Emergent BioSolutions' Management Presents At Wedbush 2012 Life Sciences Management Access Conference Call (Transcript)

Emergent BioSolutions Inc. (EBS)

Wedbush 2012 Life Sciences Management Access Conference Call

August 14, 2012 8:00 am ET

Executives

R. Don Elsey – Senior Vice President-Finance & Administration, Chief Financial Officer and Treasurer

Analysts

Christopher N. Marai – Wedbush Securities, Inc.

Presentation

Christopher N. Marai – Wedbush Securities, Inc.

Okay, hello good morning. My name is Chris Marai. I’m an analyst here at Wedbush Securities with Greg Wade and David Nierengarten. We’re part of the life science and biotechnology team. And it’s my pleasure to introduce to you today the CFO of Emergent Biosolutions, Don Elsey. He will be telling us a little bit about Emergent’s growing pipeline as well as their BioThrax franchise. Great, thank you Don.

R. Don Elsey

Thank you very much. Good morning to the hearty souls who have made it here so bright and early and I know seats are at premium. So let’s just jump in and get started the typical forward-looking statement where we are going to make some forward-looking statements and actual results may differ from those statements.

So I want to jump in with basically a company overview today. And if you take a look at Emergent just at a glance, we’ve got a proven cash generator in BioThrax, the only anthrax vaccine that’s licensed today. We’ve got two value-creating businesses, were organized into BioDefense and BioSciences. We will get into the structure and the focus of those businesses in a little bit.

Focusing on high-growth diseases. The company has been put together through a series of acquisitions both companies and the candidates over the last 8 to 10 years and we will get into a little bit of how that brought the product portfolio together. And then we will talk about the product pipeline itself and where the various candidates are and some of the key activities in the next six to nine months that we’ve got planned for those candidates.

So first let’s talk about BioThrax as I said the only licensed anthrax vaccine today. The contracts that Emergent has had with the government actually go back to about 1998, but this particular slide takes you from 2004 to today and you can see that there has been a series of contracts that Emergent has had with the government and the latest one signed in the September of last year that basically has the government signed up for our capacity from now until 2016. So we manufacture 24x7 and the government has contracted for everything that we make.

You can see that by the time we get to 2016 and we finish that contract, BioThrax will have generate over $2.6 billion worth of revenue and we will have supplied $96 million doses into the stockpile.

Let me talk about the stockpile for a moment and the overall demand equation. The government has a publically stated demand for anthrax vaccine in the stockpile of 75 million doses and please bear with me I’ve got a bit of a headcold. So 75 million doses is a rough calculus, it is 8 million people per city and three doses per person. That demand statement was put together in 2004 and there has been no need to update it because there has been no capacity to even achieve the 75 million. Today, we estimate in the stockpile, the government has about 22 million, 23 million doses of BioThrax in the stockpile of which DOD takes out 1 million to 2 million doses per year for active immunization of our troops before they go into feeders of high threat.

So with our current capacity today of 8 million, 9 million doses per year, mathematically with a full year shelf like, you never get to a full stockpile. So that leads to the next piece off the overall BioThrax equation which is Building 55. And Building 55 is a facility that we broke ground on in 2006. It is a completed facility from a hard asset perspective.

The building is finished, all the equipment is in and it is currently undergoing qualification and validation, and our expectation is, that we may be able to license that facility as early as late 2014. If a human bridging study is required for licensure that could prolong it out to 2015. But that takes our capacity from 8 million to 9 million doses per year upto 25 million doses per year on a single manufacturing train. And the facility is capable of having two manufacturing trains that accept theoretically a capacity of 50 million doses per year.

When we take a look out in time at the governments demands, what they are likely do with the stockpile, we anticipate that the government will essentially contract for one entire manufacturing train out of that facility. If we put in the second train, that would then allow us to go after first responders, go after ex-U.S. demand, which we have not been able to address in the past given that our capacity is being signed up for.

So that’s a very quick overview of our were BioThrax is, or has been, where it is in today’s contract and what we are doing to expand capacity, and grow revenue from the BioThrax product.

As I said before, we are organized in Bio-Defense and Bio-Sciences, you see some of the product candidates here, I want to spend a lot of time here. I will get into actual pipeline chart in a moment. Bio-Defense at this point in time is focused strictly on anthrax, so infectious disease. We continue to take a look entire landscape of chemical, biological, radiological and nuclear. But at this point in time it’s focused on infectious disease. Depending upon where the government goes in formulating counter measures for some of these other areas, we may branch-out into some of those other areas.

Read the rest of this transcript for free on seekingalpha.com

More from Stocks

Video: Here's What May Come Next for Theranos Founder and CEO Elizabeth Holmes

Video: Here's What May Come Next for Theranos Founder and CEO Elizabeth Holmes

Dow Leads Major Indices With Triple-Digit Rally

Dow Leads Major Indices With Triple-Digit Rally

Micron CEO: Internet of Things and Data Economy Will Drive Company's Growth

Micron CEO: Internet of Things and Data Economy Will Drive Company's Growth

Tesla Model 3 Delivery Time Falls, but Will It Help the Stock?

Tesla Model 3 Delivery Time Falls, but Will It Help the Stock?

Baidu Stock Plummets After COO Qi Lu Resignation

Baidu Stock Plummets After COO Qi Lu Resignation