Emergent BioSolutions Inc.

Good day and thank you for standing by. Welcome to the Q4 2021 Emergent BioSolutions Incorporated Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star and zero. I would now like to hand the conference over to your speaker today, Bob Burroughs, Vice President of Investor Relations. I will now turn the call over to the company. Please proceed.

Thank you, Judy, and good afternoon, everyone. Thank you for joining us today as we discuss the operational financial results for fourth quarter 2021 as well as full year 2021. As is customary, today's call is open to all participants, and the call is being recorded and is copyrighted by Immersion File Solutions. In addition to today's press release, there is a series of slides accompanying this webcast available to all webcast participants. Turning to slides three and four, during today's call, we may make projections and other forward-looking statements related to our business, future events, our prospects, or future performance. These forward-looking statements are based on our current intentions, beliefs, and expectations regarding future events. Any forward-looking statement speaks only as of the date of this conference call and except as required by law, we do not undertake to update any forward-looking statement to reflect new information, events, or circumstances. Investors should consider this cautionary statement as well as the risk factors identified in our periodic reports filed with the SEC when evaluating our forward-looking statements. During today's call, we may also refer to certain non-GAAP financial measures that involve adjustments to GAAP figures in order to provide greater transparency regarding emergence operating performance. Please refer to the tables found in today's press release regarding our use of adjusted net income, adjusted EBITDA, and adjusted gross margin, and the reconciliations between our GAAP financial measures and these non-GAAP financial measures. Turning to slide five, the agenda for today's call will include Bob Cramer, President and Chief Executive Officer, who will comment on the current state of the company. and Rich Lindahl, Chief Financial Officer, who will speak to the financials for 4Q21 and FY21. Rich will also discuss in detail the 22 forecast, including 1Q22 revenue guidance. This will be followed by a Q&A session where additional members of the executive leadership team are present and available as needed. Finally, for the benefit of those who may be listening to the replay of the webcast, this call was held and recorded on February 24, 2022. Since then, Immersion may have made announcements related to topics discussed during today's call. And with that introduction, I would now like to turn the call over to my colleague, Bob Kramer. Bob, please proceed.

