Q2 2022 Emergent BioSolutions Inc Earnings Call
Thank you for standing by and welcome to the emergent Bio solutions second quarter 2022 earnings Conference call. 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 one one on your telephone as a reminder.
This program is being recorded and now I'd like to introduce your host for today's program, Bob Burrows, Vice President of Investor Relations. Please go ahead Sir.
Jonathan and good afternoon, everyone. Thank you for joining us today as we discuss the operational and financial results for second quarter 2022.
As is customary today's call is open to all participants in the call is being recorded and is copyrighted by emergent bio solutions. In addition to today's press release, there was a series of slides accompanying this webcast available to all webcast participants.
Turning to slides three and four during today's call, we may make projections and other forward looking statements related to our business future events, our prospects or future performance. These forward looking statements are based on our current intentions beliefs and expectations regarding future events.
Any forward looking statement speaks only as of the date of this conference call and except as required by law, we do not undertake to update any forward looking statements to reflect new information events or circumstances.
You should consider this cautionary statement as well as the risk factors identified in our periodic reports filed with the SEC when evaluating our forward looking statements. During today's call. We may also refer to certain non-GAAP financial measures that involve adjustments to GAAP figures in order to provide greater transparency regarding emergence operating performance. Please refer to the tables found in today's press release regarding.
And our use of adjusted net income adjusted EBITDA and adjusted gross margin and the reconciliations between our GAAP financial measures and these non-GAAP financial measures.
Slide five of the agenda for today's call will include Bob Kramer, President and Chief Executive Officer, who will comment on the current state of the company and Rich Lindahl, Chief Financial Officer, who will speak to the financials for Q2, 2022, which will also discuss the updated 2022 guidance.
This will be followed by a Q&A session, where additional members of the executive leadership team are present and available as needed.
Finally for the benefit of those who may be listening to replay. The webcast. This call was held and recorded on August one 2022. Since then emergent may have made announcements related to topics discussed during today's call and with that introduction I will now turn the call over to Bob. Please proceed.
Thank you Bob and good afternoon, everyone. Thank you for joining the call I want to provide you with a recap of our accomplishments last quarter and update you as well on our progress today, our year to date progress My comments are summarized on slide seven of the deck.
The evolving COVID-19 pandemic the war in Ukraine, the declaration of Monkey pox, as a public health emergency and the ongoing opioid overdose epidemic further highlight the crucial need for an all hazards approach and preparedness and response.
These events underscore the importance of early and consistent investments in developing manufacturing and stockpiling medical countermeasures before a crisis occurs. They also serve as a reminder for the critical role that public private partnerships play in protecting public health.
This is core to what emergent has done over the past 24 years and our commitment to supporting preparedness efforts remain steadfast.
This commitment is reflected in our strategic vision focused on public health threats, and where we can make a positive impact for patients and for our customers.
As we reflect on the second quarter and the first half of 2022, a few things we highlighted last February have become more clear.
First our medical countermeasures business remains a cornerstone of our strategy and our steady proven contributor to revenue and profitability.
Our relationship with the U S government is strong and growing as we explore and pursue additional opportunities through strategic partnering M&A and grants and contracts as evidenced by our Tim Baxter in the bank.
<unk> earlier this year, we also continue to see growing interest and demand from allied governments and organizations outside the United States.
Secondly, the ongoing opioid overdose epidemic remains a very serious public health threat as such market demand for our nasal naloxone products, primarily driven by Narcan nasal spray continues to increase resulting in performance at or beyond our expectations even as.
Generics continue to enter the market.
Third 2022 shaping up as a re baseline of year for our <unk> business and a return to our pre COVID-19 focus on our molecules and market offerings, namely through leveraging our expertise and development services to drive drug substance and drug product manufacturing.
Fourth we're making considerable progress in our product pipeline, including the acceptance for review of our BLA for <unk> seven nano nine and our ongoing chikungunya vaccine candidate Phase III trials you may note in particular that our phase III persistence data for this chicken.
Canada was published in the Lancet recently.
We also continued to make good progress around and advancing our earlier stage programs, including the initiation of phase one trials of our universal influenza vaccine candidate as well as our therapeutic product candidate for cyanide poisoning.
