Q1 2026 Emergent BioSolutions Inc Earnings Call

April 30, 2026

Operator: Good day, and thank you for standing by. Welcome to the Q1 2026 Emergent BioSolutions Earnings Conference Call. I would now like to hand the conference over to your first speaker today, Frank Vargo, Vice President, Treasurer. Please go ahead.

Speaker #1: After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press *11 on your telephone.

Speaker #1: You'll then hear an automated message advising that your hand is raised. To withdraw your question, please press *11 again. Please be advised that today's conference is being recorded.

Speaker #1: I would now like to hand the conference over to your first speaker today, Frank Vargo, Vice President Treasurer. Please go ahead.

Frank Vargo: Good afternoon, everyone, and thank you for joining us as Emergent discusses its operational and financial results for Q1 2026. As is customary, today's call is open to all participants, is being recorded, and is copyrighted by Emergent BioSolutions. In addition to today's press release, a slide presentation accompanying this webcast is available to all webcast participants. Turning to slide 2. During today's call, Emergent may make projections and other forward-looking statements relating to its business, future events, prospects, or future performance. These forward-looking statements are based on our current intentions, beliefs, and expectations regarding future events. Any forward-looking statements speak 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.

Speaker #2: Good afternoon, everyone, and thank you for joining us as Emergent discusses its operational and financial results for the first quarter of 2026. As is customary, today's call is open to all participants.

Speaker #2: It's being recorded, and it's copyrighted by Emergent BioSolutions. In addition to today's press release, a slide presentation accompanying this webcast is available to all webcast participants.

Speaker #2: Turning the slide to: During today's call, Emergent may make projections and other forward-looking statements related to its business, future events, prospects, or future performance.

Speaker #2: These forward-looking statements are based on our current intentions, beliefs, and expectations regarding future events. Any forward-looking statements speak only as of the date of this conference call and accept as required by law.

Speaker #2: Emergent does not undertake to update any forward-looking statements or 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 these forward-looking statements.

Frank Vargo: Investors should consider this cautionary statement, as well as the risk factors identified in Emergent's periodic reports filed with the SEC when evaluating these forward-looking statements. During today's call, Emergent may also discuss certain non-GAAP financial measures that include adjustments to GAAP figures to provide additional transparency regarding the company's operating performance. Please refer to the tables included in today's press release. Turning to slide 3. The agenda for today's call includes remarks from Joe Papa, President and Chief Executive Officer, who will provide an update on the company's leadership in public health preparedness, business performance, and key highlights. Rich Lindahl, EVP and Chief Financial Officer, will then review the Q1 2026 financial results and provide an update on the full year 2026 guidance. Joe will conclude with a discussion of the company's key catalyst for growth, followed by a question-and-answer session.

Frank Vargo: Investors should consider this cautionary statement, as well as the risk factors identified in Emergent's periodic reports filed with the SEC when evaluating these forward-looking statements. During today's call, Emergent may also discuss certain non-GAAP financial measures that include adjustments to GAAP figures to provide additional transparency regarding the company's operating performance. Please refer to the tables included in today's press release. Turning to slide 3. The agenda for today's call includes remarks from Joseph Papa, President and Chief Executive Officer, who will provide an update on the company's leadership in public health preparedness, business performance, and key highlights. Rich Lindahl, EVP and Chief Financial Officer, will then review the Q1 2026 financial results and provide an update on the full year 2026 guidance. Joe will conclude with a discussion of the company's key catalyst for growth, followed by a question-and-answer session.

Speaker #2: During today's call, Emergent may also discuss certain non-GAAP financial measures that include adjustments to GAAP figures to provide additional transparency regarding the company's operating performance.

Speaker #2: Please refer to the tables included in today's press release. Turning the slide 3. The agenda for today's call includes remarks from Joe Papa, President and Chief Executive Officer who will provide an update on the company's leadership in public health preparedness, business performance, and key highlights.

Speaker #2: Rich Lindahl, EVP and Chief Financial Officer, will then review the first quarter 2026 financial results, and provide an update on the full year 2026 guidance.

