Good day, ladies and gentlemen, and welcome to the Third Quarter 2011 Emergent BioSolutions Incorporated Earnings Conference Call. My name is Ann and I’ll be your coordinator for today’s call. As a reminder this conference is being recorded for replay purposes. At this time all participants are in listen-only mode. (Operator Instructions) I’d like to turn the presentation over to Mr. Robert Burrows. Please proceed sir.

Thank you, Ann. Good afternoon ladies and gentlemen. Again, my name is Robert Burrows, I’m Vice President of Investor Relations for Emergent. Thank you for joining us today, as we discuss Emergent BioSolutions’ financial results for the third quarter and full nine months of 2011. As is customary, our call today is open to all participants. In addition, the call is being recorded and is copyrighted by Emergent BioSolutions. Joining me on the call this afternoon with prepared comments will be Fuad El-Hibri, Our Chairman and Chief Executive Officer and Don Elsey, our Chief Financial Officer. Additional members of our senior management team will be present on the call for purposes of the Q&A session. Before we begin, I’m compelled to remind everyone that during the call, management may make projections and other forward-looking statements regarding future events and the company’s prospects or future performance. These forward-looking statements reflect Emergent’s current perspective on existing trends and information. Any such forward-looking statements are not guarantees of future performance and involve substantial risks and uncertainties. Actual results may differ materially from those projected in any forward-looking statements. You are encouraged to review Emergent’s filings with the SEC on Forms 10-K, 10-Q and 8-K for more information on the risks and uncertainties that could cause actual results to differ. For the benefit of those who may be listening to the replay, this call was held and recorded on November 3, 2011. Since then, Emergent may have made announcements relating to topics discussed during today’s call. So again, please reference our most recent press releases and SEC filings. Emergent BioSolutions assumes no obligation to update the information in today’s press release or as presented on this call, except as may be required by applicable laws or regulations. Today’s press release may be found on our website at www.emergentbiosolutions.com under Investors/Press Releases. And with that introduction, I would now like to turn the call over to Fuad El-Hibri, Emergent BioSolutions’ Chairman and CEO. Fuad?

