Emergent Biosolutions, Inc. (EBS - Free Report) delivered second-quarter 2018 earnings of $1.07 per share, surpassing the Zacks Consensus Estimate of 96 cents and the year-ago bottom-line figure of 13 cents.
Revenues in the reported quarter skyrocketed 117.8% from the year-earlier period’s level to $220 million, primarily backed by high product sales, partially offset by lower contracts plus grants revenues. Moreover, the top line outpaced the Zacks Consensus Estimate of $209 million.
Shares of Emergent were up almost 3.25% on Aug 2 following its earnings release. The stock has outperformed the industry so far this year with a rally of 21.9% against the industry's decrease of 3.7%.
Quarter in Detail
Total product sales soared 183% to $180.1 million from the year-earlier quarter’s tally, mainly owing to higher sales of Emergent’s anthrax vaccine, BioThrax, and smallpox vaccine, ACAM2000.
BioThrax’s sales surged 48% in the quarter under review to $77.6 million. Other product sales rose to $1.02.5 million from $11.3 million in the comparable quarter last year.
The increase in other product sales is almost entirely courtesy of the incremental contribution of ACAM2000, raxibacumab and Trobigard, which did not generate sales in the prior-year period.
Notably, raxibacumab and ACAM2000 were acquired by Emergent from GlaxoSmithkline (GSK - Free Report) and Sanofi (SNY - Free Report) respectively, during the fourth quarter of 2017.
Contracts, grants and collaboration revenues declined 21% year over year to $16.5 million, primarily due to reduction in the R&D activities, associated with certain development funding programs.
On the flip side, contract manufacturing revenues jumped 46% to $23.6 million compared with the year-ago figure. This upside was primarily on the completion of certain contract manufacturing services at the company’s Canton site.
Research and development expenses were $24.7 million, down 4% from the level in the comparable quarter last year. This downside was due to lower costs associated with contract development services.
Emergent maintained its previously issued revenue guidance of $715-$755 million in 2018. The company continues to expect adjusted net income between $110 million and $125 million.
Third-Quarter 2018 Outlook
The company anticipates total revenues between $165 million and $190 million in the third quarter of 2018.
Late in July, Emergent initiated a phase I study for its pipeline candidate, ZIKV-IG, currently being developed as a therapeutic intervention against Zika virus disease.
In May, The Coalition for Epidemic Preparedness Innovations announced a collaboration with Profectus BioSciences, Inc. and Emergent BioSolutions Inc. whereby both Profectus and Emergent will receive up to $25 million, each, to advance the development and manufacturing of a vaccine against the Nipah virus.
In April, Emergent announced the successful completion of the Mutual Recognition Procedure for market authorization of its anthrax vaccine, BioThrax, across five Concerned Member States within the European Union including Italy, the Netherlands, Poland, the U.K. and France. BioThrax has received a market authorization across four of the five countries.
Emergent plans to make a $50-million investment over the next three years at the Camden fill/finish facility located in Baltimore. The expansion is likely to drive the company’s key contract development and manufacturing organization business unit.
Zacks Rank & Another Stock to Consider
Emergent currently carries a Zacks Rank #2 (Buy). Another top-ranked stock in the health care sector is Eagle Pharmaceuticals, Inc. (EGRX - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Eagle Pharmaceuticals’ earnings estimates have been moved 15.1% north for 2018 and 26% for 2019 over the past 60 days. The stock has soared 45.4% year to date.
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