Speaker #2: Joe will conclude with a discussion of the company's key catalysts for growth, followed by a question-and-answer session. Finally, for the benefit of those who may be listening to the replay of this webcast, this call was held and recorded on April 30th, 2026.

Frank Vargo: Finally, for the benefit of those who may be listening to the replay of this webcast, this call was held and recorded on 30 April 2026. Since that time, Emergent may have made announcements related to topics discussed during today's call. With that, I will now like to turn the call over to Joseph Papa. Joseph.

Speaker #2: Since that time, Emergent may have made announcements related to topics discussed during today's call. With that, I would now like to turn the call over to Joe Papa.

Speaker #2: Joe.

Speaker #3: Thank you, Frank, and good afternoon, everyone. Welcome to our first quarter 2026 earnings call. This is Joe Papa, and I'm joined today by Rich Lindahl, our Chief Financial Officer.

Joseph Papa: Thank you, Frank, and good afternoon, everyone. Welcome to our Q1 2026 earnings call. This is Joe Papa, and I'm joined today by Rich Lindahl, our Chief Financial Officer. Let's turn to slide 5. Our aspiration at Emergent is to be the leader in solving public health threats around the world. Over the last 25 years, we have built what we believe is the most diverse biodefense product portfolio in the world. Our medical countermeasures address anthrax, smallpox, Mpox, Ebola, botulism, and complications from smallpox vaccination, alongside the leading branded naloxone franchise with our NARCAN Nasal Spray, which has a decade of trusted brand leadership. We believe in our unique position within the industry demonstrate just how public-private partnerships are critical to national security. Turning to slide 6.

Speaker #3: Let's turn to slide 5. Our aspiration at Emergent is to be the leader in solving public health threats around the world. Over the last 25 years, we have built what we believe is the most diverse, biodefense product portfolio in the world.

Speaker #3: Our medical countermeasures address anthrax, smallpox, mpox, Ebola, botulism, and complications from smallpox vaccination. Alongside the leading branded naloxone franchise with our NARCAN nasal spray, which has a decade of trusted brand leadership.

Speaker #3: We believe in our unique position within the industry, demonstrate just how public-private partnerships are critical to national security. Turning to slide 6. Since implementing our multi-year transformation plan in 2024, we have stabilized and right-sized the company in order to provide Emergent with a strong foundation for future growth.

Joseph Papa: Since implementing our multi-year transformation plan in 2024, we have stabilized and right-sized the company in order to provide Emergent with a strong foundation for future growth. 2026 marks a pivotal year of our transformation as we invest in high-growth opportunities. I'm pleased to note that this process is now well underway. We are focusing on segment revenue growth and improved operating performance. We are generating strong cash flow for continued investment in internal R&D and quality capabilities. We have identified product acquisition opportunities that address unmet medical needs and have the potential for sustainable long-term revenue growth. Debt reduction will remain a priority for us. In 2025, we reduced our net debt levels by approximately 22%, and we have planned for further improvement on our balance sheet and credit ratings.

Speaker #3: 2026 marks a pivotal year of our transformation as we invest in high-growth opportunities. I'm pleased to note that this process is now well underway.

Speaker #3: We are focusing on segment revenue growth and improved operating performance. We are generating strong cash flow for continued investment in internal R&D and quality capabilities.

Speaker #3: We have identified product acquisition opportunities that address unmet medical needs and have the potential for sustainable long-term revenue growth. Debt reduction will remain a priority for us in 2025 to reduce our net debt levels by approximately 22%, and we have planned for further improvement on our balance sheet and credit ratings.

Joseph Papa: Collectively, these activities are about putting in place the foundations for creating sustainable long-term value creation. To move to slide 8, we'll take a look at our Q1 highlights. Thanks to the great efforts of our Emergent team, our Q1 results are evident in both our top and bottom line performance. We reported Q1 revenue of $156 million, which exceeded the high end of our guidance range and was ahead of internal expectations. Adjusted EBITDA came in at $136 million, also above our internal expectations, representing a 23% margin. It's driven by continued efforts to deliver a lean and operationally efficient customer-centric business model. For example, networking capital improved by over $100 million since Q1 2025.

