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8-K - Emergent BioSolutions Inc. | form8-k_jpm_1_8_18.htm |
EX-99.1 - Emergent BioSolutions Inc. | exhibit99_1.htm |
Safe-Harbor StatementThis presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements, other than statements of historical fact, including, without limitation, our financial projections, and any other statements containing the words “will,” “believes,” “expects,” “anticipates,” “intends,” “plans,” “targets,” “forecasts,” “estimates” and similar expressions in conjunction with, among other things, discussions of the Company’s outlook, financial performance or financial condition, strategic goals, growth strategy, international market expansion, acquisition strategy, product sales, government development or procurement contracts or awards, government appropriations, manufacturing capabilities, product development timeline, Emergency Use Authorization (EUA) and the timing of other regulatory approvals are forward-looking statements. These forward-looking statements are based on our current intentions, beliefs and expectations regarding future events. We cannot guarantee that any forward-looking statement will be accurate. Investors should realize that if underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could differ materially from our expectations. Investors are, therefore, cautioned not to place undue reliance on any forward-looking statement. Any forward-looking statement speaks only as of the date of this presentation, and, except as required by law, we do not undertake to update any forward-looking statement to reflect new information, events or circumstances.There are a number of important factors that could cause the Company’s actual results to differ materially from those indicated by such forward-looking statements, including the availability of funding and the exercise of options under our BioThrax and NuThrax contracts; appropriations for the procurement of our products; our ability to secure EUA pre-authorization approval and licensure of NuThrax from the U.S. Food and Drug Administration within the anticipated timeframe, if at all; availability of funding for our U.S. government grants and contracts; our ability to identify and acquire or in-license products or product candidates that satisfy our selection criteria; our ability to successfully integrate and develop the products or product candidates, programs, operations and personnel of any entities, businesses or products that we acquire, including our recently completed acquisitions of the ACAM2000 business from Sanofi and raxibacumab from GSK and the timing and receipt of required FDA approvals for actions contemplated in connection with our integration of these products; whether anticipated synergies and benefits from an acquisition or in-license are realized within expected time periods, if at all; our ability to utilize our manufacturing facilities and expand our capabilities; our ability and the ability of our contractors and suppliers to maintain compliance with Current Good Manufacturing Practices and other regulatory obligations; the results of regulatory inspections; the outcome of the class action lawsuit filed against us and possible other future material legal proceedings; our ability to meet operating and financial restrictions placed on us and our subsidiaries that are contained in our senior credit facility; the success of our ongoing and planned development programs; the timing of and our ability to obtain and maintain regulatory approvals for our product candidates; and our commercialization, marketing and manufacturing capabilities and strategy. The foregoing sets forth many, but not all, of the factors that could cause actual results to differ from our expectations in any forward-looking statement. Investors should consider this cautionary statement, as well as the risk factors identified in our periodic reports filed with the Securities and Exchange Commission, when evaluating our forward-looking statements.Non-GAAP Financial Measures This presentation contains two financial measures (Adjusted Net Income and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization)) that are considered “non-GAAP” financial measures under applicable Securities and Exchange Commission rules and regulations. These non-GAAP financial measures should be considered supplemental to and not a substitute for financial information prepared in accordance with generally accepted accounting principles. The Company’s definition of these non-GAAP measures may differ from similarly titled measures used by others. Adjusted Net Income adjusts for specified items that can be highly variable or difficult to predict, or reflect the non-cash impact of charges resulting from purchase accounting. EBITDA reflects net income excluding the impact of depreciation, amortization, interest expense and provision for income taxes. The Company views these non-GAAP financial measures as a means to facilitate management’s financial and operational decision-making, including evaluation of the Company’s historical operating results and comparison to competitors’ operating results. These non-GAAP financial measures reflect an additional way of viewing aspects of the Company’s operations that, when viewed with GAAP results and the reconciliations to the corresponding GAAP financial measure, may provide a more complete understanding of factors and trends affecting the Company’s business.The determination of the amounts that are excluded from these non-GAAP financial measures are a matter of management judgment and depend upon, among other factors, the nature of the underlying expense or income amounts. Because non-GAAP financial measures exclude the effect of items that will increase or decrease