Emergent BioSolutions reported earnings on Thursday. With strong growth in sales, spurred on by the company's top-selling BioThrax, there wasn't much to complain about in the third quarter.
Emergent BioSolutions results: The raw numbers
Continue Reading Below
Source: company press release.
What happened with Emergent BioSolutions this quarter?
- After a brief hiatus to deal with manufacturing issues, BioThrax sales are back on track, increasing 66% year over year, which drove the increase in overall product sales and overall revenue.
- Expansion of manufacturing capacity for BioThrax into Building 55 is progressing. The Food and Drug Administration wants a reanalysis of one of the assays used to show equivalence between manufacturing in the old plant and Building 55. Emergent BioSolutions is exploring two possible solutions to satisfying the FDA's request; the slower of the two solutions would be finished in the first half of next year, but that isn't major issue as the company doesn't plan to start full-time production in Building 55 until a German approval occurs in the first half of 2016.
- Emergent BioSolutions is moving ahead with its spinoff of its biosciences business -- to be called Aptevo Therapeutics -- into a separate publicly traded company. The spinoff is targeted for mid-2016.
- Emergard, the military-grade auto-injector device that Emergent BioSolutions licensed earlier this year, was launched outside the United States.
What management had to sayDan Abdun-Nabi, Emergent BioSolutions' president and CEO, commented on plans for the potential to expand sales of BioThrax as Building 55 comes online next year: "We have had an initial meeting with the CDC to discuss the follow-on multi-year procurement contract to address the stated requirement of securing 75 million doses of an anthrax vaccine for the Strategic National Stockpile. We are now targeting a follow-up meeting in early 2016 to begin negotiating the next contract."
This year marks the end of the company's multi-year growth plan. If Emergent BioSolutions hits its fourth-quarter target, growth in net income will end up being more than double the company's original goal. Abdun-Nabi updated investors on when to expect a new plan: "We are finalizing our next growth plan, which will be a five-year plan taking us to 2020. This plan will be presented in January at the JPMorgan Healthcare Conference in San Francisco in concert with the announcement of our preliminary 2015 financial results and the forecast for 2016.
Looking forwardManagement tightened its 2015 revenue guidance by bringing up the bottom end of the guidance. Management now expects total revenues in the range of $520 million to $540 million, compared with the previous guidance of $510 million to $540 million.
Next year, in addition to expanding sales of BioThrax to the U.S. and other governments, the spinoff of Aptevo Therapeutics will be a key milestone focusing Emergent BioSolutions. The spinout will allow the company to focus on its core in biodefense and emerging infectious diseases while removing the high costs of research and development associated with the biosciences division.
The article Emergent Biosolutions Inc.: Spinning Off, but Not Sputtering Out originally appeared on Fool.com.
Brian Orelli has no position in any stocks mentioned. The Motley Fool recommends Emergent BioSolutions. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright 1995 - 2015 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.