Thank you, Chelsea, and good afternoon everyone. My name is Bob Burrows, Vice President of Investor Relations for Emergent. Thank you for joining us today as we discuss our fourth quarter and full-year 2016 financial and operational results. As is customary, today’s call is open to all participants. In addition, the call is being recorded and is copyrighted by Emergent BioSolutions. Participating on the call with prepared comments will be Dan Abdun Nabi, President and Chief Executive Officer; and Bob Kramer, Executive Vice President and Chief Financial Officer. A Q&A session will follow at the conclusion of our prepared comments and other members of senior management will be available to participate if need be. Before we begin, I will remind everyone that during today’s call either on our prepared comments or the Q&A session management may make projections and other forward-looking statements related to our business, future events, our 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. Please review our 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. During our prepared comments as well as during the Q&A session, we may also refer to certain non-GAAP financial measures that involve adjustments to GAAP figures in order to provide greater transparency regarding Emergent’s operating performance. Again, please refer to the tables found in today’s press release regarding our use of adjusted net income, EBITDA and adjusted EBITDA and the reconciliations between our GAAP financial measures and these non-GAAP financial measures. For the benefit of those who may be listening to the replay of the webcast, this call was held and recorded on February 23, 2017. Since then, Emergent may have made announcements related to topics discussed during today’s call. 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 regulation. Today’s press release may be found on the Investors home page of our website. And with that introduction, I would now like to turn the call over to Dan Abdun Nabi, Emergent BioSolutions’ President and CEO. Dan?

