Emergent BioSolutions Inc. (EBS) September 2026 Conference Transcript

Good afternoon, everyone, and thank you for joining the 2026 H.C. Wainwright 28th Annual Global Investment Conference. My name is Ahmed Mahmood, an Associate Research Analyst at H.C. Wainwright, and I'm happy today to introduce our presenters for this session, Joe Papa, CEO, and Rich Lindahl, CFO of Emergent Biosolutions, a public health company providing medical countermeasures and other life-saving products.

Joe?

Thank you.

Hello, everyone. Pleasure to be here today, and thank you very much for your interest an emergency unique company. We have a 26-year history of working with the U.S. government, other governments around the world, to partner with them to create biodefense programs, activities where we help them prepare. And the number one areas and risks of biodefense tend to be, what's the number one viral risk? It's smallpox. We have both a therapeutic as well is a vaccine for smallpox. Number one bacterial threat is anthrax. We have, once again, a vaccine as well as a therapeutic for anthrax. The number one toxin in the world is the botulism, and we have both botulism and antitoxin for that. And then, of course, you may have read in the news the current risk of the outbreak of Ebola in Africa, and we have a product that's a treatment, a monoclonal antibody for the treatment of Ebola. So we've got a number of different products. Our product is called Ebanga. So a number of different products. It makes a very unique business model where we partner with governments around the world to help get them prepared for risk of biodefense. In addition, because our business deals with different types of pathogens that the government doesn't want exposure to, we have a long lifespan of our products. and that the government doesn't want a number of players to have access to anthrax. Their concern is that if anthrax spores got into the hands of a bad actor, they may choose to do something that could be problematic for the government. So we have a longevity of our business in the sense that we make the product for the U.S. government. There's limited people that can go. I can guarantee you there's no one going to the garage tonight and say, I'm going to create an anthrax vaccine. That's just not going to happen because they're not going to get access to anthrax spores. But we also, beyond making the product, we have the ability to provide the government with ongoing stability, testing, make sure the potency is there, shelf life is there, and that gives us additional longevity. So that gives you a sense of our business. Beyond that, we also, beyond public health, we have a product, the number one product for opioid overdoses is Narcan. That's our product. We continue to be the market leader in that area. That's the quick view. There's some safe harbor comments I'll make. I would prefer all of you to look at our SEC filings if you have any interesting questions on that. In terms of leadership in public health, I'll start with the team. The team is a very experienced and trusted management team. The team has over 100 years of experience in the biopharma segment. So good, strong team, good representatives from all the different areas of our business. This is just a look at our portfolio. This includes all the products in our portfolio. This represents the leading position in biodefense. We have more products in biodefense than any other company has out there. As I mentioned, if you start at the top there with smallpox, we have a therapeutic and a vaccine for smallpox. The products that are also used for mpox, there's ACAM2000, which is our vaccine that can also be used for mpox. Anthrax, we have a number of different products there, both therapeutically and a vaccine for anthrax. botulism, I mentioned botulism, antitoxin, and then Ebola is our Ibanga monoclonal antibody. All those products are designed to make sure that the governments around the world have products to anticipate risk in the biopreparedness and biodefense. In addition to that, I mentioned the opioid overdose. And once again, our products there are Narkea, which is the gold standard, four milligram product. And we also, they're licensed with Hikma, have access to Klaxado nasal spray, which is an 8-milligram strength of nalaxone. So it gives you a very wide, diversified portfolio of products. I'm happy to say I had a chance to meet RFK Jr. just in early September. And one of the things I can absolutely say to him, that many of you have heard the questions that have been asked about the U.S. government about most favored nation pricing. I can absolutely assure you that I can walk into that office and tell him that right now, EMERGE already provides most favored nation pricing. Unlike many of the pharma companies, the U.S. gets the most favored nation pricing for the products that we make for the U.S. government. In terms of our manufacturing footprint, we've streamlined that footprint down, the manufacturing network. We have two hub locations. One is in Lansing, Michigan. That capability there is bacterial fermentation. We make the product there. And the other hub is Winnipeg. Winnipeg makes predominantly products for hyperimmune plasma product capabilities in terms of what we're there. In addition, based on the need in the marketplace, we are also restarting our Canton facility. We announced that fairly recently about the Canton restart. That