Q4 2023 Emergent BioSolutions Inc Earnings Call
Participants
Richard Lindahl; Executive Vice President, Chief Financial Officer, and Treasurer; Emergent BioSolutions Inc
Joseph Papa; President and Chief Executive Officer; Emergent BioSolutions Inc
Paul Williams; Senior Vice President - Products Business; Emergent BioSolutions Inc
Jessica Fye; Analyst; JPMorgan
Frank DiLorenzo; Analyst; Singular Research
Presentation
Operator
Good afternoon, everyone. I'm the operator for today's call. Thank you for joining today as Emergent discusses their operation and financial results for the fourth quarter and full year. As is customary today's call is open to all participants and the call is being recorded and is copyrighted by Emergent BioSolutions. In addition to today's press release, there is a series of slides accompanying this webcast available to all webcast participants.
Turning to Slide 3. During today's call, Emergent may make projections and other forward-looking statements related to their business. Future events are prospects for future performance. These forward-looking statements are based on their current intentions, beliefs and expectations regarding future events. Any forward-looking statements occurs only as today of this conference call and as expected, by required by law.
Emergent does not undertake to update any forward-looking statement to reflect new information, events or circumstances. Investors should consider this cautionary statement as well as risk factors identified in emergent periodic reports filed with the SEC when evaluating their forward-looking statements.
During today's call, Emergent may also discuss certain non-GAAP financial measures that involve adjustments to GAAP figures in order to provide greater transparency regarding Emergent's operating performance. Please refer to the table found in today's press release.
Turning to Slide 4. The agenda for today's call will include Joe Papa, President and Chief Executive Officer, who will comment on our focus and priorities. Paul Williams, SVP and Head of the products business. We'll provide comments on our call nasal spray, and finally, Rich Lindahl, EVP and Chief Financial Officer, who will speak to the current state of the Company and financials for fourth quarter and full year and guidance for full year 2024. This will be followed by a Q&A.
Finally, and for the benefit of those who may be listening to the replay of this webcast, this call was held and recorded on March 6, 2024. Since then, Emergent may have made announcements related to topics discussed during today's call. And with that, I would like to turn the call over to Rich Lindahl for opening remarks. Rich?
Richard Lindahl
Thank you, Jonathan, and good evening, everyone, and thank you for joining us tonight. Before we get into our results for the fourth quarter and full year, I'd like to take a moment to introduce our new President and Chief Executive Officer, Joe Papa, who joined us a few weeks ago. We are thrilled to have him on our team and look forward to benefiting from his over 35 years of experience in the health care and pharmaceutical industry, along with this proven record as a transformational leader.
Let me turn it over to Joe to say a few words.
Joseph Papa
Thank you, Rich, for the warm welcome and good afternoon, everyone. I'm delighted to join the team and further emergent mission of protecting and enhancing the lives of patients. A lot of people ask me what drew me at Emergent that's easy. I've always been driven by the ability of farmers to save lives and emerging plays.
A unique and critical role in addressing public health crisis has the leading bio defense contractor. We're addressing the most pressing and urgent threats like the opioid epidemic, where data tells every six minutes and Americans die from an opiate overdose to anthrax never was bacterial infectious threat to smallpox number one, viral threat to botulism most of the lethal biologic Thompson Ebola, hemorrhagic fever and chemical threats like nerve gaps that have implications to our service, men and women.
Emergent has capabilities not many can match or in other words, we have a significant moat around our business. Also the near term challenges that emerge have been facing, notably our debt and impact our ability to achieve our full potential. I'm eager to work with the team and tackle these challenges head on base of my three decades of experienced industry. And now knowing the determination of the merchant Board and the leadership team, I believe we can successfully navigate through these issues that emerge it faces today.
I'd like to bring your attention to slide number six of our presentation. Why in only two weeks and month to my CEO role, we will move forward with a multiyear plan to stabilize turnaround and then transform our company. Of course, a business transformation isn't going to happen overnight.