Finally quality and compliance are critical to our operations at a merger or doubling down on strengthening our culture of quality and compliance with ongoing programs to ensure meeting both our regulatory requirements and our own high standards.
Taking a closer look at each of the business lines first across our medical counter measure and government products business, we see continued momentum.
We continue to supply anthrax vaccine to the U S government under the existing 18 months option exercise.
Approximately $400 million.
Thereby ensuring product availability, while the FDA reviews, our BLA submission with.
We've been given a producer date of April of 2023, so assuming everything goes as planned we expect our review to be completed by then.
Turning to smallpox, we anticipate the U S government to exercise the next contract option for <unk> 2000, this quarter the latest component under our 10 year $2 billion procurement contract.
The HSR Act review period for the <unk> acquisition has expired and Comerica is anticipating a procurement contract from BARDA in Q3 of this year. Once the contract is awarded we expect to close on the deal shortly thereafter.
Relatedly. We are also closely following the monkey pox public health emergency and public comments by government and health officials about the distribution and use of a cam 2000 as part of vaccination plans, though it is not indicated for use against monkey pox.
As we have for more than 20 years, we're working with the U S and allied governments and organizations to support their public health preparedness needs across a wide array of threats.
As we announced in July we're excited to add the Banca and FDA approved monoclonal antibody treatment for infections caused by Ebola virus to our portfolio of medical countermeasures are collaboration with Ridgeback Biotherapeutics makes immersion responsible for the manufacturing sales.
And distribution of <unk> in the U S and Canada <unk> will remain the global access partners.
And our commercial products business. The opioid overdose epidemic continues to be a serious issue and our focus remains on increasing awareness of and access to nasal naloxone as.
As mentioned earlier Narcan and our nasal naloxone sales are on track through the first half of this year led by increased market demand and resilience in the U S public interest in Canadian markets, but offset in part by the continued decline in market share in the United States retail market with the introduction.
<unk> of generic competition.
As expected our second generic entrant is adding pressure to market share and pricing, including in the public interest market.
Our revenue guidance takes into consideration the maturing impact of generic competition and the anticipated increase in naloxone market demand given the continuing dynamics of the opioid crisis.
As we're now seeing a return to global travel we've restarted sales of vivo Ts in North America and in Europe and are in the process of Relaunching <unk> Cora in the United States and launching <unk> in Europe .
Turning to contract development and manufacturing services. We're in the early innings of transitioning this part of our business from a very heavy focus on Covid response during 2020 and 2021 to where we originally planned to take the business. When we established our 2020 through 2024 strategy.
Late in 2019.
This transition includes the following key elements.
Number one winding down the majority of our Covid response work, including activities previously performed in support of Jensen at one of our drug substance facilities.
Secondly, operationalize ing, the significant capital investments and drug substance and drug product capability and capacity expansion at several of our other sites during 2020, and 2021, and finally stepping up our long standing commitment to quality and compliance across our enterprise network.
Kirk.
Let me say a few words on each of these important initiatives.
With respect to winding down our Covid work, our expectation is to have a significant portion of the <unk> wind down of work completed by the end of Q3 and are hopeful for a timely contract resolution.
Following the end of that work will turn our attention towards resuming our internal product development and manufacturing at Bayview.
A decision on which product May go first into the facility. Following the conclusion of the Anson activities has not yet been finalized.
Over the past 36 months, we have expanded and upgraded our capabilities, including installing and working to qualify state of the art high speed fill finish lines and improving drug substance manufacturing flexibility.
These investments were contemplated when we established our 2020 through 2024 strategic plan at the end of 2019, while these new investments will take time to fully operationalize that gave us reason to be bullish on the future of the <unk> business and our molecule to market service offering we adore.
<unk> pre COVID-19.
Third and building on my earlier comments regarding our commitment to quality and taking lessons learned from the pandemic response, we're investing and strengthening our quality and compliance across all of our sites. This includes our previously discussed work at Bay view as well as planned maintenance and upgrades at our Winnipeg and Camden site.
