Ladies and gentlemen, thank you for standing by and welcome to the Emergent BioSolutions Incorporated Fourth Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. I would now like to hand the conference to your company to begin. Please go ahead.

Thank you, Joelle, 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 the operational and financial results for the fourth quarter and 12 months of 2019. As is customary, today's call is open to all participants and in addition the call is being recorded and is copyrighted by Emergent BioSolutions. Participating on the call with prepared comments will be Bob Kramer, President and Chief Executive Officer; and Rich Lindahl, Chief Financial Officer. Other members of the senior team are present and available during the Q&A session that will follow our prepared comments. Before beginning, 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 are based on our current intentions, beliefs, and expectations regarding future events. We cannot guarantee that any forward-looking statement will be accurate. Investors should realize that if underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could differ materially from our expectations. Any forward-looking statement speaks only as of the date of this conference call and except as required by law, we do not undertake to update any forward-looking statement to reflect new information, events or circumstances. Investors should consider this cautionary statement, as well as the risk factors identified on our public reports filed with the SEC when evaluating our forward-looking statements. 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. 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 20, 2020. Since then, Emergent may have made announcements related to topics discussed during today's call. You are once encouraged to refer to our most recent press releases and SEC filings, all of which may be found on the Investor's homepage of our website. And with that introduction, I would now like to turn the call over to Bob Kramer, Emergent BioSolutions President and CEO. Bob?

