Emergent BioSolutions at Jefferies Conference: Strategic Transformation

On Thursday, 05 June 2025, Emergent BioSolutions (NYSE:EBS) presented a strategic overview at the Jefferies Global Healthcare Conference 2025, outlining its ongoing transformation plan. The company’s CFO, Richard Lindahl, highlighted both the promising financial improvements and the challenges ahead, emphasizing a focus on public health threats and growth initiatives.

Key Takeaways

• Emergent BioSolutions aims for 2025 revenue between $750 million and $850 million.
• The company completed the stabilization phase of its transformation plan and is now in the turnaround phase.
• Q1 2025 revenue was $222 million, with a 50% increase in cash position.
• International sales comprised 60% of medical countermeasure sales.
• Emergent is expanding its R&D pipeline and pursuing strategic growth opportunities.

Financial Results

• Q1 2025 Revenue: $222 million, aligning with guidance despite year-over-year fluctuations.
• Cash Position: Increased by 50% to $149 million from the previous year.
• Net Leverage: Reduced significantly from 5.7x to 2.8x.
• Gross Margins: Improved by 700 basis points.
• SG&A Expenses: Decreased by approximately 40%, or $32 million year-over-year.
• Adjusted EBITDA: Improved by 1,300 basis points year-over-year.
• Full Year 2025 Guidance: Revenue of $750 million to $850 million, Adjusted EBITDA of $150 million to $250 million.
• Q2 2025 Revenue Guidance: $95 million to $120 million.

Operational Updates

• Manufacturing Footprint: Focus on North American facilities, minimizing tariff impacts with compliance to USMCA regulations.
• Commercial Products: Narcan and Cloxado target North American and Canadian markets, with a strong US public interest sector presence.
• Medical Countermeasures: Continued strong demand, with $27 million in international orders secured for 2025.
• R&D Pipeline: Received a $17 million contract option for Ibanga and began the MOSA study for Tembexa.

Future Outlook

• Growth Catalysts: Partnership with RocketVax for vaccine development and Cloxado acquisition to enhance the product portfolio.
• International Expansion: Focus on growing the medical countermeasure business globally.
• Capital Allocation: Investment in growth opportunities, debt repayment, and a $50 million share repurchase program.

For a detailed understanding of Emergent BioSolutions’ strategic direction and financial performance, refer to the full transcript below.

Full transcript - Jefferies Global Healthcare Conference 2025:

Richard Lindahl, CFO, Emergent BioSolutions: Okay.

Victoria Gendron, Jefferies Investment Banking Team, Jefferies: Good afternoon, and welcome to the Jefferies Global Healthcare Conference. My name is Victoria Gendron with the Jefferies Investment Banking Team, and it is with my great pleasure to introduce Richard Lindahl, the CFO of Emergent BioSolutions.

Richard Lindahl, CFO, Emergent BioSolutions: Okay. Thank you very much, Victoria, and, thank you all for coming today. We appreciate your interest in our company. I’m going to start, with the standard safe harbor, slide here that basically tells you, to listen very carefully to what I say, but also please refer to our SEC filings. So I’ll start by just introducing the company as one that we’ve been around for over twenty five years, and we’ve been focused throughout all that time on providing solutions to public health threats.

We focus on biological threats and preparedness for those. We also are very focused on the opioid crisis in America and Canada and providing solutions to help save lives there. Very simply, our mission is to protect and save lives. And we have you can see at the bottom left hand of this slide, some of the dimensions of the company. We have 11 products, that we market today.

We’ve anticipated 2025 revenue of between $750,000,000 and $850,000,000 We employ about 900 people, and we are a strategic partner to governments, NGOs, and as well as biopharma innovators. On this slide you can see we operate in two segments today. On the left hand side you can see our government or medical countermeasure segment. You can see highlighted here the primary threat areas that we focus on, anthrax, smallpox, botulism, and Ebola today. We provide a range of vaccines and therapeutic solutions to address the the government’s preparedness needs.

And we sell primarily to the US government, but also to foreign allied governments around the world. And I’ll talk more about that in a little bit. Again, I referenced the the opioid overdose emergency product, naloxone products. We have our flagship product is Narcan nasal spray, the four milligram formulation. We also recently acquired the rights to, the commercial rights to Cloxado, which is an eight milligram formulation.

We have an experienced team. We’re led by Joe Papa, our CEO, who joined us about fifteen months ago and he brought thirty five years of experience in the industry to the team. You can see the rest of the team highlighted here. It’s a tenured team. It’s one that has significant experience in the industry and one that has been working together very closely as we move through our phases of development, which I’ll highlight here on the next page.

