Emergent BioSolutions Inc. Q2 FY2025 earnings call

• Joe Papa mentioned that the company is making great progress on its multiyear transformation plan, beating top and bottom line guidance in the second quarter. - Rich Lindahl highlighted that second quarter adjusted EBITDA was $29 million, adjusted EBITDA margin was 20%, and adjusted gross margin was 49%, with operating expenses down $63 million or 53% versus the prior year across R&D and SG&A. - The company has increased liquidity by $297 million year-to-date, with access to $367 million in financial capacity, and net leverage has improved to 1.9x debt-to-adjusted EBITDA. - They executed 7 revenue-producing contract modifications year-to-date and have made progress in integrating KLOXXADO into the NARCANDirect platform.

Second quarter revenues of Emergent were $141 million, which was $21 million above the guidance range of $95 million to $120 million. Year-to-date, international MCM sales represent 40% of the revenues. In the second quarter, NARCAN sales saw a roughly 50% increase in revenue compared to the first quarter of 2025. Smallpox revenue grew to $147 million year-over-year, reflecting deliveries under multiyear contracts and increased international demand. Total product sales in the second quarter were $126 million, with other revenue being $15 million. Adjusted EBITDA was $29 million in the second quarter of 2025, an increase from negative $10 million in the prior year. Adjusted gross margin was 49%, improving 2,300 basis points year-over-year.

• Full year 2025 adjusted EBITDA guidance is raised to $175 million to $200 million from $150 million to $200 million previously. - Total revenues guidance is narrowed to $765 million to $835 million. - Third quarter 2025 revenue is forecasted to be $180 million to $210 million. - MCM product sales are anticipated to be $440 million to $475 million across U.S. government and international orders. - Commercial products including KLOXXADO are expected in the range of $265 million to $300 million.

• Potential market competition could impact product sales. - Changes in government contracts might affect revenue. - Fluctuations in pricing could impact margins.

Q: Jessica Fye asked about NARCAN strategic pricing actions, the nature of naloxone market growth (volume or revenue), maintaining market share, and SG&A run rate.

A: Joseph C. Papa responded that NARCAN pricing has been relatively stable in recent months, the low to mid-single digit growth is for volume, the company is confident in maintaining market share due to being the majority share player, competitive pricing, and new programs like KLOXXADO, and Rich Lindahl noted that the Q2 SG&A number is a good run rate for the rest of 2025.

Q: Eduardo Rafael Martinez-Montes asked about NARCAN's response to new synthetic opioid-like abuse agents and the MCM competitive landscape for smallpox antiviral.

A: Joseph C. Papa discussed that NARCAN is important in addressing new opioids as it can save lives, and the company is working on TEMBEXA clinical trials for MCM, tracking the competitive landscape and seeking additional data on TEMBEXA's effectiveness