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Good day, and thank you for standing by. Welcome to the Q3 2025 Emergent BioSolutions Inc. Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand your conference over to your first speaker today, Frank Vargo, Vice President and Treasurer. Please go ahead.

Good afternoon, everyone. Thank you for joining today as Emergent discusses their operational and financial results for the third 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 series of slides accompanying this webcast available to all webcast participants. Turning to Slide 2. During today's call, Emergent may make projections and other forward-looking statements related to their business, future events, prospects or future performance. These forward-looking statements are based on their current intentions, beliefs and expectations regarding future events. Any forward-looking statements 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 3. The agenda for today's call will include Joe Papa, President and Chief Executive Officer, who will provide an update on the company's transformation plan and highlight key results; and Rich Lindahl, EVP and Chief Financial Officer, who will provide details on the third quarter and year-to-date 2025 financial results as well as provide an update on full year 2025 guidance. Joe Papa will conclude by discussing the company's business performance and key catalysts for growth, followed by Q&A. Finally, for the benefit of those who may be listening to a replay of this webcast, this call was held and recorded on October 29, 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. Joe?

Thank you, Frank, and hello, everyone. Welcome to Emergent's third quarter 2025 earnings call. This is Joe Papa, CEO of Emergent, and I'm joined today by Rich Lindahl, our Chief Financial Officer. I will start by providing third quarter highlights, and then Rich will review the third quarter financials. I'll return to review key business catalysts to drive growth. We'll close with a Q&A session. Turning to Slide #5. The Emergent team's aspiration is to be the leader in solving public health crisis around the world. As part of our mission to protect and save lives, we develop and deliver highly complex products that address some of the world's most pressing threats. Based on the efforts of our team, we had another great quarter and are on track to exceed our initial 2025 revenue and adjusted EBITDA guidance. Year-to-date, we have secured 11 contract modifications and product orders for our biodefense business while maintaining our market leadership position in the nasal naloxone category. We have a durable biodefense business. Model has a North America-based supply chain for our products with manufacturing in the U.S. or in USMCA-compliant facility. Finally, we believe our differentiated capabilities in plasma and hard-to-manufacture products position us to be a strategic long-term partner for our customers. Turning to Slide 6. Emergent was founded 25 years ago, and our business is unlike traditional pharmaceutical companies. In fact, we have the most diversified biodefense and naloxone product portfolio. It is focused on addressing the global health -- public health threats of smallpox, anthrax, mpox, Ebola, botulism and even opioid overdose emergency situations. Just yesterday, we released a new survey finding that reinforce bioterrorism remains a significant concern to informed public policy leaders. Turning to Slide 8. We are making great progress with our multiyear transformation. During 2025, we continue to make strategic investments for the long-term growth while creating significant value for our stakeholders. We are achieving operating margin improvements and evaluating best options to advance top line growth while maintaining our attractive cost structure. On Slide 9, we provide a more detailed look at the third quarter, included exceeding our internal guidance on both the top and bottom line. Third quarter revenues of $231 million were $21 million above the high end of our Q3 guidance range of $180 million to $210 million. Our profitability continues to improve. And year-to-date, we have already achieved the high end of our full year adjusted EBITDA guidance range with $194 million generated as of the third quarter. Both the revenue and profitability of the business exceeded our internal management expectations and the analyst consensus. Based on the year-to-date performance, we are increasing our adjusted EBITDA guidance range, $195 million to $210 million, up from $175 million to $200 million. Our liquidity remains very strong. We now have access to $346 million in financial capacity to invest in additional growth and capital deployment. This includes $246 million of balance sheet cash and our undrawn revolver. We are pleased with the significant collection of cash for accounts receivable even during the first days in Q4. We are selectively deploying our capital to create stakeholder value. Our net leverage improved to approximately 2x net debt to adjusted EBITDA, down from 3.3x in the third quarter of 2024. In the third quarter of 2025, we also repurchased some Emergent bonds and continued with our share repurchase program where we have spent $15.8 million of our $50 million 12-month program. We are excited by the progress in the MCM segment with 4 new contract modifications added in the third quarter. We also see upside from our international customers, which represent 34% of our MCM sales year-to-date, which is up from the mid- to high teens in past years. Our leadership in naloxone remains strong, and we are committed as ever to combating the opioid overdose epidemic and saving lives. With 2 months left in the year, we feel very good about our 2025 performance and are actively working to establish additional growth drivers for 2026 and beyond. On Slide 10, we summarize the strong performance of our naloxone business year-to-date. We remain the leader in the naloxone category amongst public interest customers, and we are benefiting from a stabilized U.S. pricing market for naloxone. Quarter-over-quarter, NARCAN unit volume grew by 13% and revenue grew by 9%. This sequential growth reaffirms that we have moved past the onetime first quarter events. In fact, NARCAN demand remains strong. We expect continued growth of the entire market, which may provide a tailwind to our business. Now I'd like to turn the call over to Rich to walk through the third quarter financials.