The first space stabilizing Emergent, we expect will take us three to six months, and we'll focus on continuing to build credibility with our key stakeholders, including employees, customers, government regulators, shareholders and debtholders for example, it means looking to strengthen the engagement of all of our employees and focusing on our exciting mission to protect and enhance and help save lives. Also this clear, we must de-risk our balance sheet and reduce our debt.
Now in that regard today, we announced that we've entered into a forbearance agreement through April 30, 2024, with our lenders, which will take us through this in more detail later on. The next phase of our turnaround will begin in 2024 and will span into 2025. We'll focus on key growth opportunities and investments that will drive profitable growth by improving our operating performance, reduce our working capital and may include product and our asset divestitures.
We expect these actions will be critical in our efforts to reduce our debt and to derisk our balance sheet and our final phase transformation plan for 2026 and beyond. We're focused on strategically transforming members to achieve durable and sustainable growth and profitability.
I also want to note an important driver of our past and future success is quality and compliance. Quality and compliance are key value drivers for Emergent, there will remain a top priority. Our products are relied upon to save lives in a time of crisis. Our patients and customers depend on us. We must continue to provide the highest quality products to ensure that customers, government agencies and patients have confidence in us as a trusted partner.
In 2023, Emergent manufacturing facilities have been successfully inspected by five regulatory agents around the globe and five other inspectional bodies for a total of 18 inspections, including three by the FDA that resulted in either an NAI. status for BII. status. This includes successful close out of the Baltimore Khamsin warning letter in just 14 months. That's very significant, truly remarkable accomplishment by the merchant team the leadership team, their teams and the broader organization.
To this end, over my first few weeks, I've had the pleasure of meeting many of the talented and dedicated employees that work at Emergent will continue to visit more emergent facilities in the coming weeks. The commitment to the mission and values are so clear and each and every employee that I've met with I look forward to visiting with more sites in the next few weeks and speaking directly with our team members.
I'm confident the team insights will enhance how we deliver value to our customers, partners, patients and shareholders. I'm going to take that feedback from the team setting clear goals that we can line around together as an organization.
And that's what's going to drive the results. It's a privilege to lead emergent and chart a new chapter in this vital space, whether it's increasing access to Narcan nasal spray to help combat the opioid epidemic or continuing to deliver important medical countermeasures to customers around the world emerging, providing critical products to address global health crisis and an increasingly dangerous world. I'm confident that these important treatments provide for a bright future.
And I look forward to advancing the Company's progress, improving our financial position and driving value for shareholders given money to lease tenure at the Company. Rich will provide an overview of the quarter. Before that, I'll turn it over to Paul to discuss Narcan nasal spray. Our largest products represented the important work divergent dose for patients. The only integrated and will no doubt be an important value driver for the Company going forward to probably 20.
Paul Williams
Thank you, Joe, and hello, everyone. Turning to Slide 8 of the presentation I'd like to start by reviewing the state from the opioid crisis. Latest CDC data show 105,000 people, sadly died from drug overdoses over the latest 12 month period, of which nearly eight in 10 were opioid related today. Opioid overdose is the leading cause of accidental death in the U.S. and with the recent rise in synthetic opioids such as personal, you see very little sign of abatement.
These are unsettling and staggering statistics with so many families loved ones, friends and communities behind these lives lost since adding Narcan nasal spray to our portfolio in 2018, we continue to play a key role in responding to the devastating opioid crisis. And this past year was filled with historic patient and customer first milestones that broadened access and increased awareness of our life-saving opioid overdose reversal treatment.
2023 began with a favorable FDA Advisory Committee's unanimous vote in support of our products OTC use and then FDA approval of that designation in March. We believe our canned nasal spray should be immediately accessible alongside 80 kits and businesses and workplaces as well as across small businesses in schools and on airplanes because an opioid overdose can happen to anyone anywhere.
And at any time, our OTC retail launch Narcan nasal spray in August has provided access and availability across 32,000 outlets spanning mass drug and grocery and online retailers and e-commerce sites. In 2024, we will expand access further into businesses, workplaces and other channels as well as planning for the introduction of future line extensions in the U.S. Public Interest channel continues to grow our one-of-a-kind and proprietary distribution platform.