Thank you, Bob, and good afternoon, everyone, and thank you for joining us this afternoon. During the call today I will highlight several key 2016 developments and review our 2016 through 2020 strategic plan including our 2020 goals and growth plans over the next four years. I’ll then turn the call over to Bob Kramer, who will review our 2016 financial performance and our 2017 financial and operational growth. So, let’s begin with a review of several key developments from last year. As you know, in the latter half of 2016, we had a number of significant accomplishments. In December we signed a follow-on contract with the CDC valued at up to $911 million to supply the SNS with approximately 29.4 million BioThrax through September 2021. Simultaneously with the CDC contract award, BARDA issued a full-source notification to secure an additional $100 million of BioThrax for delivery into the SNS within 24 months from the date that contract is awarded, which we continue to anticipate will be in the first half of this year. In 2016, we also signed a contract with BARDA valued at up to $1.6 billion for the development and procurement of NuThrax, our next generation Anthrax Vaccine candidate. That contract includes FDA licensure of building 55, our large scale BioThrax manufacturing facility which will also support NuThrax development and production. And finally, we completed the spin-off of Aptevo Therapeutics, allowing us to focus on public health threats and emerging infectious disease markets. With these operational goals completed, this past December we undertook an evaluation of the 2016 through 2020 strategic plan to determine the impact, if any, on our previously announced 2020 growth. We have now completed that assessment and have concluded that we remain well-positioned to continue our growth in the public health threats and emerging infectious diseases’ markets and to achieve the following 2020 goals. First, achieve $1 billion in total revenue with at least 10% from ex-U.S. sales. Achieve a net income margin of at least 13%, and this is defined as GAAP net income over total revenue which is a slight change from our prior metric, and I will discuss that change in greater detail in a moment. Finally, achieve a portfolio that includes six products in clinical or advanced development, three of which are dual marketing opportunities. So, let me discuss each of these goals in greater detail starting with our 2020 revenue target of $1 billion. We envision this goal being achieved from a combination of our net growth as well as M&A. We expect that the primary drivers for organic growth will include growth in product sales driven by increases in our Anthrax Vaccine revenue, from the combination of BioThrax and NuThrax deliveries to the SNS, growth in our auto injector product offerings, which includes expanding our manufacturing capacity to address our new demand. Achieving FDA approval for the auto injector devices for sales in the United States, broadening our customer base both domestically and internationally, and expanding the number and types of chemical threats that can be addressed with this pipeline. We also see product sales growth with a potential for EUA procurement of our development stage products that address unmet medical needs. This includes NuThrax as well as potentially several of our hyperimmunes and anti-infectives. Furthermore, we anticipate an increase in sales in international markets which I will discuss in greater detail in just a moment. Moreover, we see continued growth in our contract manufacturing revenue stream. We are investing in our infrastructure to expand our capabilities in bulk manufacturing, finished services, and our ADM facility for contract services to a broad spectrum of customers including the U.S. government. An ancillary benefit of growth in our CMO business will be enhanced utilization of our manufacturing capacity, which will positively impact our margins. We envision that each of these will be meaningful contributors to our revenue growth by 2020. On the M&A front, we continue to target opportunities that maximize our core competencies and are accretive within 12 months of acquisition. These targets include businesses and products that are revenue-generating as well as pipeline candidates that can typically be acquired with grants and contract funding that contribute to our revenue growth target. I remain confident that we will execute at least one meaningful acquisition in 2017. Similarly, given the opportunities that are currently under review, I feel very comfortable that we’ll be able to execute a number of acquisition transactions during the planned period. Moving on to our target of at least 10% of revenue derived from ex-U.S. sales, as international awareness of the heightened risk of global terrorism continues, we expect the international market for medical countermeasures to grow. We will pursue sales using existing frameworks such as tenders issued on a country-by-country basis as well as the NATO support and procurement agency and the EU joint procurement mechanism which enables all 28 member states to come together and procure medical countermeasures. In that regard, just last week, the EU Parliament approved their latest directive on combating terrorism. This legislation outlines member states' obligations to provide adequate medical countermeasures to protect citizens from CBRNE threats which, when combined with the joint procurement mechanism, could increase demand for products across our portfolio. Our recent German approval for large-scale manufacturing of BioThrax in building 55 positions us to pursue licensure across targeted countries within the EU, providing the foundation to support our efforts to expand the international sales of BioThrax and enhance the utilization of our manufacturing capacity. Our second 2020 financial goal is to achieve a net income margin of at least 13%. Again this is defined as GAAP net income over total revenue, and this is a change from our prior metric which was tied to a net income CAGR. The rationale for changing the metric is to require management to improve the company’s performance on the net income to revenue ratio through increased focus on financial discipline while at the same time continuing to deliver healthy net income growth. It should be noted that this metric is aligned with industry benchmarks. A key to achieving this target is to manage net R&D spending to less than 15% and SG&A spending to less than 25% of revenue. Finally, on the operational side, our 2020 goal remains to achieve a portfolio that includes six products in clinical or advanced development, three of which are dual market opportunities. Our pipeline is robust and continues to grow in addition to NuThrax which we are targeting Phase 3 enrollment in 2018. We have three product candidates scheduled to have their first subjects enrolled this year. Earlier this month we announced initiating a Phase 1b multiple ascending dose study for UV-4B which is our dengue anti-viral therapeutic. Later this year, we’re targeting to have first subjects enrolled in a Phase 2 trial for Seasonal Influenza Hyperimmune Therapeutic as well as a Phase 1 trial for Zika Therapeutic. In addition to these clinical candidates, we have numerous preclinical candidates in development that leverage our various platform technologies, three of which could be eligible for priority review vouchers, thereby significantly enhancing their potential value. We feel that the most effective way to achieve our growth objectives is to organize our operations into four distinct business units, each with a leadership team accountable for results and empowered to drive growth by leveraging our core competencies. This strategy is driving our new organizational structure. Since these business units will not have fully dedicated resources but rather will limit our capabilities across the company, we expect our operations will be more streamlined with meaningful cost efficiencies and savings, particularly in SG&A. Bob Kramer will provide greater clarity around the anticipated cost savings during his prepared remarks. Let me give you a brief snapshot of each of these business units. First, the vaccines and anti-infective business unit will consist of BioThrax, our flagship marketed product and will also be responsible for developing several clinical products including NuThrax, UV-4D which is our anti-viral for dengue as well as GC-072 an antibacterial for Burkholderia along with numerous pipeline product candidates based on our broad spectrum anti-viral and antibacterial small molecule platforms. Our antibody therapeutics business unit will consist of our marketed Hyperimmune products Anthrasil, BAT and VIGIV. In addition, this business unit will be responsible for developing our pipeline of antibody candidates for seasonal flu, Zika and Hemorrhagic Fevers caused by viruses such as Marburg and Ebola. These antibody therapeutics may be eligible for EUA procurement during our planned period and several have development contracts with the U.S. government that provide ongoing revenues. Our devices business unit currently markets two products, RCL, the only device cleared by the FDA to remove or neutralize chemical warfare agents and T9 toxins from the skin and Trobagard, an auto-injector designed for military use to neutralize specific nerve agents which we are selling outside the United States. Trobagard is based on our auto-injector platform that we intend to develop to address a portfolio of chemical and nerve agent threats for military and other high-value customers. Our fourth business unit is contract manufacturing which provides product development, clinical and commercial manufacturing services, including bulk manufacturing capabilities and finished services that support over 21 products sold in approximately 50 countries. Importantly our ADM facility will reside in this business unit, which provides contract manufacturing services to the U.S. government. As a reminder, these business units will not have fully dedicated resources but rather will leverage our capabilities across the company. That’s why we expect our operations will be more streamlined with meaningful cost efficiencies and savings. I remain very excited about our 2016 through 2020 plan and believe that our strategy and our revised organizational structure will position us to successfully achieve our 2020 goals. That concludes my prepared comments. And I will now turn the call over to Bob Kramer. Bob?

