Earnings Call Transcript - EBS Q4 2023

Operator, Operator

Good afternoon, everyone. I'm the operator for today's call. Thank you for joining today as Emergent discusses their Operation and Financial Results for the Fourth Quarter and Full Year. As is customary, today's call is open to all participants, and the call is being recorded and is copyrighted by Emergent BioSolutions. In addition to today's press release, there is a series of slides accompanying this webcast available to all webcast participants. Turning to Slide 3. During today's call, Emergent may make projections and other forward-looking statements related to their business, future events, their prospects or future performance. These forward-looking statements are based on their current intentions, beliefs and expectations regarding future events. Any forward-looking statements speaks only as today of this conference call. And as expected by required by law, Emergent does not undertake to update any forward-looking statement to reflect new information, events or circumstances. Investors should consider this cautionary statement as well as risk factors identified in Emergent's periodic reports filed with the SEC when evaluating their forward-looking statements. During today's call, Emergent may also discuss certain non-GAAP financial measures that involve adjustments to GAAP figures in order to provide greater transparency regarding Emergent's operating performance. Please refer to the table found in today's press release. Turning to Slide 4. The agenda for today's call will include Joe Papa, President and Chief Executive Officer, who will comment on our focus and priorities; Paul Williams, SVP and Head of the Products Business, will provide comments on NARCAN Nasal Spray; and finally, Rich Lindahl, EVP and Chief Financial Officer, who will speak to the current state of the company and financials for fourth quarter and full year and guidance for full year 2024. This will be followed by a Q&A. Finally, and for the benefit of those who may be listening to the replay of this webcast, this call was held and recorded on March 6, 2024. Since then, Emergent may have made announcements related to topics discussed during today's call. And with that, I would like to turn the call over to Rich Lindahl for opening remarks. Rich?

Rich Lindahl, CFO

Thank you, Jonathan. Good evening, everyone, and thank you for joining us tonight. Before we get into our results for the fourth quarter and full year, I'd like to take a moment to introduce our new President and Chief Executive Officer, Joe Papa, who joined us a few weeks ago. We are thrilled to have him on our team and look forward to benefiting from his over 35 years of experience in the healthcare and pharmaceutical industry, along with his proven record as a transformational leader. Let me turn it over to Joe to say a few words.

Joe Papa, CEO

Thank you, Rich, for the warm welcome. Good afternoon, everyone. I'm delighted to join the team and further Emergent's vision of protecting and enhancing the lives of patients. A lot of people have asked me what drew me to Emergent. That's easy. I've always been driven by the ability of pharma to save lives, and Emergent plays a unique and critical role in addressing public health crises. As a leading biodefense contractor, we're addressing the most pressing and urgent threats, like the opioid epidemic, where data tells us that every six minutes an American dies from an opioid overdose, to anthrax, the number one bacterial infectious threat, to smallpox, the number one viral threat, to botulism, the most lethal biologic toxin, Ebola, hemorrhagic fever, and chemical threats like nerve gas that have implications for our service members and women. Emergent has capabilities that not many can match. Or in other words, we have a significant moat around our business. Also, the near-term challenges that Emergent has been facing, notably our debt, have impacted our ability to achieve our full potential. I'm eager to work with the team and tackle these challenges head-on. Based on my three decades of experience in the industry and now knowing the determination of the Emergent Board and the leadership team, I believe we can successfully navigate through the challenges that Emergent faces today. I'd like to bring your attention to Slide #6 of our presentation. While I am only two weeks into my CEO role, we will move forward with a multi-year plan to stabilize, turn around and then transform our company. Of course, a business transformation isn't going to happen overnight. The first phase, stabilizing Emergent, we expect will take us three to six months and we'll focus on continuing to build credibility with our key stakeholders, including employees, customers, government regulators, shareholders and debt holders. For example, that means looking to strengthen the engagement of all of our employees and focusing on our exciting mission to protect, enhance and help save lives. Also, it is clear we must derisk our balance sheet and reduce our debt now. In that regard, today, we announced that we've entered into a forbearance agreement through April 30, 2024, with our lenders. Rich will take us through this in more detail later on. The next phase, our turnaround, will begin in 2024 and will span into 2025. We'll focus on key growth opportunities and investments that will drive profitable growth by improving our operating performance, reducing our working capital and may include product and/or asset divestitures. We expect these actions will be critical in our efforts to reduce our debt and to derisk our balance sheet. Our final phase, transformation, is planned for 2026 and beyond. We'll focus on strategically transforming Emergent to achieve durable and sustainable growth and profitability. I also want to note an important driver of Emergent's past and future success is quality and compliance. Quality and compliance are key value drivers for Emergent and will remain a top priority. Our products are relied upon to save lives in a time of crisis. Our patients and customers depend on us. We must continue to provide the highest quality products to ensure that customers, government agencies, and patients have confidence in us as a trusted partner. In 2023, Emergent manufacturing facilities have been successfully inspected by five regulatory agencies from around the globe and five other inspectional bodies for a total of 18 inspections, including three by the FDA that resulted in either an NAI status or VAI status. This includes the successful closeout of the Baltimore Camden warning letter in just 14 months. That's a very significant and truly remarkable accomplishment by the Emergent team, the leadership team, their teams and the broader organization. To this end, over my first two weeks, I've had the pleasure of meeting many of the talented and dedicated employees that work at Emergent and will continue to visit more Emergent facilities in the coming weeks. The commitment to the mission and values are so clear in each and every employee that I've met with. I look forward to visiting with more sites in the next few weeks and speaking directly with our team members. I'm confident that team insights will enhance how we deliver value to our customers, partners, patients, and shareholders. I'm going to take that feedback from the team, setting clear goals that we can align around together as an organization and that's what's going to drive the results. It's a privilege to lead Emergent and chart a new chapter in this vital space whether it's increasing access to NARCAN Nasal Spray, to help combat the opioid epidemic or continue to deliver important medical countermeasures to customers around the world. Emergent is providing critical products to address global health crises in an increasingly dangerous world. I'm confident that these important treatments provide for a bright future and I look forward to advancing the company's progress, improving its financial position and driving value for shareholders. Given my two-week tenure at the company, Rich will provide an overview of the quarter. Before that, I'll turn it over to Paul to discuss NARCAN Nasal Spray, our largest product, representative of the important work Emergent does for patients, families and communities and will no doubt be an important value driver for the company going forward. So, Paul, let me turn it to you.