Thank you Bob. Good afternoon everyone and thank you for joining us on our call today. During the third quarter, we continued to execute on our operating plan. We manufactured and delivered doses of BioThrax into the SNS. We advanced the development of our infectious disease, oncology, and autoimmune programs, and we made progress on Building 55 scale up. I am pleased to report that at the end of the quarter as expected, we received an award for the supply of BioThrax to the SNS over the next five years. This clearly underscores the government’s continued commitment to procure BioThrax as a critical medical countermeasure in the strategic national stockpile. In terms of our third quarter results, we achieved total revenues of approximately $59 million, which is within the $50 to $60 million guidance we provided in our previous earnings call. We also realized net income of $1.5 million. In terms of the remainder of the year, we are reaffirming our full year 2011 guidance of total revenues of $270 to $290 million, and net income of $15 to $25 million. Turning now to the status of BioThrax manufacturing in the current year. During the quarter, we completed deliveries under the original 14.5 million dose contract and begun to make deliveries of the 3.5 million doses under the contract modification. We remained on track to complete deliveries of all 17.9 million doses under this modified contract by the end of the year. As discussed last quarter, we have been experiencing yields that put us at the lower end of the historic 7 million dose to 9 million dose range. Over the course of the year, we have identified additional steps to our ongoing process optimization initiatives to further improve our success rate. Some of these steps we have already implemented, as a result, we are starting to see improvements to our yield. Once we implement the remaining steps, we expect to increase the output to a range of between 8 to 10 million doses per year. With these measures, we expect to deliver between 8 to 8.5 million doses under the first year of the annual award. Under the terms of the award, we retained the ability to modify the timing of the deliveries from year to year depending on manufacturing yields and other factors. On September 30, we received a notice of award from the CBC to supply 44.75 million doses of BioThrax over the next five years with a total value up to $1.25 billion. The total value includes a premium of less than $1 per dose for delivery of five-year data products, which we anticipate in the later portion of the contract term, plus a modest annual price escalation. The delivery time of award is expected to commence in December, immediately following the completion of deliveries under our current market. Turning now to recent developments in our clinical stage product pipeline. Let me begin with our BioDefense Division. Over the last decade, we have built a broad portfolio of anthrax countermeasures to meet the requirements of the U.S. government. Our anthrax franchise consists of the only FDA-licensed anthrax vaccine BioThrax and several novel vaccines and therapeutics in development with funding support from BARDA and NIAID. To-date, we have delivered over 55 million doses of BioThrax to the U.S. government and since 1998 over 10 million doses have been administered to more than 2.6 million people. In partnership with BARDA, we are developing a number of enhancements to BioThrax in order to strengthen its utility for the government. These include a reduced dosing schedule of three doses over six months with subsequent boosters for general use and a potential two-dose schedule for post-exposure use of BioThrax with a novel agent. We also continue to develop BioThrax, an RTA-based vaccine candidate under a multiyear $187 million development contract from BARDA. We have developed a promising new formulation that we believe will provide long-term stability. In addition, we have established a manufacturing process using disposable technology that generates very high yields. We expect this process to generate sufficient doses that would exceed the entire U.S. government’s requirement using one single-use bioreactor at the 500-liter scale. We believe this gives us ultimate flexibility in the manufacturing of patient and the transferability of the process. In addition to the portfolio of vaccines for anthrax, we are currently developing two therapeutic candidates for the treatment of symptomatic patients. Each of our candidates for anthrax is polyclonal IgG that’s supported by approximately $11 million of Florida funding. Now that we have agreed with the FDA on a regulatory path forward under the animal rule, we have initiated two nonclinical studies to advance the program. However, continued progress requires additional funding from the U.S. government and we’re waiting for an opportunity to re-engage in a dialog with HHS regarding future funding. The growth of our BioDefense division is to strengthen the nation’s arsenal of medical countermeasures and provide products that will support the government’s biopreparedness efforts. Now that we are comprehensively addressing the anthrax franchise, we are exploring other opportunities to develop medical countermeasures for the SNS. Let me now turn to our Biosciences division. For TB, there are updates on two Phase II trials. The first relates to the efficacy trial involving 2,800 infants in South Africa. All patients have been vaccinated and are being monitored. We continue to anticipate final results in 2012. The second trial relates to the efficacy study involving approximately 1,400 HIV-infected adults age 18 to 20 in South Africa, in Senegal. This trial has been initiated and is primarily funded by a European development agency. For 2016, enrollment of the Phase Ib portion of a study evaluating our candidate in combination with bendamustine in patients has been completed. We anticipate in the near term those in-patients in the phase II portion of the study, which will examine the safety and efficacy of TRU-016 versus Bendamustine alone. And finally, for SBI-087, enrollment in a Phase II dose regimen study for RA has been completed. We will provide updates as agreed upon with our development partner, Pfizer. Turning now to our manufacturing infrastructure, let me update you on our Lansing and Baltimore operations. For our Lansing facility, Building 55, our plans for process development and product comparability continue to make steady progress under the existing $107 million development contract from BARDA. We have completed characterization and engineering runs and have initiated nine clinical studies. We are making preparations to initiate manufacturing of consistency lots, but recently met with the FDA to discuss our overall comparability plan. The FDA was supportive of our plan and we’re in the process of now finalizing our past relationship without the need for clinical study. For our Baltimore facility, we continue to be on track to substantially complete facility modifications and to initiate tech transfer for our TB candidate, the first product candidate for this site by year end. Finally, in terms of M&A, we continue to pursue acquisition and licensing opportunities with a focus on late-stage or revenue-generating products. In conclusion, for the remainder of 2011, we look forward to continuing deliveries of BioThrax to the U.S. government and advancing clinical-stage development progress. That concludes my prepared comments, and I will now turn it over to Don, who will take you through the numbers in greater detail. Don?

