GAITHERSBURG, Md. - Emergent BioSolutions Inc. (NYSE: EBS) has been awarded contract modifications exceeding $250 million by the U.S. Department of Health and Human Services to supply medical countermeasures (MCMs) for anthrax, smallpox, and botulism. These contracts aim to maintain the nation's stockpile for biological threat preparedness.
The company will deliver millions of doses of four MCMs under the Administration for Strategic Preparedness and Response (ASPR) at the HHS. One of these includes a $30 million contract for the anthrax vaccine CYFENDUS® (previously AV7909), designed for post-exposure prophylaxis in adults. Another $99.9 million contract is for the ACAM2000® smallpox vaccine, licensed for individuals at high risk for smallpox infection.
Additionally, two new contracts totaling $122.9 million have been awarded for the supply of VIGIV® [Vaccinia Immune Globulin Intravenous (Human)], a treatment for complications due to smallpox vaccination, and BAT (LON:BATS)® [Botulism Antitoxin Heptavalent (A, B, C, D, E, F, G) – (Equine)], an antitoxin for botulism treatment. These supplies are for this year and into early 2025.
Paul Williams, senior vice president, products head at Emergent, stated that these modified contracts reaffirm Emergent's role as a trusted biodefense partner and underscore the sustainability of their product portfolio. Emergent specializes in developing, manufacturing, and supplying MCMs for both military and civilian use.
The contracts are part of Emergent's ongoing 10-year agreements with the Biomedical Advanced Research and Development Authority (BARDA) and ASPR. The products supplied under these contracts are critical components of the U.S. Strategic National Stockpile, which is designed to respond to public health emergencies.
The announcement is based on a press release statement and provides a glimpse into the U.S. government's ongoing efforts to prepare for potential biological threats by securing essential vaccines and treatments.
In other recent news, Emergent BioSolutions has witnessed a series of significant developments. The company's robust first-quarter earnings report for 2024 and the positive progress of its licensee, Bavarian Nordic's chikungunya vaccine, have been key highlights. Analyst firm Benchmark has increased Emergent BioSolutions' share price target from $5.00 to $8.00, maintaining a Buy rating, following these developments and the growing public demand for the company's anti-opioid treatments.
Emergent BioSolutions has also sold its Baltimore-Camden drug product facility to Bora Pharmaceuticals for approximately $30 million, a strategic move to streamline operations and enhance profitability. In addition, the company has revised its profit outlook for the year, projecting total revenues between $1 billion and $1.1 billion, with commercial product sales expected to range from $460 million to $500 million.
The company is also consolidating operations and reducing its enterprise footprint, which involves closing two facilities at an estimated cost of $18-21 million. These actions are part of a cost-saving strategy expected to save around $80 million annually.
InvestingPro Insights
Emergent BioSolutions Inc. (NYSE: EBS) has secured significant contract modifications from the U.S. government, reinforcing its position as a key player in the public health preparedness sector. Despite these positive developments, it is important to consider the company's financial health and market performance for a comprehensive understanding of its prospects.
InvestingPro data indicates that Emergent BioSolutions has a market capitalization of approximately $369.96 million. The company's Price to Earnings (P/E) ratio stands at -0.65, reflecting its current lack of profitability. Additionally, the company has experienced a substantial revenue growth of 21.67% over the last twelve months as of Q1 2024, with a remarkable quarterly revenue growth of 82.84% in Q1 2024.
InvestingPro Tips suggest that while Emergent operates with a significant debt burden and is quickly burning through cash, the stock has shown strong returns over the last month (23.86%) and three months (226.85%). Analysts do not anticipate the company will be profitable this year, and it has not been profitable over the last twelve months. Moreover, the company does not pay a dividend to shareholders, which may be a consideration for income-focused investors.
For those interested in delving deeper into the financial and market metrics of Emergent BioSolutions, there are additional InvestingPro Tips available at https://www.investing.com/pro/EBS. Readers can use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. There are 9 additional InvestingPro Tips that can provide further insights into the company's performance and potential investment opportunities.
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