Emergent BioSolutions Inc.

Good afternoon, everyone. I'm the operator for today's call. Thank you for joining today as Emergent discusses their operation and financial results for the fourth quarter and full year. As is customary, today's call is open to all participants, and the call is being recorded and is copyrighted by Emergent BioSolutions. In addition to today's press release, there is a series of slides accompanying this webcast available to all webcast participants. Turning to slide three. During today's call, Emergent may make projections and other forward-looking statements related to their business, future events, their prospects, or future performance. These forward-looking statements are based on their current intentions, beliefs, and expectations regarding future events. Any forward-looking statement speakers only as today of this conference call and as today's Expected by, required by law, Emergent does not undertake to update any forward-looking statement to reflect new information, events, or circumstances. Investors should consider this cautionary statement as well as risk factors identified in Emergent's periodic reports filed with the SEC when evaluating their forward-looking statements. During today's call, Emergent may also discuss certain non-GAAP financial measures that involve adjustments to gap figures in order to provide greater transparency regarding emergence operating performance. Please refer to the table found in today's press release. Turning to slide four, the agenda for today's call will include Joe Papa, President and Chief Executive Officer, who will comment on our focus and priorities. Paul Williams, SVP and Head of the Products Business, will provide comments on NARCON, nasal spray, and finally, Rich Lindahl, EVP and Chief Financial Officer, who will speak to the current state of the company and financials for fourth quarter and full year and guidance for full year 2024. This will be followed by a Q&A. Finally, and for the benefit of those who may be listening to the replay of this webcast, this call was held and recorded on March 6th to 6th, 2024. Since then, Emergent may have made announcements related to topics discussed during today's call. And with that, I would like to turn the call over to Rich Lindell for opening remarks. Rich?

Thank you, Jonathan. Good evening, everyone, and thank you for joining us tonight. Before we get into our results for the fourth quarter and full year, I'd like to take a moment to introduce our new President and Chief Executive Officer, Joe Papa, who joined us a few weeks ago. We are thrilled to have him on our team and look forward to benefiting from his over 35 years of experience in the healthcare and pharmaceutical industry, along with his proven record as a transformational leader. Let me turn it over to Joe to say a few words.