has a live attenuated virus vaccines active ingredient capability, which is not widely available around the world. So we did choose to restart that just recently. So it gives you a sense of the capabilities we have, both in terms of where the sites are, but then also being able to make the full portfolio of our product capabilities for our company. So we've done some good steps in terms of streamlining, but also maintaining the capabilities. Additionally, I mentioned this at the beginning that we have a multi-year transformation plan underway. I joined the company in 2024 with the intent to first stabilize the company and then find the turnaround where we'll decide where to make the best investment for the future. Our priorities on the turnaround, we're absolutely to look for where can we make the best investment, the best return on investment for all of our stakeholders in the company. We're in the middle of that right now. We've stabilized the company. We're investing for the future and looking for those future growth opportunities, all while making sure that we continue to be the leader in solving global public health threats and prioritizing patient safety, quality, and compliance across our entire portfolio of our products. That's what we do and why we do it. I'm going to go in through each segment. I'll start with Naloxone. I'll take me a couple of slides to go through that, and then I'll go to the medical countermeasures business. The Naloxone business, I'm delighted to say we got approval for that product to go over-the-counter in 2023. We believe Naloxone's availability as over-the-counter status has been a dramatic improvement in reducing the number of opioid overdose deaths. In 2023, the opioid overdose deaths in the United States was somewhere in the 90,000 to 100,000 people dying every year for opioid overdoses. That's a terrible number. I'm delighted to say in 2025, we've been able to bring that number down dramatically. It's somewhere now in the around 50,000 level. Still way too many people dying from opioid overdoses, but we have been able to dramatically reduce that. We believe a big part of that is because we've been able to move the product from prescription to OTC. With OTC status, we can make it more available. We can put it on the wall kit, on the walls. We can clip it onto a backpack for our students so they can have it on their backpack so that wherever the person needs the product, you have the potential ability to save a person's life because if you overdose on an opioid, you will stop breathing. And once you stop breathing, you only have four or five minutes before you're going to have some serious problems or deaths. So having the availability of the product wherever you need it has been a big part of why we think the number of opiate overdose deaths have come down. Our product, Narcan, is the gold standard out there. It is the leading brand. It's what's commonly referred to, even if they're using the generic nalaxone, they're often and we'll talk about it as the Narcan product. So that's our portfolio. To be clear, we have faced some intensifying competitive pressures on the Narcan business. The overall market continues to grow in units, but we have faced pressures. And as a result of that, we have brought down our estimates for revenue. But once again, we continue to hold the market share. We believe our market share is somewhere in the 50% with now four generic competitors in the market, and we're still holding on to about 50%. We have had to price the product competitively, which means we have to come closer to where the generics are. We don't have to match them, but we have to certainly be close with that, and that's the reason why we've run into some challenges with Narcan. But importantly, we still are focused on trying to protect and save lives. We are continuing to make our product even more accessible, bringing out new innovation for multi-pack cases, bringing out backpacks, kits that you can clip on the backpack, things that can help make the product available, more forms that will help save lives because it will be where you need it. As a result of some of the challenges with Narcan, we did have to make some reductions in the actual numbers of what we were doing from a restructuring point of view. We did that based on this generic entries. We've decreased the expense base by approximately $40 million. dollars. We closed two labs in Maryland. We sold an unutilized office building that we had available to us, and we exited a warehouse lease. All this is designed to continue to make us more flexible, leaner, more customer-focused, and obviously improve the overall efficiency of how our business operates. That's been what the decisions we've made as a result of some of these incremental challenges. Now, let me move to the other part of our business, the very exciting part of our business, the medical countermeasures. As I mentioned, it's a very unique business. We look at where can we address the dangers that the world face, and I think all of us see the newspapers every day, the news on TV, on the internet, and we know we live in an increasingly dangerous world. We are working to make this a little bit safer by making medical countermeasure products that will help prepare governments around the world for what's going on out there. Most of our business is with the U.S. government. However, we have diversified and increased our