In addition to enhancements driven by our own quality standards. The FDA last inspected our Camden site in February of this year. They provided some comments that we have incorporated into our investment plans and have indicated that additional feedback feedback will be forthcoming.
We await that feedback we're performing additional reviews of the facility with a third party to provide further oversight of manufacturing and product release processes. This is a proactive step to ensure compliance and delivery of medically necessary products to patients.
We anticipated the <unk> business to return to its pre COVID-19 growth trajectory as evidenced by our updated 2022 forecast of $115 million in revenue at the midpoint of our updated range, while lower than the performance we experienced during the pandemic. It is up from approximately 80 million.
In 2019.
This and future growth will be driven by executing on the three initiatives I mentioned earlier.
As rich will detail in his remarks, our second quarter financial performance and updated full year 2022 guidance reflect the themes that are shared namely the strength of our core medical countermeasure and commercial products businesses and the reality of the post COVID-19 environment for our <unk> offerings.
I remain optimistic about emergence long term success driven by the continued strength of our core business, our commitment to improving quality and compliance across the enterprise and the future potential of expanding product offerings, both through partnering and M&A as well as our internal development pipeline.
Looking ahead to the second half of 2022 and beyond we expect to close the deal with <unk> for Tim Baxter and began fulfilling the contract with the U S government as plan with.
We've initiated a second phase III study to evaluate safety and Immunogenicity of check the ERP vaccine candidate and adults 65 and above. This is in addition to the ongoing pivotal phase III clinical trial for individuals aged 12, $3 64, we expect to have data from both.
Miles in 2023.
We will actively seek to qualify and operationalize our enhanced <unk> capabilities in support of internal products and new business from new and existing customers and finally, we are continuously evaluating potential M&A and partnering opportunities that complement our core areas of focus.
And leverage our key capabilities.
Turning over to rich I want to formally welcome <unk> to the emergent board of directors. She was appointed as our director effective July 15th we will benefit greatly from our decades of experience, particularly her expertise in health care compliance and legal and regulatory oversight.
Importantly, I also want to thank the entire emergent team for their relentless focus on our patients and customers in a rapidly changing world and with that I'll turn it over to rich before taking your questions rich.
Thank you Bob Good afternoon, everyone and thank you for joining the call.
I'll start on slide nine with some summary thoughts.
As you heard just now from Bob while the business continues to make good progress towards our long range strategic plan, our financial results for the second quarter were mixed.
Our medical countermeasures or MCM products continued to perform well and are on track through the first half of the year and remain a strong foundational component of the company.
Accordingly, our portfolio of medical countermeasure offerings is poised to expand with the anticipated closing of the acquisition of Cam backstop, the oral anti virals smallpox treatment and the collaboration with rich back on <unk>, the monoclonal antibody treatment for Ebola.
Of note our updated guidance for 2022 does not yet include the impact of either of these products.
For the commercial products. We also delivered solid outcomes in the quarter driven principally by continued market demand for narcan nasal spray in the public interest or Pip channel Importantly, we expect the recent entrance of another generic product to increased competition in the Pip market starting in the second half of this year and our updated full year forecasts.
This reflects the anticipated impact.
As for <unk>. It is important to keep in mind that we are still rebase lining this business as we transition back to a pre COVID-19 growth trajectory in line with our strategic plan.
Second quarter's results as well as the updated 2022 full year CD Amo forecast are informed by three primary factors.
The wind down of our relationship with the handset.
As disclosed in our 8-K filings in June we believe the contract entitles us to a significant payment upon termination.
While we continue to pursue resolution of this matter given the uncertain timing of any potential future payments our forecast does not assume any additional revenue termination costs or contingent liabilities stemming from Janssen in 2022.
Second the expectation of limited protection production capacity at Camden in the short term as we focus on systems upgrades that reinforce our ongoing commitment to quality and compliance.
Third a transition to a post COVID-19 environment as Covid related demand wanes in the current phase of the pandemic.
Taken together our performance this quarter once again demonstrates the importance of revenue diversification and reinforces the overall strengthening durability of our products and services business model.
With that let's turn to the numbers.
As indicated on slides 10 and 11.
This include total revenues of $243 million.