Thank you, Fuad. Good afternoon, everyone. As Fuad mentioned, following the close of the markets today, we released our financial results for the third quarter of 2011. I encourage everyone to take a look at the press release, which is currently available on our website. We plan to file our quarterly report on Form 10-Q with the SEC no later than the close of business tomorrow, Friday, November 4th. The 10-Q will also be available on our website. Now for a brief overview of our financial results. Total revenues for the third quarter of 2011 were $58.8 million as compared to $74 million for Q3 2010. Total revenues for the first nine months of 2011 were $165.4 million, compared to $182.9 million for the same period in 2010. As you know, total revenues are a combination of revenue from product sales and contracts and grants. Product sales revenues in Q3 2011 were $43.7 million, a decrease of $23.6 million from the prior year. This decrease was due to a 38% decrease in the number of BioThrax doses delivered due to the lower production yield we experienced earlier in the year. Product sales revenues for the quarter consisted of BioThrax sales to HHS of $43.6 million and aggregate international and other sales of $85,000. Product sales revenues for the first nine months of 2011 were $120.7 million and consisted of $119.4 million in BioThrax sales to HHS and aggregate international and other sales of 1.4 million. The decrease of $41.3 million from product sales revenue for the same period of 2010 resulted primarily from a 29% decrease in the number of BioThrax doses delivered due to the redeployment of our potency testing from BioThrax release testing, the qualification of replacement reference standards and other development testing during the first quarter of 2011 coupled with the lower production yield. For Q3 2011, contracts and grants revenues consisted of $15.1 million, an increase of $8.4 million over the previous year. Contracts and grants revenues for the first nine months of 2011 were $44.7 million, an increase of $23.8 million over the same period in 2010. This increase is primarily due to revenues from our contract with BARDA for large-scale manufacturing of BioThrax. Revenues associated with increased activity under other development contracts with NIAID and BARDA as well as revenues from our collaborations with Abbott and Pfizer. Our gross profit in Q3 2011 was approximately 75% and approximately 77% for the first nine months of 2011. These are both within our typical gross margin range of between 70% and 80%. Our Q3 2011 R&D expenses were $29.2 million, an increase of $8.1 million or 38% over the prior year. This increase primarily reflects higher contract service and personnel-related costs and includes increased expenses of $4.5 million for product candidates and technology platform development activities in our biosciences segment including those acquired in our acquisition of Trubion late last year; $2 million for product candidates supported by our bio-defense segment and $1.5 million in other research and development activities. Our R&D expense for the first nine months of 2011 was $95.5 million, an increase of $35.8 million or 60% from the comparable period of 2010. This increase primarily reflects higher contract service and personal-related costs and increased expenses of $30.8 million for product candidates and technology platform development activities in our Biosciences segment, $3.1 million for product candidates in our BioDefense segment, and $1.9 million in research and development and support of central R&D activities. As you know, the contracts and grants funding that we receive for many of our programs partially offsets our R&D expenses. Therefore, after consideration of this funding and the portion of spending attributable to our joint venture partners, our net R&D spend for the third quarter was $12.4 million versus $13.3 million last year and $45.6 million for the first nine months of 2011 versus $36.6 million in the same period of 2010. We remain committed to investing in the development of our product pipeline and expect our total R&D spending will continue to fluctuate quarter to quarter due to the varied development stages of our broad pipeline of candidates. Our third quarter 2011 SG&A expenses were $17.4 million, a decrease of $3.3 million or 16% over the prior year. This decrease is primarily due to decreased professional services including legal and other fees incurred in 2010 related to the Trubion acquisition. We remain focused on managing the growth in our general and administrative expenses. Our SG&A expense for the first nine months of 2011 was $56 million, an increase of $1.5 million, or 3% from the first nine months of 2010. This increase is primarily due to approximately $2.2 million in restructuring charges related to our UK operations. With respect to earnings for the third quarter, net income was $1.5 million or $0.04 per basic share. This compares to net income of $13.1 million, or $0.42 per basic share for the third quarter of 2010. For the first nine months of 2011, we experienced a net loss of $5.6 million or $0.16 per basic share, as compared to net income of $25.5 million, or $0.82 per basic share for the first nine months of 2010. Turning to the balance sheet, our combined cash, cash equivalents, investments and accounts receivable totaled $177.8 million as of September 30, 2011 compared to $210.4 million at December 31, 2010 and $174.4 million as of June 30, 2011. Finally, as Fuad mentioned, we reaffirm our 2011 guidance of total revenues of $270 million to $290 million, and net income of $15 to $25 million. By the end of this year, we look forward to completing deliveries of BioThrax doses under our current U.S. government contract and to beginning deliveries under the recent award for 44.75 million additional doses. We have made significant progress with the license share of Building 55 in the modifications to our Baltimore facility and we continue to move these facilities forward. On the business development front, as Fuad mentioned, we continue to evaluate M&A opportunities that would bring near-term value and help grow our business. That concludes my prepared comments. I will now turn the call over to the operator so that we can begin the question and answer portion of the call. Operator, please proceed.

