Emergent Biosolutions, Inc. (EBS)

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Emergent Biosolutions Inc. (EBS)

Q32012 Earnings Call

November 1, 2012 8:00 am ET


Robert Burrows - Vice President, Investor Relations

Daniel Abdun-Nabi - President, Chief Executive Officer, Director

Don Elsey - Chief Financial Officer, Senior Vice President - Finance and Administration

Scott Stromatt - Senior Vice President, Chief Medical Officer


Matt Lowe - J.P. Morgan

Nicolas Bishop - Cowen and Company

Jason Kantor - Credit Suisse

Matthew Luchini - Piper Jaffray

Greg Wade



Good day, ladies and gentlemen and welcome to the Emergent BioSolutions third quarter 2012 financial results conference call. My name is Grant and I will be your operator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of this conference. (Operator Instructions) As a reminder, this call is also being recorded for replay purposes.

I would now like to turn the call over to your Mr. Bob Burrows, Vice President, Investor Relations. Please proceed.

Robert Burrows

Thank you, Grant. Good afternoon, ladies and gentlemen. Thank you for joining us today as we discuss Emergent BioSolutions' third quarter and year-to-date 2012 financial results and recently announced growth plans through 2015.

As is customary, our call today is open to all participants. In addition, the call is being recorded and is copyrighted by Emergent BioSolutions. Participating on the call this afternoon with prepared comments will be our President and Chief Executive Officer, Dan Abdun-Nabi and Chief Financial Officer, Don Elsey. Several other members of senior management team will be available to respond to your questions during 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 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 the replay, this call is held and recorded on November 1, 2012. Since then, Emergent may have made announcements relating to topics discussed during today's call. So, again, please do 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.

With that introduction, I would now like to turn the call over to Dan Abdun-Nabi, Emergent BioSolutions' President and CEO. Dan?

Daniel Abdun-Nabi

Well, thank you, Bob. Good morning, everyone and thank you for joining on our call today. During my prepared comments, I will review cover two broad topics. First, I will discuss our financial and operational performance for the past quarter and the year-to-date. Then, I will discuss in greater detail the growth plans through 2015 that we announced this morning.

To begin, let me review our financials for the period. Our total revenues for the third quarter were approximately $67 million. This is within the guidance that we provided during our August conference call. Year-to-date total revenues were just over $187 million. Net income for the quarter were $6.6 million and net income for the first nine months of the year were $7.4 million.

Turning to our achievements during the third quarter. We made significant progress in a number of areas. In our biodefense division we completed the manufacturing of BioThrax consistency lots in Building 55 and final product testing of these lots continues to move forward.

Regarding PreviThrax, our Recombinant Anthrax Vaccine candidate, we announced that BARDA exercised a one-year contract option to further advance the development of this program. This option was exercised based upon PreviThrax. Having met all of the key milestones and after BARDA completed interagency process review.

In our biosciences division, we initiated a Phase 2 study of TRU-016 in combination with bendamustine for relapsed refractory CLL. Recruiting for this study is on track with data expected next year.

Meanwhile we completed the Phase 1b comparative study evaluating TRU-016 in combination with bendamustine and rituximab in relapsed indolent NHL The data from that study indicated that the combination therapy had an acceptable safety profile and there was evidence of clinical activity.

Finally during the quarter, we initiated a $35 million share repurchase program.

Now, I would like to discuss our near-term milestones. First, our biodefense programs. We anticipate completing all testing for our building 55 consistency lots in Q1 2013. Once completed the consistency lot material will be used in our pivotal nonclinical study, which we expect to initiate in Q2 2013. The data from that study together with other comparability data will be reviewed by FDA as part of our licensing package.

We continue to anticipate that we will be in a position to file for regulatory approval for building 55 in 2014. With respect to a postexposure prophylaxis or pep indication for BioThrax, we expect to initiate a Phase 2 antibiotic noninterference study by year-end. We anticipate this will be the final clinical study required in order to secure the pep indication. That trial is expected to be completed in mid-2014. In addition, Q1 next year, we expect to initiate a Phase 2 immunogenicity study for nuthrax also for a pep indication.

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