Thank you, Rich, for the warm welcome. Good afternoon, everyone. I'm delighted to join the team in further emergent mission of protecting and enhancing the lives of patients. A lot of people have asked me what drew me to Emergent. That's easy. I've always been driven by the ability of pharma to save lives, and Emergent plays a unique and critical role in addressing public health crisis. As the leading biodefense contractor, we're addressing the most pressing and urgent threats Like the opioid epidemic, where data tells every six minutes an American dies from an opioid overdose. To anthrax, the number one bacterial infectious threat. To smallpox, the number one viral threat. To botulism, the most lethal biologic toxin. Ebola, a hemorrhagic fever. in chemical threats like nerve gas that have implications to our service men and women. Emergent has capabilities not many can match, or in other words, we have a significant moat around our business. Also, the near-term challenges that Emergent has been facing, notably our debt, have impacted our ability to achieve our full potential. I'm eager to work with the team and tackle these challenges head-on. Based on my three decades of experience in the industry and now knowing the determination of the Emergent board and the leadership team, I believe we can successfully navigate through these issues that Emergent faces today. I'd like to bring your attention to slide number six of our presentation. While I am only two weeks into my CEO role, we will move forward with a multi-year plan to stabilize, turn around, and then transform our company. Of course, a business transformation isn't going to happen overnight. The first phase, stabilizing Emergent, we expect will take us three to six months and will focus on continuing to build credibility with our key stakeholders, including employees, customers, government regulators, shareholders, and debt holders. For example, that means looking to strengthen the engagement of all of our employees and focusing on our exciting mission to protect, enhance, and help save lives. Also, it is clear we must de-risk our balance sheet and reduce our debt now. In that regard, today, we announce that we've entered into a forbearance agreement through April 30th of 2024 with our lenders. Rich will take us through this in more detail later on. The next phase, our turnaround, will begin in 2024 and will span into 2025. We'll focus on key growth opportunities and investments that will drive profitable growth by improving our operating performance, reduce our working capital, and may include product and or asset divestitures. We expect these actions will be critical in our efforts to reduce our debt and to de-risk our balance sheet. Our final phase, transformation, is planned for 2026 and beyond. We'll focus on strategically transforming emerging to achieve durable and sustainable growth and profitability. I also want to note an important driver of Mergent's path and future success is quality and compliance. Quality and compliance are key value drives for Mergent and will remain a top priority. Our products are relied upon to save lives in a time of crisis. Our patients and customers depend on us. We must continue to provide the highest quality products to ensure that customers, government agencies, and patients have confidence in us as a trusted partner. In 2023, emergent manufacturing facilities have been successfully inspected by five regulatory agents from around the globe and five other inspectional bodies for a total of 18 inspections, including three by the FDA that result in either an NAI status or VAI status. This includes the successful closeout of the Baltimore-Kansan Warning Letter in just 14 months. That's very significant. Truly remarkable accomplishments by the emergent team, the leadership team, their teams, and the broader organization. To this end, over my first two weeks, I've had the pleasure of meeting many of the talented and dedicated employees that work at Emergent and will continue to visit more Emergent facilities in the coming weeks. The commitment to the mission and values are so clear in each and every employee that I've met with. I look forward to visiting with more sites in the next few weeks and speaking directly with our team members. I'm confident that team insights will enhance how we deliver value to our customers, partners, patients, and shareholders. I'm going to take that feedback from the team, setting clear goals that we can line around together as an organization, and that's what's going to drive the results. It's a privilege to lead Emergent and chart a new chapter in this vital space, whether it's increasing access to Narcan nasal spray to help combat the opioid epidemic or continue to deliver important medical countermeasures to customers around the world. Emergent is providing critical products to address global health crisis in an increasingly dangerous world. I'm confident that these important treatments provide for a bright future, and I look forward to advancing the company's progress, improving its financial position, and driving value for shareholders. Given my two-week tenure at the company, Rich will provide an overview of the quarter. Before that, I'll turn it over to Paul to discuss Narcan nasal spray, our largest product, and representative of the important work Emergent does for patients. families, and communities, and will no doubt be an important value driver to the company going forward. So, Paul, we turn to you.

Thank you, Joe, and hello, everyone. Turning to slide 8 of the presentation, I'd like to start by reviewing the state of the opioid crisis. The latest CDC data show 105,000 people sadly died from drug overdose over the latest 12-month period, of which nearly 8 in 10 were opioid-related. Today, opioid overdose is the leading cause of accidental death in the U.S., and with the recent rise in synthetic opioids such as fentanyl, you see very little sign of abatement. These are unsettling and staggering statistics with so many families, loved ones, friends, and communities behind these lives lost. Since adding Narcan nasal spray to our portfolio in 2018, we continue to play a key role in responding to the devastating opioid crisis. And this past year was filled with historic, patient, and customer-first milestones that broadened access and increased awareness of our life-saving opioid overdose reversal treatment. 2023 began with a favorable FDA Advisory Committee's unanimous vote in support of our product's OTC use, and then FDA approval of that designation in March. We believe Narcan nasal spray should be immediately accessible alongside AED kits at businesses and workplaces, as well as across small businesses, in schools, and on airplanes, because an opioid overdose can happen to anyone, anywhere, and at any time. Our OTC retail launch Narcan Nasal Spray in August has provided access and availability across 32,000 outlets spanning mass, drug, grocery, and online retailers and e-commerce sites. In 2024, we will expand access further into businesses, workplaces, and other channels, as well as planning for the introduction of future line extensions. In the US, the public interest channel continues to grow. Our one-of-a-kind and proprietary distribution platform, Narcan Direct, supports our customers' needs and helps facilitate seamless ordering and distribution of the product to the many thousands of endpoints that are critical in dispensing Narcan nasal spray into the hands of those who need it. This past year, our ability to meet increasing demand enabled us to distribute approximately 22 million doses or 11 million two-dose cartons in the US and Canada to get Narcan into the hands of those who need it the most and provide a chance to save a life. And most recently in January of this year, we announced the shelf life extension of Narcan nasal spray from 36 months to 48 months in the United States. We believe this will increase adoption and access to the product. We've also made a tremendous impact with our Ready to Rescue campaign, which aims to break down the stigma associated with opioid overdose and educate the public, and in particular college-age adults. We continue to partner with public figures and notable influencers to expand awareness of the risks associated with opioid use and the importance of being prepared with Narcan nasal spray. In the coming quarters, we'll continue to execute on our plans to broaden access and availability of Narcan nasal spray and meet the demand as we seek to help save more lives. Now I'd like to turn it over to Rich to discuss the fourth quarter performance in more detail.

