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Emergent (EBS) Q1 Earnings Miss Estimates, Revenues Beat
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Emergent BioSolutions Inc. (EBS - Free Report) reported a first-quarter 2023 adjusted loss of $3.17 per share, wider than the Zacks Consensus Estimate of a loss of $1.67. The figure also missed our model estimate of a loss of $1.62 per share. In the year-ago quarter, EBS reported earnings of 18 cents per share.
Revenues in the quarter totaled $165.1 million, down 46% from the prior-year period’s level. This decline was caused by a reduction in COVID-related contract development and manufacturing (CDMO) revenues. The top line beat the Zacks Consensus Estimate and our model estimate of $143 million and $143.8 million, respectively.
Shares of Emergent were up 6.36% at close on May 9, following the results.The stock has lost17.8% in the year-to-date period compared with the industry’s 5.4% decline.
Image Source: Zacks Investment Research
Quarter in Detail
Total product sales decreased 40.0% from the year-ago quarter’s level to $143.4 million. This was due to the year-over-year deterioration in sales of the Anthrax vaccine and ACAM2000.
Sales of anthrax vaccines (BioThrax and AV7909) were $21.9 million in the reported quarter, down 80% year over year. This decline can be attributed to a decrease in deliveries of AV7909 and BioThrax to the U.S. government’s Strategic National Stockpile.
Narcan (naloxone HCl) nasal spray added $100 million to product sales, up 8% year over year. This rise was likely due to higher volumes of Narcan sprays sold to public customers in Canada.
Sales of smallpox vaccine totaled $7.2 million, down 69% from the year-ago-quarter’s level, due to the timing of ACAM2000 international sales.
Other product sales amounted to $13.9 million, up 23% year over year. The increase was primarily driven by higher Vivotif and Vaxchora product sales.
Revenues from contracts and grants plunged 32% year over year to $6.5 million.
Total CDMO revenues came in at $15.2 million compared with $60.8 million in the prior-year period. CDMO services revenues declined 74% year over year to $13.4 million. CDMO lease revenues totaled $1.8 million, indicating a substantial decline from the year-ago quarter’s reported figure of $9 million.
This significant decline was due to negligible combined revenues from AstraZeneca (AZN - Free Report) and Janssen, a Johnson & Johnson (JNJ - Free Report) subsidiary.
In July 2020, J&J and Emergent entered into an agreement to provide CDMO services for J&J’s single-shot, adenovirus-based COVID-19 vaccine for five years. In June 2022, the companies announced their decision to terminate the deal, citing contract breaches.
The decline in CDMO lease revenues was largely due to a reduction of lease revenues related to the Janssen contract termination.
Emergent suffered a setback in 2021 due to a manufacturing mishap at its Bayview facility. Reportedly, the COVID-19 vaccine ingredients of J&J and AstraZeneca got mixed at the facility, which led to several faulty batches of J&J’s vaccine. Emergent lost its contract for AstraZeneca’s vaccine following the mishap.
2023 Guidance
Emergent has updated its guidance for adjusted EBITDA, adjusted net loss and net loss. The company also revised the categories used in discussing product/service level revenues.
Projection for total revenues remains unchanged in the $1,100-$1,200 million range. Emergent expects total revenues in the band of $210-$230 million for second-quarter 2023.
EBS anticipates a net loss of $185-$135 million for 2023 compared with the previous guidance of a loss of $180-$130 million. It also projects an adjusted net loss of $85-$35 million compared with the previous guidance of a loss of $80-$30 million.
Adjusted gross margin is expected between 39% and 42% (earlier estimate: 41-44%).
Management expects Anthrax Medical Counter measures (Anthrax MCM) sales — comprising AV7909, BioThrax, Anthrasil and raxibacumab — in the range of $260-$280 million. Revenues from the Narcan nasal spray are expected in the band of $360-$380 million (previously $290-$310 million).
Product sales from Smallpox MCM (comprising ACAM2000, Vigiv and Tembexa) are expected to add $235-$255 million to total revenues. EBS expects revenues of $120-$140 million (previously $165-$185 million) from other products.
It projects CDMO revenues in the range of $90-$110 million compared with the previous guidance of $115-$135 million.
Loss per share estimates for Ocuphire Pharma have narrowed from 29 cents to 24 cents for 2023 and from 86 cents to 81 cents for 2024 in the past 60 days.
The company’s shares have surged 64.6% in the year-to-date period. Ocuphire’s earnings beat estimates in three of the last four quarters and missed the mark once, the average surprise being 23.85%.