Narcan direct supports our customers' needs and helps facilitate seamless ordering and distribution of the product to the many thousands of endpoints that are critical in dispensing, our canned nasal spray into the hands of those who need it this past year. Our ability to meet increasing demand enabled us to distribute approximately 22 million doses for 11 million to those cartons in the US and Canada to get Narcan into the hands of those who needed the most and provide a chance to save a life.
And most recently, in January of this year, we announced the shelf life extension of Narcan this rate from 36 months to 48 months in the United States. We believe this will increase adoption and access to the product. We've also made a tremendous impact with our ready to rescue campaign, which aims to break down the stigma associated with opioid overdose and educate the public and in particular, college-age adults.
We continue to partner with public figures and notable influencers to expand awareness of the risk associated with opioid use and the importance of being prepared with our canned nasal spray in the coming quarters, we'll continue to execute on our plans to broaden access and availability of American nasal spray and meet the demand as we seek to help save more lives. Now I'd like to turn it over to Rich to discuss the fourth quarter performance in more detail.
Richard Lindahl
Thanks, Paul. I'll begin by expanding on the 8-K filing that Joe mentioned earlier in the call today, we announced that we have entered into a forbearance agreement with our lenders through April 30th. While we continue our initiatives to increase operational performance, improve working capital and pursue certain product or asset sales. As Joe highlighted, the transformation of the Company will be a multiyear process with the near term being heavily focused on strengthening our credit profile and capital structure.
All decisions will be made through the lens of improving overall performance and enhancing enterprise value. While the details of the sale processes are confidential, we seek to generate additional cash proceeds that can be used to further reduce our debt and enable credit improvement as we transform the business. The forbearance agreement provides further evidence of the constructive relationship we continue to have with our lenders, and we look forward to providing further updates on our capital structure in the future.
During the fourth quarter, iMergent made great progress, improving the fundamentals of our business and advancing our core products. We continued to reduce costs and right-size operations in order to de-risk the business and strengthen our financial position. These actions reflect our sharpened strategic focus and the ongoing transformation of our business as we concentrate on enhancing revenue, improving operational efficiencies and reducing debt.
Throughout 2023, we maintained a very positive relationship with the U.S. government and other key medical countermeasure customers. As a result, we achieved significant contract awards that reinforce the value of our products as an essential part of the government's preparedness planning, which continues to evolve.
As having said that, as I'll expand on in a few minutes, our 2024 forecast has more variability than in years past. In October, we appointed two pharmaceutical industry veterans to the Board, Neal Fowler and Don to earlier who bring more than 70 years of combined biopharmaceutical industry and sales experience, we believe their expertise will be valuable as we continue to grow our can sales advance our other products and partner with governments to prepare for public health threats.
Let me walk through some of the progress we're making across our core products, as highlighted on slide 10, as you just heard from Paul, after many years of research and development and in partnership with the FDA, we officially launched Narcan nasal spray as an over-the-counter opioid overdose reversal treatment in August last year.
This is a monumental milestone for our Company that expanded access to the Loxo throughout the year. We've been able to meet the ever-increasing demand for Northam, resulting in expanded access and broader awareness of Northam and underpinned by strong support from federal and state programs.
As we look ahead, we expect Narcan nasal spray to remain a key contributor to our growth in the near term. We also secured several important contract wins last year across our other core products, including a new $379.6 million U.S. Department of Defense defense contract for RSDL, a $75 million option to extend emergence. Existing contract for Saipem has a 10-year contract with Barta valued at $704 million for the development and manufacturing scale-up of procurement of Mikulski Bonga for license treatment for Ebola virus.
And we've already announced a contract award for 2024 with the US Department of Defense valued at $235.8 million to supply BioThrax, a form of the anthrax vaccine this new contract award is a testament to the importance of our medical countermeasure portfolio to the U.S. government's Preparedness and Response Plan.
