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Emergent BioSolutions Inc. (EBS)
30th Annual J.P. Morgan Healthcare Conference
January 10, 2012 2:00 PM EST
Daniel Abdun-Nabi – President & Chief Operating Officer
Matthew Lowe – JP Morgan
Matthew Lowe – JP Morgan
Previous Statements by EBS
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Thank you, Matthew. Good morning Ladies and Gentlemen and thank you for joining the presentation this morning and thank you for the invitation to present. We really do appreciate that.
It is my distinct pleasure to present business overview for Emergent Biosolutions. Before I begin let me remind you I will be making forward-looking statements in the course of this presentation. Those statements are subject to risks and uncertainties and actual results may differ. I direct your attention to our SEC filings for a complete description of the risks and uncertainties affecting our business.
Let me begin with a company overview. I think as I go through this presentation you’ll come to realize that Emergent presents a unique value proposition. We are a proven significant cash generator, operating in two value creating businesses with a focus on high growth disease areas, along with a rich history of strategic transactions. And all of this has allowed us to establish an advanced clinical stage product pipeline and I’d like to talk about each one of these individually.
As I noted, Emergent has a history of cash generation, specifically on our marketed product BioThrax, has a ten year history of revenue generation, primarily through sales to the US government. As you can see from this slide, since September 2004, we have sold or have been under contract to sell approaching 100 million doses of BioThrax to the US government with a total contract value of over $2.5 billion. Our most recent award, which is highlighted in the green row, provides delivery through Q3, 2016 and five years of revenue visibility just for BioThrax.
BioThrax is a significant asset for the company, generating substantial EBITDA which we have been using to support our planned full growth.
To support our growth strategy, we are now operating in two separate and distinct business divisions, BioDefense and BioSciences and each of these divisions has a unique focus and business model. Let me start with the BioDefense model.
It addresses the needs of the US government in stockpiling medical countermeasures to address ongoing biological threats. Thus in doing so, the division really needs to focus on the particular needs of the US government, with the specialized product attributes that they are looking for, with the production capabilities and delivery schedules set they are targeting and we need to be mindful of the changing prioritization that the government articulates from time to time. So along with manufacturing, product development, clinical development, process and analytical development skills that we have, we’ve developed unique capabilities around government contracting, procurement processes, government budgeting, strategic alliances and partnership, all of which has enabled the BioDefense division to be successful.
Separately, the BioSciences group or division really has a separate focus which is really to develop unique vaccines and therapeutics that meet unmet medical needs or underserved medical markets globally. With these two business divisions, we focus on three targeted disease areas and they are depicted here. Infectious disease, oncology and autoimmune and some of the specific targets are identified on the screen. And these were selected using carefully crafted processes and filters that were established by the company and they’re unique and tailored to our organization. So we focus on our core competencies, our unique capabilities and our growth strategy in selecting the disease areas of primary interest to the company.
Applying this process, we have both developed and acquired advanced stage clinical programs which will allow us to achieve our strategic missions. Acquisitions have played a key role in our overall growth program and as you can see from this slide, since 2006, we have a robust and rich history of strategic transactions. This has enabled us to acquire and integrate into our portfolio several advanced stage clinical programs and has also allowed us to expand our manufacturing infrastructure capabilities.
So our current strategy with respect to acquisitions is that continues to be a core focus for us as we grow and we are looking in terms of our growth approach on strategic acquisitions to target near term revenue generators that we could add to the portfolio. We believe this approach will significantly enhance the overall value of the portfolio we currently have under development.
The portfolio that you have in front of you is comprised of a number of different products, both in the BioSciences and the BioDefense divisions. It is very well balanced between vaccines and therapeutics. Importantly, six of the eight products in the portfolio have substantial, that’s either partial or full funding from external third party sources on a non-diluted basis and as I will discuss throughout the presentation, the pipeline is expected to provide clinical data in the coming 12 to 24 months, which could further enhance our overall value and outlook.
Now I’d like to talk about each of the divisions in a little bit greater detail and I’d like to start with the BioDefense division. Our flagship product is BioThrax. It is the only FDA licensed vaccine for the prevention of anthrax disease and as medical – BioDefense medical countermeasure, it’s really rather unique. It is both FDA approved for the prevention of anthrax disease and has been administered in 2.7 million individuals as part of a standardized vaccination program. So that’s rather unusual.