Thank you, Dan, and good afternoon everyone. Thank you again for joining the call. I’d first like to make some general comments about our financial results for the fourth quarter of 2016 compared to last year and then turn to our performance for the full year of 2016 compared to last year, including select elements of our balance sheet, namely our cash position. I will then discuss how we see our operating and financial performance developing during 2017. With the successful spin-off last year of our BioSciences business into a separate publicly traded company, Aptevo Therapeutics, we are providing our 2016 financials in two ways. First, on a combined basis which includes the now discontinued operations of Aptevo and secondly on a continuing operations basis which excludes the Aptevo operations. You’ll find in today’s press release a reconciliation between combined and continuing operations or statements of operations both for the fourth quarter and for full-year 2016. From our prepared remarks today I’ll be referring to our results on a continuing operations basis, which will be the norm going forward. With that said, the fourth quarter 2016 total revenues were $152 million slightly below Q4 of last year due primarily to the lower BioThrax sales of $68 million partially offset by increases in other product sales, contract manufacturing revenue and grant and contract revenue. As you know, our new BioThrax procurement contract with the CDC was not signed until late Q4 of last year, hence the reason for lower BioThrax shipments in Q4 of 2016 versus 2015. Moving down the P&L statement, our gross margin for Q4 2016 was 63% within our expected range. Net R&D spend for the quarter continued to trend positively in 2016 whereby our grant and contract revenue exceeded our gross R&D spend resulting in a surplus for the quarter. The surplus was a result of higher than normal grant and contract revenue associated with the expansion of our CIDM facility in Baltimore, spending on building 55 in our VIGIV program. The Q4 and 2016 full-year experience of having grant and contract revenue exceed R&D spend is not something we expect going forward. SG&A expense for the quarter was $35 million or 23% of total revenue, a level below our target range of 25%. As Dan outlined earlier, 2016 was full of important accomplishments which allowed us to finish the year on a high note and importantly prepare us for 2017 and beyond. First, we transitioned our BioThrax manufacturing from building 12 to building 55. Second, we transitioned from one five-year BioThrax procurement contract to another five-year contract. However, we were delayed in signing which resulted in fewer BioThrax doses delivered in Q4 and therefore negatively impacted our total revenues for the year. Third, we successfully spun out our Aptevo operations and incurred several one-time transaction-related costs that further impacted our GAAP performance for the year. Despite the year-over-year comparisons, our 2016 performance was strong and showed continued diversification of our business as evidenced by the volume. First, total revenues of $489 million for the year are above the preliminary estimate we provided in January despite reduced BioThrax deliveries. Importantly, other product sales and contract manufacturing revenues showed tangible year-over-year growth. Second, our gross margin of 63% was in line with our expectations. Third, as commented upon earlier, our grant contract revenue was $143 million, which exceeded our R&D costs of $108 million creating a $35 surplus for the year, while positive for 2016, it should not be seen as a recurring trend. Fourth, while the total SG&A spend of $143 million is $22 million above last year, more than half of this variance was related to the Aptevo spin-off costs incurred as well as costs to transition BioThrax manufacturing to building 55. Fifth, the business generated $141 million of EBITDA or 29% of our total revenue reflecting the ongoing cash flow generating strength of the core business. And finally, the net margin for the year came in at 12.8%. As Dan covered during his discussion of our 2020 financial goals, we are targeting a 13% net income margin. Historically this margin has been in the 8% to 12% range. The 2016 margin of 12.8% was positively impacted by the previously mentioned surplus of grant and contract revenue in excess of R&D spending. Thus the 13% margin represents a meaningful improvement over our historical average. On the balance sheet, at year-end, our cash position was $271 million, which takes into account the $45 million contributed to Aptevo as part of the spin. Overall, our liquidity position remained very strong and continues to be well positioned to support our operations as well as our strategic M&A initiatives. Before I turn to discussing our forecast for 2017, as Dan mentioned earlier, we’re in the process of organizing our operations into four distinct business units, each with a leadership team accountable for results and each empowered to drive growth by leveraging our core competencies. One of the drivers of this new structure is its cost efficiency. We expect this will streamline our operational and administrative cost structure, such that when fully implemented, should result in significantly reduced operating expenses. This includes reduced SG&A which will be implemented throughout 2017. The savings associated with these planned initiatives will be fully realized in 2018 and are expected to result in $20 million of lower spending. As for our 2017 full-year forecast, we are reaffirming our guidance, namely revenue of between $500 million and $530 million including BioThrax sales of between $260 million and $285 million under our contractual arrangements with both CDC and BARDA. Secondly, net income is estimated to be between $60 million and $70 million; adjusted net income is projected to be between $70 million and $80 million and EBITDA is expected to be between $135 million and $145 million. Please keep in mind that we do not include any M&A activity in our annual guidance except for the provision of specific diligence-related expenses required to support our ongoing M&A efforts. Additionally, for the first quarter of 2017, we’re estimating total revenues of between $110 million and $125 million. This is an adjustment to our previous revenue guidance for the quarter of between $120 million and $135 million. The Q1 revenue range has been lowered due primarily to the timing of BioThrax shipments between Q1 and Q2 of this year. That concludes my prepared remarks. And I’ll now turn the call over to the operator to begin the Q&A session.