Finally, we achieved many important R&D milestones this year in July 2023, we received U.S. FDA approval of Xifaxan this a two-dose anthrax vaccine for post-exposure prophylactic use. We received Health Canada regulatory approvals for our ACAM2000 vaccine and Tembec's a drug that each address smallpox. We also submitted a supplemental BLA to the FDA that would extend a CAM.
2000 indication to include immunization against the impacts firings. We expect to hear back from the FDA by the third quarter of this year. These contracts and development advances reflect the U.S. government's need to maintain a high level of preparedness against a wide range of perfect potential threats that frankly, are increasing as events unfold.
Worldwide Emergent is uniquely positioned to deliver these products in an efficient and cost effective manner and we are committed to supporting the U.S. government's efforts to address emerging infectious diseases and strengthen future preparedness.
In 2023, we also completed several initiatives to improve our credit profile and de-risk our capital structure. As you know, we divested our travel health business, generating up to $380 million of proceeds, extended the maturity of our secured credit facility to May 2025, implemented actions to save over $160 million of annualized operating expense and announced a strategic shift to focus on our products business.
Turning to our results. We had solid revenue in the quarter, which led to full year 2023 revenue, in line with the midpoint of our guidance range provided on November 8, adjusted EBITDA was impacted by revenue, timing and onetime write-offs, which I'll provide further detail on shortly as it as indicated on slide 11, highlights in the fourth quarter include total revenues of $277 million, driven by noncash and Saipem. This total segment adjusted gross margin of $86 million, adjusted EBITDA in the quarter of $3.4 million and adjusted net loss of negative $40 million.
Diving deeper into the quarterly revenues, important items on slide 12 include anthrax MCM sales of $112 million, driven by census deliveries to the U.S. government's Strategic National Stockpile, including initial shipments under the $75 million contract option provided by Barda that we announced on November 28, Northam's sales of $111 million, demonstrating the continued strength and durability of this product, driven by consistent demand from the U.S. Public Interest channel and the growing market in Canada.
Revenue in the quarter also includes contributions from the launch of OTC Narcan into retail channels. Smallpox MCM sales of $12 million, driven by the IGID. other product sales of $15 million, primarily related to our SDL and balance and total bio services revenues of $21 million, reflecting our continued transition to focus on existing customers.
Turning to operating expenses on Slide 13 cost of commercial product sales in the quarter was $50 million, driven by strong sales of non-cash cost of MCM product sales in the quarter was $97 million, driven primarily by second to sales volume and other medical countermeasure products as well as an increased inventory write-offs.
Cost of services of $38 million, reflecting actions taken to improve profitability from R&D expense of $29 million, which includes one-time costs associated with Project terminations and SG. and A. spend of $90 million, including expenses supporting key market initiatives reduced by expenses, offset by reduced expenses related to restructuring initiatives.
With that, let's move to Slide 14 and review segment performance during the quarter and note that beginning with the fourth quarter of 2023, we now report our results in three segments commercial products, MCM products and services. This change will provide increased transparency for investors as we move forward.
In the commercial segment, revenues were $111 million, comprised entirely of NeuroCare and segment. Adjusted gross margin was $61 million or 55% in the SCM segment revenues were $138 million, driven by anthrax, RSDL and bath segment. Adjusted gross margin was $42 million or 30%. As for the Services segment revenues were $21 million and segment adjusted gross margin was negative $17 million.
Shifting to slide 15, I'll highlight our 2023 full year performance. Full year revenue was $1.05 billion, in line with the midpoint of our previously provided guidance. Full year total segment adjusted gross margin was $336 million or 33% at the low end of our guidance range. Full year adjusted EBITDA was negative $22 million, also at the low end of our range and adjusted net loss was negative $319 million.
Transitioning to Slide 16, I'll highlight the 2023 for your costs. Cost of commercial products was $210 million, driven by the continued strength of Nokia and nasal spray in the existing channels, as well as the launch of Narcan nasal spray over the counter in late August 2023.
Cost of MCM products was $306 million, which was influenced by sales volume, product mix and unabsorbed manufacturing overhead costs. Cost of services was $190 million, heavily influenced by our cost structure in the first half of 2023, which was a primary focus of the cost reduction actions we announced on August 8, R & D expense was $97 million, including the chicken Goodyear cost prior to the divestiture of the travel business.