Thanks, Joe. Good afternoon, everyone. We appreciate you joining the call. We're off to a strong start in the second half of 2025. Our third quarter revenue came in at $231 million, exceeding the upper end of our guidance range by $21 million, driven by sequential growth of NARCAN and the addition of 4 new contract modifications. Through the third quarter, we continue to see year-over-year improvements in both gross margin and adjusted EBITDA margin, highlighting the efficiency of our business that delivered 38% adjusted EBITDA margin this past quarter. To further highlight our strong performance, net income for the third quarter was $51 million. Year-to-date net income was $107 million and year-to-date earnings per share was $1.89. Year-to-date performance has also exceeded our internal expectations. We're raising our total revenue guidance to a range of $775 million to $835 million, a $5 million improvement at the midpoint. And we're increasing our adjusted EBITDA guidance to a range of $195 million to $210 million, a $15 million increase at the midpoint as compared to our prior forecast. The profitability and cash generation of our company has allowed us to focus on creating opportunities to generate additional shareholder value. In the third quarter, we deployed cash towards both equity and debt repurchases, taking advantage of opportunistic pricing. Even with these actions, our cash position and leverage ratio remained in a strong and stable position. Both of our business segments outperformed in the quarter. And importantly, we saw no disruption from external macro factors that may be pressuring the rest of biopharma. We continue to play a vital role as a trusted partner to both the U.S. government and our international partners with growing demand for our medical countermeasures as nations prioritize preparedness and response capabilities. Please turn to Slide 12 to review our third quarter financials. I'll start by noting that the prior year comparisons fully reflect our restructuring actions from early 2024. Highlights of the quarter include total revenues of $231 million. As a reminder, third quarter 2024 benefited from a partial quarter of now divested revenues from RSDL and the Camden facility. Adjusted EBITDA margin of 38%, an increase of 200 basis points versus the prior year, underscoring our continued strong profitability in our -- with our efficient platform. Adjusted gross margin of 61% improved 200 basis points year-over-year, driven by a more favorable product mix, the expansion of strategic global partnerships and a leaner cost structure stemming from our divestitures and restructuring initiatives. And finally, operating expenses of $52 million were $38 million lower compared to the prior year. Of note, you can see that our SG&A spend declined roughly 50% from last year. Additional third quarter revenue details can be found in the appendix. Turning to Slide 13, I'll walk through our performance for the first 9 months of 2025. Total revenues were $594 million, a decline compared to the prior year, reflecting the divestitures, the J&J onetime settlement in 2024 and strategic pricing actions taken on NARCAN. Adjusted EBITDA was $194 million or 33% of total revenues, an improvement of approximately $32 million and 1,400 basis points year-over-year. This outcome illustrates our strong operating leverage, the impact of our restructuring actions as well as a favorable product mix in 2025, driven by international MCM sales. Adjusted gross margin of 57% improved 1,100 basis points compared to the prior year. This expansion was driven by product mix and continued operational efficiencies stemming from the 2024 initiatives. Operating expenses totaled $176 million, a $133 million reduction from the prior year. Most of this reduction came from a $112 million decline in SG&A, while we preserved critical R&D capabilities to support long-term growth. Moving on to Slide 14. For the first 9 months of 2025, total revenue was $594 million, driven by total product sales of $545 million. As noted, 2024 includes revenue associated with onetime events and divested assets. The table in the upper right corner of Slide 14 normalizes 2024 revenue for these items. With that, let's break down performance by key product lines. Naloxone nasal spray revenue totaled $188 million, reflecting improved sequential momentum from the second and third quarters. Anthrax medical countermeasure revenue was $61 million based on the timing of government procurement orders. Smallpox revenue was $231 million, an increase of $30 million or 15%, reflecting deliveries under multiyear contracts and increased international orders. Lastly, other revenues were $49 million. As a reminder, last year's revenues included $50 million from the Janssen settlement as well as the Camden facility revenue prior to its divestiture in August '24. Normalizing for these items, other revenues grew $25 million year-over-year due to increased services demand in our Winnipeg facility, along with C&G revenue related to our Ebanga development program. Turning to Slide 15. I'm pleased to report continued progress in strengthening our financial position. For the third quarter of '25, total liquidity was $346 million compared -- comprised of $246 million of cash and $100 million of undrawn revolver capacity. Liquidity improved $96 million year-over-year. As of September 30, our gross debt was $693 million, down about $7 million versus prior year, driven by our unsecured bond repurchases during the quarter. Total net debt in Q3 2025 was $448 million, a $103 million or 19% reduction. Our net leverage remained in the 2x adjusted EBITDA range at the end of the third quarter as we both increased profitability and reduced gross debt. We also collected significant accounts receivable from late September MCM deliveries in early October despite the current U.S. government shutdown, further enhancing our operating cash flow. This outcome further reinforces the importance of our business. Please turn to Slide 16. Our capital allocation priorities are focused on 3 key areas: growth, debt repayment and share repurchases. First, we're investing in both organic and inorganic opportunities to strengthen our core businesses and drive future revenue expansion. Some important tailwinds include increasing international revenue from our medical countermeasures segment and our stronger balance sheet, which enables business development. We remain very judicious stewards of shareholder capital and continue to evaluate opportunities to advance internal R&D projects. Next, we continue to prioritize debt repayment to strengthen our balance sheet and improve financial flexibility. Beginning in August, we initiated a $30 million bond repurchase program and during the quarter, retired $6.9 million in principal amount of unsecured bonds for $5.8 million of cash. We are also committed to creating shareholder value through the 12-month $50 million share repurchase program we announced in March 2025. In the third quarter, we repurchased another 1.1 million shares for $8.9 million, bringing us to $2.3 million repurchased year-to-date for $15.8 million or an average price of $7 per share. We remain opportunistic with buybacks in future quarters as we evaluate market conditions and other factors. Transitioning to Slide 17, we are updating our full year '25 guidance by raising the midpoint of our revenue and profitability metrics. Further details are as follows: total revenues of $775 million to $835 million, an increase of $5 million at the midpoint; adjusted EBITDA in the range of $195 million to $210 million, an improvement of $15 million at the midpoint. We're also raising our adjusted gross margin guidance to a range of 52% to 54%, a 200 basis point improvement over our prior guidance at the midpoint. Based on the strong performance year-to-date across our segments, we're also raising the midpoint of our medical countermeasures products revenue guidance while maintaining our prior guidance range for commercial products. Segment revenue guidance is as follows: MCM product sales of $450 million to $475 million. We continue our enduring partnership with the U.S. government, which is further evidenced by the 11 contract modifications we've received year-to-date for our medical countermeasure products. Commercial products, including KLOXXADO, in the range of $265 million to $300 million. Year-to-date, commercial product sales were $188 million with stable pricing across the U.S. public interest channel. Our performance in 2025 reinforces our market-leading position in the opioid overdose reversal space. In closing, on Slide 18, we're continuing the turnaround phase of our multiyear plan with solid performance in the first 9 months of 2025. Our 2025 revenue outlook remains focused on our core business across both the medical countermeasures and commercial segments. Of note, international sales now represent 34% of the company's MCM segment, which is up meaningfully from the high teens in prior years. We are closely monitoring this trend and making targeted investments to facilitate this growth. Our partnership with the U.S. government and international customers remain strong as evidenced by the 11 contract modifications year-to-date. Our gross margins and profitability have continued to improve throughout the year, and we're generating positive operating cash flow while enhancing our liquidity position. Our leverage ratio is stable at approximately 2x adjusted EBITDA. Looking ahead, our plan remains consistent. We're pursuing strategic growth investments while actively seeking opportunities to deliver value to our shareholders. I'll now turn the call back to Joe to discuss our business outlook and catalysts. Joe?

