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• Fourth Quarter 2023 Total Revenues of $277 million, which aligned our Full Year to the mid-point of guidance
• Full Year 2023 Total Revenues of $1.05 billion, which was the mid-point of guidance
• Fourth Quarter 2023 Net Loss of $50 million and Adjusted EBITDA of $3 million
• Issues Q1 2024 and FY 2024 guidance

GAITHERSBURG, Md., March 06, 2024 (GLOBE NEWSWIRE) -- Emergent BioSolutions Inc. (NYSE: EBS) today reported financial results for the quarter and year ended December 31, 2023.

"Emergent has a long history of helping protect people around the world from opioid overdose emergencies and chemical, biological and radiological threats. This commitment to public health, together with Emergent's leadership, give me confidence in the long-term future of the company," said Joe Papa, President and CEO at Emergent. "Emergent faces some short-term challenges, which we are addressing head on. At the same time, we are making decisions and putting strategies in place for Emergent to add value for customers, patients and investors. Emergent is a company with a bright future, and I am excited to help lead it forward."

FINANCIAL HIGHLIGHTS ⁽¹⁾

Q4 2023 vs. Q4 2022

Full Year 2023 vs. Full Year 2022

SELECT Q4 2023 AND FULL YEAR BUSINESS UPDATES

• Launched NARCAN^® Naloxone HCl Nasal Spray 4 mg Over-The-Counter (“OTC NARCAN^®”), broadening our customer base and sales channels to retail pharmacies and digital commerce websites as well as through physician-directed or standing order prescriptions at retail pharmacies, health departments, local law enforcement agencies, community-based organizations, substance abuse centers and other federal agencies
• Announced U.S. Food and Drug Administration (“FDA”) approval of CYFENDUS^® (Anthrax Vaccine Adsorbed, Adjuvanted), previously known as AV7909, a two-dose anthrax vaccine for post-exposure prophylaxis use
• Awarded a $75 million option to Emergent's existing contract for the acquisition of the newly approved CYFENDUS^®
• Awarded a 10-year contract by the Biomedical Advanced Research and Development Authority (“BARDA”) for advanced development, manufacturing scale-up, and procurement of Ebanga™ (ansuvimab-zykl) product, a treatment for Ebola
• Awarded a $379.6 million U.S. Department of Defense contract for RSDL^®
• The FDA closed out its inspection of the Company’s Camden facility and issued a “close-out letter” of its Warning Letter issued in August 2022
• Continued progress on strengthening our fundamentals with key focus on our Medical Countermeasure (“MCM”) and NARCAN^® products
• Implemented organizational and resource changes resulting in $160 million of annual savings
• Amended and extended maturity of our secured credit facility to May 2025
• Divested the Travel Health business valued at $380 million

FOURTH QUARTER 2023 FINANCIAL PERFORMANCE ⁽¹⁾

Revenues

Beginning in 2023, the Company revised the categories used in discussing product/service level revenues. The new categories are:

• NARCAN^® — comprises contributions from NARCAN^® Nasal Spray
• Other Commercial Products - comprises contributions from Vaxchora^® and Vivotif^®, which we sold to Bavarian Nordic as part of our travel health business in May 2023
• Anthrax MCM — comprises potential contributions from CYFENDUS^®, previously known as AV7909, BioThrax^®, Anthrasil^® and Raxibacumab
• Smallpox MCM — comprises potential contributions from ACAM2000^®, VIGIV and TEMBEXA^®
• Other Products — comprises potential contributions from BAT^®, RSDL^® and Trobigard^®
• Bioservices — comprises service and lease revenues from the Bioservices business

Products Revenue, net

NARCAN^®

For Q4 2023, revenues from NARCAN^® (naloxone HCl) Nasal Spray increased $19.9 million, or 22%, as compared with Q4 2022. The increase was primarily driven by higher OTC NARCAN^® sales to U.S. public interest channels and retailers, partially offset by a decrease in sales of prescription based NARCAN^® due to the launch of OTC NARCAN^® in 2023 and the cessation of authorized generic NARCAN^® sales related to the termination of the Company’s relationship with Sandoz.

Other Commercial Products

For Q4 2023, revenues from Other Commercial Products decreased $4.9 million as compared with Q4 2022. The decrease was driven by no sales of our Vaxchora^® and Vivotif^® products during the current year quarter, which we sold to Bavarian Nordic as part of our travel health business in May 2023.

Anthrax MCM

For Q4 2023, revenues from Anthrax MCM increased $55.2 million, or 98%, as compared with Q4 2022. The increase reflects the impact of timing of sales related to CYFENDUS^® (Anthrax Vaccine Adsorbed, Adjuvanted), Anthrasil^® (Anthrax Immune Globulin Intravenous (human)) and BioThrax^® (Anthrax Vaccine Adsorbed). Anthrax vaccine product sales are primarily made under annual purchase options exercised by the U.S. Government ("USG"). Fluctuations in revenues result from the timing of the exercise of annual purchase options, the timing and amount of USG purchases, the availability of governmental funding and timing of Company delivery of orders that follow.

