Emergent BioSolutions Inc. Q4 FY2024 earnings call

• Joseph Papa joined Emergent one year ago to turn around the business, focusing on mission to protect and save lives. The team completed the stabilization phase ahead of schedule, reducing debt, strengthening balance sheet, and refocusing on mission.
• 2025 will be the turnaround phase to generate long-term profitable growth. Key 2024 accomplishments include reducing net debt, improving profitability and operating cash flow, strategically divesting assets, streamlining site network, and securing $550 million in MCM contract awards. NARCAN distributed 11 million two-dose cartons in 2024.
• Richard Lindahl discussed 2024 financials: total revenues $1.04 billion, adjusted EBITDA $183 million (a $205 million positive swing from 2023), total adjusted gross margin $457 million (a $121 million annual improvement). Full-year operating expenses down $101 million or 21% year over year.

In 2024, total revenues were $1.04 billion. Product sales were $909 million, with a slight decline versus the prior year due to lower NARCAN sales and timing of anthrax sales, offset by increased smallpox revenue. For 2025, segment revenue guidance includes MCM product sales forecasted to be $435 million to $485 million across US government and international orders, and commercial products (including NARCAN and Kloxato) estimated to be $265 million to $315 million. NARCAN continues to maintain a leading market share of the growing naloxone nasal spray market.

• 2025 total revenue guidance: $750 million to $850 million.
• Adjusted EBITDA guidance: $150 million to $200 million.
• Net income guidance: $16 million to $66 million; adjusted net income: $20 million to $70 million.
• Segment adjusted gross margin: 48% to 51%, a roughly 500 basis point expansion at midpoint versus 2024.
• First quarter 2025 revenue forecast: $200 million to $240 million.

• Potential shifts in government funding timing due to onboarding of a new administration, which may cause uncertainty in delivery timelines.
• Staff transitions associated with new administrations that could impact business operations.

Q: Please provide more specifics on NARCAN guidance, including volume, price, and market share assumptions.

A: Pricing saw stabilization in the second half of 2024, but there will be a follow-through impact on full-year results. Expect to maintain a very strong majority market share in the public interest market.

Q: How is the 2025 adjusted EBITDA guidance evolving and its sensitivity to NARCAN dynamics?

A: 2025 adjusted EBITDA is roughly flat year over year at midpoint, and growth in 2026 and beyond will come from portfolio diversification, organic opportunities like Tembexa and Ebanga, and external business development.

Q: When will Kloxado be available within the NARCAN direct system?

A: Announced the transaction in January, working through logistics, expect to have it in the next 30 to 60 days.

Q: Is the MOSA trial for MPOX still on track for first interim analysis end of first quarter?

A: Working with WHO for emergency use label, expect to hear more soon; additional clinical trial work is underway but details not to be discussed in detail now.

Q: Any further near-term contract adjustments or option exercises for BioDefense products?

A: Timing of option exercises could shift, but broadly, US government is expected to continue executing against contracts and issuing procurement orders in 2025, with a strong first quarter expected due to momentum from 2024.