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Emergent BioSolutions Reports Financial Results For Third Quarter 2022
GAITHERSBURG, Md., Nov. 08, 2022 (GLOBE NEWSWIRE) -- Emergent BioSolutions Inc. (NYSE: EBS) today reported financial results for the third quarter ended September 30, 2022.
“For more than 20 years, Emergent has been a dependable partner to customers, including the U.S. and allied governments, in helping prepare for public health threats through our products, services, and development programs,” said Robert G. Kramer, president and CEO. “As we continue to strengthen our operations, be guided by financial discipline, and evaluate opportunities for growth, we remain confident in our ability to deliver results for our patients, customers, and shareholders.”
FINANCIAL HIGHLIGHTS (1)
| ($ in millions, except per share amounts) | Q3 2022 | Q3 2021 | % Change |
| Total Revenues | $240.0 | $329.0 | (27)% |
| Net Loss | $(75.7) | $(32.7) | * |
| Net Loss per Diluted Share | $(1.52) | $(0.61) | * |
| Adjusted Net Loss (2) | $(63.2) | $(19.3) | * |
| Adjusted Net Loss (2) per Diluted Share | $(1.27) | $(0.36) | * |
| Adjusted EBITDA (2) | $(15.2) | $(3.3) | * |
| Gross Margin % | 33% | 30% | 300 bps |
| Adjusted Gross Margin % (2) | 34% | 31% | 300 bps |
| * % change is greater than +/- 100% | |||
| ($ in millions, except per share amounts) | YTD 2022 | YTD 2021 | % Change |
| Total Revenues | $790.2 | $1,069.5 | (26)% |
| Net Income (Loss) | $(135.8) | $41.6 | * |
| Net Income (Loss) per Diluted Share | $(2.71) | $0.77 | * |
| Adjusted Net Income (Loss) (2) | $(96.9) | $82.3 | * |
| Adjusted Net Income (Loss) (2) per Diluted Share | $(1.93) | $1.52 | * |
| Adjusted EBITDA (2) | $(8.0) | $169.7 | * |
| Gross Margin % | 37% | 46% | (900) bps |
| Adjusted Gross Margin % (2) | 38% | 46% | (800) bps |
| * % change is greater than +/- 100% | |||
SELECT Q3 2022 AND OTHER RECENT BUSINESS UPDATES
- Completed the acquisition from Chimerix of its worldwide rights to TEMBEXA(R) (brincidofovir), the first U.S. Food and Drug Administration (FDA) approved smallpox oral antiviral for all ages, following the award by the Biomedical Advanced Research and Development Authority (BARDA) of a 10-year procurement contract valued at up to $680 million to deliver 1.7 million doses of TEMBEXA to the U.S. government.
- Initiated a Phase 1 study to evaluate the safety and immunogenicity of EBS-LASV, a recombinant VSV-vectored Lassa virus vaccine candidate being developed for prevention of disease caused by Lassa virus infection.
- Completed enrollment of participants in the pivotal Phase 3 study evaluating safety and immunogenicity of the Company's single-dose CHIKV VLP vaccine candidate in adults aged 12 to 64; recruitment continues for the second Phase 3 study focused on adults 65 and older.
- Announced data from a Phase 2 study evaluating the CHIKV VLP vaccine candidate in prior recipients of other investigational alphavirus vaccines. The study demonstrated that CHIKV VLP was well-tolerated and immunogenic in both alphavirus vaccine-naïve participants and participants previously vaccinated against the Venezuelan equine encephalitis virus.
- Published in early October the 2021 ESG Report (available at https://www.emergentbiosolutions.com/impact/environmental-social-governance/).
Q3 2022 FINANCIAL PERFORMANCE (1)
Revenues
| ($ in millions) | Q3 2022 | Q3 2021 | % Change |
| Product sales, net (3): | |||
| $24.2 | $15.6 | 55% |
| 87.9 | 133.3 | (34)% |
| 49.0 | 80.7 | (39)% |
| 25.1 | 40.9 | (39)% |
| Total product sales, net | $186.2 | $270.5 | (31)% |
| Contract development and manufacturing (CDMO): | |||
| $36.2 | $112.6 | (68)% |
| 0.2 | (71.0) | (100)% |
| Total CDMO | 36.4 | 41.6 | (13)% |
| Contracts and grants | 17.4 | 16.9 | 3% |
| Total revenues | $240.0 | $329.0 | (27)% |
| * % change is greater than +/- 100% | |||
Product Sales, net
Anthrax vaccines
For Q3 2022, revenues from Anthrax vaccines increased $8.6 million as compared to Q3 2021. The increase is largely driven by timing of deliveries to the U.S. government (USG), specifically the Strategic National Stockpile (SNS). The Company received an AV7909 (Anthrax Vaccine Adsorbed, Adjuvanted) contract modification in September 2021 valued at approximately $399.0 million to deliver additional AV7909 doses through March 2023.
Nasal naloxone products
For Q3 2022, revenues from nasal naloxone products decreased $45.4 million as compared to Q3 2021. The decrease was driven by a reduction in commercial retail sales following the launch of a generic in December 2021. This decrease was partially offset by strong growth in unit sales of branded NARCAN®(naloxone HCl) Nasal Spray to public interest customers in the U.S., as well as from sales of the authorized generic product licensed to Sandoz, which launched in December 2021.
ACAM2000
For Q3 2022, revenues from ACAM2000 decreased $31.7 million as compared to Q3 2021. The decrease was due to a lower number of doses sold to the USG, partially offset by an increased number of doses sold to non-U.S. customers at a higher price per dose.
