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Emergent (EBS) Misses on Q2 Earnings, to Restart Bayview Unit

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Emergent BioSolutions Inc. EBS reported second-quarter 2021 earnings of 33 cents per share, which significantly missed the Zacks Consensus Estimate of $1.81 and declined 83% year over year.

Revenues in the reported quarter were $397.5 million, up 1% from the prior-year period. Growth in contract development and manufacturing (“CDMO”) services revenues were almost completely offset by loss of sales of anthrax and smallpox vaccines. The top line also missed the Zacks Consensus Estimate of $415.73 million.

Shares of Emergent declined 4.5% during after-hours trading on Jul 30, following lower-than-expected second-quarter results. In fact, the company’s shares have declined 27.2% so far this year against the industry’s increase of 0.3%.

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Zacks Investment Research


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Quarter in Detail

Total product sales decreased 39% from the year-ago quarter to $181.2 million.

Narcan (naloxone HCl) nasal spray added $106.2 million to product sales, reflecting an increase of 46% year over year, driven primarily by growth in the U.S. and Canadian markets.

Notably, sales of anthrax vaccines (BioThrax and AV7909) were $51.5 million in the reported quarter, decreasing 61% year over year. The decrease in sales of anthrax vaccines was due to timing of deliveries to the U.S. government. Emergent did not report any sales for its smallpox vaccine, ACAM2000, as no deliveries to the U.S. government were scheduled during the quarter. The company had reported revenues of $70 million from ACAM2000 in the year-ago quarter.

Other product sales were almost flat year over year at $23.5 million.

Revenues from contracts and grants increased 8% year over year to $25.4 million.

CDMO services revenues jumped more than 160% year over year to $190.9 million. The increase was on the back of contributions for services provided to partners engaged in developing COVID-19 vaccines or therapy, especially the Biomedical Advanced Research and Development Authority (BARDA).

The company recorded adjusted EBITDA of $173 million in the reported quarter, up 1% compared from the prior-year quarter.

Guidance

Emergent maintained its revenue guidance for 2021 in the range of $1.7-$1.9 billion. The Zacks Consensus Estimate for total revenues stands at $1.81 billion.

The company expects CDMO services revenues to be between $765 million and $875 million. It expects revenues in the range of $280 - $310 million and $185 - $205 million from anthrax vaccines and smallpox vaccine, respectively. Revenues from NARCAN nasal spray are expected to be between $305 million and $325 million

Emergent anticipates adjusted net income within $395-$470 million. Adjusted EBITDA is anticipated in the range of $620-$720 million.

For the third quarter of 2021, the company expects total revenues of $400-$500 million.

Bayview Facility Update

In a separate press release, Emergent announced that the FDA has allowed the company to resume its production activities related to J&J’s JNJ COVID-19 vaccine at the Bayview manufacturing facility. However, the site will continue to be under routine inspections by the FDA.

Please note that the company had to halt production at the facility on FDA’s request in mid-April as the regulatory authority began inspection to investigate the error that led to manufacturing of faulty doses of J&J’s COVID-19 vaccine in March. Reportedly, Emergent had mixed up doses of AstraZeneca’s AZN COVID-19 vaccine with J&J’s vaccine.

Emergent Biosolutions Inc. Price, Consensus and EPS Surprise

Emergent Biosolutions Inc. Price, Consensus and EPS Surprise
Emergent Biosolutions Inc. Price, Consensus and EPS Surprise

Emergent Biosolutions Inc. price-consensus-eps-surprise-chart | Emergent Biosolutions Inc. Quote

Zacks Rank & Stock to Consider

Emergent currently has a Zacks Rank #4 (Sell).

Codexis, Inc. CDXS is a better-ranked company from the biotech sector, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Codexis’ loss estimates have narrowed from 53 cents to 50 cents for 2021 and from 52 cents to 50 cents for 2022 over the past 30 days.


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AstraZeneca PLC (AZN) : Free Stock Analysis Report

Johnson & Johnson (JNJ) : Free Stock Analysis Report

Codexis, Inc. (CDXS) : Free Stock Analysis Report

Emergent Biosolutions Inc. (EBS) : Free Stock Analysis Report

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