footprint, and we sell now somewhere in that 20% to 30% every year outside of the U.S. government. So we are getting some additional diversification by selling to countries in Europe, countries in Middle East, countries in Asia. So we are continuing to expand our geographic footprint. The most recent quarter we had was the second quarter we reported revenues, $168 million. It was the highest second quarter we had since 2020. About 20% of our MCM revenue came from outside the U.S., as I mentioned. And we continue to get new contract awards with the U.S. government and other governments around the world. So that's clearly something that we're excited about in terms of what we see. One of the things I'll mention is that as we think about the growth drivers for this business, we know that there are going to continue to be outbreaks of Ebola. Ebola is obviously a very serious problem. It seems like we have an Ebola outbreak almost once every year. And unfortunately, it's continuing to be widespread. The good news is that we've had ways to control it. So the products that were out there, unfortunately, the current outbreak of Ebola is not the normal Ebola Zaire strain. This is a different strain, and we're continuing to look for new ways to treat it. Emergent has a product under development right now for what we will call pan-Ebola because that's an important opportunity for us to continue to improve on the therapies we have. Beyond that, though, there are other things that we know. And one of the things that we know, and just has shown up really in the last 12 months, is that there are bad actors out there that are trying to get chaos in the world. And one of the ways they've done it is what I'd call the traditional weapons. They send a missile across the border and into another country. What the bad actors have seen over the last 12 months especially is that if the U.S. government's involved with something, they send a missile across a border, the U.S. government just knocks it down. Our military is very well prepared to do that. So the bad actors are now looking for what are the other ways they create chaos in the world. and that's kind of their mindset and what we believe is happening is they're looking at other ways to create chaos in the world and what we believe is one of the areas that we have to be prepared for is the ability to use ai for pathogens create new pathogens you know for example to take a a smallpox dna and insert it with crisper into a flu virus as a simple example Hopefully that doesn't happen, but we've got to be prepared for things like that. And that's why we continue to spend the money in R&D, continue to work very closely with the U.S. government to help prepare and other governments around the world to help them prepare for potential issues out there in terms of AI-generated threats. You may have seen this quote just last week. This was from Anthropic, one of the leaders in AI. And they just came out last week with the headlines about cases that are coming in from Yemen, Russia, and China involving support of biological weapons. There's a real concern out there. This is Anthropik's comments, not mine, but I think it's important that what's going on out there is there's a lot of concern about using AI in a way that could create new pathogens. And for us, the sooner we know and the more we can collaborate with the likes of Anthropik or other AI leaders, we hope to be able to be prepared and help to protect and save lives by working ahead of time for biopreparedness. So that's a concern that, you know, exactly where that goes, how far it goes, I can't speak to that, but I can tell you that we want to make sure that we are prepared across any type of outbreak that could cause problems for national security for the U.S. or other countries around the world. So let me go through the financial results, the year-to-date numbers, just to give you some sense of where we are as a company. These are the key financial metrics for year-to-date 2026 versus a year ago. You can see these metrics. We had a very good first half of the year. Revenue was up $27 million, $399 million. Adjusted EBITDA was up from 112 to 132, up $20 million. And the margin went up by 3%. We also did that while we were reducing operating expenses. They came down by $13 million. So if you look at these, you can see some very strong performance for the first half of 2026 for our company. We're delighted to talk about some of the things we've done to try to do this. But importantly, it's been a good team effort across the board. If I go to the next page, this list looks at some additional metrics. I won't go through all of them. I don't want to bore you with the numbers. You can see the presentation that is posted. But I would say, certainly, if you look at a couple of things here, we continue to share a strong amount of cash flow from operations, and we've been using that to pay down our debt. When I joined the company at the end of 2023, early 2024, we had about $800 million of gross debt. I'm delighted to say that that gross debt now is down to $590 million at the end of the second quarter. We've made an additional $75 million payment on the gross debt, and got it down to $515 million. and our EBITDA leverage is now down to about a little less than two. So we've made some really good progress in reducing the total quantum of debt as well as by increasing EBITDA, the net leverage has