Emergent BioSolutions Inc. (EBS - Free Report) reported second-quarter 2020 earnings of $1.98 per share, which easily beat the Zacks Consensus Estimate of 53 cents. Moreover, the figure was up from earnings of 20 cents in the year-ago quarter.
Revenues in the reported quarter were up 62.3% from the prior-year period to $394.7 million, primarily due to an increase in product sales and contract development and manufacturing services revenues.
Shares of Emergent have soared 103.7% in the year so far compared with the industry’s growth of 5.2%.
Quarter in Detail
Total product sales surged 63% to $298.5 million from the year-earlier quarter due to increased sales of anthrax vaccines and ACAM2000.
ACAM2000, which was acquired from Sanofi (SNY) in the fourth quarter of 2017, generated sales of $70 million.
Meanwhile, newly-acquired product, Narcan (naloxone HCl) nasal spray, added $72.8 million to product sales, relatively flat year over year. Narcan was added to Emergent’s portfolio following the acquisition of Adapt Pharma in October 2018.
Notably, sales of anthrax vaccines (BioThrax and AV7909) were $132.3 million in the reported quarter, reflecting a significant increase year over year. Other product sales plunged 69% on a year-over-year basis to $23.4 million.
Revenues from contracts and grants decreased $17.4 million year over year to $23.6 million.
Contract manufacturing revenues surged to $72.6 million, increasing $53.9 million from the year-ago quarter’s figure due to the contribution of the recently announced arrangements across development services, drug substance and drug product with the industry and the government, most notably the company's landmark public-private CDMO partnership with BARDA in support of the U.S. government's Operation Warp Speed Program.
2020 Guidance Updated
Along with the earnings release, Emergent updated its financial outlook for the current year. The company now expects total revenues of $1.5-$1.6 billion compared with the previous forecast of $1.2 -$1.3 billion. The Zacks Consensus Estimate for the metric stands at $1.19 billion for the year.
For the third quarter of 2020, the company expects total revenues of $420-$450 million.
Other Updates and Coronavirus Response
Emergent was awarded a public-private contract development and manufacturing (CDMO) partnership task order by the U.S. Department of Health and Human Services (HHS) under Operation Warp Speed, valued at approximately $628 million, for the production of COVID-19 vaccine candidates through 2021 and viral drug product capacity expansion at its Rockville, MD, facility.
Emergent signed a five-year large-scale drug substance manufacturing agreement for Johnson & Johnson’s (JNJ - Free Report) lead COVID-19 vaccine candidate beginning 2021. The agreement is valued at approximately $480 million for the first two years and follows the initial agreement, which was valued at approximately $135 million, to provide CDMO services and secure large-scale manufacturing capacity.
Emergent signed a three-year, large-scale drug substance manufacturing agreement for AstraZeneca’s (AZN - Free Report) COVID-19 vaccine candidate, valued at approximately $174 million through 2021.
Earlier, Emergent entered into a manufacturing agreement with Vaxart (VXRT - Free Report) to produce the clinical material for the latter’s experimental oral vaccine candidate against COVID-19.
Emergent currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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