(Operator Instructions). And our first question comes from the line of Karen Jay. Please proceed.

Hi, Karen Jay for (indiscernible) thanks for taking my questions. I just have a couple, the first is, I want to make sure I understand from your prepared comments, it sounds as if you will not need to do any bridging studies for Building 55, and if that’s the case, can you reconfirm the timeline that the plants could be operational or online in 2013?

Thank you for joining us today, Karen. This is, obviously, it is good news that the FDA was supportive of a plan that wouldn’t include a clinical trial, which we estimated would add between a year and a half or two years to the timeline. This is, however, not the exact savings in time that we would need to do other comparability studies, non-clinical studies that may take a bit longer than expected. But overall, I would say that we may gain something around a year’s time due to this important development.

Okay great, that’s great news. Also just (indiscernible) that the current extension contract will likely finish delivering in 4Q and you will start deliveries under the new contract in 2011?

Yes towards the end of 2011.

Okay. Just one more question, the changes that you’re implementing, the remaining steps to increase yield, is that going to require any shutdown or slowdown in manufacturing?

We don’t anticipate that would require any shutdown or slowdown. It will take a while for these improvements to take effect, which we hope will happen during the first half of next year. So, we are optimistic that these additional steps will help us to get to the level of 8 million to 10 million rather than the 7 million to 9 million, which we have historically experienced. Now, again, even with an 8 million to 10 million range and with those improvements there is still variability in the manufacturing process, so the range, the higher range with the midpoint of 9 million is still 8 million to 10 million.

Great. Thank you very much, and congrats on the new contract.

Thank you. Thank you very much, Karen.

And our next question comes from the line of Nicholas Bishop. Please proceed.

Hi, good afternoon. Thanks for taking my questions. I just wanted to follow up a little bit more on the Building 55 licensure path. I was just wondering if you could elaborate a little bit more on exactly what the FDA has said you do or do not have to do and what issues remain to be cited and when those issues will become clear.

Well, we’ve had a very positive dialog with the FDA recently and our comparability plan, which is pretty comprehensive and detailed, was commended on, and we’re evaluating these comments. So, it’s really premature to tell you exactly the timeline impact. I tried to explain to Karen that we’re hoping that might have about an eight-year impact of pulling the timeline in, but we’re still working through the exact ramifications with respect to the timelines.

Okay, thanks. And then just one quick one on the mechanics of the new BioThrax contract and that, as you mentioned, that you could have a yield of up to 10 million doses, although expected to deliver in 2012, 8 million to 8.5 million, if you have a greater yield then you expected, is there any mechanism by which you could deliver more than that number on this contract?

Obviously irrespective of the yields that we were actually experiencing this year, which are within the historic range of 7 to 9 million and that will continue to fluctuate as we go forward. With the new award, which has an average of 9 million doses, we are obviously working towards shifting upward the range from 7 to 9 million to 8 to 10 million so that the average is about 9 million. Again, we may have year-to-year fluctuations and that’s fine because the award includes terms that allow for the acceleration of delivery or the postponement of delivery into the next delivery years. So, there is flexibility. Our goal is to shift the paradigm so that on average we can deliver 9 million a year, but I have reemphasized as I have always emphasized this is a biological manufacturing process with variability. So we are historically in the 7 to 9 million dose range. We hope to achieve quite sometime next year this 8 to 10 million range. We’ve already seen and implemented some of the steps and they are looking promising and we are very excited about implementing the remaining steps.