Thanks, Paul. I'll begin by expanding on the 8-K filing that Joe mentioned earlier in the call. Today, we announced that we have entered into a forbearance agreement with our lenders through April 30th while we continue our initiatives to increase operational performance, improve working capital, and pursue certain product or asset sales. As Joe highlighted, the transformation of the company will be a multi-year process, with the near term being heavily focused on strengthening our credit profile and capital structure. All decisions will be made through the lens of improving overall performance and enhancing enterprise value. While the details of the sale processes are confidential, we seek to generate additional cash proceeds that can be used to further reduce our debt and enable credit improvement as we transform the business. The forbearance agreement provides further evidence of the constructive relationship we continue to have with our lenders, and we look forward to providing further updates on our capital structure in the future. During the fourth quarter, Emergent made great progress improving the fundamentals of our business and advancing our core products. We continue to reduce costs and right-size operations in order to de-risk the business and strengthen our financial position. These actions reflect our sharpened strategic focus and the ongoing transformation of our business as we concentrate on enhancing revenue, improving operational efficiencies, and reducing debt. Throughout 2023, we maintained a very positive relationship with the U.S. government and other key medical countermeasure customers. As a result, we achieved significant contract awards that reinforced the value of our products as an essential part of the government's preparedness planning, which continues to evolve. Having said that, as I'll expand on in a few minutes, our 2024 forecast has more variability than in years past. In October, we appointed two pharmaceutical industry veterans to the board, Neil Fowler and Don DeGoglia, who bring more than 70 years of combined biopharmaceutical industry and sales experience. We believe their expertise will be valuable as we continue to grow Narcan sales, advance our other products, and partner with governments to prepare for public health threats. Let me walk through some of the progress we're making across our core products as highlighted on slide 10. As you just heard from Paul, after many years of research and development and in partnership with the FDA, we officially launched Narcan nasal spray as an over-the-counter opioid overdose reversal treatment in August last year. This is a monumental milestone for our company that expanded access to naloxone. Throughout the year, we've been able to meet the ever-increasing demand for Narcan, resulting in expanded access and broader awareness of Narcan and underpinned by strong support from federal and state programs. As we look ahead, we expect Narcan nasal spray to remain a key contributor to our growth in the near term. We also secured several important contract wins last year across our other core products, including a new $379.6 million U.S. Department of Defense contract for RSDL, a $75 million option to extend Emergen's existing contract for Sifendis, and a 10-year contract with BARDA valued at $704 million for the development and manufacturing scale-up and procurement of Evanga, our licensed treatment for Ebola virus. And we've already announced a contract award for 2024 with the U.S. Department of Defense valued at $235.8 million to supply BioThrax, a form of the anthrax vaccine. This new contract award is a testament to the importance of our medical countermeasure portfolio to the U.S. government's preparedness and response plans. Finally, we achieved many important R&D milestones this year. In July 2023, we received U.S. FDA approval of Sifendis, a two-dose anthrax vaccine for post-exposure prophylactic use. We received Health Canada regulatory approvals for our ACAM2000 vaccine and Timbexa drug that each addressed smallpox. We also submitted a supplemental BLA to the FDA that would extend ACAM2000's indication to include immunization against the MPOX virus. We expect to hear back from the FDA by the third quarter of this year. These contracts and development advances reflect the U.S. government's need to maintain a high level of preparedness against a wide range of potential threats that frankly are increasing as events unfold worldwide. Emergent is uniquely positioned to deliver these products in an efficient and cost-effective manner, and we are committed to supporting the U.S. government's efforts to address emerging infectious diseases and strengthen future preparedness. In 2023, we also completed several initiatives to improve our credit profile and de-risk our capital structure. As you know, we divested our travel health business, generating up to $380 million of proceeds, extended the maturity of our secured credit facility to May 2025, implemented actions to save over $160 million of annualized operating expense, and announced a strategic shift to focus on our products business. Turning to our results, we had solid revenue in the quarter, which led to full-year 2023 revenue in line with the midpoint of our guidance range provided on November 8th. Adjusted EBITDA was impacted by revenue timing and one-time write-offs, which I'll provide further detail on shortly. As indicated on slide 11, highlights in the fourth quarter include total revenues of $277 million driven by Narcan and Sifendis. Total segment adjusted gross margin of $86 million. Adjusted EBITDA in the quarter of $3.4 million and adjusted net loss of negative $40 million. Diving deeper into the quarterly revenues, important items on slide 12 include ANPRAC's MCM sales of $112 million driven by Sifendis deliveries to the U.S. government's strategic national stockpile, including initial shipments under the $75 million contract option provided by BARDA that we announced on November 28th. Narcan sales of $111 million, demonstrating the continued strength and durability of this product, driven by consistent demand from the U.S. public interest channel and the growing market in Canada. Revenue in the quarter also includes contributions from the launch of OTC Narcan into retail channels. Smallpox MCM sales of $12 million, driven