A decrease over the prior year, driven primarily by a significant a significant reduction in Cobra related <unk> revenues that was offset by a solid increase in product sales revenues and as expected our key profitability measures declined versus the prior year with adjusted EBITDA of negative $29 million and adjusted net loss of 43 million.
Yeah.
Other notable items in the quarter include anthrax vaccine sales of $96 million.
Higher than the prior year due to timing of deliveries of 87 909 to the U S government strategic national stockpile.
Nasal naloxone product sales of $102 million slightly lower than the prior year and comprised a significant unit sales of branded narcan to use public interest and Canadian customers as well as contributions from sales of the authorized generic product license to sandoz as.
As expected we continued to see lower branded Narcan sales in the U S commercial retail market as a result of the generic launch late in the fourth quarter of last year.
Other product sales were $40 million higher than the prior year, driven primarily by deliveries to the U S government of <unk> IV and deliveries are back to international customers.
And to finish out the products discussion note that there were zero ATM revenues in the quarter as has been the case for several years, we anticipate the next U S government option exercise and thus the majority of this year's ATM revenue will be realized in the second half.
Turning to our services segment combined <unk> service and lease revenues were negative $2 million significantly lower than the prior year driven by several factors first the reversal of $13 million of previously recognized revenues from the Janssen contract to align cumulative revenue recognized with cumulative cash collected.
Next in CDMA services revenues the decline is largely due to lower combined revenues of $82 million from.
From Janssen and Astrazeneca, reflecting reduced production activities at the Beijing facility for these two customers.
The decrease also reflects limited capacity utilization of the Camden facility in the quarter driven by both the annual maintenance shutdown and activities to strengthen quality and compliance.
These factors were partially offset by an increase in contracted manufacturing activities at the Winnipeg facility.
And finally in CDMA lease revenues the substantial decline was primarily due to the completion in November 2021 of the companies public private partnership with BARDA in response to the COVID-19 pandemic.
Turning to operating expenses cost of product sales in the quarter was $91 million higher than the prior year due to the higher volume of product sales.
Cost of <unk> was $79 million.
Significantly lower than the prior year due to reduced production across the CMO network, partially offset by higher costs at the Winnipeg site, resulting from increased manufacturing activities during the period.
R&D expense of $50 million consistent with the prior year and reflecting our continued commitment to investments and pipeline programs intended to expand our product portfolio.
SG&A spend of $81 million lower than the prior year due to reduced professional services and marketing costs, partially offset by higher compensation costs.
Turning to additional financial information, let's move to slide 12, and review key <unk> performance metrics.
As of June 30, our total customer count was 70, a decline of one on a sequential basis and in the second quarter, we secured new business of $16 million all from existing customers and substantially all for non Covid work.
Next please turn to slide 13 for a review of segment performance during the quarter.
As you know in the first quarter call in April we introduced segment reporting information by products and services using the two key metrics of revenue and adjusted gross margin to measure each segment's performance.
The product segment revenues were $237 million, an increase over the prior year and adjusted gross margin was $148 million or 62% both increases over the prior year, reflecting the impact of higher sales volume and product mix.
As for the services segment revenues were negative $2 million a substantial decrease from the prior year for the reasons just discussed and adjusted gross margin was negative $81 million, reflecting the decline in production activities across our CMO network.
Moving to slide 14, I'll touch on a select balance sheet and cash flow highlights we.
We ended the second quarter in a strong liquidity position with $358 million in cash and available revolver capacity of just under $600 million.
Our net debt position was $475 million and net leverage remained modest at one three times.
Our operating cash flow was negative for the quarter and our investing and financing cash flows reflected our capital allocation priorities as follows.
Second quarter capital expenditures were $32 million as we continued to invest in expanded capabilities and capacity to support our diversified products and services business lines.
And in the second quarter, we repurchased approximately 700000 shares at a cost of $23 million pursuant to the $250 million repurchase authorization approved by our board of directors in November of last year.
Cumulatively as of June 30, we have spent $188 million of this authorization to repurchase four 4 million shares.
Please turn to slide 15, and 16 for a review of our updated 2022 forecast and associated assumptions.
Detailed in today's press release, we are resuming our guidance for the full year 2022 and have provided the following updated ranges.