Thank you, Bob, and good afternoon everyone. Thank you for joining the call today. In my comments this afternoon, I’ll provide a brief recap of what was accomplished during 2019 and then turn to our strategic plans and expectations for 2020 and beyond. As we look back at the year just completed, I think there are three key takeaways. First, we effectively executed on our strategy of building and strengthening our leadership positions in the public health markets we compete in. Secondly, we continue to progress strategic R&D investments, which we expect will contribute to longer-term revenue growth. And third, we made prudent investments to build scale in key functions to better leverage our core competencies for sustainable competitive advantage. Let me take a few minutes and expand on each of these three points, starting with strategy execution. In 2019, we initiated deliveries of our next-generation Anthrax Vaccine candidate AV7909, beginning the transition from BioThrax to AV7909 as the cornerstone of the U.S. government’s preparedness efforts against the threat of Anthrax. Related to this, BARDA exercised its first contract option for 10 million doses of AV7909 to be delivered over a 12-month period, valued at approximately $261 million. Next, we made great strides with our smallpox franchise. We secured a $2 billion 10-year procurement contract for the continued supply of ACAM2000, the only single-dose FDA-approved smallpox vaccine and the U.S. government’s principal response tool against the threat of smallpox. We also secured a $535 million 10-year contract for the continued supply of VIGIV, our FDA-approved therapeutic for smallpox vaccine complications. Next, we secured a $19 million commitment as part of an anticipated $490 million 10-year commitment from the U.S. government for the continued supply of BAT, our FDA-approved Botulism Antitoxin. And finally, we completed the integration of the PaxVax and Adapt Pharma acquisitions and continued to invest in and further scale the travel health and NARCAN Nasal Spray franchises. So to summarize, during 2019, we successfully strengthened our leadership positions across our portfolio of products by securing over $3 billion worth of long-term procurement contracts with the U.S. government. As a result, we now have three key medical countermeasure franchises—those being Anthrax, smallpox, and opioid overdose reversal—each of which are in a position to generate in excess of $250 million in annual revenue. A clear follow-through on our commitment to profitably grow revenue while diversifying our product and customer mix. The second key takeaway relates to R&D. During 2019, we made significant progress in our R&D portfolio, advancing a number of product candidates through various stages of development. This included initiating a Phase 3 study for AV7909, completing a Phase 2 study for our FLU-IGIV seasonal influenza A therapeutics, completing the interim analysis of a Phase 4 pediatric study for our approved cholera vaccine, Vaxchora, advancing various auto-injector based programs addressing chemical threats, and furthering various drug-device combination programs addressing the opioid crisis. We also presented updated results from our Phase 2 study of our chikungunya vaccine candidate and more recently received alignment of both EMA and FDA to pursue our development program for a Phase 3 study involving the use of a surrogate endpoint of efficacy. We anticipate initiating this Phase 3 study later this year. The last takeaway relates to scale. During 2019, we made significant progress in further scaling our business through targeted investments in people, capabilities, and infrastructure to continue to drive top and bottom line growth over the long term, while at the same time managing our expense base. The strong execution against our operating goals translated equally into strong financial results. On the top line, we recorded over $1 billion in revenue, which marks the achievement of a corporate goal one year in advance of what we set out to do when we first established the goal in 2016. Notably, revenue grew over 40% as compared to 2018, as we fully integrated the PaxVax and Adapt acquisitions, drove organic growth, and executed numerous contracts as I just outlined. We also generated strong profitability with year-over-year increases in adjusted EBITDA and adjusted net income of 40% and 24%, respectively. As we closed the chapter on 2019, I'd like to take the opportunity to thank the leadership team and my 1,800 colleagues at Emergent for the extraordinary progress we achieved as a company over the course of the year. As a result of their hard work and efforts, we're entering 2020 with momentum and confidence. So, let's look forward a bit and talk about 2020. As we discussed at our November Analyst and Investor Day, we intend to once again double our revenues over the next five years between 2020 and 2024 while remaining disciplined as we manage this growth. Our strategy includes expanding our leadership positions in current and new public health threat markets and continuing to make investments in capabilities, innovation, and operational excellence. This strategy is centered on five core principles: first, executing our core business; second, growth through M&A; third, strengthening our R&D portfolio; fourth, building scalable capabilities; and fifth, continuing to evolve our culture. With that as a backdrop, for 2020, we've established ambitious financial goals, which Rich will further touch on in his prepared remarks. We've also established a variety of operational goals for the coming year, which will drive the continued growth of the company. This is where I like to spend the balance of my time in prepared comments. Beginning with our Anthrax Vaccines, which are elements of our broader franchise in Anthrax, we plan to ship doses of both BioThrax and AV7909 over the course of the year, thereby continuing to support the U.S. government's ongoing preparedness against the threat of Anthrax, while supporting the ongoing transition in the stockpile from BioThrax to AV7909. The exact mix of the two products and the timing are dependent upon a number of factors. That said, our 2020 revenue guidance contemplates a combined contribution for both vaccines in the range of between $270 million and $300 million of revenue, a return to historic annual levels. Turning to our smallpox franchise, which consists of both the ACAM2000 vaccine and the VIGIV therapeutic, we anticipate strong contributions from both in 2020. Our 2020 revenue guidance contemplates ACAM2000 revenue of between $180 million and $200 million, consisting primarily of shipments to the U.S. government. Recall that in 2019, the U.S. government committed to buy approximately 18 million doses with a value of approximately $170 million as part of the base year contract award. We completed delivery of all doses in 2019 and expect a similar award in 2020. The $180 million to $200 million range for ACAM2000 also includes anticipated sales to international customers. On that note, last year, we signed a multi-year procurement contract with a U.S.