by VIGID. Other product sales of $15 million, primarily related to RSDL and BAT. and total bioservices revenues of $21 million, reflecting our continued transition to focus on existing customers. Turning to operating expenses on slide 13, cost of commercial product sales in the quarter was $50 million, driven by strong sales of Narcan. Cost of MCM product sales in the quarter was $97 million, driven primarily by Sifenda sales volume and other medical countermeasure products, as well as an increase to inventory write-offs. cost of bioservices of $38 million, reflecting actions taken to improve profitability, R&D expense of $29 million, which includes one-time costs associated with project terminations, and SG&A spend of $90 million, including expenses supporting key Narcan initiatives offset by reduced expenses related to restructuring initiatives. With that, let's move to slide 14 and review segment performance during the quarter. Note that beginning with the fourth quarter of 2023, we now report our results in three segments, commercial products, MCM products, and services. This change will provide increased transparency for investors as we move forward. In the commercial segment, revenues were $111 million comprised entirely of Narcan, and segment adjusted gross margin was $61 million, or 55%. In the NCM segment, revenues were $138 million, driven by ANFRAX, RSDL, and BAT. The segment adjusted gross margin was $42 million, or 30%. As for the services segment, revenues were $21 million, and segment adjusted gross margin was negative $17 million. Shifting to slide 15, I'll highlight our 2023 full-year performance. Full-year revenue was $1.05 billion, in line with the midpoint of our previously provided guidance. Full year total segment adjusted gross margin was $336 million, or 33%, at the low end of our guidance range. Full year adjusted EBITDA was negative $22 million, also at the low end of our range. And adjusted net loss was negative $319 million. Transitioning to slide 16, I'll highlight the 2023 full year costs. Cost of commercial products was $210 million, driven by the continued strength of Narcan nasal spray in the existing channels, as well as the launch of Narcan nasal spray over-the-counter in late August 2023. Cost of MCM products was $306 million, which was influenced by sales volume, product mix, and unabsorbed manufacturing overhead costs. Cost of bioservices was $190 million, heavily influenced by our cost structure in the first half of 2023, which was a primary focus of the cost reduction actions we announced on August 8th. R&D expense was $97 million, including the chikungunya costs prior to the divestiture of the travel health business. SG&A was $368 million, which included additional marketing expenses related to NARCAN, legal fees, and restructuring expenses. Moving to slide 17, commercial product segment revenue for the full year was $497 million, up roughly $100 million versus the prior year. with a segment-adjusted gross margin of 58%, in line with the prior year and reflecting pricing reductions we took mid-year on Narcan nasal spray to improve access and affordability. Full-year MCM product segment revenue was $447 million, and segment-adjusted gross margin was 34%. The margin for the MCM business was influenced by sales volume, product mix, cost absorption, and inventory write-offs. And the services segment had revenue of $79 million and segment adjusted gross margin of negative $103 million, influenced by sales volume and costs in the first half of 2023 prior to our restructuring efforts announcement on this date. I'll now turn to slide 18 and touch on select balance sheet and cash flow highlights. We ended 2023 with $112 million in cash and $192 million of total liquidity, including availability under our revolving credit facility. The increase in cash and liquidity versus the prior quarter was due to sales timing and collection of accounts receivable. Operating cash flow in the full year was negative, but in the second half of 2023, it was positive $92 million. Capital expenditures were $52 million in 2023, and as of December 31st, our net debt position was $757 million. Turning to 2024 guidance, please see slide 19. As announced in our press release this evening, we are providing guidance for full year 2024 as follows. Total revenues of $900 million to $1.1 billion. Commercial product sales of $460 to $500 million, as we expect continued strong demand for Narcan in the U.S. public interest channel in Canada, combined with further growth with OTC Narcan in the retail channel. We're forecasting NCM product sales of $340 to $490 million. As we've previously noted, now that SIFENDIS is fully licensed, the primary procurement will transition from BARDA to the Strategic National Stockpile. We recognize that the U.S. government is balancing multiple threat preparedness needs with the level of funding provided by Congress, and that this fact could impact the magnitude and timing of, in particular, anthrax procurements in the near term, even as this potential threat remains a top strategic priority. As a result, we've provided a wide range of potential outcomes for the MCM segment. We continue to engage with our U.S. government stakeholders to improve the procurement visibility that is needed to support this critical capability for the benefit of all United States citizens. As a final note on the NCM products, we continue to see stable, consistent sales to the U.S. government under the long-term contracts we have in place for our plasma and chemical decontamination products, VIGIB, VAT, and RSDL. We're forecasting services segment revenue of $70 to $80 million, reflecting our commitment to serving our existing customers. Shifting to profitability metrics, we're forecasting adjusted EBITDA of $50 to $100 million, and reflecting the impact of our 2023 cost reduction actions, our capacity utilization profile, and the range of revenue expectations across our segments. For the full year of 2024, we're forecasting total segment adjusted gross margin of 40 to 45%, an increase over the 2023 level, primarily reflecting the full year impact of our profitability improvement efforts. Finally, we're forecasting Q1 revenue in a range of $200 to $250 million. That's all for the financial update. I'll now turn the call back over to Joe for some final thoughts.

