding tax XXXX was QX

In measures, delays was terms of quarter line our revenue by profitability timing impacted discussed. bottom the already also first our

of slightly we $X adjusted loss result, $X quarter first net loss an GAAP million a over million, of and million. net $X.X of a As had EBITDA

a $XXX a million to Turning strong quarter the million. of sheet, maintaining $XXX the balance balance of liquidity we and position cash ended receivables we are as with

and earnings. standard adopted continue We increased million of a revenue on place methodology, to revenue million. facility the to on our capital of a of CIADM $XXX with our related support January balance to balance BARDA new new an we pursue revenue One revenue $XX.X recognition adjustment, offsetting million M&A and operations our As modified contract borrowing million $XXX resulted opportunities. necessary, a in review Based which deferred accounting sheet. that net XXXX. a recognition current $XX we contracts, resources credit Accordingly, increase and effective of the note this our reminder, to the capacity final in quarter. our have be that report information in to within day. by on we recently provides XX-quarter review put Form on be the That the can next anticipate More retained available filing which tax we change will completes

turn me let Now our to guidance.

million Total have income year million. $XXX net $XX million, standard income which as financial net follows. XXXX accounting of $XXX revenue $XXX and $XXX the We $XXX EBITDA of guidance, of full new to and of our million $XXX is reaffirmed to of million. million million, reflects revenue recognition pretax income Adjusted to to $XXX $XXX to $XXX

development to Importantly, corporate M&A does provision efforts. support estimates of for not include outlook the transactions except diligence potential required new M&A ongoing or related XXXX for expenses, other our the specific

Lastly, expected of $XXX quarter. current the second guided of first total we quarter outlook revenue This million previously deliveries in and reflects $XXX in have to deliveries additional plus quarter BioThrax ACAMXXXX the for the million.

this If call the the outcome strong Operator? quarter or now to XX% I financial squarely the session. my of will concludes That you quarter XXXX operator over first us approximately remarks we achieve question-and-answers our keep prepared the and anticipate half would first represent the million turn track that can second annual to to begin the a half to objectives. on and with $XXX Achieving see actual revenues XX% revenue forecast. combine revenues, $XXX to million first revenue of we guidance full year

Operator

of Flanders Thank Sachs. Goldman Dana And our comes the from you. [Operator Instructions] from line question first

Your line open. now is

Christopher Staral

guys. is This Thanks questions. Dana. on taking Chris Hi our for Staral for

to this radiation XXXX, medical in review your include nuclear the in biological to or expanded harmful treat an chemical right that and think be mandatory seems wheelhouse. the that priority agents Congress countermeasures program or So extension, I passed

about programs identified as you a potentially on So maybe the think that. know after material should And have we development do what ongoing and you those comment including of impacting NuThrax who makes determination can threat? your how a then I follow-up is

Dan Abdun Nabi

an threats. for companies our expand Chris vaccine When for against been and adopted serious years, one It’s that the not enterprise review trying the have absolutely to know and that’s be last sharing to eligible you be five look observation. that incentives for Yeah. Congressional That’s Thank vouchers. initiatives really have eligible that’s prevention NuThrax. identified NuThrax, right. we develop to create medical mentioned and a joining of over could at some there of countermeasures you you call approved disease do of thank for priority PRV you these many the portfolio, the of would for in that that the we BioThrax. specifically Anthrax is number products I already XX

PRV our So we antibody whether think it’s available those and the in PRV circumstances. be portfolio, of we are therapeutic across as until development looking the programs it’s not infectives part at certainly the about any vaccines side, as But whether in or would potential. the analysis

in today the a for universal and So would flu flu portfolio the a vaccine PRV product we vaccine the do broad Zika and for they as eligible have several a flu then it be just And both designation. we few. that be actually therapeutic the spectrum be the include vaccine could eligible product, have would

So a for real to in see products PRV economic includes it us portfolio are driver value migrating eligible. we that and is

So hopefully going pipeline we gives potential forward. you look that at for impact the sense as a

Christopher Staral

through extension? contract renewal or XXXX extension the was then And is in the extension shipment long and been is color that on up assume quarters? maybe pushing quick were realized That’s and a we the delay very was and should coming it that more after little that any granted there ACAMXXXX you to in for how flow my XQ for -- caused was then fair have helpful. the an we now And provide calling should ACAMXXXX out what is, revenues XQ follow-up March would just the of be can the understand you through that delay be revenues to we expected program the so

Dan Abdun Nabi

Yeah.

do the, do take the delivery question that So to rest we single so now are in orders have this the to we put second the recently have so into contract complete. you year deliveries quarter, could of through I expect under expired same. expected great that delayed that ACAM the would And

continued make year. are negotiate scheduled follow-on government are we the for we balance through so to a of And to supply. U.S. with deliveries expecting And the contract

there will expect in a We to have by to expect multi-year place and that contract we be be year-end.

need the the really because of during that remain terms continued of supply extension, in for orders balance extension So, for year in right no are effective. place the now

Christopher Staral

a lot. Thanks

Dan Abdun Nabi

Sure.