-allied nation in support of their continued procurement of ACAM2000. This latest contract win is a good example of the global nature of the medical countermeasure public health threat preparedness business. When we consider partnerships with organizations outside the U.S., we look for international entities that have similarly aligned goals around preparedness and response, in order to assist them with their readiness capabilities against the threat of various chemical and biological threats. Next, we expect continued growth in the sales of the NARCAN Nasal Spray business rising to between $285 million and $315 million. This range includes an assumption of two additional states adopting co-prescription legislation along with branded competition entering the market sometime during 2020. We will continue to focus on three areas: first, expanding awareness of the risks of opioids and the importance of having ready access to naloxone as highlighted by the U.S. Surgeon General's advisory statement; second, increasing availability and accessibility through a variety of naloxone distribution programs; and third, maintaining affordability of NARCAN. With this focus, we feel confident that NARCAN Nasal Spray will continue to have a meaningful impact on addressing the opioid crisis. While we're on the topic, let me address the 8-K we filed earlier this week. On February 18, we announced that we've reached a settlement agreement in our ongoing litigation with Perrigo related to their ANDA, seeking to market a generic version of NARCAN Nasal Spray. Per the agreement, Perrigo's license will be effective as of January 2033 or earlier under certain circumstances, including the outcome of the current Teva litigation or litigation against future ANDA filers should they come about. This settlement remains subject to customary final approvals. In regard to the Teva litigation matter, also on February 18, we announced that a date for closing arguments has been scheduled by the court for next Wednesday, February 26. Next, let me say a few words about our CDMO services business. We continue to build out our growing portfolio of molecule-to-market contract development and manufacturing services to support both Emergent's growth as well as the growth of external pharma and biotech customers. Factoring in our broad technology platform supporting mammalian, microbial, viral, plasma, and advanced therapy approaches, we have reoriented the focus of our CDMO business centering on three strategic pillars. First, commercial, which includes sales and marketing penetration, domestic and international expansion and pipeline and portfolio management. Second, operational, where we're striving to harmonize our processes and systems, extend our technological expertise across multiple biologic modalities, as well as expand our capacity and capabilities. And finally, customer centricity, with a focus on project management, consistent and focused governance of our relationships with customers in the development of a comprehensive molecule-to-market offering. As you may remember, we announced our decision in 2018 to invest approximately $50 million in expanded capacity and state-of-the-art capabilities at our drug product facility in Baltimore. We anticipate completing this project this year and are already actively engaging in discussions with customers for access to this site's services. We expect to begin generating a positive return on this investment beginning in 2021. Speaking more broadly, we look for the CDMO business to continue to be a consistent and growing contributor to the overall operations and financial performance of the company, and an integral component of our broad product and solutions offering. Before turning the call over to Rich, let me finish with a couple of brief comments on our key 2020 goals related to R&D. In our devices business, we will continue to invest in and advance our various development pipeline programs for auto-injectors in the medical countermeasures market, specifically addressing chemical threats, and in additional naloxone and other spray and syringe constructs addressing components of the opioid crisis. Of our devices-based development programs, we anticipate one regulatory filing and one approval in 2020. In our therapeutics business, we will continue to invest in the pipeline to address public health threats with our antibody platforms. Regarding FLU-IGIV, our influenza A therapeutic for hospitalized patients and leading therapeutic development program, we plan to capitalize on the completion of the Phase 2 and database lock, which occurred last year with a data readout in Q2 and then potential Phase 3 initiation later in this year. In our travel health business, Vaxchora, our FDA-approved single-dose oral vaccine for cholera, recently received a positive opinion from the EMA, which we anticipate leading to market authorization for the product within a couple of months. If received, it will be valid in all 28 member states of the EU, as well as in the European Economic Area countries. And with respect to our chikungunya program, we continue to work toward launching the Phase 3 trial of CHIKV VLP as supported by the compelling Phase 2 data we presented and reported on late last year. While we're on the topic of emerging infectious diseases, I want to take a moment and speak to the ongoing global crisis related to the coronavirus. As an organization, Emergent is committed to being part of the solution to support pandemic responses, especially where there is an absence of approved preventative and treatment options. The rise of COVID-19 and the push to develop response capabilities against this emerging infectious disease is squarely in our wheelhouse. We have considerable experience, expertise and the infrastructure to bring to bear in helping respond to and solve for this increasingly challenging public health threat. Currently, we're working with several organizations, including the U.S. government, NGOs, and commercial parties as to how to best marshal our resources and capabilities, whether it's for the vaccine, a therapeutic, diagnostic, or utilizing our extensive contract development and manufacturing capability. We'll keep you apprised and posted on progress as events unfold. So, to summarize, in 2019, it was another solid year for Emergent operationally, as well as financially. 2020 is lining up to be equally successful across all of our business units. The management team and I are committed to achieving our goals and remain confident in our ability to grow organically, while leveraging opportunities to accelerate organic growth through strategic M&A, focusing on innovation in the advancement of our pipeline candidates and continually driving toward great shareholder value over the long term. With that, I'll now turn the call over to Rich to provide more detail on the 2019 results and our thoughts about 2020.

