We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Emergent Biosolutions (EBS) Down 20% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
A month has gone by since the last earnings report for Emergent Biosolutions (EBS - Free Report) . Shares have lost about 20% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Emergent Biosolutions due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Emergent's Q2 Earnings and Revenues Miss Estimates
Emergent reported second-quarter 2022 adjusted loss of 86 cents per share, which was wider than the Zacks Consensus Estimate of 63 cents. In the year-ago quarter, EBS had reported earnings of 33 cents per share.
Revenues in the reported quarter were $242.7 million, down 39% from the prior-year period’s level. The year-over-year downside in revenues can be attributed to a significant reduction in COVID-related contract development and manufacturing (CDMO) revenues. The upside was offset by a solid increase in product sales revenues. Revenues missed the Zacks Consensus Estimate of $291 million.
Quarter in Detail
Total product sales increased 31% from the year-ago quarter’s level to $237.2 million, driven by strong sales of the anthrax vaccine and other products (VIGIV and BAT). The increase was slightly offset by a slightly lower sales of Narcan nasal spray.
Sales of anthrax vaccines (BioThrax and AV7909) were $95.6 million in the reported quarter, up 85.6% year over year. The increase in sales of anthrax vaccines was due to the favorable timing of deliveries of AV7909 to the Strategic National Stockpile of the United States Government.
Narcan (naloxone HCl) nasal spray added $101.6 million to product sales, down 4.3% year over year. The decline in sales can be attributed to erosion in sales following the launch of a generic in December 2021. The downside was slightly offset by higher volumes of Narcan sprays sold to public interest customers in the United States and Canada and from the sales of the authorized generic product licensed to Sandoz, the generic arm of Novartis.
Emergent reported zero revenues for its smallpox vaccine ACAM2000 in the second quarter. The company anticipates the majority of 2022’s ACAM revenues to be realized in the second half of the year.
Other product sales were $40 million, up 70% year over year.
Revenues from contracts and grants declined 71.3% year over year to $7.3 million. This substantial decline was due to lower revenues from the Biomedical Advanced Research and Development Authority (BARDA) due to the termination of a development and manufacturing agreement signed last November.
Total CDMO revenues were recorded at a loss of $1.8 million, compared to the year-ago quarter’s revenues of $190.9 million. While CDMO services revenues declined 97.4% year over year to $2.7 million, the CDMO lease revenues fell 105.2% to a loss of $4.5 million.
The decline in CDMO services revenues was due to lower combined revenues of $82 million from AstraZeneca and Janssen, a subsidiary of Johnson &Johnson, which resulted in lower production-related work carried out at one of Emergent’s facilities, which reduced manufacturing activities. Moreover, Emergent reversed $8.3 million of previously recognized revenues under the Janssen contract.
Revenues from the CDMO leases fell due to the completion of a public-private partnership between Emergentand BARDA. The decline can also be contributed to a $21.9 million decrease in lease revenues related to the J&J’s contract and Emergent’s reversal of a previously recognized revenue of $5 million under the aforementioned contract.
Emergent reported an adjusted EBITDA loss of $29 million for the second quarter, down from the year-ago quarter’s earnings of $49.5 million.
Update on 2022 Guidance
In May, Emergent temporarily suspended its guidance for CDMO revenues and other metrics, including total revenues, adjusted net income, adjusted EBITDA and gross margin. Back then, Emergent maintained its previous guidance for all other business segments.
It has issued fresh guidance for total revenues, adjusted EBITDA and CDMO services while providing updated ranges for its other business segments.
The company lowered its previous guidance for full-year 2022 revenues from the range of $1.3-$1.4 billion and now expects it to be between $1.15 billion and $1.25 billion. The company now expects adjusted EBITDA in the range of $80-$120 million, down from $240-$300 million expected previously. Emergent expects CDMO revenues to be in the range of $105-$125 million, revised from $330 - $380 million.
Emergent also anticipates lower adjusted net income(loss) within $(15)-$10 million, compared to the previous expectation of $95-$140 million.
Management continues to expect sales of $280-$300 million from anthrax vaccines. However, the company has raised the revenue guidance for Narcan nasal spray and smallpox vaccine. It now expects revenues from smallpox vaccine to be in the range of $225-$250 million compared with the previously guided range of $190-$210 million. Revenues from the Narcan nasal spray are expected to be between $300-$340 million, up from $240-$310 million expected previously. The projection for revenues from other products and Contracts and Grants was updated in the range of $235-$240 million, from its previously expected range of $200-$260 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -121.8% due to these changes.
VGM Scores
Currently, Emergent Biosolutions has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Emergent Biosolutions has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Emergent Biosolutions belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Alnylam Pharmaceuticals (ALNY - Free Report) , has gained 47.9% over the past month. More than a month has passed since the company reported results for the quarter ended June 2022.
Alnylam reported revenues of $224.82 million in the last reported quarter, representing a year-over-year change of +1.9%. EPS of -$2.29 for the same period compares with -$1.61 a year ago.