Thank you, Rich. Before we go to questions, let's take a quick look at slide number 20. I just want to reinforce the human impact of our products on public health threats across the world. As I stated at the top of the call, every six minutes in this country, we lose a life to opioid overdose. So in the past half hour, approximately five lives were taken. Let me take it one step further. In one 24-hour period, We lose approximately 240 individuals. It's like losing a 737 airplane every day. Think about that for just a second. We are working hard to change this statistic. I cannot stress enough that the work we do in support of our mission to protect and enhance lives and ultimately help save lives is what inspires us all. Thank you again for joining us this afternoon. As you can see, the emergent team has made notable progress this year, and I look forward to building on this momentum as we execute on our transformation and the important catalysts underway. I believe we have an incredible opportunity to play a key role in public health. I'm excited to work with our team, to meet with the key stakeholders across the organization, and accelerate emergence return to growth. I know we are well positioned for success, driven by our focus on protecting communities and addressing the evolving landscape of the global health challenges. I look forward to speaking with all of you in the coming months to provide additional detail on perspectives and our near-term priorities and goals. Operator, let's now turn it over to you and open up the floor for Q&A.

Certainly. Ladies and gentlemen, if you have a question at this time, please press star 1-1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 1-1 again. Our first question comes from the line of Jessica Fay from JP Morgan. Your question, please.