Thank you, Bob. Good afternoon, everyone, and thank you for joining the call. As you heard from Bob, 2019 was a year of significant accomplishment for Emergent on multiple fronts as we achieved our operational objectives and set out an ambitious growth strategy for the next five years. From a financial perspective, we exited the year with positive momentum built upon a solid platform for continued growth. Specifically, we delivered strong annual top-line growth, increasing total revenue by approximately 40% for the second consecutive year, of which 7% was organic; improved our blended product and CDMO gross margin by 160 basis points; funded key programs to advance our research and development pipeline; generated strong cash flow from operations; strengthened our balance sheet by increasing liquidity and lowering our ratio of net debt to adjusted EBITDA; and provided a 2020 financial outlook that keeps us solidly on track to achieve our long-term strategic growth objectives. For the rest of my prepared comments today, I will provide additional detail on these themes by walking through our performance for the fourth quarter and full-year periods, discussing balance sheet highlights, and reviewing the elements of our guidance for 2020. With that, let's first look at our fourth quarter performance. As we discussed throughout the year, our 2019 annual results were back-end weighted, consistent with historical trends. As such, our fourth quarter results were particularly strong compared to prior quarters and reflect our ongoing efforts to increase the scale of our operations while further diversifying our sources of revenue. These points are evidenced by the following key fourth quarter highlights. Total revenues of $360 million, a 33% increase versus the prior year, largely due to deliveries of ACAM2000 under our recently awarded contract and a full quarter's worth of sales of NARCAN Nasal Spray, which was acquired in the fourth quarter of 2018; adjusted EBITDA of $134 million or 37% of total revenue, a 76% increase versus the prior year; and adjusted net income of $83 million or 23% of total revenue, an increase of $43 million versus the prior year. Digging a little deeper into quarterly revenue, NARCAN Nasal Spray sales were $67 million, continuing the strong performance witnessed in the three previous quarters of the year and reflecting the impact of ongoing community access programs addressing the public interest market, as well as higher aggregate demand in the retail channel, driven by naloxone co-prescription legislation that is now in effect in nine states. ACAM2000 sales were $79 million as we completed the $170 million of deliveries under the base year performance for the new 10-year contract announced in September. Sales of our Anthrax vaccines of $93 million, primarily AV7909, were in line with what we've previewed last month. Other product sales were $73 million, reflecting sales of countermeasure products addressing a wide range of chemical, biological, emerging infectious disease, travel health, and emerging health crisis threats. And CDMO services revenue of $26 million, which is down slightly over the prior year. Looking beyond revenue, the quarterly results also include combined product and CDMO gross margin of 61%, reflecting the impact of mix, most notably deliveries of ACAM2000 and anthrax vaccines, as well as continued robust sales of NARCAN Nasal Spray, and operating expenses, both R&D and SG&A, at levels reflecting continuing investments in key pipeline programs and capabilities to support future growth. Turning now to the full-year, our financial performance for 2019 was very strong and generally consistent with the range we previewed in early January. These results reflect the durability of our expanding business model centered on specialty products and services targeting global public health threat market opportunities. Key highlights include total revenues of $1.1 billion, an increase of $324 million or 41% as compared to last year, again, of which 7% was organic growth. Total product sales of $904 million, up $297 million or 49%. This includes $280 million from NARCAN Nasal Spray, $243 million from ACAM2000, and other product sales of $208 million, all of which were up meaningfully versus the prior year. Offsetting these increases were Anthrax vaccine sales of $173 million, which were lower by $105 million versus 2018. As a reminder, 2019 was a transition year for our Anthrax vaccine portfolio as the U.S. government began procuring our next-generation vaccine candidate, AV7909. CDMO services revenue was $80 million, consistent with our expectations for 2019 and lower than the prior year due to contracted service work in 2018 that did not recur. Combined product and CDMO gross margin of 56%, reflecting the impact of mix in our efforts to improve blended gross margin to approximately 60% in the near-to-medium term. Net R&D expense was $92 million