SG&A was $368 million, which included additional marketing expenses related to marketing and legal fees and restructuring expenses. Moving to slide 17, Commercial Products segment revenue for the full year was$ 497 million up roughly $100 million versus the prior year with a segment adjusted gross margin of 58% in line with the prior year and reflecting pricing reductions we took midyear on dark and nasal spray to improve access and affordability.
Full year MCM product segment revenue was $447 million and segment adjusted gross margin was 34% the margin for the MCM business was influenced by sales volume, product mix, cost absorption and inventory write-offs. And the services segment had revenue of $79 million and segment adjusted gross margin of negative $103 million, influenced by sales volume and costs in the first half of 2023 prior to our restructuring efforts announcement on St.
I'll now turn to slide 18 and touch on select balance sheet and cash flow highlights. We ended 2023 with $112 million in cash and $192 million of total liquidity, including availability under our revolving credit facility. The increase in cash and liquidity versus the prior quarter was due to sales, timing and collection of accounts receivable.
Operating cash flow in the full year was negative, but in the second half of 2023, it was positive $92 million. Capital expenditures were $52 million in 2023. As of December 31, our net debt position was $757 million. Turning to 2024 guidance, please see Slide 19 as announced in our press release this evening, we are providing guidance for full year 2024 as follows.
Total revenues of $900 million to $1.1 billion commercial product sales of $460 million to $500 million as we expect continued strong demand for Narcan in the U.S. Public Interest channel and Canada, combined with further growth with OTC Narcan in the retail channel were forecasting NCM product sales of $340 million to $490 million, as we've previously noted
Now that's I said this is a fully licensed. The primary procurement will transition from Florida to the Strategic National Stockpile. We recognize that the U.S. government is balancing multiple threat preparedness needs with the level of funding provided by Congress and at this fact that impact the magnitude and timing of any particular contract procurements in the near term, even as this potential threat remains a top strategic priority.
As a result, we've provided a wide range of potential outcomes for the MCM segment to continue to engage with our US government stakeholders to improve the procurement visibility that is needed to support this critical capability for the benefit of all United States citizens.
As a final note, on the MCM products, we continue to see stable consistent sales to the US government under the long-term contracts we have in place for our plasma and chemical decontamination products, VIGID., BAT and RSDL. We're forecasting services segment revenue of $70 million to $80 million, reflecting our commitment to serving our existing customers.
Shifting to profitability metrics, we're forecasting adjusted EBITDA of $50 million to $100 million, reflecting the impact of our 2023 cost reduction actions, our capacity utilization profile and the range of revenue expectations across our segments. For the full year of 2024, we're forecasting total segment adjusted gross margin of 40% to 45%, an increase over the 2023 level, primarily reflecting the full year impact of our profitability improvement efforts.
Finally, we're forecasting Q1 revenue in a range of $200 million to $250 million. That's all for the financial update. I'll now turn the call back over to Joe for some final thoughts.
Joseph Papa
Thank you, Rich. Before going to questions, let's take a quick look at slide number 20. I just want to reinforce the human impact of our product on public health threats across the world. As I stated at the top of the call, every six minutes in this country, we lose a life to opioid overdose doesn't have to have power approximately five lines were taken.
Let me take it one step further and one, 24 hour period, we lose approximately 240 individuals like losing a 737 airplane every day. Think about that for this assessment, we are working hard to change this statistic. I cannot stress enough that the work we do in support of our mission to protect and enhance lives and ultimately help save lives is what inspires us all.
Thank you again for joining this afternoon. As you can see, the Emergent team has made notable progress this year and look forward to building on this momentum. As we execute on our transformation and the important catalysts underway, I believe we have an incredible opportunity to play a key role in public health.
And I'm excited to work with our team to meet with the key stakeholders across the organization and accelerate emergence returned to growth, and we are well positioned for success, driven by our focus on protecting communities and addressing the evolving landscape, the global health challenges and look forward to speaking with all of you in the coming months to provide additional details on perspectives in our near term priorities and goals average. Let's now turn it over to you and open up the floor for Q&A.