Other (4)
For Q3 2022, revenues from other product sales decreased $15.8 million as compared to Q3 2021. The decrease was primarily due to sales of two of the Company's Government/Medical Countermeasure (MCM) products: i) VIGIV [Vaccinia Immune Globulin Intravenous (Human)], driven by timing of deliveries to the SNS; and ii) BAT® [Botulism Antitoxin Heptavalent (A, B, C, D, E, F, G) - (Equine)], driven by timing of deliveries to international customers, partially offset by an increase in sales of Anthrasil® [Anthrax Immune Globulin Intravenous (human)], RSDL® (Reactive Skin Decontamination Lotion Kit) and Vivotif® (Typhoid Vaccine Live Oral Ty21a).
Contract Development and Manufacturing (CDMO)
CDMO Services
For Q3 2022, revenues from CDMO services decreased $76.4 million as compared to Q3 2021. This decrease is largely due to lower combined revenues of $59.1 million from AstraZeneca and Janssen reflecting the impact of reduced production activities at the Bayview facility as a result of a cessation of manufacturing activities under the AstraZeneca contract which occurred in 2021, and a pause and eventual cessation of manufacturing activities under the Janssen contract which began in Q1 2022. The decrease also reflects reduced production at the Camden facility in the quarter driven by additional investments in strengthening quality and compliance that restricted the Company’s ability to optimally utilize the existing capacity at the site. These declines in revenues were partially offset by an increase in services revenues earned at the Company's Winnipeg facility.
CDMO Leases
For Q3 2022, revenues from CDMO leases increased $71.2 million as compared to Q3 2021. The increase was primarily due to the reversal of $86.0 million of revenue in Q3 2021 related to the Company's public-private COVID-19 development partnership with BARDA in November 2021, partially offset by a $15.1 million decrease in lease revenues related to the Janssen contract.
Contracts and Grants
For Q3 2022, revenues from contracts and grants were consistent with Q3 2021.
Operating Expenses
| ($ in millions) | Q3 2022 | Q3 2021 | % Change |
| Cost of product sales | $85.5 | $103.2 | (17)% |
| Cost of CDMO | 63.1 | 114.3 | (45)% |
| Research and development | 39.2 | 49.6 | (21)% |
| Selling, general and administrative | 80.2 | 82.1 | (2)% |
| Amortization of intangible assets | 14.0 | 14.5 | (3)% |
| Total operating expenses | $282.0 | $363.7 | (22)% |
Cost of Product Sales
For Q3 2022, cost of product sales decreased $17.7 million as compared to Q3 2021. The decrease is primarily due to a change in volume of product sales.
Cost of CDMO
For Q3 2022, cost of CDMO decreased $51.2 million as compared to Q3 2021. The decrease is primarily due to reduced production activities across our CDMO network in Q3 2022 compared to Q3 2021 resulting in decreased raw materials consumption. These decreases were partially offset by increased costs at the Company's Camden facility due to additional investments in quality enhancement and improvement initiatives.
Research and Development
For Q3 2022, research and development expenses decreased $10.4 million as compared to Q3 2021. The decrease is primarily due to a decline in costs for the Company's COVID-19 therapeutic and other product candidates.
Selling, General and Administrative
For Q3 2022, selling, general and administrative expenses decreased $1.9 million due to reduced professional services and marketing costs partially offset by higher travel costs.
Additional Financial Information
Segment Information
During Q1 2022, the Company began assessing its operating performance by focusing on two reportable segments: 1) a products segment (Products) consisting of the MCM and Commercial products business lines; and 2) a services segment (Services) consisting of the CDMO business line. The Company evaluates the performance of these reportable segments based on revenue and adjusted gross margin. Segment revenue includes external customer sales but does not include inter-segment services. The Company does not allocate contracts and grants, R&D, SG&A, amortization of intangible assets, interest and other income (expense) or taxes to its evaluation of the performance of these segments.
| ($ in millions) | Products | Services | ||||
| Three Months Ended September 30, | Three Months Ended September 30, | |||||
| 2022 | 2021 | % Change | 2022 | 2021 | % Change | |
| Revenues | $186.2 | $270.5 | (31)% | $36.4 | $41.6 | (13)% |
| Cost of sales | 85.5 | 103.2 | (17)% | 63.1 | 114.3 | (45)% |
| Less: Changes in fair value of contingent consideration | 0.6 | 0.9 | (33)% | — | — | —% |
| Adjusted cost of sales | $84.9 | $102.3 | (17)% | $63.1 | $114.3 | (45)% |
| Gross margin ** | $100.7 | $167.3 | (40)% | $(26.7) | $(72.7) | 63% |
| Gross margin % ** | 54% | 62% | (800) bps | NM | NM | |
| Adjusted gross margin *** | $101.3 | $168.2 | (40)% | $(26.7) | $(72.7) | 63% |
| Adjusted gross margin % *** | 54% | 62% | (800) bps | NM | NM | |
| * % change is greater than +/- 100% | ||||||
| ** Gross margin is calculated as Revenues less cost of sales. Gross margin % is calculated as gross margin divided by Revenues. | ||||||
| *** Adjusted gross margin is a non-GAAP metric that is calculated as Revenues less Adjusted cost of sales. Adjusted gross margin % is is a non-GAAP metric that is calculated as Adjusted gross margin divided by Revenues. | ||||||
| NM - Not Meaningful | ||||||
| ($ in millions) | Products | Services | ||||
| Nine Months Ended September 30, | Nine Months Ended September 30, | |||||
| 2022 | 2021 | % Change | 2022 | 2021 | % Change | |
| Revenues | $660.5 | $589.6 | 12% | $95.4 | $416.3 | (77)% |
| Cost of sales | 256.8 | 237.0 |
By: GlobeNewswire
- 08 Nov 2022
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