Emergent Biosolutions, Inc. (EBS)
Q4 2011 Earnings Call
March 8, 2012 5:00 PM ET
Bob Burrows – VP, IR
Fuad El-Hibri – Chairman and CEO
Don Elsey – SVP, Finance and Administration and CFO
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I would now like to turn the conference over to your host for today, Mr. Bob Burrows, Vice President of Investor Relations.
Thank you, Jeremy. Good afternoon, ladies and gentlemen, thank you for joining us today as we discuss Emergent BioSolutions fourth quarter and full-year 2011 financial results. As is customary, our call today is open to all participants. In addition, the call is being recorded and is copyrighted by Emergent BioSolutions.
Joining me on the call this afternoon with prepared comments will be Fuad El-Hibri, our Chairman and Chief Executive Officer and Don Elsey, our Chief Financial Officer. Additional members of our senior management team will be present on the call for purposes of the Q&A session.
Before we begin, I am 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 or 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 potential risks and uncertainties. Actual results may differ materially from those projected in any forward-looking statements. You’re encouraged to review Emergent’s filings 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 the reply, this call is held and recorded on March 8, 2012. Since then, Emergent may have made announcements relating to topics discussed during today’s call. So again, please refer to 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\Special Events.
With that introduction, I would now like to turn the call over to Fuad El-Hibri, Emergent BioSolutions’ Chairman and CEO. Fuad?
Thank you, Bob. Good afternoon, everyone and thank you for joining us on our call today. For my prepared comments, I will review our financial performance for 2011, address the forecasts for 2012, including revenue expectations for the first quarter and discuss the current status of the company.
To begin, let me review our financial results for 2011. For the full year, we achieved total revenues of approximately $273 million, which is within the $270 to $275 million range we provided in January. In addition, we realized net income of $23 million, which is within the $20 to $24 million range, we previously provided. At year end, we held cash and accounts receivable of $220 million.
Looking ahead, we are reaffirming our full year 2012 guidance of total revenues of $280 to $300 million, a split between product sales of $220 to $230 million and contracts and grants revenue of $60 to $70 million. We are also reaffirming our full year 2012 net income of $15 to $25 million. In addition, we anticipate first quarter 2012 total revenues of $40 million to $50 million.
Turning now to the status of the company. Let me first talk about our BioDefense Division. In 2011, we continued to manufacture and deliver as many doses of BioThrax into the SNS as possible. To that end, we completed deliveries under the prior 17.9 million dose contract and began deliveries under the new CDC contract. The new contract, which was awarded in September is for approximately 45 million doses valued at up to $1.25 billion to be delivered to the SNS through September 2016.
This is a significant commitment by the U. S. government and further affirms BioThrax as a critical component of the government’s biopreparedness arsenal for years to come. In response to the government’s stated requirement to build a stock pile of 75 million doses of Anthrax vaccine, we continue to make progress towards licensure of our large-scale facility Building 55. This new facility is designed to manufacture up to 25 million doses of Anthrax 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. We have presented to FDA a comprehensive plan for regulatory approval based on comparability and non-clinical studies without clinical data. During pre-submission discussions, FDA indicated its overall support for our plan that doesn’t require clinical studies and provided a specific guidance on expanding this scope of non-clinical studies. This may translate in obtaining approval potentially one year ahead of schedule.
In 2012, we’ve planned to complete consistency lot manufacturing and we anticipate licensure approval as early as 2014. The partnership with BARDA, we continue to enhance the value of Valtrex as one of the leading biodefense countermeasures.
These initiatives include obtaining post exposure indication, optimizing the dosing schedule and extending the product shelf life. We are also developing Valtrex in combination with a novel adjuvant in pursuit of a two-dose vaccination schedule administered over a two-week period. In addition, with respect to our other anthrax directive programs, including our RPA vaccine candidates and our two therapeutic candidates, we plan to complete ongoing studies and secure follow-on development funding from BARDA.