Thank you, Rich. Turning to Slide 20. Let's begin with our naloxone business. Our entire Emergent organization is proud of the tangible impact that NARCAN has on saving many lives from opioid overdoses in the United States and Canada. Next month, we will recognize the 10-year anniversary from the U.S. FDA approval of the prescription, NARCAN Nasal Spray, and we will highlight the tremendous work that is going to expand access through its over-the-counter availability in 2023. And with ongoing efforts to expand NARCAN access, adding KLOXXADO into our NARCANDirect platform for ease of purchasing, combined with the over $50 billion in opioid litigation settlement dollars, we believe that our portfolio will continue to align with the overall naloxone market growth expectations. Moving to Slide #21, I'd like to review the key results from our recent biodefense survey. There is significant bipartisan support favoring biothreat preparedness. The bottom line is that amongst policy opinion leaders, the perceived risk of bioterror threats is high and bioterrorism even outpaces concerns about nuclear risk. This is because biological attacks are viewed to be more feasible, more imminent and those surveyed were concerned about the overall preparedness. This quarter, we have secured 4 new U.S. government contracts worth approximately $155 million combined. We also successfully secured an incremental $29 million of MCM product orders with an international government partner. International sales have been a key growth driver in 2025 and represent 34% of our MCM sales year-to-date, which is meaningfully higher from prior years. On the public health front, the Emergent team was in continuous communication with our Ebanga commercial partner, Ridgeback Biotherapeutics. Ridgeback, along with other organizations and local health authorities, directly supported efforts during the recent Ebola outbreak in the Democratic Republic of Congo. This outbreak, which is one of several over the last 5 years was a stark reminder of the continued frequency and threat of the Ebola virus disease. Global readiness and resilience are key to being prepared for the next potential outbreak. Earlier this year, we announced our continued collaboration with BARDA to advance Ebanga development towards supplying treatment, ensuring we are prepared against Ebola. On Slide 22, we outlined our outlook on future growth and cash deployment. Our plan is to invest the cash we are generating from our profitable business segments into 2 growth tracks. First, exploring government collaborations for new biodefense products. The second is to identify value-creating external commercial programs that align strategically with our current business model and capabilities. In summary, on Slide #25, we have adjust -- we have outperformed our top line and adjusted EBITDA guidance expectations in the third quarter. We are raising our full year revenue guidance while also raising our adjusted EBITDA guidance to $195 million to $210 million. Throughout 2025, our operating margin and cash flow have grown significantly as we execute our multiyear turnaround plan. In conclusion, we have a unique and diversified biodefense portfolio. We are proud leaders addressing the overdose epidemic through our life-saving naloxone products. We will take additional steps to generate value for all our stakeholders, and we will strive the highest standards of quality, ethics and compliance across the entire Emergent enterprise. And with that, I look forward to taking your questions. Operator, can you please open up the line for questions.