Total revenues of 1.15 billion to $1 25 billion.
Anthrax vaccine sales of $280 billion to $300 million.
Nasal naloxone product sales of $300 million to $340 million.
Hey, Cam 2000 sales of $225 million to $250 million.
Other product sales plus contract and grants revenues of $235 million to $240 million.
<unk> revenues of $105 million to $125 million.
Adjusted net income of negative $15 million to positive $10 million.
Adjusted EBITDA of 80 million to $121 million and gross margin of 41% to 45%.
This full year 2022 forecast reflects the following key considerations.
Medical countermeasure product revenues are consistent with our previous assumptions related to deliveries under existing U S government procurement contracts, including the assumed exercise the ATM 2000 option.
Nathan Naloxone revenues reflect our most current assessment of the competitive dynamics given our experience in the first half of the year combined with the additional generic entrants in the second half of the year.
CD my revenues exclude any further contribution from your answer.
As discussed earlier, our forecast also assumes certain short term limitations on production capacity a campaign as we focus on quality and compliance upgrades as well as the continued transition to non COVID-19 work across the network.
Accordingly at the midpoint of $115 million. This updated level is a significant increase over 2019 CMO revenue of $80 million as we are benefiting from the operationalization of expanded capacity and capabilities at the Camden in Winnipeg sites and.
And as a reminder, the forecast does not include the impact of the pending acquisition of <unk> for our collaboration with rich back on a banca.
Finally, we are forecasting total revenues for the third quarter of $230 million to $270 billion.
To conclude please turn to slide 17 for some summary comments.
Our performance in the second quarter once again highlights the strength and durability of our diversified products and services business. We continue to see significant opportunity in our core medical countermeasure and growing commercial product segment addressing the preparedness and response needs of governments patients and other customers against a growing array of critical public health threats.
We also see long term potential for our <unk> offering given our capacity and capabilities coupled with the pace of innovation by our small to medium sized biopharma customers in this post Covid era.
Additionally, our R&D programs continue to progress, we're investing to strengthen quality and compliance across our entire site network.
And we will continue to prudently allocate our capital in a combination of M&A and partnering transactions as well as focused capital investments, while maintaining a strong financial position.
We look forward to keeping you informed as we execute on these plans and deliver further proof points that demonstrate the long term growth potential of our business.
That completes my prepared remarks, and I'll now turn the call over to the operator, so that we can start the question and answer session.
Operator.
Certainly once again, if you have a question. Please press star one one our first question one moment for our first question.
And our first question comes from the line of Brandon Folkes from Cantor Your question. Please.
Hi, Thanks for taking my questions and thank you for the guidance.
Can you just elaborate a little bit on the price action.
In the public interest market Narcan, just any color there in terms of sort of the.
Okay.
The magnitude of that headwind and maybe just could you provide some color.
Does this go state by state basis, maybe.
Price does come down in one state how long does it take to sort.
Flow through TV at the state.
And then maybe just staying on Narcan, how do you think about the potential implications for the proposed settlement.
Put out there which included tax portion of Narcan Kenya's. Thank you.
Yes, good afternoon, Brandon and thanks for joining the call.
A couple of comments.
First as we've commented on prior calls what we expected to see in terms of pricing pressure.
The market has materialized with the entrance of the the two generic products.
Both at the retail level, which we expected.
As well as now in the public interest market.
Can't give you specifics on the magnitude of the of the pricing because it is still forming but we are competing head to head with the generics.
For both market share as well as through pricing strategies, we were prepared for kind of what we're going through right now.
Having said that we're quite encouraged by the fact that.
<unk> can.
<unk> to perform exceptionally well.
In the public interest market as we expected given the name recognition.
In the years long.
History that we have with supporting the supply chain needs of many many customers in that very <unk>.
Diverse.
State and local government market. So we're pleased with that and quite frankly kudos to the team.
For again sticking to our guns in terms of.
Putting our emphasis on awareness.
As well as improving access to to Narcan in those very important markets.
I'm not sure I understand the second question.
And maybe I'll just go through.
Sure.
Sorry go ahead.
Just your thoughts on the potential implication.