Hey there. Good evening. Thanks for taking my questions. Three from me. First, what are the product or asset sales you are considering? Second, if I look at the 2024 commercial products guidance, can you just talk about what assumptions underpin that guidance? And just want to confirm if that for 2024 is only Narcan now, and it's how to think about the OTC contribution versus public interest in Canada. And then lastly, in the MCM guidance, can you talk about what that includes as it relates to the size and timing of an ACAM 2000 option as well as Tembexa and maybe a little bit about how to think about the split of revenues between anthrax and smallpox within that guidance. Thank you.

Okay, you have quite a bit there, Jessica. We're going to try to take them one at a time here, and I'll start with the first one on asset sales. I think it's probably best and foremost to say that what I was saying and Rich was saying is that we take the need to reduce debt very serious, and we're looking at all the opportunities to reduce the debt in our company. One of the ways that we're looking at is obviously improving our overall operating performance. That goes without saying. The second one we're thinking about is what are some of the working capital improvements we can make to also

One moment while we resume. One moment, ladies and gentlemen, while we resume. One moment.

Ladies and gentlemen, please remain on your line. Your program will resume momentarily. Once again, please remain on your line. Your conference call will resume momentarily.

Hi, this is Joe Popp in the Emergent Team.

Jessica, your line is open again.

Jessica, this is Joe Popp in the Emergent Team. Can you hear us?

Yep. Do you want me to repeat the question?

No, I have the question, and let us start. Once again, we apologize for not sure what happened with one of the satellites went down or something, but we're here. We didn't move, so we're glad to have a chance to finish the questions. Okay, number one, your question was relative to the question of asset sales, and I think what I wanted to say here is, number one, that you heard from Rich and myself that we take the reduction in debt very seriously. And we're looking at a number of things to reduce our overall debt structure. Obviously, the first step is in the operating performance of our business, and we're working on that. And Rich took some of those steps already in 2023, and we'll look to take more in 2024. Second part of what we're doing is looking at working capital management. If we reduce working capital, free up some cash, pay down some debt, that's another important thing we're going to do. And then, to your point, the question of looking at product and or asset sales is something that we are evaluating. I hope you respect I can't go into the specifics of what assets or what product at this time, but we want to just say that we're looking at those to round out the total program we have for debt reduction because we're looking at a very serious initiative for us overall looking at debt. So that's what I wanted to say in the first part of your question. I think the second part was on the commercial and Narcan.

Yeah, so just to clarify that the commercial guidance only includes Narcan for 2024. I think that was the first part of your question. And for the second part, I'll ask Paul to elaborate on the assumptions.

Yeah, so I think first off, I think it's really important to understand that the OTC designation really, for us, expands access across all channels and how can we make Narcan more available in as many access points as possible. I think particular to the public interest segment, I think we see very strong continued federal and state funding and support of those channels. On the retail side, I think we have a strong level of retail stocking, both in-store and online, and we've started to see consistent demand out of that channel. At the same time this year, we're going to be expanding further into business-to-business categories, particularly as it relates to industry, tourism, services, entertainment, and construction. That is, I think, also getting a full year's worth of OTC retail, too, versus last year.

Thanks, Paul. And then the third part of your question was, first of all, how are we thinking about ACAM and Tembexa procurement in the year? As far as ACAM is concerned, we are expecting additional procurement this year. We would expect that it would be sometime in the middle part of the year, which is consistent generally with prior practices. And at this point, our expectation is it's going to be relatively consistent with the level that we saw in 2023 for ACAM. For Tembexa, at this point, we're not anticipating additional procurement of Tembexa in this year. That has been deferred into a future period, and we'll certainly keep you posted as that goes on. As far as the anthrax and smallpox split, again, as I mentioned earlier, we provided a fairly wide range, really primarily driven by a wide range of expectations around anthrax as we look to clarify and get better visibility into what the procurement profile will look like this year for anthrax. And I've spoken to the smallpox piece already. So hopefully that addresses your questions, Jess.