Speaker #3: Collectively, these activities are about putting in place the foundations for creating sustainable long-term value creation. To move to slide 8, we'll take a look at our first quarter highlights.

Speaker #3: Thanks to the great efforts of our Emergent team, our first quarter results are evident in both our top and bottom line performance. We reported first quarter revenue of $156 million which exceeded the high end of our guidance range and was ahead of internal expectations.

Speaker #3: Adjusted EBITDA came in at 136 million, also above our internal expectations, representing a 23% margin. It's driven by continued efforts to deliver a lean and operationally efficient customer-centric business model.

Speaker #3: For example, networking capital improved by over $100 million since Q1 2025. We improved our cash balance by $11 million versus the prior year to $160 million and our total liquidity increased to $260 million.

Joseph Papa: We improved our cash balance by $11 million versus the prior year to $160 million, and our total liquidity increased to $260 million. Our strong cash position enabled the repayment of $110 million in debt last year. On the capital allocation side, we continue to create value. In April, we announced the refinancing of our prior term loan, which enabled us to secure a more favorable interest rate. We also amended our revolver to $50 million and established a new delayed draw term loan facility for $75 million. We also continued our share repurchase program, buying back $9 million in shares in Q1. Since the start of the share repurchase program in 2025, Emergent has repurchased approximately $34 million of shares. Turning to our business performance, overall MCM performed very well.

Speaker #3: Our strong cash position enabled the repayment of $110 million in debt last year. On the capital allocation side, we continue to create value. In April, we announced a refinancing of our prior term loan, which enabled us to secure a more favorable interest rate; we also amended our revolver to $50 million and established a new delayed draw term loan facility for $75 million.

Speaker #3: We also continued our share of purchase program, buying back $9 million in shares in the first quarter. Since the start of the share of purchase program in 2025, Emergent has repurchased approximately $34 million of shares.

Speaker #3: Turning to our business performance, overall, MCM performed very well. Reflecting increased global demand and strategic diversification in our international market, we can now represent 37% of our total MCM revenue.

Joseph Papa: Reflecting increased global demand and strategic diversification in our international markets, which now represent 37% of our total MCM revenue. We received 4 contracted product orders in the quarter. With respect to the naloxone business, we continue to maintain the share of leadership. We command a competitive pricing strategy and recently launched our newest product offerings, the NARCAN nasal spray carrying case and a multi-pack configuration, both of which are already performing very well in the first month of launch. We believe on slide 9 the world is an increasingly dangerous place and public health preparedness in the face of potential threats is critical. We are proud of our long-standing partnership with the government of Canada. In Q1, we announced a $140 million multi-product agreement.

Speaker #3: We received four contracted product orders in the quarter. With respect to the naloxone business, we continue to maintain the share of leadership. We command a competitive pricing strategy and recently launched our newest product offering, the Narcan nasal spray, carrying case and a multi-pack configuration.

Speaker #3: Both of which are already performing very well in the first month of launch. We believe, on slide 9, the world is an increasingly dangerous place, and public health preparedness in the face of potential threats is critical.

Speaker #3: We are proud of our long-standing partnership with the government of Canada. In the Q1, we announced a $140 million multi-product agreement. We also executed $54 million VIG award with ASPER, and approximately $21.5 million delivery order to supply biofracts to the Department of War.

Joseph Papa: We also executed a $54 million Diga award with ASPR and approximately $21.5 million delivery order to supply BioThrax to the Department of Defense. Our MCM business represents an important driver of our future growth. With the added flexibility from our recent financing, we see multiple opportunities to acquire high growth and complementary products to our MCM portfolio. Our mission on slide 10 to protect and save lives is answered every day with the work we do to drive access, awareness, and availability of life-saving naloxone. We are in lockstep with US public interest customers, the Canadian health officials, retail customers in all the communities in need. We're keeping pulse on the staggering overdose death rates and ensuring our best efforts to help combat the thousands of lives lost each month.

Speaker #3: Our MCM business represents an important driver of our future growth. And, with the added flexibility from our recent financing, we see multiple opportunities to acquire high-growth and complementary products to our MCM portfolio.