And our first question comes from Eric Schmidt with Cowen & Company. Your line is now open.

Thanks for all the updates and for taking my questions. Dan, on the 2020 guidance, you mentioned the $1 billion revenue target would be in part comprised of M&A. Is there any I guess from there you could provide what percent of that $1 billion might be coming from M&A? And you also mentioned you could close a deal in 2017. It wasn’t clear to me though, maybe Bob said this whether the 2017 guidance included some revenue contribution from M&A?

Yes, thanks for participating this afternoon, I really appreciate it. So, on the guidance, no M&A is included in that. On the cost side, there are due diligence costs as we forecast and we budget for. So, on the cost side, we do have SG&A costs associated with normal activities on M&A. But none of the potential revenues that might be associated with an acquisition are included in our forecast. Upon completion of the M&A transaction, we would be again in a position to update our guidance to incorporate any adjustments. So, and then in terms of the breakdown on sort of M&A contributions, I’m going to resist the temptation to get into specific allocations between organic and M&A. As you might recall, we had a similar challenge when we issued our 2012 to 2015 guidance. Again, we were doubling revenue with a significant target for increase in our net income CAGR. And there are many ways to get there, so I want to leave - open the flexibility for management to deal with it in a way that might be slightly different than a single path to completion. But what I would say is that we do anticipate organic growth meaningfully contributing. But it's clear to me that without M&A we’re not going to get to the $1 billion. So, it is required execution on both fronts. I do remain very confident in our ability to execute at least one M&A this year which I think will put us on a nice trajectory towards getting to that 2020 goal.

Okay, thank you for that. And then, maybe this is for Bob, on the strong Q4 contribution to net R&D. Basically net R&D was more than fully funded. What drove that - was just that timing of revenue recognition on contract on other revenue or what happened there?

Yes, I think, Eric, thanks. That’s right. There were a number of revenue recognition adjustments in Q4 including spending and investments on our CIDM facility in Baltimore as well as our VIGIV product. So again, while positive for 2016 we’re not counting on it continuing to be in that surplus position going forward.

Thank you. And our next question comes from the line of David Maris with Wells Fargo. Your line is now open.