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Emergent (EBS) Q1 Earnings Miss Estimates, Revenues Beat
Emergent BioSolutions Inc. (EBS - Free Report) reported a first-quarter 2023 adjusted loss of $3.17 per share, wider than the Zacks Consensus Estimate of a loss of $1.67. The figure also missed our model estimate of a loss of $1.62 per share. In the year-ago quarter, EBS reported earnings of 18 cents per share.
Revenues in the quarter totaled $165.1 million, down 46% from the prior-year period’s level. This decline was caused by a reduction in COVID-related contract development and manufacturing (CDMO) revenues. The top line beat the Zacks Consensus Estimate and our model estimate of $143 million and $143.8 million, respectively.
Shares of Emergent were up 6.36% at close on May 9, following the results.The stock has lost17.8% in the year-to-date period compared with the industry’s 5.4% decline.
Image Source: Zacks Investment Research
Quarter in Detail
Total product sales decreased 40.0% from the year-ago quarter’s level to $143.4 million. This was due to the year-over-year deterioration in sales of the Anthrax vaccine and ACAM2000.
Sales of anthrax vaccines (BioThrax and AV7909) were $21.9 million in the reported quarter, down 80% year over year. This decline can be attributed to a decrease in deliveries of AV7909 and BioThrax to the U.S. government’s Strategic National Stockpile.
Narcan (naloxone HCl) nasal spray added $100 million to product sales, up 8% year over year. This rise was likely due to higher volumes of Narcan sprays sold to public customers in Canada.
Sales of smallpox vaccine totaled $7.2 million, down 69% from the year-ago-quarter’s level, due to the timing of ACAM2000 international sales.
Other product sales amounted to $13.9 million, up 23% year over year. The increase was primarily driven by higher Vivotif and Vaxchora product sales.
Revenues from contracts and grants plunged 32% year over year to $6.5 million.
Total CDMO revenues came in at $15.2 million compared with $60.8 million in the prior-year period. CDMO services revenues declined 74% year over year to $13.4 million. CDMO lease revenues totaled $1.8 million, indicating a substantial decline from the year-ago quarter’s reported figure of $9 million.
This significant decline was due to negligible combined revenues from AstraZeneca (AZN - Free Report) and Janssen, a Johnson & Johnson (JNJ - Free Report) subsidiary.
In July 2020, J&J and Emergent entered into an agreement to provide CDMO services for J&J’s single-shot, adenovirus-based COVID-19 vaccine for five years. In June 2022, the companies announced their decision to terminate the deal, citing contract breaches.
The decline in CDMO lease revenues was largely due to a reduction of lease revenues related to the Janssen contract termination.
Emergent suffered a setback in 2021 due to a manufacturing mishap at its Bayview facility. Reportedly, the COVID-19 vaccine ingredients of J&J and AstraZeneca got mixed at the facility, which led to several faulty batches of J&J’s vaccine. Emergent lost its contract for AstraZeneca’s vaccine following the mishap.
2023 Guidance
Emergent has updated its guidance for adjusted EBITDA, adjusted net loss and net loss. The company also revised the categories used in discussing product/service level revenues.
Projection for total revenues remains unchanged in the $1,100-$1,200 million range. Emergent expects total revenues in the band of $210-$230 million for second-quarter 2023.
EBS anticipates a net loss of $185-$135 million for 2023 compared with the previous guidance of a loss of $180-$130 million. It also projects an adjusted net loss of $85-$35 million compared with the previous guidance of a loss of $80-$30 million.
Adjusted gross margin is expected between 39% and 42% (earlier estimate: 41-44%).
Management expects Anthrax Medical Counter measures (Anthrax MCM) sales — comprising AV7909, BioThrax, Anthrasil and raxibacumab — in the range of $260-$280 million. Revenues from the Narcan nasal spray are expected in the band of $360-$380 million (previously $290-$310 million).
Product sales from Smallpox MCM (comprising ACAM2000, Vigiv and Tembexa) are expected to add $235-$255 million to total revenues. EBS expects revenues of $120-$140 million (previously $165-$185 million) from other products.
It projects CDMO revenues in the range of $90-$110 million compared with the previous guidance of $115-$135 million.
Emergent Biosolutions Inc. Price and Consensus
Emergent Biosolutions Inc. price-consensus-chart | Emergent Biosolutions Inc. Quote
Zacks Rank & Stock to Consider
Currently, Emergent has a Zacks Rank #3 (Hold).
A better-ranked stock for investors interested in the same sector is Ocuphire Pharma (OCUP - Free Report) , sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Loss per share estimates for Ocuphire Pharma have narrowed from 29 cents to 24 cents for 2023 and from 86 cents to 81 cents for 2024 in the past 60 days.
The company’s shares have surged 64.6% in the year-to-date period. Ocuphire’s earnings beat estimates in three of the last four quarters and missed the mark once, the average surprise being 23.85%.