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Emergent BioSolutions Tops Q3 Earnings and Revenues

Emergent BioSolutions, Inc.EBS reported earnings of 83 cents per share in the third quarter of 2015, beating the Zacks Consensus Estimate of 56 cents and above the year-ago figure of 54 cents.

Emergent Biosolutions Inc. (EBS) - Earnings Surprise | FindTheCompany

Revenues surged 19.6% from the year-ago period to $164.9 million and were above the Zacks Consensus Estimate of $152 million.

Quarter in Detail

Emergent BioSolutions generates product sales from two segments - Biodefense and Biosciences.

Total product sales grew 46.8% to $124 million from the year-ago period. This increase is attributable to a rise in BioThrax sales in the reported quarter.

Product sales from the Biodefense segment increased 51.2% to $117.5 million with BioThrax contributing $109.8 million, up 66.4% from the year-ago quarter. However, Biosciences product sales decreased 4.4% to $6.5 million.

Contracts, grants and collaboration revenues were $29.6 million, down 32.7% from the year-ago quarter, which had included an upfront payment of $15 million related to the company's prostate cancer therapeutic candidate, MOR209/ES414.

Contract manufacturing revenues came in at $11.3 million, up 20.2% year over year.

Research and development (R&D) expenses were $41.9 million, down 5.3% from the year-ago quarter. Selling, general and administrative (SG&A) expenses were up 4.2% to $31.6 million.

2015 Outlook

The company expects revenues in the range of $520 million - $540 million, compared to the previous guidance of $510 million - $540 million.

The company expects adjusted income to be in the range of $60 million - $70 million.

Our Take

The company's third-quarter results were strong with both earnings and revenues exceeding expectations. We expect the strong growth momentum in BioThrax sales to continue contributing to product sales.

We note that the company is progressing on a tax-free spin-off of its Biosciences business into a separate publicly traded company, Aptevo Therapeutics. Aptevo intends to focus on cancer and hematology treatments, while Emergent BioSolutions will continue to operate as a specialty biopharmaceutical company. This spin-off is expected to be completed by mid-2016.

Emergent BioSolutions carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include are Anika Therapeutics Inc. ANIK , Spectrum Pharmaceuticals, Inc. SPPI and Actelion Ltd. ALIOF , each sporting a Zacks Rank #1 (Strong Buy).

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EMERGENT BIOSOL (EBS): Free Stock Analysis Report

ACTELION LTD (ALIOF): Free Stock Analysis Report

SPECTRUM PHARMA (SPPI): Free Stock Analysis Report

ANIKA THERAPEUT (ANIK): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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