For the current quarter, Alnylam is expected to post a loss of $1.91 per share, indicating a change of -11.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -2.4% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Alnylam. Also, the stock has a VGM Score of D.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Emergent Biosolutions (EBS) Down 20% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Emergent Biosolutions (EBS - Free Report) . Shares have lost about 20% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Emergent Biosolutions due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Emergent's Q2 Earnings and Revenues Miss Estimates
Emergent reported second-quarter 2022 adjusted loss of 86 cents per share, which was wider than the Zacks Consensus Estimate of 63 cents. In the year-ago quarter, EBS had reported earnings of 33 cents per share.
Revenues in the reported quarter were $242.7 million, down 39% from the prior-year period’s level. The year-over-year downside in revenues can be attributed to a significant reduction in COVID-related contract development and manufacturing (CDMO) revenues. The upside was offset by a solid increase in product sales revenues. Revenues missed the Zacks Consensus Estimate of $291 million.
Quarter in Detail
Total product sales increased 31% from the year-ago quarter’s level to $237.2 million, driven by strong sales of the anthrax vaccine and other products (VIGIV and BAT). The increase was slightly offset by a slightly lower sales of Narcan nasal spray.
Sales of anthrax vaccines (BioThrax and AV7909) were $95.6 million in the reported quarter, up 85.6% year over year. The increase in sales of anthrax vaccines was due to the favorable timing of deliveries of AV7909 to the Strategic National Stockpile of the United States Government.
Narcan (naloxone HCl) nasal spray added $101.6 million to product sales, down 4.3% year over year. The decline in sales can be attributed to erosion in sales following the launch of a generic in December 2021. The downside was slightly offset by higher volumes of Narcan sprays sold to public interest customers in the United States and Canada and from the sales of the authorized generic product licensed to Sandoz, the generic arm of Novartis.
Emergent reported zero revenues for its smallpox vaccine ACAM2000 in the second quarter. The company anticipates the majority of 2022’s ACAM revenues to be realized in the second half of the year.
Other product sales were $40 million, up 70% year over year.
Revenues from contracts and grants declined 71.3% year over year to $7.3 million. This substantial decline was due to lower revenues from the Biomedical Advanced Research and Development Authority (BARDA) due to the termination of a development and manufacturing agreement signed last November.
Total CDMO revenues were recorded at a loss of $1.8 million, compared to the year-ago quarter’s revenues of $190.9 million. While CDMO services revenues declined 97.4% year over year to $2.7 million, the CDMO lease revenues fell 105.2% to a loss of $4.5 million.
The decline in CDMO services revenues was due to lower combined revenues of $82 million from AstraZeneca and Janssen, a subsidiary of Johnson &Johnson, which resulted in lower production-related work carried out at one of Emergent’s facilities, which reduced manufacturing activities. Moreover, Emergent reversed $8.3 million of previously recognized revenues under the Janssen contract.
Revenues from the CDMO leases fell due to the completion of a public-private partnership between Emergentand BARDA. The decline can also be contributed to a $21.9 million decrease in lease revenues related to the J&J’s contract and Emergent’s reversal of a previously recognized revenue of $5 million under the aforementioned contract.
Emergent reported an adjusted EBITDA loss of $29 million for the second quarter, down from the year-ago quarter’s earnings of $49.5 million.
Update on 2022 Guidance
In May, Emergent temporarily suspended its guidance for CDMO revenues and other metrics, including total revenues, adjusted net income, adjusted EBITDA and gross margin. Back then, Emergent maintained its previous guidance for all other business segments.
It has issued fresh guidance for total revenues, adjusted EBITDA and CDMO services while providing updated ranges for its other business segments.
The company lowered its previous guidance for full-year 2022 revenues from the range of $1.3-$1.4 billion and now expects it to be between $1.15 billion and $1.25 billion. The company now expects adjusted EBITDA in the range of $80-$120 million, down from $240-$300 million expected previously. Emergent expects CDMO revenues to be in the range of $105-$125 million, revised from $330 - $380 million.
Emergent also anticipates lower adjusted net income(loss) within $(15)-$10 million, compared to the previous expectation of $95-$140 million.
Management continues to expect sales of $280-$300 million from anthrax vaccines. However, the company has raised the revenue guidance for Narcan nasal spray and smallpox vaccine. It now expects revenues from smallpox vaccine to be in the range of $225-$250 million compared with the previously guided range of $190-$210 million. Revenues from the Narcan nasal spray are expected to be between $300-$340 million, up from $240-$310 million expected previously. The projection for revenues from other products and Contracts and Grants was updated in the range of $235-$240 million, from its previously expected range of $200-$260 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -121.8% due to these changes.
VGM Scores
Currently, Emergent Biosolutions has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Emergent Biosolutions has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Emergent Biosolutions belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Alnylam Pharmaceuticals (ALNY - Free Report) , has gained 47.9% over the past month. More than a month has passed since the company reported results for the quarter ended June 2022.
Alnylam reported revenues of $224.82 million in the last reported quarter, representing a year-over-year change of +1.9%. EPS of -$2.29 for the same period compares with -$1.61 a year ago.
For the current quarter, Alnylam is expected to post a loss of $1.91 per share, indicating a change of -11.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -2.4% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Alnylam. Also, the stock has a VGM Score of D.