[Operator Instructions] Our first question comes from the line of Jess Fye from JPMorgan.

I have several. First, what drove the strong year-over-year growth in other products specifically? Second, with international driving 34% of MCM orders year-to-date, can we think of these orders as recurring? Are they part of multiyear contracts? Or are they one-off orders? And can you remind me how the gross margin on international MCM orders compares to the gross margin associated with U.S. MCM sales? Then for NARCAN, you mentioned OTC sales and Canadian sales fell year-over-year. What are you seeing in each of those segments of the business? And should we consider any impact from the government shutdown to the NARCAN business this quarter? And what about the MCM business?

Okay. There's quite a bit there, Jess. Thank you for the questions. Rich, you want to take the first part about the other category in terms of what's there?

Yes. So a lot of it is driven by contracts and grants with the Ebanga program having significant activity this year. And that's really probably the major driver there.

I think the second question you had about our international contracting and is that a recurring revenue base or the onetime. We've worked very diligently over the last 18 months where we made some investments in our international platform to reach out and get more international revenue and sales. And I'm glad to say that, that is paying off, and we are seeing that. So we view this as part of a concentrated program and activity. Admittedly, any given contract is for a set amount of product in a set amount of time. But we clearly see the international opportunity is one that will be a growth opportunity for us in the future. So probably the best answer is these products are certainly part of a specific order for a specific quantity at a specific time, but we do view this as being an international growth opportunity, especially as we know the European Union and other parts of the world are continuing to ramp up their capabilities in this entire area of biodefense and Strategic National Stockpile that they're setting up. And our team has been delighted to try to help them as they get ready for this European Union Stockpile program on Strategic National side. We're trying to help them think through that type of process. On the next part of your question, I think, was international gross margin. And one of the things I can say is our international gross margins higher. The answer to that is yes. And one of the issues that we have is that we have committed to the U.S. government and that they help us with our funding for our programs and our products that they would -- U.S. government would get what we refer to as most favored nation pricing. So as a result of that, they usually get the best price and other countries pay a little bit more. It's not a big margin difference, but there is a little bit better pricing for the U.S. government and that they helped us with the development of our products. The next question I believe was NARCAN and Canada and what's happening there. We're making good progress. We talked about a number of different project agreements that we have with the Canadian provinces, and we're making good progress there. I would say that's something that's going to be variable in any given quarter in terms of when the sales happen in the third quarter, the fourth quarter or next year, but we're making very good progress. Canada is recognizing that they've got issues with opioid overdoses and they're looking to us to help them satisfy some of that demand out there. So we're making good progress there. There is going to be some variability quarter-over-quarter in terms of when the order gets shipped in third quarter, fourth quarter or first quarter, but we are very happy with the relationship we have with the Canadian government. Final question I think you had was government shutdown. And I can tell you firsthand, the U.S. government employees that we work with at the Strategic National Stockpile of BARDA, Department of Defense continue to work every day, and they're going above and beyond to call of duty in terms of what they're doing, notwithstanding the shutdown. And I can tell you firsthand, Rich and myself and the rest of our team had a meeting with the highest levels of BARDA, Department of Defense and the Strategic National Stockpile just last week. So everything we see is they continue to move forward on these important strategic initiatives that in terms of what the biodefense really represents in the U.S. is an important must-do activity. So they keep working hard, and we're obviously there to support them in any way we can. I think I got all that, Jess, but -- operator, next question.

