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Emergent (EBS) Earnings and Revenues Beat Estimates in Q1
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Emergent BioSolutions Inc. (EBS - Free Report) reported first-quarter 2020 earnings of 1 cent per share, The Zacks Consensus Estimate was of a loss of 2 cents. Moreover, the figure was narrower than the year-ago loss of 10 cents per share.
Revenues in the reported quarter were marginally 1% from the prior-year period to $192.5 million, primarily backed by an increase in contract development and manufacturing (CDMO) and contracts and grants revenues. The top line also beat the Zacks Consensus Estimate of $190 million.
Shares of Emergent have rallied 45.9% in the year so far against the industry’s decline of 0.6%.
Quarter in Detail
Total product sales dipped 3% to $148.2 million from the year-earlier quarter. The fall in revenues was due to a decrease in sales of small pox vaccine ACAM2000, as previously anticipated by the company.
ACAM2000, which was acquired from Sanofi (SNY - Free Report) in the fourth quarter of 2017, did not record any sales in the reported quarter.
Meanwhile, newly-acquired product of Narcan (naloxone HCl) nasal spray added $72.2 million to product sales, increasing 10% 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 $51.9 million in the reported quarter, reflecting a significant increase year over year. Other product sales plunged 20% on a year-over-year basis to $24.1 million.
Revenues from contracts and grants increased 4.1% year over year to $22.6 million, primarily owing to higher grant received from the PC2A (diazepam) auto-injector drug-device product candidate.
Contract manufacturing revenues surged 36% to $21.7 million from the year-ago figure. This upside was primarily on solid demand across development services, drug substance and drug product offerings.
The company recorded adjusted EBITDA of $15.3 million in the reported quarter compared with $8.4 million in the year-ago period, up 82.1%.
2020 Guidance
Along with the earnings release, Emergent reiterated its financial outlook for the current year, which it provided in February 2020.
Emergent predicts revenues of $1.18-$1.27 billion for 2020. The Zacks Consensus Estimate for the metric stands at $1.22 billion for the period.
The company expects adjusted net income within $160-$210 million while adjusted EBITDA is anticipated in the band of $300-$360 million.
In the second quarter of 2020, the company expects total revenues within $270-$300 million.
Other Updates and Coronavirus Response
In March 2020, Emergent initiated the development of two product candidates for the treatment and prevention of the novel coronavirus disease, COVID-19. The company is developing the two candidates, leveraging its hyperimmune platforms, which have a well-established safety database.
During the same time, 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 also has a collaboration agreement with Novavax, Inc. (NVAX - Free Report) to support the latter’s development of a vaccine candidate against COVID-19. Per the terms of the agreement, Emergent will use its CDMO services to advance Novavax’s COVID-19 vaccine candidate into clinical stage.
Last month, the company announced an agreement whereby it will use its CDMO services to back the manufacturing of Johnson & Johnson’s lead vaccine candidate for COVID-19. The deal is valued at around $135 million.
Additionally, Emergent’s single-dose oral cholera vaccine, Vaxchora, was approved by The European Medicines Agency (EMA) in the first quarter of this year. The company is planning to commercially launch the same in late 2020.
Moreover, during the first quarter, Emergent secured an approval from the FDA and EMA to develop its chikungunya vaccine candidate, CHIKV VLP. The company is looking to conduct a phase III safety and immunogenicity study using serum neutralizing antibodies (SNA) as an immune correlate of protection to predict the clinical benefit of the vaccine candidate.
Emergent Biosolutions Inc. Price, Consensus and EPS Surprise
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Emergent (EBS) Earnings and Revenues Beat Estimates in Q1
Emergent BioSolutions Inc. (EBS - Free Report) reported first-quarter 2020 earnings of 1 cent per share, The Zacks Consensus Estimate was of a loss of 2 cents. Moreover, the figure was narrower than the year-ago loss of 10 cents per share.
Revenues in the reported quarter were marginally 1% from the prior-year period to $192.5 million, primarily backed by an increase in contract development and manufacturing (CDMO) and contracts and grants revenues. The top line also beat the Zacks Consensus Estimate of $190 million.
Shares of Emergent have rallied 45.9% in the year so far against the industry’s decline of 0.6%.
Quarter in Detail
Total product sales dipped 3% to $148.2 million from the year-earlier quarter. The fall in revenues was due to a decrease in sales of small pox vaccine ACAM2000, as previously anticipated by the company.
ACAM2000, which was acquired from Sanofi (SNY - Free Report) in the fourth quarter of 2017, did not record any sales in the reported quarter.
Meanwhile, newly-acquired product of Narcan (naloxone HCl) nasal spray added $72.2 million to product sales, increasing 10% 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 $51.9 million in the reported quarter, reflecting a significant increase year over year. Other product sales plunged 20% on a year-over-year basis to $24.1 million.
Revenues from contracts and grants increased 4.1% year over year to $22.6 million, primarily owing to higher grant received from the PC2A (diazepam) auto-injector drug-device product candidate.
Contract manufacturing revenues surged 36% to $21.7 million from the year-ago figure. This upside was primarily on solid demand across development services, drug substance and drug product offerings.
The company recorded adjusted EBITDA of $15.3 million in the reported quarter compared with $8.4 million in the year-ago period, up 82.1%.
2020 Guidance
Along with the earnings release, Emergent reiterated its financial outlook for the current year, which it provided in February 2020.
Emergent predicts revenues of $1.18-$1.27 billion for 2020. The Zacks Consensus Estimate for the metric stands at $1.22 billion for the period.
The company expects adjusted net income within $160-$210 million while adjusted EBITDA is anticipated in the band of $300-$360 million.
In the second quarter of 2020, the company expects total revenues within $270-$300 million.
Other Updates and Coronavirus Response
In March 2020, Emergent initiated the development of two product candidates for the treatment and prevention of the novel coronavirus disease, COVID-19. The company is developing the two candidates, leveraging its hyperimmune platforms, which have a well-established safety database.
During the same time, 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 also has a collaboration agreement with Novavax, Inc. (NVAX - Free Report) to support the latter’s development of a vaccine candidate against COVID-19. Per the terms of the agreement, Emergent will use its CDMO services to advance Novavax’s COVID-19 vaccine candidate into clinical stage.
Last month, the company announced an agreement whereby it will use its CDMO services to back the manufacturing of Johnson & Johnson’s lead vaccine candidate for COVID-19. The deal is valued at around $135 million.
Additionally, Emergent’s single-dose oral cholera vaccine, Vaxchora, was approved by The European Medicines Agency (EMA) in the first quarter of this year. The company is planning to commercially launch the same in late 2020.
Moreover, during the first quarter, Emergent secured an approval from the FDA and EMA to develop its chikungunya vaccine candidate, CHIKV VLP. The company is looking to conduct a phase III safety and immunogenicity study using serum neutralizing antibodies (SNA) as an immune correlate of protection to predict the clinical benefit of the vaccine candidate.
Emergent Biosolutions Inc. Price, Consensus and EPS Surprise
Emergent Biosolutions Inc. price-consensus-eps-surprise-chart | Emergent Biosolutions Inc. Quote
Zacks Rank
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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Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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