Paul Williams, SVP and Head of the Products Business

Thank you, Joe, and hello, everyone. Turning to Slide 8 of the presentation, I'd like to start by reviewing the state of the opioid crisis. The latest CDC data show 105,000 people sadly died from drug overdose over the latest 12-month period, of which nearly eight in 10 were opioid related. Today, opioid overdose is the leading cause of accidental death in the U.S. And with the recent rise in synthetic opioids, such as fentanyl, we see very little sign of abatement. These are unsettling and staggering statistics with so many families, loved ones, friends, and communities behind these lives lost. Since adding NARCAN Nasal Spray to our portfolio in 2018, we continue to play a key role in responding to the devastating opioid crisis. And this past year was filled with historic patient and customer-first milestones that broadened access and increased awareness of our lifesaving opioid overdose reversal treatment. 2023 began with a favorable FDA advisory committee's unanimous vote in support of our products OTC use and then FDA approval of that designation in March. We believe NARCAN Nasal Spray should be immediately accessible alongside AED kits at businesses and workplaces as well as across small businesses, in schools and on airplanes because an opioid overdose can happen to anyone, anywhere and at any time. Our OTC retail launch of NARCAN Nasal Spray in August has provided access and availability across 32,000 outlets, spanning mass, drug, grocery and online retailers and e-commerce sites. In 2024, we will expand access further into businesses, workplaces, and other channels as well as planning for the introduction of future line extensions. In the U.S., public interest channel continues to grow. Our one-of-a-kind and proprietary distribution platform, NARCAN Direct, supports our customers' needs and helps facilitate seamless ordering and distribution of the product to the many thousands of endpoints that are critical in dispensing NARCAN Nasal Spray into the hands of those who need it. This past year, our ability to meet increasing demand enabled us to distribute approximately 22 million doses or 11 million two-dose cartons in the U.S. and Canada to get NARCAN into the hands of those who need it the most and provide a chance to save a life. And most recently, in January of this year, we announced the shelf life extension of NARCAN Nasal Spray from 36 months to 48 months in the United States. We believe this will increase adoption and access to the product. We've also made a tremendous impact with our Ready to Rescue campaign, which aims to break down the stigma associated with opioid overdose and educate the public, and in particular, college-age adults. We continue to partner with public figures and notable influencers to expand awareness of the risks associated with opioid use and the importance of being paired with NARCAN Nasal Spray. In the coming quarters, we'll continue to execute on our plans to broaden access and availability of NARCAN Nasal Spray and meet the demand as we seek to help save more lives. Now, I'd like to turn it over to Rich to discuss the fourth quarter performance in more detail.