Question and Answer Session
Operator
(Operator Instructions)
Jessica Fye, JPMorgan and your question, please.
Jessica Fye
Good evening. Thanks for taking my questions. Three from me. And first, what are the product or asset sales you are considering? And if I look at the 2024 commercial products guidance, can you just talk about what assumptions underpin that guidance and just want to confirm is that for 2024 us only Narcan now and it's how to think about the OTC contribution versus public interest in Canada?
And then lastly, in the MCM guidance. Can you talk about what that includes as it relates to the size and timing have an AGM 20 option as well as Tim Baxter and maybe a little bit about how to think about the split of revenues between anthrax and smallpox within that guidance? Thank you.
Joseph Papa
Okay. You have quite a bit there, Jessica. We're trying to take them one at a time here, and I'll start with the first one on asset sales, I think it's probably less important to say that what I was saying, Rich was saying is that we take the need to reduce debt very serious, and we're looking at all the opportunities to reduce the debt in our company.
One of the ways that we're looking at is obviously improving our overall operating performance. That goes without saying second one we're thinking about is what are some of the working capital improvements we can make the call. I'll let Joe, Bob James.
Richard Lindahl
Jessica, your line is open again, Gary, I'll just add, Joe Papa, the emergency Yuhara.
Joseph Papa
Yes, I do I mean to repeat the question now I have the question and let us start with again, we apologize for not sure what happened with the one of the satellites went down or something, but we're here we didn't move. So we're glad to have a chance to finish the questions.
Okay, everyone. Your question was relative question of asset sales. And I think what I wanted to say here is number one that you heard from Rich and myself that we take the reduction in debt very serious, and we're looking at a number of things to reduce our overall debt structure. Obviously, the first step is in the operating performance of our business, and we're working on that and which took some of those steps already in 2023. And we'll look to take more in '24.
Second, part of what we're doing is looking at working capital management. If we reduce working capital, free up some cash paid out some debt. That's the another important thing we're going to do that. And to your point, a question of looking at product and or asset sales is something that we are evaluating.
I hope you respect. I can't go into the specifics of what assets or what product at this time. But we wanted to just say that things that we're looking at those two round out that total program, we have for debt reduction given looking at a very serious initiative for us. So overall, net debt. So that's what I want to spend.
The first part of your question, I think the second part within the commercial margin?
Richard Lindahl
Yes. So just to clarify that the commercial guidance only includes Narcan for 2024. I think that was the first part of your question. And for the second part, I'll ask Paul to him to elaborate on the assumption.
Paul Williams
Yes. So I think first of all, I think it's really important to understand that the UTC designation really for us expands access across all channels and how do we make it work in more available in as many access points as possible. I think particular to the public interest segment. I think we see very strong continued federal and state funding in support of those channels.
On the retail side, I think we can see we have we have a strong level of retail stocking on both in-store and online, and we start to see consistent demand out of that channel at the same time this year, we're going to be expanding further in the business into business business-to-business categories, particularly as it relates to industry, tourism services, entertainment and construction. That is, I think also getting a full year's worth of OTC Retail versus last year.
Richard Lindahl
Thanks, Paul. And then the third part of your question was, first of all on how are we thinking about A-CAM And Tim, excellent procurement in the year as far as they can is concerned, we are expecting additional procurement this year. We would expect that it would be sometime in the middle part of the year, which is consistent generally with prior practices.
And at this point, our expectation is it's going to be relatively consistent with the level that we saw in 2023 for a TAM for Tembec's up at this point. We're not anticipating additional procurement of Tembec stuck in this year that has been deferred into a future period, and we'll certainly keep you posted as that goes on as far as the anthrax and smallpox split?
Tom, again, there's as I mentioned earlier, we provided a fairly wide range, really primarily driven by a wide range of expectations around anthrax as we look to clarify and get better visibility into what the procurement profile will look like this year for anthrax. And I've spoken to the smallpox piece already. So hopefully, that addresses your questions.