or 9% of adjusted revenue, reflecting our ongoing discretionary investments in select development programs that are internally funded, most notably, our CHIKV VLP vaccine program and our FLU-IGIV therapeutic program, among others. SG&A spend of $274 million or 25% of total revenue reflects the addition of the operations associated with the PaxVax and Adapt Pharma acquisitions. As a percentage of total revenue, 2019 SG&A is directly in line with historical norms for the company. And in terms of full-year profitability, adjusted EBITDA of $280 million or 25% of total revenue and adjusted net income of $152 million or 14% of total revenue both reflect the influence of product mix, operational execution, and cost management balanced with prudent investments and a sustained focus on profitable growth. Three other items I want to touch on are first, the tax rate. For 2019, our effective tax rate is 30%, which is higher than expected due primarily to the non-deductibility of contingent consideration expense related to the Adapt Pharma acquisition. Excluding the impact of this non-deductible expense, our effective tax rate for 2019 was 23%. Second, customer mix. As you will see in the 10-K, which will be filed in the coming days, our customer mix profile continues to become more diversified. For 2019, the mix between U.S. government sales and non-U.S. government sales was 61% and 39%, respectively versus 76% and 24%, respectively in 2018. And third, geographic mix. As will also be disclosed in the 10-K, for 2019, our revenue from ex-U.S. customers as a percent of total revenue was 10%, as compared to 9% in 2018. This shows yet another means by which we are diversifying and therefore further strengthening our business. To round things out, in terms of the balance sheet, we ended this year in a solid liquidity position as evidenced by cash of $168 million and an accounts receivable balance of $271 million. Total debt increased slightly year-over-year, and at the same time, we meaningfully lowered our leverage ratio of net debt to adjusted EBITDA to about 2.3 times, which is at the low end of our target range of 2 times to 3 times. As a result, we further strengthened our credit profile and our current capital structure continues to position us for sustained growth and expansion. Let me turn now to guidance. Taking into consideration the performance from 2019 as well as current facts and circumstances before us, we are reaffirming our forecast for full-year 2020 that we previously published in early January. This consists of the following: Total revenue of $1.175 billion to $1.275 billion, which reflects the following product specific details; NARCAN Nasal Spray sales of between $285 million and $315 million, Anthrax vaccine sales of between $270 million and $300 million, and ACAM2000 sales of between $180 million and $200 million. Returning to our reaffirmed guidance, additional metrics include adjusted net income of $160 million to $210 million and adjusted EBITDA of $300 million to $360 million. In addition, across the year 2020, we look to achieve a variety of additional objectives, namely, the continuation of the following: First, expansion of the CDMO services business and its contribution to the overall business. Second, improvement of gross margin by 200 basis points to 400 basis points, driven by improved product mix and operating efficiencies. Third, investment in discretionary development projects funded by the company that further our pipeline of potential future drivers of incremental growth. And finally, adherence to a prudent capital deployment philosophy focused on maintaining sufficient capital to both invest in the business as well as execute on attractive M&A opportunities should they arrive. In terms of revenue mix, in 2020, we anticipate that product sales will account for 80% to 85% of total revenue, with the remainder split between CDMO services and contracts and grants revenue. And in terms of the cadence of revenue and earnings, we currently anticipate that 2020 will follow a similar pattern to that seen in 2019. With that in mind, we also are providing guidance on first quarter total revenue of between $190 million and $215 million. This forecast reflects our expectation of no deliveries of ACAM2000 during the first quarter due to two factors. First, as mentioned earlier, in the fourth quarter, we completed delivery of the full 18 million doses under the base year performance of the recently signed $2 billion 10-year contract. Second, as Bob said, we expect the U.S. government will exercise the first one-year option for another 18 million doses to be delivered in calendar 2020. While we anticipate this option exercise will happen in the near term, our current guidance assumes deliveries of ACAM2000 will resume in the second quarter. That completes my prepared remarks. I'll now turn the call over to the operator to begin the question-and-answer session.