Rich Lindahl, CFO

Thanks, Paul. I'll start by elaborating on the 8-K filing that Joe mentioned earlier. Today, we shared that we have entered into a forbearance agreement with our lenders until April 30, as we work on improving our operational performance, enhancing working capital, and pursuing certain product or asset sales. As Joe pointed out, transforming the company will take multiple years, with a strong focus in the near term on bolstering our credit profile and capital structure. All decisions will prioritize improving performance and enhancing enterprise value. While the specifics of the sale processes are confidential, our goal is to generate additional cash that can help further reduce our debt and improve our credit situation as we evolve the business. The forbearance agreement reinforces the positive relationship we maintain with our lenders, and we look forward to updating our capital structure in the future. In the fourth quarter, Emergent made significant strides in enhancing the fundamentals of our business and advancing our core products. We are continually reducing costs and optimizing operations to mitigate risks and strengthen our financial stance. These initiatives reflect our refined strategic focus and ongoing transformation as we aim to boost revenue, enhance operational efficiencies, and decrease debt. Throughout 2023, we upheld a strong partnership with the U.S. Government and other key medical countermeasure clients. This resulted in important contract awards, validating the value of our products in the government's preparedness planning, which is continually evolving. However, as I will explain shortly, our 2024 forecast carries more variability than in previous years. In October, we welcomed two seasoned pharmaceutical executives to the Board, Neal Fowler and Don DeGolyer, who bring over 70 years of experience in the biopharmaceutical industry and sales. We believe their insights will be invaluable as we continue to grow NARCAN sales, advance our other products, and collaborate with governments to prepare for public health threats. Let me outline some of the advancements we are making with our core products. As Paul mentioned, after extensive research and development, and in partnership with the FDA, we launched NARCAN Nasal Spray as an over-the-counter treatment for opioid overdose in August last year. This was a landmark achievement that increased access to naloxone. Throughout the year, we met the growing demand for NARCAN, resulting in wider access and awareness, supported by strong federal and state initiatives. Looking forward, we anticipate that NARCAN Nasal Spray will be a key driver of our near-term growth. We also secured critical contract wins last year across our other core products, including a new $379.6 million contract from the U.S. Department of Defense for RSDL, a $75 million option to extend our existing contract for CYFENDUS, and a 10-year contract valued at $704 million with BARDA for developing and manufacturing Ebanga, our licensed treatment for Ebola. Moreover, we've announced a contract for 2024 with the U.S. Department of Defense worth $235.8 million for BioThrax, an anthrax vaccine, further emphasizing the significance of our medical countermeasure portfolio to the U.S. Government's preparedness plans. Additionally, we achieved several key R&D milestones this year. In July 2023, we received FDA approval for CYFENDUS, an anthrax vaccine for post-exposure use. We gained Health Canada regulatory approvals for our ACAM2000 vaccine and TEMBEXA drug, both addressing smallpox. We also submitted a supplemental BLA to the FDA to extend ACAM2000's indication to cover immunization against the Mpox virus, with feedback expected by the third quarter this year. These contracts and developments underscore the U.S. Government's need to maintain preparedness against a broad spectrum of potential threats, which are increasing globally. Emergent is well-positioned to provide these products efficiently and cost-effectively, and we are dedicated to supporting the U.S. Government in addressing emerging infectious diseases and strengthening future preparedness. In 2023, we also initiated several measures to enhance our credit profile and derisk our capital structure, including divesting our travel health business for up to $380 million, extending our secured credit facility maturity to May 2025, implementing $160 million in annual operating expense savings, and shifting our focus to our products business. Now, let's review our results. We achieved strong revenue in the quarter, aligning our full-year 2023 revenue with the midpoint of our guidance provided on November 8. Adjusted EBITDA was influenced by revenue timing and one-time write-offs, which I will detail shortly. Highlights from the fourth quarter include total revenues of $277 million, driven by NARCAN and CYFENDUS; total segment adjusted gross margin of $86 million; adjusted EBITDA of $3.4 million; and an adjusted net loss of $40 million. Looking deeper into quarterly revenues, Anthrax MCM sales were $112 million, fueled by CYFENDUS deliveries to the U.S. Government's Strategic National Stockpile, including early shipments under the $75 million contract option with BARDA. NARCAN sales reached $111 million, reflecting the product's robust demand from the U.S. public interest channel and growing market in Canada. Revenue also included contributions from the OTC NARCAN launch into