Operator

Thank you. And our the Cowen of question next line from Company. comes and Schmidt, Eric

open. Your lines are

Eric Schmidt

thanks So taking rate Maybe limiting in on yet order for talk be in. just the to year-end question. accomplished? get my submission about you to NuThrax Can this to, steps and what is

Dan Abdun Nabi

Yeah. for for Thanks the Thanks Adam Unit I you Adam through joining Adam? Eric, you good going in to of that hear our for call. EUA lead am vaccines Havey, Business to steps and Head anti-infectives. know, to standing a as ask the your the EVP voice. walk Operations as to and key submission.

Adam R. Havey

Thanks Dan.

PPQ complete that the the two So process call us two really loss, kind essentially and right back through to of that our [ph] really validation basically engineering would those things just manufacturing And from need that’s with parallel show process, there loss application. that the validate the are submitting reproducibility rate we some and we you runs of of Bob now need is One EUA the Popsie mentioned, working only in are in hold limiters. to manufacturing test process. consecutive is Eric what process as the we

Eric Schmidt

maybe under about And possibility doses that year. a one this Is orders approval next are one at of think we up I XX think still million point to Adam process? for I NuThrax talking at point

Adam R. Havey

Yeah.

we So, I Anthrax XX doses we I guided we we delivery said XXXX. have think vaccine as think when million approximately delivery of expect think around in

kind enabling EUA start procurement more possibilities the the in the give BioThrax really transition and they expect the current BARDA range from I of a NuThrax. post would those make that contract for and claims to speaks to to we think claims the of of EUA would

Eric Schmidt

Okay.

So EUA other you would think you order in words? full a get years don’t under

Adam R. Havey

No.

we think absolutely a years full I order. would get

can I the comes got XX XXXX. still is really It million bit a the NuThrax XX capability just to with we The it even great deliver capacity. XX of doses thing timing. we'd the depends little bit to building in have to produce if up so quite EUA later, and increased think million on

Eric Schmidt

Okay. things was BioThrax quarters basis. And then seen in given the we coming guidance so bit in weakness on and in late you February. QX I updated quarter and an back a surprised annual the lumpy little always normalized have the But guess late have before, to by I

are to off think contracts, difficult as any to deliveries make you I happened operating insight does So guess of the of timing maybe for there? that it what more you or

Bob Kramer

it's Bob. lumpy a in the as source ACAMXXXX We the quite Rich overall to wanted question. offer Thanks And is Eric, CFO, another delivery Yeah. for traditional schedule. variability new potential the QX. frankly really the addition of of

nothing was than really to new there is as ACAM into QX asked So and responded up fact the other earlier. that we are ending pushing a shipment

more into that. it anything wouldn't I read than So

Eric Schmidt

team Rich with Thanks Glad of guys. a is joining lots friends. Okay.

Richard Lindahl

you, Eric. Yeah. Thank

Operator

from our line comes And question Chardan. of you. Thank Keay the next Nakae from

is now open. line Your

Keay Nakae

the any timing to EU. I about think for ask how Thanks. you should expanded the into wanted we about sales

what to facility, you actual then First it how respect supply but do takes and step is to that stand you negotiate available? in preparing the after terms to in with how contract long products also you're do licenses of think get do the having to

Dan Abdun Nabi

it Yeah is It's in call in pretty matrix the high call is and BioThrax EU their for stockpiling. significant. their data at it enterprise. fairly allocating varying in it terms And development terms and address It's for but and every Union funding and country call EU taking approval as it developing of I'll how the identifying across and single the to -- plans procurement developing the quite own exciting you reality is threat whole the for a I’ll Keay, of know regulatory thanks point a policy seriously the CBRNE, there European the thanks of are levels is in the stages joining pretty question. So of and the it's

So a bit different. is every country

isn’t different countries various differently. answer So to products your question. single And prioritize a there

personnel a and military in prioritize Others in of high to potentially the interested smallpox look really some for and threat in on smallpox higher the Others example rotate stockpiles. the stockpiles existed know Anthrax We've the at their as an seen years UK. creating Syria. protect countries have and of starting of concern. some level focused that's we've level a threat attack are keenly number to chemical For exist civilian as in populations. do you a that And vaccine attack seen

and see with address opportunities they not a really single a conversations within to it's product have. or our it's matrix portfolio approval, regulatory So the that customers having around around what simply across single threat consensus they whole the