Thank you. Our first question comes from Brandon Folkes with Cantor Fitzgerald. Your line is now open.

Alright. Thank you for taking my questions, and congratulations on a great quarter and year. Firstly, can you elaborate on your assumptions around the market dynamics for NARCAN and the opioid overdose market now that branded competitors come to market, as you mentioned in your prepared remarks? And then maybe, I'm not sure if you're going to answer this, but I'll ask it anyway. At this stage, is the Teva settlement off the table or is this still possible on NARCAN as well? Thank you.

Thanks, Brandon. I didn't understand. Can you repeat the second question?

Is the settlement still possible?

So, thoughts on branded competition. As we described or have talked a couple of times, we fully expect some competition in the market in 2020. We're not going to predict or estimate who might be doing that. Again, our guidance for 2020 is in that $285 million to $315 million range. Two additional co-prescription states coming in, a branded competitor, so depending on when and if, it's really difficult to predict the impact on the $285 million to $315 million. So, I will not guesstimate, Brandon. I think on the Teva question, I think we've said openly that the settlement question has not come up. We fully have all the confidence in the world and the strength of the patents that we have in place. And our focus remains on those areas that we have been describing for settlement since we bought the brand, which is around awareness, accessibility, and affordability, and doing everything we can to make that product available when it needs to be available to the patients and customers who need it. So that remains our core focus.

Great. Thanks very much. And one more if I may. Just on the BioThrax work down in 2020 in your guidance, how should we think about that? Are we at a steady state of BioThrax sales in 2020 and looking forward into 2021? And will AV7909 drive the growth, or should we continue to model or work out of BioThrax in 2021 and beyond? Thank you.

Yes. Thanks, Brandon. So, the way that we look at the anthrax vaccine franchise is, we expect fully that both BioThrax and AV7909 will continue to be procured by the government, obviously, for different reasons. BioThrax is currently supporting both the HHS requirement for a stockpile of licensed anthrax vaccine, while the Department of Defense is using it to immunize military personnel who are going into high-threat areas. We fully expect that dynamic will continue. As we stated, 2019 kind of began the transition period, Brandon, as the government started to slow down their procurement of BioThrax while they began to accelerate their procurement of AV7909. We expect that transition to continue in 2020 as we execute against the contracts that are in place. So, that's the dynamic. We're not going to speculate on the mix of those two vaccines, but in the aggregate, we reinforce our belief that going forward, that number of $270 million to $300 million in total revenue between the two will hold.

Great. Thank you very much.

Thank you. Our next question comes from Jessica Fye with JPMorgan. Your line is now open.

Hi, guys. Good afternoon. Thanks for taking my questions. A couple more on NARCAN, for the sales in the fourth quarter, it looks like revenue was down about 11% sequentially, and I noticed that the IQVIA script data that we can see is down 7% sequentially. So, recognizing that that data doesn't even fully capture the retail business, let alone the public interest side, I'm wondering what led to the sequential revenue decline beyond what would be predicted by the script volume decline. Was that timing of public interest orders or maybe something else?

Yes. Jess, thanks for joining and thanks for the question. I think that your read on that is right. When folks look at that IQVIA data, they're getting a partial view of the overall performance of the business. So, as we stated, we think that there has been a bit of a trend or shift to that public interest market being in that 60% of the market area versus the retail in that 40% space, but, as we've said, this market continues to develop. It's dynamic, it's being influenced by any number of programs where the government, both at the local level as well as the state and federal level, continue to implement programs and get traction on those programs to make this product more accessible to the patients and customers who need it; that could be taken in the form of programs like NARCAN days in different states. So, there are any number of programs that are impacting those quarter-over-quarter number. So, I think folks need to just be a little cautious about looking at a quarter-by-quarter versus on a more macro level.

Okay. And next one on NARCAN is just – has the judge in that litigation with Teva given any indication of how long it might take to turnaround a ruling?

No. No, they haven't, Jess.

Okay. And maybe switching to raxi, I realize you have revenue from the follow-on contract in the guidance. Is the old contract there completed? And should we not expect any raxi revenue until a new contract is in place? Or is there still kind of any more deliveries that could occur in the meantime?

Yes. So those deliveries under the contract that was acquired back in Q4 of 2017, we've pretty much completed that. So, we expect that the RFP will come out for raxi near-term. And we have some revenue in 2020 under a new contract, but we clearly don't break that out separately.

Okay. Got it. Any chance that you could quantify the contribution in your ACAM guidance from that international contract with an allied government that you alluded to?

Well, I think if you look at the $180 million to $200 million range that we provided for ACAM and you look at what was put under contract and delivered last year, which was that 18 million doses for $170 million, and you take into consideration that the next option period will include a 3% to 3.5% price increase for a dose as per the contract, you can start to triangulate what that might look like from a U.S. GP piece. And that $180 million to $200 million range, the delta is going to be ex-U.S.

Okay. Perfect. Thank you.

Thank you. Our next question comes from Dana Flanders with Guggenheim. Your line is now open.

