Rather than wowing speculators with promises of a scientific breakthrough, Emergent BioSolutions' (EBS 9.68%) coronavirus strategy positions the company as the go-to resource for vaccine manufacturing support. Aside from its ever-increasing number of contract manufacturing agreements with major industry players and rising stars, the company is also developing coronavirus therapeutics of its own, leveraging its core competitive advantages in manufacturing.

With its stock surging this year, Emergent is a potentially appealing option for healthcare investors rounding out their COVID-19 portfolios. That said, some investors may balk at its relatively thin profit margin of 6.14%, weak year-over-year quarterly revenue growth of only 1%, and lack of consistent earnings growth over the past year. These concerns are valid, but taking a closer look at where the company is experiencing growth will clarify its short-term prospects as a competitor in the coronavirus market.

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Emergent is a keen infectious-disease competitor

Impressively for a midsize biotech company, Emergent has 10 products on the market. These include a handful of critical vaccines for diseases like smallpox as well as in-demand therapies such as Narcan nasal spray for opioid overdoses. Product sales dropped by 3% in the first quarter compared with last year, however.

In its pipeline, the company is currently working on 15 different infectious-disease vaccines or therapies, including its two COVID-19 projects, as well as seven different drug delivery devices. The vast majority of its pipeline programs are in phase 1 clinical trials or in preclinical development.

Both of Emergent's COVID-19 therapies, COVID-HIG and COVID-EIG, are antibody cocktails which could dramatically reduce the disease's severity, and both are in phase 1 clinical trials with a goal of starting phase 2 trials sometime before the end of 2020. Its antibody cocktails are derived from a convalescent donor's purified blood plasma, meaning that scaling production to match demand will be a consistent challenge if they are approved. Nonetheless, it secured $34.6 million in federal funding for coronavirus therapy development in July, so it won't need to bear the full costs of clinical trials alone.

Helping other companies to manufacture their coronavirus vaccines will continue to be lucrative

Given that its COVID-19 pipeline projects will take a significant amount of time to pay off if they do so at all, Emergent's best chance at revenue growth in the short term is the contract manufacturing activities it performs for many of the pharma industry's leading coronavirus vaccine developers. Even before the impact of the pandemic was fully apparent, Emergent reported that revenue from its contract manufacturing operations had increased by 36% in the first quarter compared with 2019.

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AstraZeneca (AZN 0.28%) signed an agreement with the company in June worth $87 million under which Emergent will support manufacturing operations for AZD1222, the highly promising Oxford vaccine candidate. Johnson & Johnson's (JNJ 1.49%) contract with the company to manufacture its Ad26.COV2-S was even larger, estimated to be valued at $480 million in the first two years. Smaller contenders like Vaxart (VXRT -10.29%) and Novavax (NVAX 2.06%) have also signed contracts for Emergent to handle their vaccine manufacturing, meaning that the company has massive exposure to the upside of many different projects. Notably, the revenues from these collaborations will almost certainly exceed Emergent's estimate in the first quarter, which predicted contract development and manufacturing revenues of $145 million at most for the entire year.

Thus, Emergent's future as a coronavirus stock is quite bright, given its increasingly widespread integration into the vaccine value chain for many of the most exciting candidates. Whether or not its collaborators are successful, the company stands to benefit from their efforts, and it may make an effective therapy or two of its own as a bonus in the long term.

Emergent's earnings report is scheduled for July 30, so healthcare investors who are still on the fence should follow up to see the impact of its manufacturing collaborations on its bottom line.