the Company’s reported results of operations, management strongly encourages investors to review the Company’s consolidated financial statements and publicly filed reports in their entirety.TrademarksBioThrax® (Anthrax Vaccine Adsorbed), RSDL® (Reactive Skin Decontamination Lotion Kit), BAT® [Botulism Antitoxin Heptavalent (A,B,C,D,E,F,G)-(Equine)], Anthrasil® (Anthrax Immune Globulin Intravenous [human]), NuThrax™ (anthrax vaccine adsorbed with CPG 7909 adjuvant), VIGIV [Vaccinia Immune Globulin Intravenous (Human)], Trobigard™ (atropine sulfate, obidoxime chloride), ACAM2000®, (Smallpox (Vaccinia) Vaccine, Live), raxibacumab, a fully human monoclonal antibody and any and all Emergent BioSolutions Inc. brands, products, services and feature names, logos and slogans are trademarks or registered trademarks of Emergent BioSolutions Inc. or its subsidiaries in the United States or other countries. All other brands, products, services and feature names or trademarks are the property of their respective owners. Forward-Looking Statements / Non-GAAP Financial Measures / Trademarks
Our mission is simple – To Protect and Enhance Life As a global specialty life sciences company, Emergent is focused on providing specialty products for civilian and military populations that address accidental, intentional and naturally occurring public health threats
C B R N E CHEMICAL: Nerve agents, cyanide, chlorine, toxic industrial chemicalsBIOLOGICAL: Anthrax, smallpox, botulism, Ebola, other category A threats RADIOLOGICAL/NUCLEAR: Nuclear, radiological agentsEXPLOSIVE: Trauma, burn, wound care E I D EMERGING INFECTIOUS DISEASES: Pandemic influenza, Zika, Dengue, Marburg, gram-negative organisms, multi-drug resistant pathogens Public Health Threats Diverse and Growing Global Threat Landscape
>10Pipeline Products Revenue Growth ($ Millions) 2012-2017 History of Solid Business & Financial Growth 13GLOBAL LOCATIONS 8MARKETEDPRODUCTS 4 PLATFORMSHyperimmunes Auto-injector AntiviralsAntibacterials SERVICESDevelopment & CMO SERVICES (Bulk Manufacturing Aseptic Fill/Finish) At a Glance Net IncomeGrowth ($ Millions) Revenue Diversification($ Millions) 2012 2017E $558 $278 BioThrax Other Product Sales Contract Manufacturing C&G 51% 12% 13% 24% 78% 22% Note: 2017 preliminary financial results shown in this presentation are only effective as of January 8, 2018, the date it was originally provided. 2017E values assume mid-point of range of estimated CY2017 financial results
Maturing International MarketRisk posed by state and non-state actorsEC Directive and EU Joint Procurement Mechanism, NATO Supply Agreement GlobalizationRapid disease transmission (Pandemic Flu, Ebola, Zika)Antimicrobial resistance Source: Health Security. 2016 Sep-Oct; 14(5): 284-304 US Government ResponseContinued focus on preparednessCreating a sustainable enterprise to foster innovation Dual-Market OpportunityProducts that serve both government and commercial customersVaccines, therapeutics, devices, detection and diagnostic systems Growing, Well-Funded PHT Market Expanding Public Health Threats Markets ~$13 Billion Per Year Since 2010Total Annual US Funding for Health Security*
Drivers:Accelerate organic growthComplete additional acquisitionsExpand service offerings TotalRevenue TargetedDevelopment Net IncomeMargin $ $1B>10% ex-US 6 Products In Advanced Development; 3 Dual-Market >14%1~30% EBITDA Margin Drivers:Advance existing portfolioLeverage platforms & technologiesFocus on externally funded programs Drivers:Maintain Net R&D margin of <15% of net revenue2Attain SG&A margin of <25% 1 Reflects an estimated effective tax rate that includes the expected effects of the United States Tax Cuts and Jobs Act of 2017 on the company’s 2017 income tax provision.2 Net revenue is defined as total revenue less contracts and grants revenue. Year-End 2020 Growth Plan Goals Executing on Our 2020 Growth Plan
8 Aligned Business Unit Structure Contract Manufacturing Devices Vaccines &Anti-infectives Antibody Therapeutics Roadmap to Achieving 2020 Growth Plan Goals Executing on Our 2020 Growth Plan Each Business Unit Possesses: Focused Leadership TeamsTailored Strategies & PlansRevenue-Generating Products/ServicesUnique Development ProgramsDistinctive Core CompetenciesStreamlined Operations Focused Strategy Leverage & Expand Leadership PositionDevelop Innovative Products/ServicesGrow Through AcquisitionsExpand Best/Only-In-Class MCMsExpand Into Dual Markets Proven Core Competencies Government Relations & ContractingMCM DevelopmentQuality ManufacturingBusiness & Product AcquisitionsFinancial Discipline
Expanding Our Leadership Position: Marketed Products VIGIVCNJ-016® [Vaccinia Immune Globulin Intravenous (Human)] (VIGIV) ACAM2000® [Smallpox (Vaccinia) Vaccine, Live] Smallpox RSDL® [Reactive Skin Decontamination Lotion Kit] TROBIGARDTM [Atropine Sulfate (2 mg)/Obidoxime chloride (220 mg)] Auto-injector* Nerve & Chemical Agents BioThrax® [Anthrax Vaccine Adsorbed] AnthrasilTM [Anthrax Immune Globulin Intravenous (Human)] Raxibacumab[Anthrax Monoclonal Antibody] Anthrax BAT® [Botulism Antitoxin Heptavalent (A, B, C, D, E, F, G) - (Equine)] Botulism Executing on Our 2020 Growth Plan Established Leadership in Protecting Against Growing CBRNE and EID Threats#1 vaccine provider and antibody provider to the Strategic National Stockpile (SNS)20-year history of government contracts for development, procurement, stockpiling5 only-in-class products licensed by the FDA for their stated indications20+ countries as customers and growing * Trobigard is not currently approved or cleared by the United States (US) Food and Drug Administration (FDA) or any similar regulatory body, and is only distributed to authorized government buyers for use outside the US. This product is not distributed in the US.
