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 3. 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 statements speaks only as today of this conference call.

And as 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 GAAP figures in order to provide greater transparency regarding Emergent's operating performance. Please refer to the table found in today's press release. Turning to Slide 4.

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 NARCAN 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 6, 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 Lindahl 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 and further Emergent's vision 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 a 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, hemorrhagic fever, and 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 #6 of our presentation.

While I am only two weeks in to my CEO role, we will move forward with a multiyear 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 we'll 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 derisk our balance sheet and reduce our debt now.

In that regard, today, we announced that we've entered into a forbearance agreement through April 30, 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 derisk our balance sheet.

Our final phase, transformation, is planned for 2026 and beyond. We'll focus on strategically transforming Emergent to achieve durable and sustainable growth and profitability. I also want to note an important driver of Emergent's past and future success is quality and compliance.

Quality and compliance are key value drives for Emergent 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 agencies from around the globe and five other inspectional bodies for a total of 18 inspections, including three by the FDA that resulted in either an NAI status or VAI status.

This includes the successful closeout of the Baltimore Camden warning letter in just 14 months. That's very significant. Truly remarkable accomplishment 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, 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, let me turn it 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 eight 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, we 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 lifesaving opioid overdose reversal treatment.

2023 began with a favorable FDA advisory committee's unanimous vote in support of our products 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 of 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 U.S., 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 U.S. 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 paired 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..

Total revenues of $900 million to $1.1 billion. Commercial Product sales of $460 million 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 MCM product sales of $340 million to $490 million.

As we previously noted, now that CYFENDUS is a 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 citizen.

As a final note on the MCM 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, VIGIV, BAT and RSDL.

We're forecasting Services segment revenue of $70 million to $80 million, reflecting our commitment to serving our existing customers. Shifting to profitability metrics.

We're forecasting adjusted EBITDA of $50 million to $100 million, 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 million 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 #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 Emergent's 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. [Operator Instructions] Our first question comes from the line of Jessica Fye from JPMorgan. 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 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 ACAM2000 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 it one at a time here. And I'll start with the first one on asset sales.

I think it's probably most important 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.

Second one we're thinking about is what are some of the working capital improvements we can make to....

[Technical Difficulty] One moment while we resume. [Operator Instructions] All right....

Hi, this is Joe Papa and the Emergent team..

Jessica, your line is open again..

Jessica, this is Joe Papa and the Emergent team.

Can you hear us?.

Yes.

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 serious 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 '24. 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 things 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 want 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 and as many access points as possible.

I think particularly 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 start 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 we're 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, there's -- 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..

Operator, let's take our next question, please..

Certainly. One moment for our next question. And our next question comes from the line of Frank DiLorenzo from Singular Research. Your question please..

Good afternoon, and thanks for taking my call. I have a couple of 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 ACAM2000, assuming there's a positive FDA response to that sBLA 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..

Rich, 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, given certainly the timing of that in the year, we are not anticipating any material contribution from -- 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 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 the 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 an ex U.S. strategy for NARCAN? Thank you..

Paul, do 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 meets their needs in terms of what they're doing.

To my point I mentioned earlier relative to us moving into the -- 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 Papa. 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 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 will look at, new line extension opportunities, kits, et cetera..

And to your question on ex U.S., similar to what we do with the medical countermeasures space, we work with stakeholders outside the U.S. in multiple other countries, departments of health, ministries of defense, to best understand what their needs are from -- 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. [Operator Instructions] 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 things that -- 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 upfront 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..