Good afternoon. Couple of questions. So for deals, maybe you can just explain a little further what you’re looking for, what’s your sweet spot for acquisitions? And then secondly, maybe if you can talk about the prospects for ex-U.S. sales; do you currently have the capacity for ex-U.S. sales? What do you think you need to do if you don’t have the capacity to get there? And what’s the sales process? When should we expect that to start to come online? Thank you.

Thanks for joining the call today, David. I’m just noting the questions here. So, first on the M&A, the sweet spot, we really are targeting across the CDRN as well as the explosive space, and emerging infectious diseases. We’re targeting opportunities across all of our business units. At this point we’ve got a fairly robust funnel which includes revenue-generating products, full-on businesses as well as pipeline candidates that come with grant contract funding. So, it is a full portfolio of opportunities. Our expectation is that at least one such acquisition should be completed this year in order for us to remain on track to complete our 2020 goal. So hopefully that’s a response to your question. Now, on the international side, the capacity for meeting international demand, we certainly have - certainly for BioThrax we’re building 55 online. We do have the ability to manufacture additional doses for BioThrax as we have said historically. We do not believe the international market for BioThrax is anywhere close to the demand in the U.S. Nevertheless, we are seeing increased interest and appetite for discussing with Emergent potential sales of BioThrax. But it’s also across the portfolio. We’re particularly interested in that. Interest in the auto-injector product offering, and there as we said repeatedly, we’re facing manufacturing constraints and we really do need to expand manufacturing capacity to address that. So, maybe that’s what you were referring to. That manufacturing capacity is moving along nicely. And we expect to be in a position in 2017 to significantly enhance our production capabilities to address what we see as a growing market. On the sales process or the cycle, it’s continuous. We are always looking out for and we’re actually seeing tenders coming from the countries increasingly across the globe. We’re seeing in Europe, we’re seeing in the Middle East, we’re seeing in the Near East and we’re seeing in the Far East. This is something that’s just normal business. We’re particularly excited with the joint procurement that has been out there now for a bit of time, coupled with the EU directive that just got published which is mandating EU member states to start procure and stockpile medical countermeasures across the CDRN threat list. I’m seeing a real opportunity for our portfolio to come into focus for many of these countries and the opportunity for increasing sales in that jurisdiction. More to come on that. It’s going to be an evolving process. It’s not something that happens digitally overnight. The member states have to identify what their particular requirements will be and then determine how best to fulfill them. I see that evolving over the next 18 to 24 to 30 months, somewhere in that time horizon. So, hopefully that captured your questions here?

It does, thank you.

Thank you. And our next question comes from the line of Jessica Fye with JPMorgan. Your line is now open.

Hi, this is Hugo on for Jessica. Thank you for taking our question. Maybe as a follow-up to the prior question on M&A, where do you see the greatest opportunities in Bio-Defense?

Yes, you broke up just a little. Where do we see the greatest opportunities in Bio-Defense?

The greatest opportunities in Bio-Defense.

There are really a lot of them. We see opportunities on the chemical side, on the biologic side, and there are also on the emerging infectious disease side, particularly in explosives. We’re very interested in devices that could address the burn market, which for us is a dual market opportunity. There, we’re seeing the need on a government level to acquire and stockpile and make those available for both civilian protection and military protection. But also as the prospects were being solid in a more traditional commercial setting whether it’s burn centers or in hospitals and the like. We’re looking at all those scenes. We’re looking at therapeutic scenes. We’re really very broad based and robust, including smallish products to fairly sizeable product opportunities. As I mentioned earlier, we're targeting full-on businesses as well as individual products, both domestically and internationally.

Thank you.

Thank you. And our next question comes from the line of Keay Nakae with Chardan. Your line is now open.

Yes, thanks. I was wondering if you can just give us a little bit more color on the significant up-tick in the other Bio-Defense product sales in Q4. And even if we think about that number on a full-year basis, how do we think about the growth prospects in 2017 versus what you did in total in ‘16?

Yes, thanks for the question, Keay. We don’t disclose the individual product contributions other than BioThrax. But I think what we can say is that some of the other products in general in that portfolio, whether it’s the BAT product or even the VIGIV product, we see as having upside in opportunity. As we commented before, historically those other product categories as a group have contributed somewhere in the range of 5% to 10% overall revenue. We see some upside there, potentially in the 10% to 15% range going forward. So, I think across the board including Trobagard and auto injector technology, we see some upside. Adam, if you want to comment further?