Smallpox MCM

For Q4 2023, revenues from Smallpox MCM decreased $133.1 million, or 92%, as compared with Q4 2022. The decrease was due to no current quarter sales of TEMBEXA^® and timing of VIGIV deliveries. Fluctuations in revenues from Smallpox MCM result from the timing of the exercise of annual purchase options in existing procurement contracts, the timing of USG purchases, the availability of governmental funding and timing of Company delivery of orders that follow.

Other Products

For Q4 2023, revenues from other product sales increased $6.3 million, or 72%, as compared with Q4 2022. The increase was primarily due to higher BAT^® product sales, partially offset by lower sales of RSDL^®.

Bioservices Revenues

Services

For Q4 2023, revenues from Bioservices services increased $3.4 million, or 20%, as compared with Q4 2022. The increase was primarily driven by resolution of a customer's outstanding obligation at our Bayview facility and increased production at our Camden facility, partially offset by a decrease in production at our Winnipeg facility. In the prior year, there was a reversal of revenue related to the halt in manufacturing under the Janssen Agreement.

Leases

For Q4 2023, revenues from Bioservices leases were consistent with Q4 2022.

Contracts and Grants

For Q4 2023, revenues from contracts and grants decreased $0.4 million, or 6%, as compared with Q4 2022. The decrease was primarily attributable to changes in the mix and timing of various development initiatives.

Operating Expenses

Cost of Commercial Product Sales

For Q4 2023, cost of Commercial product sales increased $9.9 million, or 25%, as compared with Q4 2022. The increase was primarily due to higher sales of OTC NARCAN^® and Branded NARCAN^®, partially offset by no sales of Vivotif^® and Vaxchora^® or related expenses during the current quarter due to the sale of our travel health business to Bavarian Nordic in May 2023.

Cost of MCM Product Sales

For Q4 2023, cost of MCM product sales decreased $30.4 million, or 24%, as compared with Q4 2022. The decrease was primarily due to lower sales of TEMBEXA^® and lower shutdown costs, partially offset by increases due to higher sales of CYFENDUS^®, Anthrasil^® and BioThrax^®, inventory write-offs and additional allocations of cost of goods sold to MCM Products from Bioservices.

Cost of Bioservices

For Q4 2023, cost of Bioservices decreased $14.9 million, or 28%, as compared with Q4 2022. The decrease was primarily due to higher allocations to MCM Product cost of goods sold and reduced production activities related to the halt in manufacturing under the Janssen Agreement at our Bayview facility, coupled with decreases in production at the Company’s Camden and Winnipeg facilities.

Research and Development Expenses

For Q4 2023, R&D expenses decreased $17.6 million, or 37%, as compared with Q4 2022. The decrease was primarily due to the sale of the Company’s development program for CHIKV VLP to Bavarian Nordic, which was a significant contributor to prior period R&D expense, as well as a decrease in funded R&D across various development initiatives and reduction in related overhead costs driven by headcount reductions, partially offset by write-offs related to program terminations during the period and an increase in Ebanga™ and TEMBEXA^® funded R&D.

Selling, General and Administrative Expenses

For Q4 2023, SG&A expenses decreased $3.7 million, or 4%, as compared with Q4 2022. The decrease was primarily due to decreases in consulting and contracted services and decreases in compensation and other employee costs related to the restructuring initiatives taken during 2023. The decrease was partially offset by an increase in marketing expenses related to the launch of OTC NARCAN^® and higher professional services fees related to legal remediation services.

Goodwill Impairment

For Q4 2023, goodwill impairment decreased $6.7 million as compared with Q4 2022. The decrease was related to the Q4 2022 $6.7 million non-cash impairment charge to Goodwill in the Bioservices reporting unit, which reduced the reporting unit's goodwill balance to zero.

ADDITIONAL FINANCIAL INFORMATION ⁽¹⁾

Capital Expenditures

For Q4 2023, capital expenditures decreased largely due to lower product development activities across the Company’s facilities.

SEGMENT INFORMATION

In the fourth quarter of 2023, we realigned our reportable operating segments to reflect recent changes in our internal operating and reporting process. The Company now manages the business with a focus on three reportable segments: (1) a Commercial Products segment consisting of our NARCAN^® and other commercial products which were sold as part of our travel health business in the second quarter of 2023; (2) a MCM Products segment consisting of the Anthrax - MCM, Smallpox - MCM and Other products and (3) a services segment (“Services”) consisting of our Bioservices. The Company evaluates the performance of these reportable segments based on revenue and segment adjusted gross margin, which is a non-GAAP financial measure. Segment revenue includes external customer sales, but does not include inter-segment services. The Company does not allocate contracts and grants, R&D, SG&A, amortization of intangible assets, interest and other income (expense) or taxes to its evaluation of the performance of these segments.

FOURTH QUARTER 2023 SEGMENT RESULTS