Emergent BioSolutions Inc. Q1 FY2025 earnings call

• Executing on multiyear plan to stabilize, streamline operations, and drive profitable growth. - Achieved revenue and adjusted EBITDA targets, improved cash and liquidity position. - Partnered with U.S. government and allied nations for medical countermeasures preparedness and delivered NARCAN Nasal Spray. - Completed two strategic business development transactions. - Focused on core strengths of medical countermeasures and opioid overdose reversal treatment. - NARCAN managed through one-time events and saw improved revenue trends in the second quarter. - MCM had favorable quarter with international revenue and better transparency on 2025 deliveries from U.S. government stakeholders. - New CMO implemented R&D strategy for product line extensions. - North America-centric manufacturing model with MCM pox manufactured in U.S. or Canada and U.S. MCA compliant, managing future inventory orders to mitigate tariff impacts.

For Commercial Products, NARCAN revenue declined year-over-year due to factors like reduced pricing in the public interest space starting in late 2024, a one-time sale of short-dated generic inventory by a third-party distributor, and federal administration transition causing purchasing delays. However, improved trends in unit volumes were seen in the second quarter. For MCM Products, the first quarter was very favorable with significant international revenue while maintaining strong relationships with U.S. and allied government partners. In absolute terms, total revenues were $222 million, adjusted EBITDA was $78 million. Revenue contribution: Commercial Products (including NARCAN) and MCM Products were key segments, with MCM having significant international revenue contributing to its portion.

• Reaffirmed full year 2025 guidance: total revenues $750 million to $850 million, adjusted EBITDA $150 million to $200 million. - Segment level guidance: MCM product sales $435 million to $485 million, Commercial Products (including KLOXXADO) $265 million to $315 million. - Second quarter 2025 revenue forecasted $95 million to $120 million, with full year revenue weighted more to second half, and profitability expected to decline in second quarter then improve meaningfully from third quarter.

• Tariff impacts on components sourced from European Union if not managed properly. - Market dynamics for NARCAN including competition from third-party distributors and federal funding process changes.

Q: On tariffs, talk about manufacturing footprint including API sources and product crossing border for sale.

A: Majority of product manufactured/sourced in U.S., active ingredients mostly in U.S. Some NARCAN device from Europe, working to get more from U.S. Most products USMCA compliant with limited tariff exposure.

Q: Elaborate on gross margin improvement this quarter and trajectory.

A: Factors include cost reductions from selling Camden and Bayview, less unutilized capacity, and favorable product mix with higher margin international orders.

Q: Were NARCAN dynamics in motion like competitor selling short-dated product contemplated in 1Q forecast?

A: Contemplated some, but got more clarity on magnitude as time went on regarding third-party distributor's short-dated product and federal funding timeline.

Q: What changed in Naloxone market growth expectation to mid-single digits?

A: Always contemplated mid-single digit growth rate for overall NARCAN and Naloxone total market, with total pie expected to grow at that rate.

Q: Are international customers referenced in March 2025 press release likely to place more orders and revenue recognition?

A: View international growth as important, diversification seen with 40% of overall revenue and 60% of MCM revenue from outside U.S., but specific magnitude of $27 million plus opportunity not specified, but more opportunity exists.

Q: How will $65 million Ontario contract be allocated over 3 years?

A: Reasonable to assume fairly even allocation over 3 years.

Q: Will Emergent benefit from pharmaceutical and biotechnology manufacturing onshoring and divest manufacturing infrastructure?

A: Have capacity for drug substance and fill finish, will look to help onshoring opportunistically, currently like current footprint but would consider divestment if good price, have divested sites worth ~$150 million.

Q: Has the company been actively repurchasing stock and status of repurchase program?

A: Will comment on progress against repurchase program each quarter, no active repurchasing mentioned at this point