Hi, thanks for taking my questions. My first one, just following up on the raxi contract, how should we just think about the complexity of negotiations? I know ACAM was a complex contract to negotiate and was delayed a little bit. Should we think of raxi as similar complexity or possibly an easier and more straightforward contract to negotiate? And then my second question. I think, I heard that you're assuming two additional states adopt Co-Rx legislation this year. Can you help us understand kind of what goes behind those assumptions? Do you have good line of sight into that? Or is that just that there are so many states considering this, you felt that was appropriate to put in the guidance? Thank you.

Yes. Keay, thanks for the question and for joining the call. As we've talked about pretty openly over the last three years to five years, we have proactively made investments in our infrastructure and our capability in order to handle additional M&A transactions. And as an example that we referred to in the past, we made a pretty substantial investment in 2015 and 2016 in our SAP enterprise system such that it is capable of handling multiple acquisitions going forward, which made both the Adapt as well as the PaxVax acquisitions much smoother than we would have been able to do without that investment. So, we are ready for additional M&A transactions. You're correct to point out that the—they all are a bit challenging. No one is easy. And we've done single product acquisitions that have included staff and manufacturing facilities. We've done carve-outs, such as the ACAM2000, which came out of Sanofi, which was very complex, and we've been able to handle them seamlessly in order to protect the integrity of the revenue base while doing important things, including making sure that the talent that we acquire is protected, as well as ensuring a smooth transition of things that are important to us around culture as well as facility. So, we're ready and experienced, and we'd like to do it again soon.

Okay. Thank you.

Thank you. Our next question comes from Keay Nakae with Chardan. Your line is now open.

Thanks. Bob, maybe shifting gears to potential M&A as you will need to meet your 2024 aspirational goals. You talked about the progress in integrating your two most recent acquisitions PaxVax and Adapt. So, where do you think the organization stands now if you were to acquire another company as opposed to just the product line? And how prepared are you at this stage to take on a task like that to manage that type of integration, which is never easy?

Yes. Keay, thanks for the question and for joining the call. As we've talked about pretty openly over the last three years to five years, we have proactively made investments in our infrastructure and our capability in order to handle additional M&A transactions. And as an example that we referred to in the past, we made a pretty substantial investment in 2015 and 2016 in our SAP enterprise system such that it is capable of handling multiple acquisitions going forward, which made both the Adapt as well as the PaxVax acquisitions much smoother than we would have been able to do without that investment. So, we are ready for additional M&A transactions. You're correct to point out that the—they all are a bit challenging. No one is easy. And we've done single product acquisitions that have included staff and manufacturing facilities. We've done carve-outs, such as the ACAM2000, which came out of Sanofi, which was very complex, and we've been able to handle them seamlessly in order to protect the integrity of the revenue base while doing important things, including making sure that the talent that we acquire is protected, as well as ensuring a smooth transition of things that are important to us around culture as well as facility. So, we're ready and experienced, and we'd like to do it again soon.

Okay. And then—and just maybe a follow-on question to the comment about your plans for some discretionary investment this year. I assume that was maybe more capital investment as opposed to R&D. Can you expand on that and maybe a little more color on what type of amount we're talking about?

So, I think in general, without giving specific to a line item or category, we continue to look opportunistically at making investments that support our ability to grow and scale the business over the long haul and throughout the example where we committed to spend $50 million in our Baltimore facility to support the growth of the CDMO business unit. As we look at M&A opportunities, there are clearly opportunities across all four business units. And as we talked about during the annual Investor Day, R&D continues to be a focus of ours, especially during this 2020 through 2024 period as we need and want revenue to come through that pipeline so they can meaningfully contribute to our revenue growth at the end of this cycle, but, more importantly, throughout the next five-year period. So, we're going to continue to be, as Rich indicated, a bit prudent about how we use our capital, but again, the growth will require investments across the board in a number of areas, but we'll do that in a very careful, prudent way.

Okay, thanks. That's all I had.

Thank you. Our next question comes from Boris Peaker with Cowen. Your line is now open.

Good evening. This is John Scott on for Boris. My first question is, given the recent slowdown in global travel and restrictions that are in place, have you seen an impact on Vaxchora or Vivotif, either in terms of sales or in the investments that you've been making in those franchises?