I think you captured many of the opportunities. I think one thing as this part of our business continues to grow, it could be a bit lumpy. We’ve talked about that, so some of the sales as we get into especially international sales could come in chunks. We could have a large Q2 and large Q4. So, as we think about trends, we talked about ways to be more transparent as that grows and becomes more meaningful in particular ex-U.S. side. So, more to come but I think you’re going to see in total that other product group continues to build and continue to grow.

Well, just back to the Q4 result, was it just one product in the portfolio that really had fulfillment of outside orders or was it multiple? And again, just trying to understand what of that is one-time in order to project full-year ‘17 growth versus full-year ‘16 growth?

Yes, sure, it wasn’t one product. There were several products that contributed to that up-tick in the other product revenue. And again back to Adam’s point, those opportunities tend to be a little lumpy. They’re not nearly as predictable compared to our fixed delivery schedule as BioThrax for example. So, we’ll continue to see some individual product lumpiness but overall to the point I made earlier, you should see some growth in that category going forward.

Okay, thanks for that. And then, over to M&A, obviously it sounds like you’ve got a pretty good funnel as you say, step to look at. But if you could just attribute one sticking point to being able to float something, is it valuation more than anything else? And what would have changed from last year to this year that might make something look more attractive to being able to finalize? Thanks.

Yes, thanks for the question. As you know, M&A is a process. You start with an identification of an interesting candidate or company or pipeline. Then you engage in diligence and negotiation as we’re seeing a willing seller, a willing buyer price point, and it all has to fall into line. It’s not as though you start from scratch every year; it’s a continuous process. Some products come into the funnel and other products go out. We were very close last year on completing an acquisition, we had reached agreement on terms, and the diligence had been completed. Both parties were quite satisfied with the structure and nature of the transaction. Literally at the 11th hour, it was an external event that derailed it. We lost that opportunity. Those things happen in M&A, and that’s just the nature of the beast. There is no difference between this year and last year; it’s just a continuation and a continuum towards the completion of the transaction. Given where we stand today and the opportunities that we are looking at, and there are multiple, I reiterate my high confidence in getting at least one deal completed this year, which I think will set the stage likely for continued growth and trajectory towards 2020. Hopefully that clarifies your question?

Yes, thank you.

Thank you. And our next question comes from the line of Jim Molloy with Laidlaw. Your line is now open.

Hi Dan, thanks for taking my questions. That was a pleasure to hear from you guys, an excellent quarter it seems. And good to see the 2020 guidance reinstated. One of the questions I had on that $1 billion number, you made it very clear that M&A is part of that. How much of that will be on the back of BioThrax? Adam is doing a yeoman’s work up there in Michigan.

Yes, thanks Jim. Thanks for participating this afternoon and thanks for the call. As I mentioned in my prepared comments, we are anticipating meaningful growth through increased product sales. The component of that is the combination of BioThrax and migrating to NuThrax. As you’ve seen we do have a contract with BARDA for development and procurement of NuThrax. It's a sizeable contract. We can’t predict for sure with certainty how many of those will be procured. But we have certainly in our models assumed that there will be a meaningful contribution to our growth through that transition from BioThrax to NuThrax. Continuing sales opportunity for BioThrax will target customers such as the DOD. It is, and will remain, a meaningful contributor to our story going forward, Jim.

Okay. I know it will; I was hoping to get a number of how meaningful, but that’s quite all right. On the BioThrax, OUS, you mentioned the German approval. Would it be reasonable to think that’s where if any OUS sale goes that’s where the majority will go for the near future? And maybe following up on that margins have come down a bit some of the manufacturing is coming in at a lower margin, can you get back to the mid-70s sort of overall gross margin for the whole business?

Let me ask Adam to take the international opportunities on BioThrax. I think it’s been, from my vantage point, interesting and exciting. The landscape in Europe is changing in particular. And then Bob, you can take the margin question. Go ahead, Adam.