Yes. Our next question comes from Raghuram Selvaraju from H.C. Wainwright & Co.

This is Eduardo on for Ram. I was hoping to get a little update on the Rocketvax collaboration, if you have any -- anticipate any meaningful catalysts over the next 12 months?

Sure. Just a reminder for everybody, earlier in the year, we agreed with Swiss Rockets, the parent of Rocketvax to work with them on 4 project opportunities. They are making good progress on the first product that we've acknowledged, they do have funding for the Phase I of that -- research of that product. They are now obtaining the initial quantity of clinical trial material to get that trial started. Our expectation that trial will start sometime in the early part of 2026. And I remind you what we believe is really important with the Rocketvax technology is that it is different than the mRNA technology. It's not mRNA, but it is a fast to develop technology, but it uses live attenuated virus technology, vaccine technology. And by doing that, it could be developed quickly, similar to mRNA. However, there's durability in the immune response because they use a live attenuated version. So that's why we're excited about it because it falls under something called Project NextGen as the U.S. government is looking for the next virus outbreak, how can it be controlled? And they view this type of technology as being potentially important to that next wave of outbreaks, whatever pandemic it may be. So yes, Rocketvax in progress. We're working with them. There's still a lot of work to be doing, but they have the funding for the Phase I starting sometime in 2026.

Is there another question you'd like to ask?

Sure. Yes. Could I get -- just kind of curious more on the MCM products this time. Which of the products do you think is going to be the principal driver of U.S. government contract-based revenue going forward? And do you have any ideas what -- why that might be?

Yes. I think the advantage that we have in Emergent is we have the most diversified product portfolio in the biodefense world. And we all recognize that the biodefense category is -- we're living in an increasingly dangerous world. And the technology, as we showed in our survey in biodefense is something that could be very quickly rolled out by some terrorist group. So we think it's important that we are prepared. I think it really comes down to -- for us, it's just having the diversity of the portfolio so that we're ready for any potential activity, and we work very closely with BARDA, Strategic National Stockpile, Department of Defense to ensure that whatever happens that we're prepared to help them and we're working very closely with them. And as I said, we meet with them on a regular basis to get prepared. So I don't know if I want to pick out any singular product. I think they're all important to us. And I think what's probably the most important thing about when you think about Emergent is the diversity we have, whether it be products for smallpox, whether it be a vaccine or a therapeutic, products for anthrax, whether it be the vaccine or therapeutic, products for botulism. We've got products of mpox. We have all of them. And I think that's what really truly sets us apart from the other players in the space. Clearly, in the new category, do we like the opportunity with TEMBEXA? Do we see the continuing outbreaks of Ebola? Yes, those are important things for us as well, and I think they'll drive a big part of our future. Thank you for the question.

Thank you for your question. This concludes the question-and-answer session. I would now like to turn it back to Joe Papa, CEO, for closing remarks.

Well, thank you, everyone, for joining us today. We very much appreciate your interest in our company. Please reach out if there's any other additional questions, but we're excited about what Emergent is accomplishing this year. I think we're well on our way to have another good year for us and another great quarter and very much thanks to all people working at Emergent for all the work they've done to help us have a very strong year-to-date. Thank you, everyone, for joining us today. Have a great day.