Thank you. Let's take our next question, please.

Certainly one moment for our next question. And our next question comes from the line of Frank DeLorenzo from Singular Research. Your question, please.

Good afternoon, and thanks for taking my call. I have a couple questions, the first related to the MCM business and the second related to Narcan. So I'll just start with MCM. Following along the lines of ACAM 2000, assuming there's a positive FDA response to that SPLA toward the end of the year, say third quarter. How would that additional indication impact the overall sales potential for that product going forward, say in 2025 and beyond? And then separate from that, could you talk about your next potential submission to the FDA regarding the MCM space? Thanks.

Rick, do you want to take that?

Sure. So, as you referenced and as we talked about on the call, we do have the SBLA in front of the FDA to expand the ACAM indication to cover the Mpox virus. At this point, you know, given certainly the timing of that in the year, we are not anticipating any material contribution driven by Mpox in 2024. It does provide some incremental upside for the product as we move forward in 25 and beyond, and so we'll certainly provide further updates as we move on. As far as any other BLAs at this point, there's nothing in the queue immediately, but we will certainly continue to work on and investigate other possibilities as we continue to develop different ideas and products.

Okay, thanks. Regarding Narcan, can you give us a little more granularity on the public interest space and getting Narcan into the first aid kit segment, if you will? I know first aid kits are a big deal in a lot of different areas, whether it's schools or industry. Has there been any movement there? And separate from that, could you talk about a longer-term NXUS strategy for Narcan? Thank you.

Well, you want to take that one, please? Yeah, sure. Thanks for the question. I think to the first point, the public interest channel in particular, I think we continue to see really strong demand. Obviously, the public interest channel is really their goal is to get Narcan into the most vulnerable populations that are suffering from the opioid crisis in as many forms as possible. And we work with those organizations at the local level to enable Narcan to be in, whether that's in vending machines or other put-ups that best meet their needs in terms of what they're doing. To my point I mentioned earlier relative to us moving into, as part of our retail expansion, moving into broader business-to-business targets, getting into first aid kits in the workplace, in restaurants, and other particular areas like that. That is a priority for us this year as we expand in the retail segment.

Hi, this is Joe Bob. I had a chance to meet with Paul's team last week, and I can tell you they've got some very exciting plans, and they've looked at a lot of different line extension opportunities, other things that will just continue to expand our presence, and most importantly, just to make sure our access, we have more access available to try to curtail some of these unfortunate opioid overdoses that have occurred, as I said. But they've got some exciting plans. They're going to look at new line extension opportunities, kits, etc.,

And to your question on XUS, similar to what we do in the medical countermeasure space, we work with stakeholders outside the U.S. and multiple other countries, departments of health, ministries of defense, to best understand what their needs are in terms of how they're dealing with the opioid crisis, and we'll work with them to support their needs internationally in terms of whatever direction that goes.

Okay, thank you.

Operator, next question.

Thank you.

Once again, if you have a question at this time, please press star 1-1. And this does conclude the question and answer session. I'd like to hand the program back to Joe for any further remarks.

Well, thank you, everyone, for joining us this afternoon. It's a pleasure to have a chance to share with you some of the excitement we see at Emergent and some of the steps that we're taking today to make sure that we have a bright future for tomorrow. We look forward to meeting with all of you and talking to you in the future as we have a chance to go out and talk about the excitement that we see and opportunities that we're addressing and, importantly, some of the challenges we're addressing up front and taking on head-on. So thank you, everyone, for joining us today. Have a great day, everyone.

Thank you all. And with that, ladies and gentlemen, we now conclude the call. Thank you for your participation. Please note an archived version of today's webcast as well as a PDF version of the slides used during today's call will be available later today and accessible through the Investors Landing page on the company's website. Thank you again. We look forward to speaking with you all in the future. Goodbye.