Speaker #3: Our mission on slide 10 to protect and stabilize is answered every day with the work we do to drive access, awareness, and availability of life-saving naloxone.

Speaker #3: We are in lock steps with U.S. public interest customers and Canadian health officials retail customers and all the communities in need. We're keeping pulse on the staggering overdose death rates and ensuring our best efforts to help combat the thousands of lives lost each month.

Speaker #3: We believe over-the-counter access to Narcan should be more publicly accepted and normalized, just as other life-saving emergencies tools are like defibrillators or fire extinguishers, for that matter.

Joseph Papa: We believe over-the-counter access to NARCAN should be more publicly accepted and normalized just as other life-saving emergency tools are like defibrillators or fire extinguishers for that matter. Just in the news this week, with national attention on the opioid settlement funds of over $50 billion, which support state, local municipalities, tribes, and other entities to help turn the tide from the detrimental effects of the opioid crisis. The Purdue settlement alone released over $5 billion for the state for education and naloxone purchase. There's tremendous amount of work left to be done to expand access and awareness to naloxone and to ultimately bring the number of overdose deaths down to zero. Federal and state programs also continue to support naloxone funding and services through the SOR and Substance Use Block Grants. We just announced a new awareness effort with naloxone NARCAN for pro baseball player Davis Schneider.

Speaker #3: Just in the news this week, if national attention on the opioid settlement funds of over $50 billion, which supports state, local municipalities, tribes, and other entities help turn the tide in the detrimental effects of the opioid crisis.

Speaker #3: The PRODUCE settlement alone released over $5 billion for the states for education and naloxone purchase. There's tremendous amount of work left to be done since we had an access and awareness to naloxone and to ultimately bring the number of overdose deaths down to zero.

Speaker #3: Federal and state programs also continue to support naloxone funding and services through the SOAR and Substance Use Block Grants. We just announced a new awareness effort with naloxone Narcan for pro baseball player Davis Schneider.

Speaker #3: Davis Schneider shares his personal story in his late brother's honor. Our goal is to raise awareness of Narcan, help save lives from opioid poisoning so no more families feel the same heartbreak.

Joseph Papa: Davis Schneider shares his personal story in his late brother's honor. Our goal is to raise awareness of NARCAN to help save lives from opioid poisoning, so no more families feel the same heartbreak. Additionally, we recently announced a partnership with British Columbia to supply NARCAN Nasal Spray for the province's take-home naloxone program. This order follows an additional investment of CAD 18 million by the government of British Columbia. In the US public interest channels performed in line with our expectations for the quarter. US FDA approved our NARCAN Nasal Spray carrying case in multi-pa-actions, delivering on our promise to offer new line extensions to patients and customers. We will continue to engage the public across the country, especially in college campuses with our Ready to Rescue campaign to help drive adoption where young adults may be at risk.

Speaker #3: Additionally, we recently announced a partnership with British Columbia to supply Narcan nasal spray for the province's take-home naloxone program. This order followed an additional investment of $18 million Canadian by the government of British Columbia.

Speaker #3: In the U.S., the U.S. public interest channel performed in line with our expectations for the quarter. The U.S. FDA approved our Narcan nasal spray carrying case and multi-pack options delivering on our promise to offer new lined extensions to patients and customers.

Speaker #3: We will continue to engage the public across the country, especially in college campuses, with our Ready to Rescue campaign to help drive adoption where young adults may be at risk.

Speaker #3: Since 2016, Emergent has delivered more than $100 million doses of Narcan nasal spray to people, communities, and businesses across the U.S. and Canada to help save lives from opioid poisonings.

Joseph Papa: Since 2016, Emergent has delivered more than 100 million doses of NARCAN Nasal Spray to people, communities, and businesses across the U.S. and Canada to help save lives from opioid poisonings. On slide 11, we are pleased to share that part of our durable and sustainable footprint, we are now expanding our Canton manufacturing site in Massachusetts. Our new strategic partnership with Substipharm Biologics enables us to restart the manufacturing at the Canton facility to support the Japanese Encephalitis vaccine. Emergent entered into a U.S. distribution agreement with Substipharm to support the product opportunity with the U.S. government following U.S. FDA approval. This opportunity establishes our new approach to external manufacturing partnerships, moving beyond a fee for service CDMO approach to one that allows us to share in the product's potential success.