Developing Innovative Products: Current Pipeline *Target for First Subject Enrollment.**Granted Fast Track Designation in December 2017 by the U.S. Food and Drug Administration. Executing on Our 2020 Growth Plan Vaccines & Therapeutics Platform Threat Partner PRV Potential Pre Clinical CLINICAL PHASE I II III NuThrax™Next generation anthrax vaccine Vaccine Biological HHS - BARDA - 2019* FLU-IGIVSeasonal Influenza A therapeutic Hyperimmune EID - - 2019* ZIKA-IG**Zika Virus therapeutic Hyperimmune EID - 2018* ZIKV-VLA1601 Zika vaccine Vaccine EID Valneva 2018* UNI-FLU Universal Flu vaccine Vaccine EID - EBX-205Broad-spectrum antibiotic Antibacterial EID - GC-072Burkholderia antibiotic Antibacterial Biological DoD - DTRA - FILOVPan-Ebola and Sudan Virus therapeutic Monoclonal Biological - EBI-001Pan-respiratory iminosugar antiviral Antiviral EID - Devices Platform Threat Partner PRV Potential Formative Studies RegistrationTrials Regulatory Application PC2AOther nerve agent APIs Auto-injector Chemical - - D42PAM/Atropine Auto-injector Chemical DoD - MCS - SIANStabilized Isoamyl Nitrite Intra-Nasal Spray Device Chemical HHS - BARDA/SwRI - 2018
Current CMO Services Offering Executing on Our 2020 Growth Plan Diverse & Flexible cGMP Bulk ManufacturingViral/Non-Viral Aseptic Fill/FinishMaster/Working Cell and Virus BanksEnd-to-End Custom ManufacturingProcess and Analytical DevelopmentStability Testing Government-Selected Solutions Provider: CIADM One of three in the U.S.Public-private partnership with BARDASurge-capacity ready, infrastructure for biologics-based MCMsFlexible manufacturing addresses biological threats, EIDs Experienced Contract Manufacturing Service Provider Producing or supporting manufacture of > 20 commercial productsContributed to development, production of > 200 clinical products Fill, finish, packaging – vials, syringesProduct and stability testing servicesInspected by FDA, EMA, MHRA, BMGS, ANVISA, PMDA, GCC Marketed Services
Clinical-stage Candidates PlatformTechnologies ManufacturingCapabilities RevenueGenerators Track Record of Successful M&A 2012-2017 M&A as a Driver of Growth Near-Term Revenue Contributors Long-Term Revenue Contributors Revenue Generating/Accretive OpportunitiesDual-Market ProductsCommercial Products that Leverage Capabilities Executing on Our 2020 Growth Plan Focus of Ongoing M&A Through 2020 & Beyond R&D Primarily Funded by Governments, NGOsR&D with External FundingUnfunded R&D – Innovation Investments
Preliminary Unaudited Financial Results Note: 2017 preliminary financial results shown in this presentation are only effective as of January 8, 2018, the date it was originally provided. Please see the appendix for non-GAAP reconciliation tables. Completed two revenue-generating acquisitionsAdvanced NuThraxTM development to enable EUA filing in 2018Strengthened relationship with BARDA: Awarded task order for VHF therapeuticAwarded BioThrax® procurement contractSecured contract modification to manufacture BATInitiated clinical studies for therapeutics addressing EIDsConverted $240M of convertible debt; closed new credit facility with capacity up to $300M Selected Operational Accomplishments 2017 Performance Continued Trajectory Toward 2020 Goals Executing on Our 2020 Growth Plan Total Revenue: $555M-$560M GAAP Net Income: $80M-$84M Adjusted Net Income: $92M-$96M EBITDA: $160M-$164M Pre-Tax Income: $113M-117M
Financial Note: The guidance in this presentation is only effective as of the date it is originally provided, January 8, 2018. Please see the appendix for non-GAAP reconciliation tables. Advance NuThraxTM to enable EUA 2018 filing Complete ACAM2000® deliveries; establish multi-year follow-on contract Execute an acquisition that will generate revenue within 12 months of closing Operational Increase pipeline to at least 4 product candidates in advanced development 2018 Outlook Total Revenue: $715M-$755M Net Income: $95M-$110M Adjusted Net Income: $110M-$125M EBITDA: $175M-$190M Executing on Our 2020 Growth Plan Deliver raxibacumab doses under currentcontract; advance tech transfer to our CIADM Pre-Tax Income: $120M-$140M
Growing global public health threat marketUniquely positioned with focused strategy, proven core competencies, and aligned business unit structure supporting market leadershipCommitment to domestic and international revenue growth and diversification, organically and through M&AAttractive pipeline driven by platform and innovative technologiesEstablished financial strength and discipline Positioned for Value Creation Through 2020 and Beyond Key Takeaways
Corporate UpdateAppendixReconciliationTablesJanuary 9, 2018
Reconciliation of Net Income to Adjusted Net Income Reconciliation of Net Income to EBITDA OLD DATA Reconciliation Tables