Hi, John. Thanks for the call. Thanks for the question. We haven't seen much of a slowdown. I mean, our traveler health footprint is, as you know, it's focused on typhoid and cholera. While we will opportunistically look at additional assets to add to that travel health business, we haven't seen much of an impact. So—and I think if we were to, it would be pretty short-term in nature.

Okay. Thanks. And then moving on to NARCAN with the new co-prescribing states, can you comment on which states those would be? Or whether there are any states you would want to flag there at an advanced stage with that type of regulation? And do you anticipate that the regulation would be focused on patients getting a high dose of opioids? Or would it be more expansive along the lines of what New Mexico did last year?

Yes. So, we're not going to speculate on which states kind of bring this over the finish line in 2020. As I commented earlier, there are a handful of states that are more advanced than others and we're working with any number of them. So, again, we're not going to guess, both in terms of timing or which individual states, but we expect them to be very consistent with the previously adopted nine states that are in place today.

Okay. Thank you very much for taking my questions.

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

Hello. This is Robert Maltbie covering for Lisa. She couldn't be here today. So, thank you for taking my call. I don't know if I'm the last, but as I like to say, sometimes you save the best for last. And I want to congratulate you for your long-term performance. I believe we launched coverage four years ago at much lower levels at $30 and obviously want to welcome our new—newer friends covering, and the more the better from Barclays, Morgan Stanley, I think I heard JPMorgan, Guggenheim and Chardan and Cowen. So, congratulations on also, gentlemen, the garnering that type of broad interest. It only comes from building and executing. So, congratulations on that long term, and we hope the next four years or five can be equally profitable. My question relates again to that longer-term focus. You mentioned some targets out four years or five years in terms of some pretty good targets, doubling your revenue. And my first question relates to what—as far as you can tell, what do you expect the revenue mixture between governments and, say, non-government sources to look like during that ramp?

Yes. Robert, thanks for the question and for the kind comments about the team. It is clearly the result of our 1,800 employees working in a very diligent committed way that we've had the success that we've had over our 21-year history, but, more notably, the significant progress we've made over the last three years to five years. So, appreciate the kind words. As we look at and as we announced last year in terms of our 2020 through 2024 goal of yet again doubling revenue during that five-year period, as we in 2013, 2014, 2015 and again 2016 through 2019, it will be a combination of both organic growth and strategically aligned M&A transactions. So, we—again, we are structuring with four very distinct business units, each operating and having developed their own strategy, but collectively, we're committed as an organization to make a meaningful difference in terms of protecting and enhancing life, that's part of the core strategy. Operating in this growing attractive public health threat market, which we anticipate to be in that $50 billion addressable market range. So, there is ample room for us to leverage our competencies and our historical success in a growing attractive market.

Terrific. And hopefully, all the employees are participating in the way we have. We don't do investment banking. We leverage our IP with proprietary private funds, and we've been very happy. And so my second question relates to the AV7909 and the BioThrax. And looking at that crossover in the initial procurement options of the BARDA contract and your enrollment in the Phase 3 studies, how should we think about the path forward for the product outside of the U.S.? And that's all I have.

Yes. Sure. So, again, thanks for the question and the kind words. As I commented before, we see opportunities for continued procurement of both vaccines, BioThrax and the second-generation candidate, AV7909, both domestically and internationally. As we have in the recent years gotten traction around our growing portfolio of medical countermeasure products outside the U.S., we see ample opportunity for both the vaccine—the Anthrax vaccine candidates to do likewise. So, that growth will be slower and a bit lumpier. As we've commented in the past, governments outside the U.S. are not, in many cases, as mature or developed in terms of their strategies, but we see progress being made, particularly in the European Union adopting procurement strategies and objectives that are more aligned with what the U.S. government is doing. So, for us, that all means more opportunity across the broad portfolio of 10 products that we have today. So, again, we had a goal in the last strategy of having 10% of our revenue being generated from customers and patients outside the U.S. We hit that goal a little bit early, almost a year early, and have every expectation of maintaining that level going forward.

Thank you.

Thank you. I'm not showing any further questions at this time. I would now like to turn the call back over to Bob Burrows for closing remarks.

Thank you, Joelle. With that, ladies and gentlemen, we'll now conclude the call. Thank you for your participation. Please note an archived 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, this concludes today’s conference call. Thank you for participating. You may now disconnect.