Thank you, Bob, and good afternoon, everyone. Thank you for joining the call this afternoon. Today, I'd like to provide a brief recap of 2021, share some important highlights from each of our business lines, as well as our R&D pipeline, and then turn our attention to 2022 and beyond. My comments are summarized across slides six through eight in the deck that's accompanying this call. Before I go any further, I want to thank our entire emergent team, now more than 2,500 strong, for their continued focus and commitment to our mission of protecting and enhancing lives. Today's results demonstrate our team's resilience, and I couldn't be more grateful for their work delivering meaningful outcomes for patients while continuing to fight the COVID-19 pandemic. I'd also like to acknowledge Emergent's founder and executive chairman, Fuad Elhibri, who has announced his retirement effective April 1st of this year. On behalf of everyone at Emergent, both past and present, I want to thank Fuad for his vision, his dedication in building Emergent into the company that it is today. Turning to our results, I first want to underscore a few key accomplishments for the year. First, we achieved record revenues in 2021 of $1.8 billion, with more than $500 million in adjusted EBITDA and positive cash flow. 2021 continued to trend toward achieving our 2024 financial goals. Second, with the latest announcement regarding AstraZeneca vaccine drug substance, we've supplied more than 130 million dose equivalents of COVID-19 vaccine for use around the world. Next, we realized more than 600 million in government contract options being exercised in the second half of 2021 alone, including for our smallpox vaccine, ACAM2000, and our next generation anthrax vaccine, AB7909. Fourth, we initiated the rolling BLA submission for AB 799 and the pivotal Phase III clinical trial for our single-dose chikungunya virus VLP vaccine candidate. Fifth, we secured more than $400 million of new business for our CDMO services business. And finally, Emergent delivered more than 5 million units of Narcan, the equivalent of more than 10 million doses while continuing our support of work for those at risk of an opioid overdose, including increased advocacy to expand access to naloxone. In addition, in 2021, we reorganized our operating structure to focus on customers and markets, resulting in three distinct business lines. First, the medical countermeasure business, second, commercial, and finally, CDMO services. We also aligned our research and development function to enhance the delivery of pipeline, which includes both clinical and preclinical stage programs. Now let's turn to our performance in the year ahead. As mentioned, our medical countermeasure business secured more than 600 million in government contract options in the second half of last year. While COVID-19 has captured the headlines, impacts from lesser known but potentially more significant public health threats remain a risk. We continue to supply the U.S. government and allied governments around the globe with medical countermeasures for anthrax, smallpox, botulism, and chemical agents, and we continue to work with the U.S. government agencies like BARDA, NIH, NIAID, and the U.S. Department of Defense to advance solutions in areas where there is a great unmet need. In our CDMO business, It remains durable and sustainable with strong and stable base of clients across development services, drug substance manufacturing, and drug product manufacturing and packaging. In 2021, the value of secured CDMO contracts exceeded $400 million and spanned a variety of therapeutic areas in addition to the ongoing COVID-19 pandemic response. We also enhanced our drug product service capability by bringing online a new high-speed fill finish line at our Camden facility and installing a high-speed viral fill finish line at our Rockville facility, the latter of which we anticipate validating by Q1 of 2023. As for our COVID-19 vaccine work, our most recent discussions with J&J have indicated that they are evaluating their global supply chain as they assess the demand for their COVID-19 vaccine. Based on this information and in coordination with J&J, we're taking the opportunity to begin our normally scheduled maintenance period for Bayview facility earlier than anticipated and also to extend it in order to make improvements and modifications. These enhancements will enable us to meet the needs of J&J while planning for Bayview's future return to non-pandemic work as part of our CDMO network, a key step in enhancing in advancing the growth of our CDMO business. As a result, we're updating our revenue guidance for 2022 to fall between 1.3 and 1.4 billion in revenue. Importantly, our contract with J&J remains unchanged, and Rich will provide more details on the guidance in a few minutes. Turning now to our commercial products business, as opioid overdoses and deaths rose to record levels in 2021, we maintain our commitment to focus on expanding awareness, maintaining affordability, and increasing accessibility to Narcan by working with federal and state governments, healthcare providers, first responders, pharmacists, and insurers in the US and Canada. Our team continues to make meaningful contributions to combat the opioid crisis by helping millions prepare for an opioid overdose emergency. Late last year, our team adapted as a generic intranasal naloxone entered the market. Concurrently, we entered into a supply agreement with Sandoz, a global leader in generic and biosimilar medicines, to allow them to distribute an authorized generic of Narcan. Given the tremendous impact of the opioid epidemic, we remain committed to servicing distribution channels across North America to ensure Narcan is readily available for those in need. With regard to travel health, we made the right decision to pause the business during the pandemic while maintaining our commercial capability. As we look forward to international travel beginning to resume, we plan to restart the business with the relaunch of VivoTeef and Vexcora in key markets later in 2022. Staying within the product side of the business, let's now turn to our research and development efforts. Emergence R&D pipeline saw strong progress in 2021 with the initiation of the phase three pivotal trial for our single dose chikungunya virus VLP vaccine candidate, the phase one trial for universal flu vaccine candidate, and the rolling BLA submission for AB7909 in 2022. In 2022, we expect to share updates regarding the progress of these trials and other pipeline candidates, including additional clinical trials across our focus areas of infectious diseases, substance use disorder, and nerve agent antidotes. We also expect to share news related to the advancement of our autoinjector platforms, which we anticipate becoming part of our medical countermeasure business following appropriate regulatory approvals. We continue our ongoing efforts as well to evaluate M&A opportunities that would strengthen our leadership positions in targeted areas of public health and contribute to diversified, sustainable revenue growth for the business. I'd like to take this opportunity to congratulate a few members of the management team for their new and expanded roles, as announced earlier this week on Tuesday, and taking effect on March the 1st. First, Atul Saran, who currently serves as Executive Vice President and General Counsel, will assume the role of Executive Vice President and Chief Strategy and Development Officer. Global research, product development activities, and M&A will now be consolidated under Atul's leadership. Secondly, Dr. Chris Cabell will be appointed as Chief Medical Officer for Emergent, a role he held in an acting capacity for part of 2021 in addition to his concurrent role as Senior Vice President, Clinical Development. In this role, Chris will be reporting to a tool. And finally, I'm pleased to announce the promotion of Jennifer Fox to the position of Executive Vice President of External Affairs, General Counsel, and Corporate Secretary. In this role, Jennifer will be joining her colleagues on my executive management team. In addition to the legal team, Jennifer will now lead the global communications and public affairs, as well as the global government affairs teams. Many of you know Atul, and I'm sure you'll get to know both Jennifer and Chris on future calls. Before I conclude, I want to again thank our team for their hard work and dedication. Emergent's performance and resilience during the past year is a testament to our strategic focus and highly capable team. Looking forward, I'm encouraged by the stability and durability across our diversified portfolio, supported by our improved operating structure that better aligns us with patients and customers and more effectively positions us for success. So thanks again for joining the call. I look forward to your questions, and I'll now turn to Rich to review the financial results. Rich?