For the public interest market all of the proposed settlements that Teva.
Put out on its earnings I think it was.
$1 2 billion Narcan Headwork fair enough, maybe 10 years.
How do you think in the past you've talked about sort of legit.
Logistics and the ability to supply that market. So just any color and how we should think about if that settlement does actually come into.
Yes.
Yes, I understand thanks, So clearly we are kind of on top of monitoring evaluating.
These market dynamics.
Including the potential settlement proposals that are being floated out there.
I think it's a bit too early to say with any degree of certainty how that will all shake out.
I think it's also important to note that.
For the first time that I can recall.
This proposed settlement includes an option for the states to receive cash payments as opposed to product offerings.
By the company so.
I think it's likely that a number of states will in fact.
Opt out for cash so they can use the proceeds as they see fit in their states for their constituents, but we'll have to wait brand and see how all that shakes out but.
Even with those headwinds.
Back to our expectations for the business in 2022, we're quite encouraged with the year to date performance, which gives us the conviction and the confidence to increase our guidance by almost $45 million in revenue for 2022.
Alright, Thank you very much.
Alright.
Thank you one moment for our next question.
And our next question comes from the line of Jessica Thanks from J P. Morgan Your question. Please.
Hey, guys. Good afternoon. Thanks for taking my questions on Camden, what was the FDA feedback you got was there any 43 issued and then on your comments about CMO Rebase lining can you.
You talk about what exactly you expect the new <unk>.
This line to be and when you expect to hit the baseline is that by the beginning of 'twenty three middle of 'twenty three.
Yes, thanks, Jess so first on Camden.
As I commented.
My prepared remarks.
We've had significant interaction with the FDA over the last year or so.
In February of this year they came for an inspection.
There was a 43 issued there were a handful of observations.
Not yet received the establishment inspection report that's one of the outstanding components of feedback there were waiting to hear from the FDA.
While we await that additional feedback as I said.
We're being proactive in terms of taking additional measures in Camden and throughout all of our sites to significantly ramp up our quality and compliance profile.
And whether that's through process improvements or training.
Again, we're being pretty aggressive, but we'll await the additional feedback from the FDA, which we expect in the next probably 30 days as it relates to <unk> I think.
We see the growth opportunities for the business today much the same way we did when.
When we generated our 2020 through 2024 strategic plan at the end of 2019, when the revenue for that business was about $80 million overall.
By that I mean, we continue to think that the molecule to market service offering.
With both development services and drug product.
As well as drug substance services.
It's a really effective a unique way for us to pursue opportunities we've talked a little bit about debut and the transition that we're going there.
That work by unwinding or winding down the answering to work to be done by the end of Q3, which kind of frees us up.
To look for opportunities to more fully utilize that facility going forward later this year and into 2023, I think what's a little different about today versus a couple of years ago. When we put to strategic plan together was the fact that we've made considerable investments throughout our CDMA network.
Both in terms of capital.
In terms of new capacity and new capability.
With new fill finish lines with process improvements, but importantly, with our quality and compliance profile with training process improvements and any number of initiatives that we're undertaking so to get to your point about the.
Future growth, we expect the growth to be.
No.
A bit measured over the coming years again, it'll take us probably 12 to 18 months to fully kind of get the.
The network back up and running effectively.
Leveraging the assets that we have but we're going to be doing so with a considerable amount of tailwind given the investments that we've made over the last couple of years.
Great and then rich forgive me if I missed this.
Sorry was there more.
Yes.
To add comment, yes, I was just going to add that.
And you see that we've updated our <unk> guidance range of 105 to 125. It certainly is a move towards that base lining effort.
So that is that we're already moving in that direction.
Okay, and then forgive me if I missed this.
The ATM guidance bump can you explain.
Blaine what that's related to.
Yes, so that's both a combination of assumed deliveries under the typical option exercise as we've had in the past couple of years and then we've also had some international sales on top of that.
Okay. Thank you.
Thank you.
For our next question.
And our next question comes from the line of Boris <unk> from Cowen Your question. Please.
Alright, Thanks for taking my question. This is Nick on for Boris.
So I just have a quick question about American <unk>.
So previously.