So not digital. terms might threats amount of it's conversations allocate, money and the to not want takes address, now discussions the It is ongoing in stockpile and are what of a have issues point internal to where the them. these issues while countermeasures to and how they -- its resolved prioritization procurement they these would it's and to for be they want of the or deploy appropriate government their

can the sales. XXXX XXXX as we is a for to sales continue advancing continue see see opportunity opportunities for this us continuum, see, international we and international So to and and growth

a U.S. markets. expect for not of performance, sales the international level from we As revenue We're we XX% international do targeting XXXX the to of revenue in said to coming come past, really

So that's think evolving our can we goal. way such in the achieve that. we is And whereby landscape a

Keay Nakae

Okay. all Thanks, I that’s have.

Operator

now JPMorgan from Fye line open. Jessica next our Your comes of line the Thank you. is question And from

Jessica Fye

Hey follow business for wanted comment prepared taking development. to my term near the potential in about remarks guys. Thanks with up I questions.

decisions? commercial prioritizing and how factor you. clinical Specifically, or how those does Thank versus even targets think do stage late you clinical your assets XXXX about into

Dan Abdun Nabi

the Yeah. for the thanks Thanks. call for question. Thanks and joining

can it's essential fairly of be commercial government say period completely accretive see priority, revenue mean generators a that are the be wheel that’s really XX to off number market. To off if that to one finer priority the short advanced in table the priority to point sold also so it’s that one. potential market within bull wouldn't I traditional to opportunities earnings months. speak. but That’s a So in have development but customer are table, that not but what the Does as we no, at within whereby a we put number our only product be it's house, could can, on eye the dual a not looking completely we that it a time to launched more

ensuring funnel it's revenue the that of your terms revenue pipeline have the weighted first you question which provided. acquisition that it's it’s we priority the Hopefully one with a accretive. business two and of be meaning a we that possibility generators product business. number is there could look prioritization heavily, along look perhaps But accretive at an can Jessica? products near generator both got really when fall within description get as or the to at that answers revenue a term opportunity towards in heavily the So could we be the that And

Jessica Fye

run a for Yeah. you is do came That's I or the to ask particular our below about is think be to in quarter forecast. first that number operating this wanted And also R&D to helpful. well in the going an just rate anomaly? -- Is about year think expenses,

Bob Burrows

Yeah.

clear to our been XX% is is this Bob. level. stay that less goal been R&D. we Again, under. Historically that like term net near we've would think of having longer expenses where Jess than revenue we've not anywhere pretty So R&D of I

However exciting could to and or joint the of I investment as see selected opportunities Dan venture. commented be and point potentially we to collaboration candidates funded type carefully for and or very get get them all pick some Rich have to some where Adam they up on,

So should to to two. immediately we time over but year next that not our expect It's R&D you going inch spend the net it or will ratchet jump will up over be ramping up up. and

Jessica Fye

you. Thank Great.

Operator

now question our from comes line Thank line Your Fargo from the next Wells And [indiscernible] is of open. you.

David Maris

Hi. It's David Maris. questions. Couple of

one or how is So them the opportunities get very one no, though. it you How first, or you on done are multiple I comments, and had business over point I don't front you getting two have year. to hope are at missed active, say or and you you active development confident this you would this may attracted some and mean are

get large on if sales U.S. the the hope then international be color but comment large of maybe as of to won't you your as can following and as you is activity? the So second sort well, level any they And about be range up

is that's that question meaningful think just about sales, XXXX, sort XXXX. think would give the is, of of us be you'll more any or that have I self-evident that but U.S. maybe information a sort you timeline you. Thank great.

