Emergent BioSolutions' CEO Discusses Q2 2012 Results - Earnings Call Transcript

Emergent BioSolutions, Inc. (EBS)

Q2 2012 Earnings Conference Call

August 2, 2012 05:00 PM ET

Executives

Daniel J. Abdun-Nabi - President and CEO

R. Don Elsey - SVP Finance & Administration, and CFO

Adam R. Havey - EVP and President, BioDefense Division

W. James Jackson, Ph.D - SVP and Chief Scientific Officer

Robert Burrows - VP of Investor Relations

Analysts

Cory Kasimov - JP Morgan Chase & Co

Nicholas Bishop - Cowen and Company, LLC, Research Division

Mario Corso - Caris & Company

Matthew Miksic - Piper Jaffray & Co.

Presentation

Operator

Good day ladies and gentlemen and welcome to the Emergent BioSolutions Second Quarter of 2012 Financial Results Conference Call. My name is Ian and I will be your operator for today. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of this conference. (Operator Instructions) And as a reminder, this call is being recorded for replay purposes.

I’d now like to turn the call over to Bob Burrows, Vice President of Investor Relations. Please proceed, sir.

Robert Burrows

Thank you, Ian. Good afternoon, ladies and gentlemen. Thank you for joining us today as we discuss Emergent BioSolutions second quarter of 2012 financial results.

As is customary, our call today is open to all participants. In addition, the call is being recorded and it’s copyrighted by Emergent BioSolutions. The call today will start with a brief prepared comments by our President and Chief Executive Officer, Dan Abdun-Nabi, who will give an overview of our financial performance for the second quarter, a brief business update and our 2012 forecast, including revenue expectations for the third quarter. Then, our CFO, Don Elsey will go through the financials in detail before we open up the call for your questions. We have several other members of senior management available to respond to your questions.

Before we begin, I’m compelled to remind everyone that during the call management may make projections and other forward-looking statements regarding future events and the Company’s prospects for future performance. These forward-looking statements reflect Emergent’s current perspective on existing trends and information. Any such forward-looking statements are not guarantees of future performance and involve substantial risks and uncertainties. Actual results may differ materially from those projected in any forward-looking statements. You are encouraged to review Emergent’s filing with the SEC on forms 10-K, 10-Q and 8-K for more information on the risks and uncertainties that could cause actual results to differ.

For the benefit of those who may be listening to replay, this call is held and recorded on August 2, 2012. Since then, Emergent may have made announcements relating to topics discussed during today’s call. So again, please reference our most recent press releases and SEC filings. Emergent BioSolutions assumes no obligation to update the information in today’s press release or as presented on this call, except as may be required by applicable laws or regulations. Today’s press release may be found on our website at www.emergentbiosolutions.com under investors/news.

And with that introduction, I’d now like to turn the call over to Dan Abdun-Nabi, Emergent BioSolutions, President and CEO. Dan?

Daniel J. Abdun-Nabi

Thank you, Bob. Good afternoon, everyone and thank you for joining our call today. In my prepared comments, I will review our results for the second quarter and year-to-date, discuss our achievements for this quarter, and highlight certain near-term milestones. I will conclude my remarks with our guidance for the third quarter and for the full-year.

To begin, our total revenues for the second quarter were just over $70 million. This is within the guidance that we provided during our May conference call. Year-to-date total revenues were approximately $121 million. Net income for the quarter was $7.6 million and was approximately $800,000 for the first six months of the year.

Turning to our achievements during the second quarter, we made progress on a number of initiatives. We commenced the manufacturing of consistency lots in Building 55. This represents a significant step towards licensure of this large scale BioThrax manufacturing facility. Once completed the consistency lot material will be used in our pivotal non-clinical study.

The data from that study together with other comparability data, will be reviewed by FDA as part of our licensure package. Last year FDA indicated its overall support for our plan for regulatory approval of Building 55 without the need for conducting clinical trials. This regulatory plan is based on achieving specified end points in our proposed comparability and non-clinical studies. More recently during the second quarter, FDA notified us that they concurred with the design of our pivotal non-clinical study. If we’re successful in this plan, we remain confident that licensure could occur in late 2014.

As a remainder, we’re receiving development funding from BARDA to support the licensure of Building 55 for the manufacturer of BioThrax. In terms of BioThrax improvements we accomplished two important milestones during the second quarter. First, FDA approved an amendment to our BioThrax generally used prophylaxis or GUP label. The BioThrax label not provide for a three-dose primary series with booster doses thereafter. This is an important milestone that was achieved with significant support by the U.S. government .We believe the achievement of this milestone addresses a key requirement and enhances the value of BioThrax to our principle customers within the U.S. government.

Second, we completed enrolment in the pivotal immunogenicity study of BioThrax for a post-exposure prophylaxis or PEP indication. This is being conducted under our current BARDA contract. We also secured an additional BARDA contract to support a Phase 2 non-interference study related to a PEP indication for BioThrax.

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