Emergent BioSolutions Inc.

At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Frank Vargo, Vice President, Assistant Treasurer. Please go ahead.

Good afternoon, everyone. Thank you for joining today as Emergent discusses their operational and financial results for the first quarter of 2025. As is customary, today's call is open to all participants. The call is being recorded and is copyrighted by Emergent BioSolutions. In addition to today's press release, there are a number of slides accompanying this webcast available to all webcast participants. Turning to slide two. 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 speaks only as of the date of this conference call, and except as required by law, Emergent does not undertake to update any forward-looking statements to reflect new information, events, or circumstances. Investors should consider this cautionary statement as well as the 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 GAAP figures in order to provide greater transparency regarding Emergent's operating performance. Please refer to the tables found in today's press release. Turning to slide three, the agenda for today's call will include Joe Papa, President and Chief Executive Officer who will comment on our turnaround progress and a high-level summary of Q1 2025 performance, and Rich Lindahl, EVP and Chief Financial Officer, who will provide further details on the first quarter 2025 financials, as well as provide full-year guidance for 2025. Joe Papa will conclude by discussing the 2025 business outlook and key catalysts for growth, followed by Q&A. Finally, for the benefit of those who may be listening to the The replay of this webcast, this call was held and recorded on May 7, 2025. Since then, Emergent may have made announcements related to topics discussed during today's call. And with that, I would now like to turn the call over to Joe Papa for opening remarks. Joe?

Good afternoon, and thank you for joining us to review our first quarter 2025 earnings. This is Joe Papa, CEO of Emergent, and I'm joined today by Rich Lindahl, our Chief Financial Officer. I hope to provide brief comments on our progress with our multi-year turnaround plan and the first quarter results. Then I'll hand it over to Rich to review the financials. And then I'll return to provide some additional commentary on our business and our 2025 priorities. And then, as Frank mentioned, we'll close with a Q&A. Turning to slide five, we continue to make great progress executing on our multi-year plan to stabilize the company, streamline our operations to improve profitability, and transform the company to achieve long-term, sustainable growth built on emerging strength. Throughout the quarter, emergent colleagues executed on our strategic plan with a laser focus on improving operational efficiency and driving profitable growth. I want to call it three great Q1 achievements, all while keeping the emergent mission statement to protect and save lives at the center of our work. We delivered on our revenue and adjusted EBITDA targets, while we further improved our cash and liquidity positions. We partnered with U.S. government and allied nations to ensure preparedness with medical countermeasures, and we delivered life-saving Narcan nasal spray across the U.S. and Canada to patients, customers, and communities. And third, we completed two strategic business development transactions that aligned with and enhanced Emergent's core capabilities. Let's turn to slide six for a more detailed review of the great work of the Emergent team in the first quarter. Based on a great team effort, we are reaffirming revenue and adjusted EBITDA guidance for 2025. We improved our cash position in the quarter. At the end of the first quarter, we have cash of $149 million on the balance sheet, which includes approximately $36.5 million for the sale of the Bayview site in Baltimore. Additionally, we have $50 million from Bavaria and Nordic milestone payments. $30 million was received in the first quarter, and $20 million addition has already been received in the second quarter. We also expect to benefit from strong receivable cash collections in the second quarter. Our net leverage is now 2.8 times adjusted EBITDA, which is a remarkable achievement since it was around 5.7 times back in the first quarter of 2024. With our improved cash position and $100 million of the fully undrawn revolver, we have a total of $250 million in liquidity available to us for our strategic growth initiatives, both internally and for external business development. We have focused emergency business today to concentrate on our core strengths of medical countermeasures and opioid overdose reversal treatments. We are committed to combat the opioid overdose epidemic and help save lives. We continue to meet the demand for Naloxone with Narcan nasal spray, which is by far the category leader. In the first quarter, we managed through two one-time events with Narcan. a third-party distributor selling short-dated generic Naloxone inventory at a reduced price, and states proceeding with caution as it relates to federal funding process for Naloxone. We now have greater clarity in our encouraged NARCAN revenue progress we are seeing in the first six weeks of the second quarter. At MCMs, we had a very favorable quarter with a significant amount of international revenue while maintaining our strong relationship with U.S. and allied government partners. Through extensive meetings with U.S. government stakeholders, we have a better transparency on expectations for 2025 deliveries, which supports our 2025 guidance ranges. From an R&D perspective, our new chief medical officer, Simon Lowry, has created and is implementing a strategy to evaluate several of our current product line extensions. Two examples of that are a better understanding of the utility of Tembexa in MPOX treatment through the Africa CDC MOSA trial, and our efforts to facilitate the availability of ACAM2000 for the ongoing MPOX epidemic in Africa with the World Health Organization. Let's shift to slide seven to look at our North America-centric manufacturing model in more detail. Two key points related to our emergent model. All of our MCA products are manufactured in the U.S. or Canada and are U.S. MCA compliant, which means they are currently not subject to tariffs between U.S., Canada, and Mexico. We are actively managing our future inventory orders to mitigate any material tariff impacts associated with components sourced from the European Union. Based on the U.S. manufacturing focus and the existing information, we believe our business is relatively shielded from tariff impacts. Now I'd like to turn the call over to Rich to walk through the Q1 financial results.