retail channels. Smallpox MCM sales were $12 million, driven by VIGIV, with other product sales totaling $15 million primarily from RSDL and BAT. Total bioservices revenues were $21 million, indicating our continued transition to focus on existing customers. In terms of operating expenses, cost of Commercial Product sales for the quarter was $50 million, attributed to NARCAN's strong sales. Cost of MCM Product sales was $97 million, largely driven by CYFENDUS sales volume and medical countermeasure products, along with an increase in inventory write-offs. Bioservices costs were $38 million, reflecting profitability-improvement actions. R&D expenses stood at $29 million, including one-time project termination costs, and SG&A spend totaled $90 million, covering essential NARCAN initiatives but offset by reduced restructuring-related expenses. Now, let's move to segment performance. Starting Q4 2023, we report results in three segments: Commercial Products, MCM Products, and Services, enhancing transparency for investors. In the Commercial segment, revenues amounted to $111 million, entirely from NARCAN, with a segment adjusted gross margin of $61 million, or 55%. The MCM segment generated $138 million in revenues from anthrax, RSDL, and BAT, with a segment adjusted gross margin of $42 million, or 30%. The Services segment reported revenues of $21 million but had a segment adjusted gross margin of negative $17 million. Shifting to 2023 full-year performance, revenues totaled $1.05 billion, consistent with our guidance midpoint. Total segment adjusted gross margin for the year was $336 million, or 33%, at the lower end of our guidance range. Full-year adjusted EBITDA was negative $22 million, also at the low end of our range, and the adjusted net loss was $319 million. For the full-year costs, Commercial Products cost was $210 million, driven by NARCAN's continued success, including the over-the-counter launch in August 2023. MCM Products cost was $306 million, influenced by sales volume, product mix, and unabsorbed production costs. Bioservices costs reached $190 million, largely impacted by our cost structure in the first half of the year amidst our focus on cost-cutting initiatives announced in August. R&D expenses were $97 million, inclusive of chikungunya costs before divesting the Travel Health business. SG&A was $368 million, incorporating added marketing costs for NARCAN, legal fees, and restructuring expenses. Looking at the Commercial Products segment, revenue for the year was $497 million, up approximately $100 million year-over-year, with a segment adjusted gross margin of 58%, consistent with the previous year and reflective of midyear pricing reductions on NARCAN to enhance access and affordability. For the MCM product segment, revenue was $447 million with a segment adjusted gross margin of 34%, influenced by sales volume, product mix, cost absorption, and inventory write-offs. The Services segment generated $79 million in revenue but had a segment adjusted gross margin of negative $103 million, impacted by sales volume and costs during the first half of 2023 prior to our restructuring efforts. Now, I’ll highlight key balance sheet and cash flow details. We ended 2023 with $112 million in cash and a total liquidity of $192 million, including access to our revolving credit facility. The increase in cash and liquidity compared to the prior quarter resulted from sales timing and accounts receivable collections. While operating cash flow for the full year was negative, it was positive at $92 million in the second half. Capital expenditures reached $52 million in 2023, and our net debt position as of December 31 was $757 million. Transitioning to our 2024 guidance, we are projecting total revenues of $900 million to $1.1 billion. Commercial Product sales are expected to be between $460 million and $500 million, anticipating ongoing strong demand for NARCAN in the U.S. public interest channel and continued growth in retail following the OTC launch. We're estimating MCM product sales between $340 million and $490 million. With CYFENDUS now fully licensed, procurement will shift from BARDA to the Strategic National Stockpile. We understand the U.S. Government is weighing various threat preparedness needs against available funding from Congress, which could affect the timing and scale of anthrax procurements in the near term, even as this threat remains a priority. Thus, we've outlined a wide range of possible outcomes for the MCM segment. We continue to collaborate with our U.S. Government partners to enhance the procurement visibility essential for sustaining this critical capability for all citizens. On a positive note, we see steady sales to the U.S. Government under our long-standing contracts for plasma and chemical decontamination products, VIGIV, BAT, and RSDL. We also forecast Services segment revenue of $70 million to $80 million, reflecting our dedication to our current clients. Regarding profitability, we expect adjusted EBITDA of $50 million to $100 million, accounting for our 2023 cost reduction measures and expected revenue fluctuations across segments. For 2024, we forecast total segment adjusted gross margin of 40% to 45%, reflecting the full-year benefits of our profitability initiatives. Finally, we project Q1 revenue to range between $200 million and $250 million. Thank you for the financial update. I'll return the call to Joe for concluding remarks.