Right pretty much right. After you guys announced this.
This acquisition of <unk>, They said that.
The BARDA contract was likely to take place within the next couple of weeks or months no pushback and I. Just wanted to know if you guys had any reasoning behind us or any information as to why it's been pushed back, especially with monkey pox and not be declared a public health emergency.
Do you think that it may be push forward, but it seems to be just pushed back a little bit more.
Thanks.
Yeah. Thanks, Nick for the question and thanks for joining the call. So a couple of comments.
As I commented on my prepared remarks, the HSR process.
Waiting period.
For this expired last Friday, so now that I think gifts.
Gives BARDA and <unk> kind of the Green light.
To finalize the BARDA procurement agreement.
Which then gives us the.
The clear path to closing the transaction and moving forward.
Read anything into the.
The.
Perhaps perceived delay in getting the contract awarded obviously, Florida is looking at this very carefully.
And they are aware of that.
Our interest in acquiring the product from from chimeric. So.
Think again theres momentum to get this done and we're anxious to get down as well.
Great. Thank you and then just quickly on the you mentioned just a second ago that you had some international sales for 2000 is that just like one time sales or are those more so contracts.
I don't think I've seen any press releases on that recently.
Yes, Nick so.
We've had.
A number of ongoing.
Communications with Allied governments and public health threat organizations regarding their interest in our entire portfolio of medical countermeasures as rich indicated.
We are.
Yes.
Forecasting a bit of an uptick.
With respect to <unk>.
But we've also seen interest in any number of our other products in the portfolio. So this is part of the ongoing process and so we've been talking about for.
A number of years in terms of Allied government interest in and the entire portfolio. So nothing new here just obviously.
In today's environment.
There is a heightened sense of understanding and appreciation for having ready access to these critically needed kind of measures.
Great. Thank you very much.
Thank you.
And as a reminder, ladies and gentlemen, if you have a question. Please press star one on your telephone to ask a question one moment for our next question.
And our next question comes from the line of Chris Sakai from.
Cingular research your question please.
Hi, Yes, I mean for lease us premier here.
Can you provide some color on the generic share you are seeing.
And for the public interest.
The nasal spray.
Segment is it growing.
Yes, Chris Thanks for the question and thanks for joining the call. So clearly as we expected.
The generic products are.
And have claimed the majority of the retail market.
And now with the introduction of the second generic product recently, they're.
We're making some inroads into the public interest market, but we remain quite optimistic about our ability to hold our fair share of that market I think our team is.
Doing an extraordinary job of interfacing with literally thousands of customers in that public interest market.
And our commitment and our investments.
Establishing relationships with those customers taking care of their supply chain needs meeting their requirements.
<unk> benefits and there is a significant.
Value to the brand name and brand recognition of Narcan and the reputation that we have for being reliable supply chain providers for that kind of measure. So we're quite bullish on our ability to hold market share in that public interest market.
Okay. Thanks for that.
It looks like there's some updated guidance here.
On the nasal products.
How should we think about this.
The cadence of the sales for Q3 and Q4.
Yes, so I think you're referring to our updated guidance.
For Narcan naloxone products, we've updated the range from.
$2 40 to $3 10 to 300 to 340, so midpoint to midpoint its about a $45 million in revenue increase so I think again that reflects a couple of dynamics.
Most importantly, the continued.
Emphasis.
And demand at the state and federal level by any number of.
Customers for Narcan.
In terms of the cadence over the remaining year, we don't go into details about what's what amount of that is in Q3 or Q4.
But as rich indicated we've given the the total revenue projections for Q3 and that's as much details.
We're kind of prepared to provide right now.
Yes.
Okay. Thanks, Thanks for that.
Sure. Thank you Chris.
This does conclude the question and answer session of today's program I'd like to hand, the program back to Bob Burrows for any further remarks, thank you, Jonathan and with that ladies and gentlemen, we now conclude the call and 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 todays call will be available later today and accessible.
Through the investors landing page on the Companys website.
Again, thank you and we look forward to speaking with all of you in the future Goodbye.
Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.
The conference will begin shortly to raise your hand during Q&A you can dial one one.
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Okay.
Yes.
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