Dan Abdun Nabi

Sure. thanks joining the for Thanks David, call. your Appreciate participation.

size. So I a have say would company large in funnel we BD terms for the of our very a

in in further that are are evaluation diligence there further and much developments and negotiation of terms others are both queue. and the have and that advanced We back opportunities

you that company active size and but want have there many of the we on. I the tell given can So me size we don't and the so not is just reality focus it’s to very because that you team a the pretty and really resources of that we’re team effort active it’s the is to say asked opportunities

opportunities target in they pleased the what units. opportunities, generators elevating, and revenue like across both the business I'm very that of So associated of where overall fit terms with in would both and our with they the are them products, valuations the portfolio profile look of the

it’s year say, ended So two. to really last hard up we doing

ask one really or hard is me two It’s this tell. say more. if to You or

that grasp, in you world, quite As disappear think your suddenly are M&A unexpected. the can know reasons opportunities you for in

gone fact have had didn’t We and materialize. by it do in expect in other where years you to materialize experience

be goal position to the involvement the as anticipate is I tough well of know this in types but now, of you achieve of the for the organization. comfortable opportunities. So to a position We as a are that should the engagement, we given do. and level in set M&A that am we I number opportunities business

and year very revenue. last international thought were actually in I $XX sales, international year, up was percentage the million think total double-digit successful of year active a On we was over I year sales which last

as and ’XX. target to and continued ’XX to XXXX So, -year of ’XX, on XX% require $X get for based year-over-year-over that goal revenue that’s increases going billion you our revenue, know,

we the we, overall are continue as continue think that's and the perhaps look time revenues way ramp over significant So for I to ramp. our last to looking was at that up first history to it time year so in we David

David Maris

Thank you Okay. much. very

Operator

question line Brisebois François of the Thank from next our you. comes from Laidlaw. And

Your line is now open

François Brisebois

for taking the questions. Thanks Hey.

at through late the early couple here. a or XXXX? data ’XX VLA coming ’XX Just out through should What original be we looking

Dan Abdun Nabi

Phase X the Yeah. on data For Zika.

Let's ask Adam Havey to answer that one.

Adam R. Havey

safety. Sure. Hey a based platform. it's at Franc, on questions. looking thanks we're the Really proven -- This a is proven for

it's for are think And our conversation -- at of about in our a primary is are for I it but can we we show markers out So immunogenicity to mean this well I this at thinking funding. pc. here, facility. some on think hypothesis ids endpoint the a BARDA E plan really looking this as I our we looking safe make with based Bayview would if we platform be this

our fits business So it fits fits the market it vaccines, strategy, with growth units, ideas with into our around approach.

François Brisebois

That's Great. and one that? the terms It’s missed. think should we helpful out that of then ACAM Okay. of of or many in delivery how delivery how

Dan Abdun Nabi

leave we contract. again that be Yeah. in QX and It that get was just picked up clear, anticipate we we Franc as will that said to shipment, and so one will

François Brisebois

shipments how that's shipment you And Okay. out expect.? many out might one of that of

Dan Abdun Nabi

Yeah.

out one I one. think it was of

François Brisebois

got Oh, you.

Okay.

David, -- still XXXX billion when intact? I top then you And Okay. line $X still it's think the I heard so -- answered is

Dan Abdun Nabi

to our continues That be Yeah. goal.

François Brisebois

Right for Great. Thank me. Okay. You. it All that's

Dan Abdun Nabi

Thanks.

Operator

from Springer Research. Lisa from Thank Singular of Instructions] our You. line the And [Operator next question comes

is line Your open. now

Lisa Springer

Thank you.

get that members that the you still you do -- you there supply in? BioThrax opportunity you would like much EU of other the to, will additional countries what‘s how to covered and are to European have feel would five like the be approval market With able

Dan Abdun Nabi

the you call thanks and Lisa question. Thank joining the Yeah. for for

were think with address licensure a I from most important procedure the perspective. to So when we we went out identified, mutual recognition countries thought we

think approval we got the we're past point, the say the that those United on we’ve the I in regulatory And and that what been pleased experienced of obtained, States countries approval some Having this procurements in that's countries candidate all countries. has of crossed that outside five I that at we list. approval U.S. regulatory So not said would where based from threshold or in in even either

EU the in in So the France. sales we licensure that or I within milestone. don't But to nevertheless other countries think were a forecloses us felt that we're target pleased UK crossed and it we've based countries for the potential Germany right this these or

Lisa Springer

Okay. the quarter? share were purchases during there any And

Richard Lindahl

There any quarter. purchases No. of weren’t stock the during

Lisa Springer

you. Thank Okay.

Operator

to Mr. our to concludes session And you. I'd call over Burrows closing that the for for today. Thank like question-and-answer remarks. turn back

Bob Burrows

of Thank now later call. Thank Glenda. of ladies the Goodbye. with available the in conclude through and be you and Thank that today look forward speaking let to future. your the all today's website you you With we for note participation. an once company me accessible version again Please all of webcast archive gentlemen, and call you the

Operator

and you This now for the a thank you may disconnect. Ladies and participation conference. gentlemen, have great your program day. today's in concludes Everyone

Emergent BioSolutions (EBS) 3 May 182018 Q1 Earnings call transcript