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Emergent (EBS) Posts Preliminary '20 Results, Gives 2021 View

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Emergent BioSolutions Inc. (EBS - Free Report) reported preliminary results for 2020, which reflect a tightened view from its previous guidance range. The company also issued guidance for 2021.

Shares of Emergent have rallied 78.2% in the past year compared with the industry’s increase of 9.2%.

price chart for EBS


2020 Preliminary Results

Emergent anticipates total revenues for 2020 in the band of $1.55-$1.56 billion, tightened from the previous guidance of $ 1.52-$1.58 billion. The mid-point of the range represents year-over-year growth of 40% from 2019 levels. This increase is mainly on higher contract development and manufacturing (“CDMO”) services revenues as well as higher product sales from Narcan (naloxone HCl) nasal spray and anthrax vaccines (BioThrax and AV7909).

Emergent increased its view of adjusted net income to $415-$430 million from the previous projection of $375-$405 million provided in November 2020.

We note that, to address the COVID-19 pandemic, Emergent inked several CDMO deals to provide manufacturing services to various companies to help them produce their respective experimental vaccine candidates against COVID-19.

The company signed a CDMO contract with Vaxart (VXRT - Free Report) and small biotech Novavax (NVAX - Free Report) to help them produce their respective vaccine candidates against COVID-19. Emergent also has similar agreements with pharma bigwigs like Johnson & Johnson (JNJ - Free Report) and AstraZeneca for supporting the manufacturing of their respective COVID-19 vaccine candidates.

Please note that AstraZeneca’s adenovirus-based coronavirus vaccine candidate, AZD1222, has already received an authorization for emergency use in the United Kingdom and India.

2021 Outlook

Emergent predicts revenues of $1.95-$2.05 billion for 2021. The Zacks Consensus Estimate for the metric stands at $2.07 billion for the period. Emergent envisions adjusted net income within $475-$525 million.

In 2021, Emergent forecasts aggregate product revenues and services revenue from the CDMO business to be in the range of $925-$965 million.

The company expects sales of Narcan nasal spray in the bracket of $305-$325 million. Deliveries of smallpox vaccine ACAM2000 (expected in the band of $185-$205 million) to the Strategic National Stockpile will continue under the Biomedical Advanced Research and Development Authority procurement contract. Sales of anthrax vaccines (BioThrax and AV7909) are expected in the range of $280-$310 million.

Zacks Rank

Emergent currently sports a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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