Speaker #3: On slide 11, we're pleased to share that part of our durable and sustainable footprint, we are now expanding our Canton manufacturing site in Massachusetts.

Speaker #3: Our new strategic partnership with Substance Farm Biologics enables us to restart the manufacturing at the Canton facility to support the Japanese encephalitis vaccine. Emergent entered into a U.S.

Speaker #3: We signed a distribution agreement with Substance Farm to support the product opportunity with the U.S. government following U.S. FDA approval. This opportunity establishes our new approach to external manufacturing partnerships, moving beyond a fee-for-service CDMO approach to one that allows us to share in the product's potential success.

Joseph Papa: In addition, just yesterday, we announced a second strategic manufacturing partnerships with SAB Biotherapeutics to advance their type 1 diabetes autoimmune candidate. This work will be led by our Winnipeg team. We are excited for the ability to partner with such a dynamic company. Let's hear from Rich, who will run through our financial results. Rich?

Speaker #3: In addition, just yesterday, we announced the second strategic manufacturing partnership with SAB Biotherapeutics to advance their Type 1 diabetes autoimmune candidate. This work we led by our Winnipeg team.

Speaker #3: We're re excited for the ability to partner with such a dynamic company. Let's hear from Rich, who will run through our financial results. Rich?

Speaker #2: Thank you, Joe, and good afternoon, everyone. Thank you for joining our call today. We started fiscal year 2026 with a strong first quarter with revenue exceeding the top end of our guidance.

Richard Lindahl: Thank you, Joe. Good afternoon, everyone. Thank you for joining our call today. We started fiscal year 2026 with a strong Q1, with revenue exceeding the top end of our guidance. We've also advanced key strategic priorities and improved our cash and liquidity position versus the prior year. Execution of our 2026 turnaround plan is well underway as we work toward our near-term financial and operational goals, building on the stabilization and rightsizing actions completed over the last 2 years. We also expect the refinancing announced 2 weeks ago to provide strategically important balance sheet flexibility, lowering interest costs, extending maturities, and adding access to incremental capital to support both operational execution and our longer-term growth initiatives. Turning to slide 13, our Q1 results were in line with our expectations and reflect continued progress on execution.

Rich Lindahl: Thank you, Joe. Good afternoon, everyone. Thank you for joining our call today. We started fiscal year 2026 with a strong Q1, with revenue exceeding the top end of our guidance. We've also advanced key strategic priorities and improved our cash and liquidity position versus the prior year. Execution of our 2026 turnaround plan is well underway as we work toward our near-term financial and operational goals, building on the stabilization and rightsizing actions completed over the last 2 years. We also expect the refinancing announced 2 weeks ago to provide strategically important balance sheet flexibility, lowering interest costs, extending maturities, and adding access to incremental capital to support both operational execution and our longer-term growth initiatives. Turning to slide 13, our Q1 results were in line with our expectations and reflect continued progress on execution.

Speaker #2: We also advanced key strategic priorities and improved our cash and liquidity position versus the prior year. Execution of our 2026 turnaround plan is well underway as we work toward our near-term financial and operational goals, building on the stabilization and right-sizing actions completed over the last two years.

Speaker #2: We also expect the refinancing announced two weeks ago to provide strategically important balance sheet flexibility, lowering interest costs, extending maturities, and adding access to incremental capital to support both operational execution and our longer-term growth initiatives.

Speaker #2: Turning to slide 13, our first quarter results were in line with our expectations and reflect continued progress on execution. Total revenue for the first quarter of 2026 was $156 million, which came in above the high end of our prior Q1 revenue guidance of $135 to $155 million.

Richard Lindahl: Total revenue for Q1 2026 was $156 million, which came in above the high end of our prior Q1 revenue guidance of $135 to 155 million. As a reminder, on our last earnings call, we pointed out that our 2025 results benefited from a large international order that we do not currently expect to repeat in 2026. That order contributed approximately $60 million of revenue and $50 million of adjusted EBITDA to our Q1 2025 results and significantly influences the year-over-year comparisons of these metrics. Beginning in 2026, we are adding back non-cash stock compensation to our adjusted EBITDA. This is consistent with our peers and provides a more comparable view of profitability on a cash basis.