Okay, just to be clear. I’m sorry.

No, no that’s fine.

Okay. Just to be clear, I’m talking about next year, if you have a yield of greater than 8.5 million for example, there would be some possibility of delivering that to (indiscernible)?

Absolutely. Again under the terms of the award, we do retain the ability to modify the timing of our deliveries from year to year.

Okay, great. And then just one last financial one, both R&D and SG&A have been on a declining trend through the year. I’m wondering if you can give any guidance on whether that trend is expected to continue when they might flatten out or just what we should be thinking about there?

Don, why don’t you take that one?

Sure, happy to do that. Nick as far as a trend of decline, I really wouldn’t characterize it quite like that. As you take a look at and let me treat them somewhat separately. SG&A that’s as evident in our notes and in the various filings. There have been a lot of one-time occurrences either last year or this year. I think once you normalize for those types of one-time occurrences and you take a look at the trends throughout the year, you’ll see SG&A is relatively steady throughout the year. With regards to R&D, of course that’s going to fluctuate with where our various product candidates are in their trials at any particular point in time. So you are going to see some volatility there. Again I think certainly year over year you are going to see an increase in absolute R&D expenses as we picked up the Trubion product candidates and continue to drive those forward. So I would say that with respect to the trends in those relatively steady and SG&A and on an overall increase in R&D, but you are going to see up and down as one goes through the year. Is that answer your question, Nick?

It does. Thank you very much.

Thank you, Nick.

And our next question comes from the line of Greg Wade. Please proceed.

Thanks and good afternoon. Wondering if we might just return to the Building 55 approval process. Our expectation was that there will be a package submitted to the FDA at the end of this year and that we’d find out sometime in 2012 as to whether clinical studies would be required. Will that package still be submitted or do you require additional preclinical studies to be done before that can be submitted sometime in 2012 with an answer sometime in 2013?

Thanks for joining us, Greg. I’m not sure that we ever expected to submit a package so to speak to the FDA that is formally in a review. We did develop a plan and submitted the plan for discussion purposes to the FDA. And we have had that dialog. So yes, in a sense we have had that discussion, and they commented that they agreed with our plan on that a clinical trial is not likely to be needed and but they made some comments as to some of the engineering runs and comparability aspects of our plan that might need additional work. So you may save the time and effort that involves in the not doing the clinical trial, but on the other hand, we might be doing a bit more on the non-clinical side, so but net-net we still believe that we can bring the timeline and overall it’s less of an effort, so it’s good news.

Okay, I agree. I just like to understand the process, so you will complete this work and you will be filing for approval of Building 55 when do you expect to make for approval of Building 55?

Well, we expect again we are amending our plan right now to reflect some of the changes and I would look at potentially sometime in late 2013 early 2014 that delayed supplement could go in.

Okay great, thank you. And then I just wanted to follow that up, Don in terms of expected production in Q4 in order to if your guidance – will you be looking for something in the range of 3.5 million doses to deliver to the FNS?

I think you can back end into that, Greg as you know dose forecast per se. But taking a look at our full year forecast for revenue and backing out the first nine months, it’s easy to see where the top line has to be – and you can do the math on the doses if you want.

Okay. And then just if I one last question, according to our math it looks like a significant uptick, obviously you have the benefit of October and you actually know exactly what’s going on a daily basis. So has the October production been to such a level that gives you great confidence then that this significant uptick is going to take place?

Well remember our production, I’m sorry (indiscernible) remember our production cycle is such that our October production is really going to manifest itself in Q1 2012. The shipments that we’re making in Q4 are basically completed going through their release testing etc. If you take a look as I’ve suggested and drive the fourth quarter revenue off our guidance and you compare it to the fourth quarter revenue of last year, you’re going to see there are quite similar. So as far as a significant uptick, the uptick is not a whole lot different than it was last year.

Great, that’s helpful. Thanks for taking my questions.