Good afternoon Jim. So, as you’ve seen and mentioned, the German approval is kind of the first step in what we’ve talked about as the mutual recognition process in Europe. So, currently, we’re in the process of scheduling our technical meetings with other countries in Europe. I think as we go through that mutual recognition process, likely more demand in orders will follow. When we think about Germany, I think it’s one of many countries that we’ll see some interest in. As far as orders go and demand, as Dan mentioned earlier, we don’t expect that market to be huge. But I think it will start to, we’ll begin to see other interest from other countries as that mutual recognition process gets finalized this year.

And just remember, Jim, we put a number out there as a target for ourselves by 2020, which is 10% of our total revenue coming from ex-U.S. markets. So that frames it for you in terms of where we think we can get to in the next four years or so. Bob, on the margin?

Yes, so Jim thanks for the question on the margin. Obviously that 60% to 70% range is a blended range going across all of our products including BioThrax as well as CMO. You should not expect us to get back to that 70% to 80% range which we enjoyed when it was essentially a one-product company. The blended range stays in that 60% to 70% range. Any variability in that is obviously highly dependent upon the composition of the sales mix in any particular quarter or year. Just as an example, in 2015, BioThrax represented 90% of the overall product sales; in 2016, it was 80% of the product sales. So as you can appreciate how that flows, that ratio will directly impact the margin in that range.

Absolutely understood. And last question, just on the four business units, I know you touched on it in the prepared remarks, but what exactly drives efficiency? Everything is sort of shared right now and I’m thinking this is my asking questions business unit and after the call it will be my writing the note business unit. What really changes dramatically at EBS that drives the huge savings?

Yes, that’s a great question Jim. I’ll answer at a high level and maybe Bob you can add a little color. The prior structure that we had with the divisions, we had the BioScience and BioDefense division, where each of those divisions really had fully dedicated resources top to bottom. There were some shared resources in the G&A space but fundamentally the objective was that each of these divisions would be essentially to withstand standalone operations and companies. By the way, that is what enabled us to do the Aptevo spin-off because it really did have fully integrated operations, save for a few SG&A support. Now we’re doing away with that. We’re going into a matrix environment where each of the business units will draw on resources across the organization. So nobody has fully integrated operations. We’re going to eliminate some redundancies that existed in the prior structure and make the cost structure a bit more streamlined and more efficient. Bob, can you add a little color to that?

Yes, I think that’s exactly right, Dan. And Jim, if you can appreciate when we have fairly standalone autonomous operating divisions that are staffed with G&A dedicated to that division, it’s highly effective in one regard but it is a little sensitive in the other. What we’ve decided to do is to go to this business unit structure and streamline and centralize a number of the G&A functions that were previously distributed in the operating divisions, so most of the savings really is around the fact that those services are being provided from a centralized org structure to the different business units.

Got it. Thank you very much for taking the questions.

Thanks, Jim.

Thank you. And our next question comes from Lisa Springer with Singular Research. Your line is now open.

Good afternoon. I noticed in the press release that you mentioned reduced U.S. government interest in funding in PreviThrax. Could you comment on that?

Yes, thanks Lisa for joining the call and for the question. Yes, PreviThrax as you know is our recombinant protective antigen anthrax vaccine. Where we ended up, and I’ll ask Adam to add a little color for you, is the government favored NuThrax over our RPA as a next generation for a whole host of very good reasons. The least of which is the timeline to get to EUA and ultimately regulatory approval. The most important element there is to be able to reduce the number of doses to provide protection in combination with antibiotics as opposed to a closure prophylactic setting. To be able to stockpile that for the nation is possible as a product which has some new enhancements over BioThrax, which has a wonderful profile. Obviously, the government is looking to feel on that a bit. Adam, a little more color on the RPA decision?

Yes. I think it was really kind of standard down within the government. I think they got requirements. As Dan mentioned, NuThrax is the preferred candidate and that’s the one they’re going to fund and we’re going to take to EUAs as quickly as possible. RPA will just be on hold for now and maybe we have a risk mitigate down the road. But for now, NuThrax is the lead horse.

Okay, thanks.

Thank you, Chelsea. With that, ladies and gentlemen, we now conclude the call. And thank you for your participation. Please note an archive version of the webcast of today’s call will be available later today and accessible through the company website. Thank you again and we look forward to speaking with all of you in the future. Goodbye.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program. And you may all disconnect. Everyone have a great day.