Joe Papa, CEO

Thank you, Rich. Before we go to questions, let's take a quick look at Slide #20. I just want to reinforce the human impact of our products on public health threats across the world. As I stated at the top of the call, every six minutes in this country, we lose a life to opioid overdose. So, in the past half hour, approximately five lives were taken. Let me take it one step further. In one 24-hour period, we lose approximately 240 individuals. It's like losing a 737 airplane every day. Think about that for just a second. We are working hard to change this statistic. I cannot stress enough that the work we do in support of our mission to protect and enhance lives and ultimately help save lives is what inspires us all. Thank you again for joining us this afternoon. As you can see, the Emergent team has made notable progress this year, and I look forward to building on this momentum as we execute on our transformation and the important catalysts underway. I believe we have an incredible opportunity to play a key role in public health. I'm excited to work with our team, to meet with the key stakeholders across the organization and accelerate Emergent's return to growth. I know we are well positioned for success, driven by our focus on protecting communities and addressing the evolving landscape of the global health challenges. I look forward to speaking with all of you in the coming months to provide additional detail on perspectives and our near-term priorities and goals.

Operator, Operator

Certainly. Our first question comes from Jessica Fye from JPMorgan. Your question please.

Jessica Fye, Analyst

Hey, there. Good evening. Thanks for taking my questions. Three from me. First, what are the product or asset sales you are considering? Second, if I look at the 2024 commercial products guidance, can you just talk about what assumptions underpin that guidance? And just want to confirm if that for 2024 is only NARCAN now and how to think about the OTC contribution versus public interest in Canada? And then lastly, in the MCM guidance, can you talk about what that includes as it relates to the size and timing of an ACAM2000 option as well as TEMBEXA? And maybe a little bit about how to think about the split of revenues between anthrax and smallpox within that guidance? Thank you.

Joe Papa, CEO

Okay. You have quite a bit there, Jessica. We're going to try to take it one at a time here. And I'll start with the first one on asset sales. I think it's probably most important to say that what I was saying and Rich was saying is that we take the need to reduce debt very seriously, and we're looking at all the opportunities to reduce the debt in our company. One of the ways that we're looking at is obviously improving our overall operating performance. That goes without saying. The second one we're thinking about is what are some of the working capital improvements we can make to...

Operator, Operator

One moment while we resume. All right...

Joe Papa, CEO

Hi, this is Joe Papa and the Emergent team.

Operator, Operator

Jessica, your line is open again.

Joe Papa, CEO

Jessica, this is Joe Papa and the Emergent team. Can you hear us?

Jessica Fye, Analyst

Yes. Do you want me to repeat the question?

Joe Papa, CEO

No, I have the question. Let us start. Once again, we apologize for the technical issues, but we're here and did not move. We're glad to have the opportunity to finish the questions. Okay. Your first question was regarding asset sales. I want to emphasize that both Rich and I take the reduction in debt very seriously, and we are exploring several options to reduce our overall debt structure. The first step is improving our business's operating performance, which we are actively working on. Rich has already implemented some of these measures in 2023, and we plan to take more actions in 2024. The second part of our strategy involves managing working capital. By reducing working capital, we can free up cash to pay down debt, which is another critical action we're pursuing. Regarding your question about product and/or asset sales, this is something we are currently evaluating. I hope you understand that I cannot disclose specific details about which assets or products we are considering at this time. However, I want to reassure you that we are actively looking at these options to support our overall debt reduction initiative. That addresses the first part of your question. The second part was about the Commercial and NARCAN...

Rich Lindahl, CFO

Yeah. So, just to clarify that the Commercial guidance only includes NARCAN for 2024. I think that was the first part of your question. And for the second part, I'll ask Paul to elaborate on the assumptions.

Paul Williams, SVP and Head of the Products Business

Yeah. So, I think first off, I think it's really important to understand that the OTC designation really, for us, expands access across all channels and how can we make NARCAN more available and as many access points as possible. I think particularly to the public interest segment, I think we see very strong continued federal and state funding and support of those channels. On the retail side, I think we have a strong level of retail stocking, both in store and online, and we start to see consistent demand out of that channel. At the same time, this year, we're going to be expanding further into business-to-business categories, particularly as it relates to industry, tourism, services, entertainment and construction. That is, I think, also getting a full year's worth of OTC retail, too, versus last year.