I think what might be helpful here is that in terms of sub-locked manufacturing for this year, it’s basically done. So we have a good idea we know exactly what’s sub-locked have been produced. So now it’s a question of filling and testing etc. So obviously as we get closer to the end of the year, our confidence goes up in terms of meeting the guidance, and today we’ve reaffirmed our guidance.

(Operator Instructions). And our next question comes from the line Jim Molloy. Please proceed.

Hey guys, thanks for taking my questions. I had (indiscernible) timeline, again I apologize for beating on this one, but my understanding is that consistency lot manufacturing that’s wrapping up end of early next and then you complete validation and testing, prior to this we had assumed a bridging study year and year and a half in the second half 14, potentially getting Building 55 online. Now is the bridging study gone? Has consistency lot manufacturing extended or validation extended, or you’ve mentioned before perhaps late ‘13 or early ‘14 – Building 55, what’s filling the rest of that space?

Yes, thank you for joining us, Jim. It’s the non-clinical studies that we referred to earlier, which under the animal rule that allows programs to show consistency. One can also use animal test results to demonstrate comparability. So that’s what now we’re looking at potentially expanding that aspect that I mentioned of our total plan. So it’s a kind of a trade off. If we don’t bridge through a clinical trial, we’re bridging through enhanced non-clinical studies. And of course, we’re continuing to look at the engineering runs and preparation for the consistency lots. There we also received some comments which are promising that we can get to consistency less relatively soon.

Okay, great. Then maybe could you walk through what exactly the current pricing per vial, any changes on that? And where there are vials – I have seen most of the vials made but not shipped from prior quarters that are going to keep going to growing up in the fourth quarter to get to the sort of the big bump in the fourth.

I didn’t quite get your question, can you come again, please?

Yes sure, I mean where there lots made, but not shipped in prior quarters that are now getting shipped at the door in the fourth quarter, and it seems like the numbers are going up the door, capacity exceeds production.

Yeah, I mean again the production cycles have variability from month to months. The delivery when CDC can and is prepared to deliver various scheduling as always – something that needs to be completed. So it can vary, it seems to be a pattern with us that the fourth quarter seems to be a more substantial quarter in terms of delivery. So it just so happens, we try to get up the door with any lots as quickly as possible. So it’s not like that – there is no keeping an inventory and trying to manage quarter to quarter or add deliveries.

Okay, great. Maybe final question, still assuming on $28 per dose on the current contract, any thoughts on where that prices go to for the next contract, and then can you talk any specifics on what were the yield improvements that will drive yield.

Okay. So the first question – we consider pricing something that we don’t disclose, but it is pretty straightforward. If we look at the 75 million doses, we have given you an indication that the five-year premium that would kick in in the latter half of the five-year period, it is really not significant in amount and giving you an idea of modest escalation. So, I think when you look at how many doses we have to deliver at a total contract price, you can’t be too far off in terms of what the price per dose is.

Okay, great. Then what exactly – where are the sort of the hard moments that increased yields here in the most or going forward from building from 7 to 8 and 8 to 10?

It’s when you have a manufacturing process as you know, you have process parameters within which you manufacture tightening some of these process parameters and looking at some times shifting of course with approval of FDA. Everything has to be approved. We may improve the yields or the success rate of production. So, it’s a without getting too technical, and I don’t know that I would even want to share all that technical stuff that we’re doing. We feel that we have tremendous competency and fermentation manufacturing and this is on our strength. We are addressing those things that I’ve just discussed.

Okay, thanks for taking the questions, guys.

Thank you, Jim.

Ladies and gentlemen, we have no further questions. This concludes our question and answer session. I would now like to turn the call over to Mr. Robert Burrows for closing remarks.

Thank you, Ann. Ladies and gentlemen, that concludes today’s call. We appreciate everyone’s participation. Please note that today’s call has been recorded and a replay will be available beginning later today through November 17th. Alternatively, there is available a webcast of today’s call, an archive version of which will be available later today accessible through the company’s website. Thank you again and we look forward to speaking to all of you in the future. Goodbye.

Ladies and gentlemen, we thank you for your participation in today’s conference. This concludes the presentation, and you may now disconnect. Have a good day.