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Emergent BioSolutions CEOs Discuss 1Q 2012 Results - Earnings Call Transcript

Without this non-cash charge, the Q1 net loss would have been approximately $700,000 or $0.02 per share.

Just a quick note on Pfizer. Pfizer recently notified us of its intent to terminate its development programs with respect to SBI-087. While Pfizer informed us that the product met the primary endpoint for efficacy and was generally well tolerated in a recently completed Phase II study in RA, Pfizer also indicated that the product did not meet other criteria set by Pfizer to advance the candidate.

On termination of the license agreement, which we anticipate shortly, the license technology would revert to us, and Pfizer would have a continuing obligation to pay us low single-digit royalties on net sales of any biosimilar product they may develop directed to CD20. At this time, following the return of the technology to us, we do not plan to pursue further development of SBI-087.

Moving on, we finished the quarter with a combined cash and accounts receivable of $194 million. In terms of guidance, we reaffirm our full year 2012 guidance of total revenues of $280 million to $300 million and net income of $15 million to $25 million. Finally, for the second quarter we anticipate total revenues of $70 million to $80 million.

Turning now to an update on the business, let me first discuss our biodefense division. As a result of our Q1 financial results, we continue to manufacture and deliver doses of BioThrax to the SNS under our current $1.25 billion contract. Importantly, we also continue to make progress towards licensure of our large-scale facility, Building 55, for the production of BioThrax.

This new facility is designed to manufacture up to 25 million doses of BioThrax per year on a single production line. If needed, this facility could, with the addition of a second production line, produce up to 50 million doses per year. In our meeting last year with FDA, we received overall support for our plan for regulatory approval without the need for conducting clinical trials based on achieving specified endpoints in our proposed comparability and non-clinical studies. We plan to initiate consistency lot manufacturing in Q2, with completion anticipated in Q4. Based on this plan, we remain confident that licensure could occur as early as late 2014.

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