We are in the midst of a multiyear transformation plan. The first phase, which we completed last year, was to stabilize the company. That was characterized by a focus on improving our operating performance by focusing in on products. We divested some assets. We reduced significant costs.

We also reduced and refinanced our debt. And then we we enhanced our cash liquidity and cash flow profile as well. So with the stabilization complete, we’ve now moved into the turnaround phase, which is really our current focus. We’re focused on further improving our overall profitability, finding avenues for profitable growth, creating long term value for shareholders, and really realizing the full benefits of the actions that we’ve taken through the stabilization phase. One way to characterize this also is that our posture has moved from one of being very defensive to one being where we’re more focused on offense and and looking for opportunities to to create value.

And that will lead us into our transformation phase, which we would expect to begin in, in 2026. And with that, we would really be developing and leveraging the capabilities of our platform to expand the surface area of opportunities that we have to drive impact for our patients, employees and shareholders. I’d like to take a moment and highlight some of the proof points of our progress against our turnaround. You can see them laid out on this slide. I would certainly highlight at first that we reaffirmed our guidance coming out of the first quarter for top line revenue of, as I said earlier, $750,000,000 to $850,000,000 and adjusted EBITDA of $150,000,000 to $250,000,000 for 2025.

We got a good start against both of those objectives in the first quarter with first quarter revenue of $222,000,000 which was in line with the midpoint of our guidance. We also improved our cash position. We ended the first quarter with $149,000,000 of cash, which is up significantly about 50% from the prior year. And we further enhanced that cash position through strong collections early in the second quarter. We also collected additional milestone payments from Bavarian Nordic, which were related to the divestiture of our travel health business back in 2023.

And we also collected a little over $36,000,000 from the sale of one of our manufacturing plants, which we called the Bayview plant in Baltimore, Maryland. As a result of all these actions, we reduced our our net leverage profile from 5.7 down to 2.8 times as of the end of the first quarter, significant improvement on that metric. And diving in a little bit more into the first quarter in terms of the revenue performance, it’s important to highlight that about $91,000,000 of our which represented about 60% of our medical countermeasure sales in the first quarter was related to international sales. The international sales growth is an important priority and focus area for us as we go forward. And we continue to see significant demand across all of our channels for naloxone as well.

We are continuing to enhance and develop our R and D pipeline. We received a almost $17,000,000 contract option for continued development of our Ibanga product under a contract that we have with BARDA. This is the product for the treatment of Ebola. And then we also began enrolling patients in a trial in Africa, led by the African CDC called the MOSA study, which is to evaluate the effectiveness of our Tembexa smallpox therapeutic against MPOXX as well. And then finally, we had two important strategic growth initiatives that were entered into in the quarter.

First, as I mentioned earlier, we obtained the rights to Cloxado, the eight milligram nasal spray formulation of naloxone. And then we also entered into an investment partnership with RocketVax, under which we’re going to work together to develop and commercialize several candidates that they have in their pipeline. And all of this is done with a focus on increasing shareholder value and continuing to stay focused on our commitment to patient safety, quality and compliance. So as I mentioned, we’re off to a great start in the first quarter against our full year objectives. We had strong execution.

We continue to see solid revenue across our core business segments and strong profit follow through from the performance in 2024. We expect to generate positive operating cash flow again in 2025, and that’s giving us the flexibility to consider additional strategic initiatives and other investments for growth for the future, which will all lead to other opportunities to create value as we move down the road. I’m going to take a moment and dive just a little deeper into first quarter updates. First, on this slide, this lays out our manufacturing footprint. I know a lot of people, these days have lots of questions about tariffs and how that could affect, the business.

I’m happy to say that because of our focus on North American manufacturing, principally in The United States, but we also have a plant in Winnipeg, Canada, But all of these are compliant with the USMCA regulations, and so so that they are exempt at this stage from from from most, if not all, tariffs. We do have a some components that we do import from the European Union that could potentially be subject to some tariffs, but but the impact is not expected to be material at this point. But you can see that we have five different manufacturing facilities that we either own or have access to. We own Lansing, Michigan site, which is a specialized site that has capabilities for BSL two and BSL three requirements. Our Winnipeg site is one where we have an integrated plasma and hyper immune capability platform.