Joseph Papa
Yes, if ever and you're going to take our next question, please.
Operator
Certainly One moment for our next question.
And our next question comes from the line of Frank DiLorenzo from Singular Research on your question, please.
Frank DiLorenzo
Good afternoon and thanks for taking my call. I have a couple of questions.The first related to the MCM business in the second and related to our accounts. So I'll just start with MCM go following along the lines of ACAM. 2000, assuming there's a positive FDA response to that SBLA., it toward the end of the year, I'd say third quarter. How would how would that additional indication impact the overall sales potential for that product going forward?
Say in 2025 and beyond? And then separate from that, could you talk about your next potential submission to the FDA regarding the MCM space,?
Joseph Papa
You can take the short so as you referenced and as we talked about on the call, we do have de-escalate SBLA in front of the FDA for to expand the hub with the account indication to cover the pox virus at this point comment you have given certainly the timing of that. And then in the year, we are not anticipating any material contribution from driven by our impacts in 2024.
It does provide some incremental upside for the product as we move forward in '25 and beyond. And so we'll certainly provide further updates as we move on as far as any other BLAs at this point. There's nothing in the queue immediately, but we are certainly continuing to work on and investigate other possibilities. Tom, you know, as we continue to develop different ideas and products.
Frank DiLorenzo
Okay, thanks. Regarding Narcan, can you give us a little more granularity on the public interest base and getting a knock-on into first aid kit segment, if you will. And firstly, it's a big, big deal and a lot of different areas, whether it's schools or industry, has there been any movement there and separate from that. Could you talk about a longer-term and ex U.S. strategy for Narcan? Thank you.
Joseph Papa
I mean I think that yes, sure.
Paul Williams
Thanks for the question. I think the first point on the public interest channel in particular, I think we can continue to see really strong demand. Obviously, the public interest journalist, it really is their goal is to get Narcan into the into the most vulnerable populations that are suffering from the opioid crisis. It has many forms and as possible, and we work with those organizations at the local level on to enable our TAM to be and whether that's in vending machines or other put ups that best meet their needs in terms of what they're doing.
And back to my point, I mentioned earlier relative to us moving into the as part of our retail expansion moving into broader business, the business targets getting into first aid kits in the workplace and restaurants and other particular areas like that. That is a priority for us this year as we expand in the retail segment.
Joseph Papa
This is Joe Papa. I had a chance to meet with Ball team last week, and I can tell you they've got some very exciting plans and they looked at a lot of different mine extension opportunities, other things that will just continue to expand our presence and most importantly, just to make sure access, but we have more access available to trying to curtail some of these unfortunate opiate overdoses occurred, but they've got some current plans, we will look at new line extension opportunities.
Paul Williams
And to your question on ex U.S., similar to what we do with the medical countermeasures space, we work with stakeholders outside the US in multiple other countries, departments, health ministries of defense to best understand what their needs are from a from it in terms of how they're dealing with the opioid crisis and we'll work with them to support their needs internationally in terms of whatever direction that goes.
Frank DiLorenzo
Okay. Thank you.
Joseph Papa
Operator, next question.
Thank you.
Operator
(Operator Instructions)
This does conclude the question and answer session. And I would like to hand the program back to Joe for any further remarks.
Joseph Papa
Well, thank you, everyone, for joining us this afternoon. Pleasure to have a chance to share with you some of the excitement we see in emerging some of the things that step that we're taking today to make sure that we have a bright future for tomorrow, and we look forward to meeting with all of you and talking to you in the future.
As we have a chance to go out and talk about the excitement that we see and opportunities that we're addressing. And importantly, some of the challenges we're addressing upfront thing and on. So thank you, everyone, for joining us today. Have a great day, everyone.
Operator
Thank you all. And with that, ladies and gentlemen, we now conclude the call. Thank you for your participation. Please note an archived version of today's webcast as well as a PDF version of the slides used during today's call will be available later today and accessible through the investor's landing page on the company's website.
Thank you. Again, we look forward to speaking with you all in the future. Goodbye.