Joe Papa, CEO

Thank you, Paul. Regarding your question about ACAM and TEMBEXA procurement this year, we expect additional procurement for ACAM, likely around the middle of the year, in line with prior practices. We anticipate that the procurement level will be similar to what we experienced in 2023 for ACAM. However, for TEMBEXA, we do not expect any additional procurement this year, as it has been postponed to a future period, and we will keep you updated on any developments. Concerning the split between anthrax and smallpox, we provided a broad range mainly due to varying expectations around anthrax as we seek clearer visibility on its procurement profile this year. I have already addressed the smallpox aspect, so I hope this answers your questions, Jess.

Jessica Fye, Analyst

Thank you.

Operator, Operator

Certainly. One moment for our next question. And our next question comes from the line of Frank DiLorenzo from Singular Research. Your question please.

Frank DiLorenzo, Analyst

Good afternoon, and thanks for taking my call. I have a couple of questions, the first related to the MCM business and the second related to NARCAN. So, I'll just start with MCM. Following along the lines of ACAM2000, assuming there's a positive FDA response to that sBLA toward the end of the year, say, third quarter, how would that additional indication impact the overall sales potential for that product going forward, say in 2025 and beyond? And then separate from that, could you talk about your next potential submission to the FDA regarding the MCM space? Thanks.

Joe Papa, CEO

Rich, do you want to take that?

Rich Lindahl, CFO

We have submitted the sBLA to the FDA to expand the ACAM indication to include the Mpox virus. Given the timing of this submission, we do not expect any significant contribution from Mpox in 2024. However, it does offer some additional potential for the product as we look ahead to 2025 and beyond. We will provide more updates as progress is made. Currently, there are no other BLAs in the immediate pipeline, but we are actively exploring additional opportunities as we continue to develop new ideas and products.

Frank DiLorenzo, Analyst

Okay. Thanks. Regarding NARCAN, can you give us a little more granularity on the public interest space and getting NARCAN into the first-aid kit segment, if you will? I know the first-aid kits are a big deal in a lot of different areas, whether it's schools or industry. Has there been any movement there? And separate from that, could you talk about a longer-term an ex U.S. strategy for NARCAN? Thank you.

Joe Papa, CEO

Paul, do you want to take that one, please?

Paul Williams, SVP and Head of the Products Business

Sure. Thank you for the question. Regarding the public interest channel, we are seeing strong demand. The goal here is to ensure NARCAN reaches vulnerable populations affected by the opioid crisis in various forms. We collaborate with local organizations to place NARCAN in accessible locations, such as vending machines, to meet their specific needs. Additionally, as part of our retail expansion, we are prioritizing broader business-to-business opportunities, including incorporating NARCAN into first-aid kits in workplaces and restaurants this year.

Joe Papa, CEO

Hi, this is Joe Papa. I had the opportunity to meet with Paul's team last week, and I can share that they have some very exciting plans. They've explored various line extension opportunities and other initiatives that will help us broaden our presence. Most importantly, we aim to enhance our accessibility to address the unfortunate opioid overdoses that have occurred. They have some exciting plans in mind, including new line extension opportunities and kits.

Paul Williams, SVP and Head of the Products Business

In response to your question about outside the U.S., we engage with stakeholders in various countries, including health departments and defense ministries, to understand their needs regarding the opioid crisis. We aim to support their requirements internationally, depending on the direction this takes.

Frank DiLorenzo, Analyst

Okay. Thank you.

Joe Papa, CEO

Operator, next question.

Operator, Operator

Thank you. This concludes the question-and-answer session. I'll now hand the program back to Joe for any further remarks.

Joe Papa, CEO

Thank you all for joining us this afternoon. It’s a pleasure to share some of the excitement we see at Emergent and the steps we're taking to ensure a bright future. We look forward to meeting and discussing the opportunities we are addressing, as well as the challenges we are tackling. Thank you for being with us today. Have a great day.

Operator, Operator

Thank you all. And with that, ladies and gentlemen, we now conclude the call. Thank you for your participation. Please note, an archived version of today's webcast as well as a PDF version of the slides used during today's call will be available later today and accessible through the investors landing page on the company's website. Thank you again. We look forward to speaking with you all in the future. Goodbye.