Our Canton, Massachusetts is a drug substance facility where we can, which is also capable for live virus BSL two applications. In Rockville, Maryland, we have a, a fillfinish facility, which also has viral and nonviral drug product capabilities. And then finally, in Bayview, Maryland, while we recently sold the facility, we we retained the rights, to to have access to that facility for production under commercial arrangements with the new owner. So a significant manufacturing footprint, again, focused on North America. Diving a little deeper into our commercial products, the Narcan and KLuxado businesses are focused on the North American and Canadian markets.

In North America, in in The United States, we have most of the business is concentrated on what we call the public interest sector. So think first responders, community organizations, and other organizations that are funded by state and local governments principally. We continue to maintain a very strong share of that market, really as a result of some unique capabilities that we bring to the market, including the power of our Narcan brand name, our distribution capabilities, and some of the unique service elements that we provide to customers in terms of accessing funding sources as well as increasing the awareness and accessibility of our products. We also see opportunities to expand into the business to business market. On the slide here on the right, you can see some pictures of some new kits that we’ve recently introduced.

You know, we really think of Narcan being an emergency life saving device that is not dissimilar to an AED device. And so it’s very logical that you would have that sitting next to that that device in in whether it’s an office setting or a restaurant or a hotel or wherever it may be. And so you can see the the vision for that deployment in these pictures here. And we’re just we’re just getting started with that part of our market opportunity. We also have a significant business in Canada.

In Canada, One of the highlights more recently was that we signed a three year sixty five million dollar contract with Ontario’s Ministry of Health. And then the Cloxado product also received the approval from Health Canada for that nasal spray. So that’s an important opportunity in Canada as well. Broadly speaking in The US, we expect that that demand is going to is going to continue. The opioid crisis remains a very significant problem.

There are just way too many people dying from opioid overdoses, over eighty thousand, in 2024. And so it’s a it’s a problem, especially exacerbated by the fentanyl situation, and and this is a very effective tool to to respond and save people’s lives. The the large opioid litigation settlements are providing or expected to provide over $54,000,000,000 of of funding, to address the opioid crisis. Now not all of that is gonna go to, to spending on on on naloxone, but, but I we believe that that will help support additional demand and procurement of that product over the next ten to fifteen years. And at the federal level, are still grants that are supporting access that reached $3,500,000,000 in 2025.

On the medical countermeasure side, I would point out, first of all, we’ve been again, throughout our entire twenty five plus year history, we’ve been working with the United States government, supplying medical countermeasures. We continue to have, very strong positive working relationships, with our counterparts in the US government, maintaining a very, consistent and open line of communication. We continue to expect there’s going to remain significant and ongoing demand for these products to prepare against the potential for these, for the biological threats that our products are, in many cases, one of very few, if not the only solution for. This kind of preparedness remains a bipartisan priority. And while there is a transition ongoing with the administration, again, based on on everything that we understand, the requirements have not changed.

And, again, our dialogue would reinforce that there’s gonna be continued need for these products. And so some evidence of some of that, includes, some of the international orders also that we have received, including the 27,000,000 we announced earlier this year for 2025. And, again, we secured a an additional option, from BARDA for development of of Ibanga earlier this year. In Europe, there’s an organization called Hera, that has been, developing over the last couple years to, put a medical countermeasure strategy in place for the European Union. And we we are engaging with that organization as well to to provide assistance where we can.

And then we’re also focused with our with our ACAM two thousand vaccine, which is indicated for both smallpox and MPOXX on looking for ways to help, to help with the situation, in particular in Africa with the MPOXX outbreak there, both in terms of engaging with leaders, as well to to deter as well as the as the WHO to determine, how best to help, in with the A CAM 2,000, but also, as I mentioned earlier, with the c d the African CDC MOSA trial, for Tembexa to test the effectiveness of Tembexa for mPOXX as well. On this slide, we highlight both the existing and future focus of our international business. Again, our manufacturing and and and the majority of our business is within North America today. But we also are focused on expanding into the European Union, the Middle East, Asia Pacific, and Africa. We have been, selling already into these markets.

I mentioned earlier that in the first quarter, we had $91,000,000 of revenue, internationally, into these markets, and we continue to engage on additional opportunities as well as we continue to focus on expanding access into provide helping to provide preparedness solutions in what is, I think we’d all agree, an increasingly dangerous world. I’ll now shift gears a little bit and just dive more deeply into our specific financial results in the first quarter. I mentioned earlier that our revenue in the quarter was $222,000,000 That was down year over year from the first quarter. We tend to have, you know, fairly lumpy revenue, and and there is variability quarter to quarter, but more consistency, on an annual basis. Having said that, I referenced earlier that we took a number of actions in 2024 to address our cost structure.

