Emergent BioSolutions (NYSE:EBS) released fourth-quarter earnings on Thursday. The company announced preliminary numbers in January so it could talk about the results at the JP Morgan Healthcare conference, but the actual numbers were slightly better.

Emergent BioSolutions results: The raw numbers


Q4 2016

Q4 2015

Year-Over-Year Change


$152 million

$160 million


Income from operations

$50.9 million

$65.1 million


Earnings per share




Data source: Emergent BioSolutions.

A vial and needle sitting on a paper with a description of anthrax.

Image source: Getty Images.

What happened with Emergent BioSolutions this quarter?

  • Revenue declined while the government dragged its feet setting up the new contract for Emergent's anthrax vaccine, BioThrax, resulting in a 61% year-over-year decline in BioThrax sales. The rest of Emergent's business countered most of that, with other product sales up 249% year over year and contract manufacturing up 59% year over year.
  • The new contract with the Centers for Disease Control and Prevention was eventually signed in December, so revenue from BioThrax should get back on track as shipments to the Strategic National Stockpile (SNS) resume. All told, the contract could bring in $911 million through September 2021.
  • There's also a contract with Biomedical Advanced Research and Development Authority (BARDA) for another $100 million worth of BioThrax to be delivered to the SNS.
  • And the company also signed a contract with BARDA to develop its next generation anthrax vaccine, NuThrax, valued at up to $1.6 billion if the vaccine works and the government stockpiles the updated version, as it plans to.

What management had to say

"On the M&A front, we continue to target opportunities that maximize our core competencies and are accretive within 12 months of acquisition," Emergent's president and CEO Dan Abdun-Nabi said. "I remain confident that we will execute at least one meaningful acquisition in 2017."

Abdun-Nabi highlighted the EU directive that mandates that member states stockpile medical countermeasures to potential chemical, biological, radiological, and nuclear threats, which could boost Emergent's sales. "I see that evolving over the next 18 to 24 to 30 months, somewhere in that time horizon," he noted.

Looking forward

This year, management is looking for revenue of $500 million to $530 million, including BioThrax sales of $265 million to $280 million. The range brackets 2016's $510 million in revenue, but that includes revenue from products that were spun off into Aptevo Therapeutics (NASDAQ:APVO).

On a continuing operations basis, Emergent BioSolutions recorded $489 million in revenue in 2016, so there's potential for substantial growth on an apples-to-apples comparison. Adjusted net income is expected to land in the $70 million to $80 million range, bracketing the $77.5 million on a continuing operations basis that Emergent BioSolutions recorded in 2016.

Management also gave 2020 goals of having $1 billion in revenue with more than 10% of that coming from outside the U.S. The company is also looking to increase its net income margin to at least 13%. In 2020, Emergent is looking to have six products in clinical or advanced development.

The company is well on its way to meeting the last part of the goal, with NuThrax scheduled to enter phase 3 development in 2018, and three other products entering the clinic this year. Earlier this month, Emergent started a phase 1B trial for UV-4B, its Dengue antiviral therapeutic. And later this year, the company plans to start a phase 2 trial for its seasonal influenza hyperimmune therapeutic and a phase 1 trial for a Zika therapeutic.

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