come down to ballpark round two. So good progress in what we're doing as a company. If you think about year-to-date capital allocation, where are we focused on? We're focusing on what can we do to grow our business. As I mentioned to you before, we're focusing on international growth opportunities for our MCM business. We're looking at where can we invest internally in our company. For example, we just made a $50 million milestone payment for our product called Ebonga for the treatment of Ebola, and we continue to look for additional business development. We're also using our capital for debt management in terms of refinancing and reduction of debt. As I mentioned, we refinanced our home loan. It was $250 million previously. In April, we brought it down to $150 million dollars and extended the maturity to 2031. We also are, as I mentioned, reducing our total bonds out there outstanding. So we repurchased 75 million dollars of principal unsecured bonds, all this trying to continue to reduce our overall quantum of debt to make our companies more stable and give us more opportunities for the future. And also, in addition, we have a share repurchase program a 50 million dollar authorization of that runs through the 2027 time period march 2027 and we still have about 37.5 million of reauthorized repurchased funds available to us at this time the next slide just looks at our 2026 revenue profitability guidance and gives you some sense of what we've changed i won't go through in detail but this is the slide that we posted during our earnings call in August of 2026 as we think about the future of our company and the full year 2026 expectation. Let me talk a little bit about the business catalyst for growth. This goes back to some of the things I've said before, but just to give you some review of it. In terms of the organic growth opportunities, there's Tembexa. It's a product for the treatment of smallpox. It's a therapeutic treatment that also has potential applications for the treatment of Mpox. We're out studying that right now and the outbreak of Mpox that's occurred in Africa. We have Ibanga, which is for Ebola. That's currently under continued evaluation. Right now, we're scaling that up. We have Raxibacumab. It's a monoclonal antibody for the treatment of anthrax. In addition, we have one additional product that's new on this list, a product that's a Japanese encephalitis virus vaccine for the treatment of Japanese encephalitis virus. That's something that we're making at our facility in Canton, Massachusetts, with the belief that once we have that product completely made in the U.S., there will be an opportunity that we can potentially sell that to the U.S. government. In addition, on Narcan, we're bringing out new innovation with Narcan. We're trying to make these new packaging configurations available. We believe that, once again, by making the product with new packaging innovation that makes a multi-count that we can make available, by making a backpack kit that clips onto the backpack, by making the wall displays that go right next to the defibrillator, the product will be available in more places. The more places it's available, the more lies, we can say. In addition, we're looking at what we can do to expand internationally and then use business development to expand our portfolio of product opportunities. Next page just looks at that pipeline of where we are today. Some of the things I've already talked about, I won't go through in great detail, but there's a couple of new products there. There's the Japanese encephalitis virus vaccine I just mentioned. And in addition, I talked about us developing a pan-Ebola monoclonal antibody therapeutic product. All those are opportunities for the future. Then we've got a couple of others, undisclosed products for categories that we haven't talked about, but specifically we think those are other good opportunities and then finally a pandemic flu product opportunity because we we unfortunately think that's going to be a problem i can't say when but we do think it's a problem at some point in the future final slide just in summation just in terms of where we are as a company i think what makes emergent unique is once again we are the market leader in the mcm product category the market leader in the opioid overdose with our Narcan product. We have multi-year turnaround underway. We have capabilities of providing additional products to the government depending on what their next needs are. We have a restructuring of our manufacturing network to make it very efficient. We believe that's an important part of the go-forward strategy for us in terms of managing our overall operating expenses while we build up the new product growth drivers for the future. We've restructured our debt. We've extended the maturities as well as reduced the total quantum of debt. I think that, once again, that makes us for a more stable company and more prepared to act on the business development opportunity for the future. And then finally, we're looking at the MCM growth opportunities because, unfortunately, there will be new pathogens that come forward. Hopefully, we're going to be prepared and or we'll be helping the U.S. government to prepare for those as we think about the future. That concludes what I wanted to comment on today. Thank you very much for your attention appreciate your interest in the emerging company have a great day everyone