You can see the impact of those actions, across the rest of these, metrics on the slide. We took out we improved our gross margins by about 700 basis points in the first quarter, which provided a significant gross profit on the $222,000,000 We also held r and d expenses flat and then took out about $32,000,000 or about 40% of our SG and A costs year over year. And so those all combined to providing adjusted EBITDA improvement of 1,300 basis points and growth overall year over year despite a reduction in revenue year over year. So very strong financial performance in the first quarter. Additionally, on the balance sheet and liquidity front, we also saw a significant improvement.

I mentioned earlier that we ended the with 140 I’m sorry, we ended the first quarter with 149,000,000 of cash. That was up, 70,000,000 year over year and up significantly from the end of of twenty twenty four. We also put a new revolver in place, a hundred million dollar, asset backed revolver. And so our liquidity improved from 79,000,000 a year ago to 249,000,000 at the end of the first quarter. So very strong liquidity position.

And we also I mentioned earlier that we that we work to both reduce our debt and to improve our leverage. You can see on both a gross and a net debt basis, significant reductions year over year, particularly on net debt where we took about $280,000,000 off the balance sheet. And then as I mentioned earlier, we reduced we basically cut our net leverage in half from 5.7 to 2.8 times. So so the balance sheet is in is in very strong position as we came out of the first quarter and positions us to pursue our strategic initiatives as we move forward. So let me talk just a minute about capital allocation.

As I mentioned in the beginning, having come out of the stabilization phase, moving rapidly through turnaround and considering and looking ahead to our transformation phase, we are very focused on identifying opportunities for growth. And so we’re looking for investment opportunities both organically and inorganically, which could come in the form of either acquisition or licensing opportunities. But we’re definitely looking to leverage the platform we have and the capabilities we have to grow the business further and again, expand the surface area of opportunities that we have to drive impact, in the public health threat space. We will also, consider and look for opportunities to to further repay our debt, with excess cash flow. And then we also announced, at the end of, March, a $50,000,000 share repurchase program, as an opportunity to, provide some incremental, value creation for our shareholders as well, given, where our stock is trading today.

On this slide, we lay out our guidance in detail. I’m not going to cover every single line here, but I mentioned earlier that we’re anticipating revenue in the $750,000,000 to $850,000,000 range as well as adjusted EBITDA 150 to $200,000,000 range. That’s driven by, MCM product revenue of 435 to $485,000,000 and, and commercial product revenue, which is our naloxone nasal spray business of 265 to $315,000,000. We’re also looking at gross margins in the 48 to 51% area, and all of that is going to lead to improvements in net income and adjusted net income as well. For the second quarter, we guided to 95,000,000 to $120,000,000 of revenue.

That’s down sequentially from the first quarter. Again, as I mentioned earlier, we tend to see some lumpiness in how our revenue comes through throughout the year. So so this is, anticipated. But what it means is just given, you know, given the the the operating leverage in the business, we would expect less earnings in the second quarter versus the first quarter as well as the lower revenue. But again, as you can see for the full year, we’re still anticipating very solid performance on these various metrics.

So looking ahead, when we think about how the company is positioned and some of the catalysts that we are already working on to realize growth going forward, I referenced earlier our partnership with RocketVax. We are we we’ve invested in that company, and we are going to jointly develop and commercialize products that they have done the initial initial work on. We also obtained the rights to KLXSADA, which will provide incremental growth on the commercial side of the business. We continue to focus on the not only The US, but the international medical countermeasure business to for to provide solutions to the to the threat areas that that that all of those entities are are are looking for preparedness solutions on. And then finally, our strong cash and liquidity positions gives us the opportunity to pursue not only internal but also external growth opportunities.

So in summary, again, strong first quarter performance, very solid cash position. We’re on track executing against our priorities. We are looking for growth from existing products as well as geographic expansion and looking for business development opportunities. And all the while, we continue to remain completely focused and committed to quality, patient safety and compliance excellence throughout our business. So with that, I would be happy, we have a few minutes, I’d be happy to take any questions that anybody has and we can go from there.

Victoria Gendron, Jefferies Investment Banking Team, Jefferies: Anybody?

Richard Lindahl, CFO, Emergent BioSolutions: Okay. We’re not seeing any questions. Again, really appreciate, your participation in the talk today and your interest in the company. And thank you very much.

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