Emergent BioSolutions release preliminary financials on January 9, 2022. EBS stock has been in a short-term uptrend since November 2021.
Emergent BioSolutions Announces 2022 Financial Guidance, Provides Preliminary 2021 Results
On January 9, 2022, Emergent BioSolutions Inc. (NYSE:EBS) announced its financial guidance for 2022 and selected preliminary unaudited financial results for 2021.
“This past year we celebrated wins across the business and overcame our share of challenges, which have made our organization stronger,” said Robert G. Kramer, president and CEO of Emergent BioSolutions. “We remain focused on our growth goals and dedicated to our vision of protecting and enhancing the lives of 1 billion people by 2030. We are confident in our core business and our growth potential, driven by quality manufacturing, a broad R&D portfolio, diverse M&A opportunities, and most importantly, our talented workforce.”
“Our 2021 financial performance reflects steady growth in our core products combined with strong CDMO services revenues stemming from our participation in the global COVID-19 response,” said Richard S. Lindahl, executive vice president and CFO. “In 2022 we anticipate continued solid contributions from our Government/Medical Countermeasure and Commercial products businesses, more normalized performance from our CDMO services business, and achievement of important milestones in our R&D portfolio.”
Total revenues for 2021 are expected to be in the range of $1,770 million to $1,790 million, an increase at the midpoint of $225 million or 14% as compared to 2020. This growth primarily reflects increased sales of contract development and manufacturing (CDMO) services to pharmaceutical and biotechnology innovators and government/non-government organization (NGO) customers, and to a lesser extent higher product sales, primarily from NARCAN® (naloxone HCl) Nasal Spray.
- The Company anticipates Adjusted EBITDA of $500 million to $525 million, a decrease at the midpoint of $118 million or 19% as compared to 2020. The Company anticipates Adjusted Net Income of $315 million to $335 million, a decrease at the midpoint of $99 million or 23% as compared to 2020. This decrease primarily reflects the impact of the incremental costs at the Company’s Bayview facility. (See “Reconciliation of Non-GAAP Measures” for a definition of the terms and reconciliation tables.)
The preliminary 2021 financial results are unaudited, subject to revision, and anticipated to be finalized by late February 2022. The Company is in the process of finalizing its goodwill and long-lived asset impairment assessments for 2021. Any potential impairment has not been incorporated in these preliminary 2021 financial results. The Company’s final audited financial results could differ materially from these selected preliminary results.
- The 2022 guidance for total revenueThe income statement provides a summary of a company's revenue and expenses over a specified period of time, typically a year or a quarter. It shows the company's total revenue, th... indicates a re-baseline of the Company’s operational performance and primarily reflects the impact to the CDMO services business following the conclusion of the Center for Innovation in Advanced Development and Manufacturing (CIADM) task order with the Biomedical Advanced Research and Development Authority (BARDA) and to the commercial products business following the formation of a generic market for NARCAN® Nasal Spray.
The 2022 guidance reflects an anticipated mix of product and services gross margin, continued investment in research and development, and scale efficiencies in selling, general & administration expenses.
2022 Product/Service Level Revenues – Select Assumptions
- Anthrax vaccines revenues are expected to continue at similar levels to 2021 under the terms of the Company’s existing contract with BARDA.
- ACAM2000® (Smallpox (Vaccinia) Vaccine, Live) vaccine deliveries are expected to continue under the terms of the Company’s existing contract with the U.S. Department of Health and Human Services (HHS) at unit volume levels consistent with 2021 deliveries.
- Nasal naloxone product revenues reflect the formation of a generic market and comprise revenues from NARCAN® (naloxone HCl) Nasal Spray and revenues related to the authorized generic of NARCAN® Nasal Spray, a product licensed to Sandoz AG and launched in late 2021.
- CDMO revenues include, among others, continued production of COVID-19 drug substance for Johnson & Johnson.
Other 2022 Assumptions
- Gross margin is expected to be approximately 47%-51% on a GAAP basis, influenced by the mix of product and services revenues.
- Pipeline progress is expected across the R&D portfolio with anticipated advancements of a number of early-stage programs, the ongoing progress of the CHIKV VLP Phase 3 clinical trial, and completion of the Biologics License Application filing for AV7909, the Company’s next generation anthrax vaccine candidate.
- Capital expenditures, net of reimbursement, are expected to be approximately 10% of total revenues at the midpoint, reflecting ongoing investments in capacity and capability expansions related to the CDMO business and the Company’s R&D programs.
The Company will provide an update on the current business and discuss preliminary 2021 unaudited financial results, the financial guidance for 2022, and long-term goals during its presentation at the 40th Annual J.P. Morgan Healthcare Conference on January 10, 2022, at 8:15 AM Eastern time.
A live webcast of the presentation can be accessed through Emergent’s website. An on-demand replay of the webcast can also be accessed in the investors’ section after the presentation has concluded.
Emergent’s Narcan sales under immediate threat, says Cowen
On December 27, 2021, Cowen analyst Boris Peaker keeps a Market Perform rating on Emergent BioSolutions with a $67 price target after the company reported that generic naloxone has entered the market. The generic entry timing is earlier than expected, says the analyst, who anticipates revenue and margin erosion for Emergent over the next several years. Peaker thinks the company’s authorized generic with Sandoz “is unlikely to help much” and that Narcan sales will be threatened “immediately.”
📺 Emergent Biosolutions CEO on the vaccine factory mix-up[embedyt] https://www.youtube.com/watch?v=fut00J71GA0[/embedyt]
📈 EBS Stock Technical Analysis
The long-term trend is still negative, but the short-term trend is positive, so the stock is getting more and more appreciated by traders and investors. EBS is part of the Biotechnology industry. There are 630 other stocks in this industry, EBS did better than 63% of them. EBS is currently trading in the lower part of its 52-week range. The S&P500 Index however is trading in the upper part of its 52-week range, so EBS is lagging the market.
There is a support zone ranging from 44.75 to 44.83. There is also a support zone ranging from 43.13 to 43.46. These support zones are formed by a combination of multiple trend lines and important moving averages in multiple time frames.
There is a resistance zone ranging from 48.79 to 48.79. This zone is formed by a combination of multiple trend lines in multiple time frames. There is also resistance at 50.58 from a trend line in the daily time frame. Finally, there is resistance at 65.49 from a horizontal line in the daily time frame.
EBS has an average technical rating and it also does not offer a high-quality setup at the moment. Price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first. Click here to sign up for email alerts on when EBS stock consolidates and is a good long entry.