Rich Lindahl: Total revenue for Q1 2026 was $156 million, which came in above the high end of our prior Q1 revenue guidance of $135 to 155 million. As a reminder, on our last earnings call, we pointed out that our 2025 results benefited from a large international order that we do not currently expect to repeat in 2026. That order contributed approximately $60 million of revenue and $50 million of adjusted EBITDA to our Q1 2025 results and significantly influences the year-over-year comparisons of these metrics. Beginning in 2026, we are adding back non-cash stock compensation to our adjusted EBITDA. This is consistent with our peers and provides a more comparable view of profitability on a cash basis.

Speaker #2: As a reminder, on our last earnings call, we pointed out that our 2025 results benefited from a large international order that we do not currently expect to repeat in 2026.

Speaker #2: That order contributed approximately $60 million of revenue and $50 million of adjusted EBITDA to our first quarter 2025 results, and significantly influences the year-over-year comparisons of these metrics.

Speaker #2: Beginning in 2026, we are adding back non-cash stock compensation to our adjusted EBITDA. This is consistent with our peers and provides a more comparable view of profitability on a cash basis.

Speaker #2: It also aligns with the covenant calculations under our new debt agreement. In the first quarter, adjusted EBITDA and adjusted EBITDA margin were $36 million and 23% respectively, reflecting the quarterly revenue profile.

Richard Lindahl: It also aligns with the covenant calculations under our new debt agreement. In Q1, adjusted EBITDA and adjusted EBITDA margin were $36 million and 23% respectively, reflecting the quarterly revenue profile. Adjusted gross margin was 52%, reflecting the high fixed cost nature of our operations. We also maintained strong cost discipline. Operating expenses were $57 million in Q1 2026, down $10 million year over year, and R&D spend declined by about a third compared to Q1 2025. Total revenue was $156 million, supported by a solid contribution from Naloxone as we continue to maintain a market leadership position. The MCM portfolio performed above our expectations, driven by US government order timing and shipments.

Rich Lindahl: It also aligns with the covenant calculations under our new debt agreement. In Q1, adjusted EBITDA and adjusted EBITDA margin were $36 million and 23% respectively, reflecting the quarterly revenue profile. Adjusted gross margin was 52%, reflecting the high fixed cost nature of our operations. We also maintained strong cost discipline. Operating expenses were $57 million in Q1 2026, down $10 million year over year, and R&D spend declined by about a third compared to Q1 2025. Total revenue was $156 million, supported by a solid contribution from Naloxone as we continue to maintain a market leadership position. The MCM portfolio performed above our expectations, driven by US government order timing and shipments.

Speaker #2: Adjusted gross margin was 52%, reflecting the high fixed cost nature of our operations. We also maintained strong cost discipline. Operating expenses were $57 million in the first quarter of 2026, down $10 million year over year, and R&D spend declined by about a third compared to the first quarter of 2025.

Speaker #2: Total revenue was $156 million, supported by a solid contribution from naloxone as we continue to maintain a market leadership position. The MCM portfolio performed above our expectations driven by U.S.

Speaker #2: government order timing and shipments. International MCM revenue was $37% of total MCM revenues in the quarter, representing continued strong demand and diversification beyond the U.S.

Richard Lindahl: International MCM revenue was 37% of total MCM revenues in the quarter, representing continued strong demand and diversification beyond the U.S. government. On slide 15, we highlight the sustained improvements across our quarterly financial metrics. Liquidity and cash both improved by $11 million year-over-year, and we reduced net debt by $122 million, or approximately 22% versus Q1 2025. As a result, we continue to see improvement in our net leverage ratio, which was 2.4x adjusted EBITDA at Q1 2026 versus 2.7x at Q1 2025. This level gives us meaningful financial flexibility as we evaluate capital allocation priorities to further strengthen our long-term growth profile. This observation provides a good segue to our April 2026 debt refinancing transaction, which is highlighted on slide 16.

Rich Lindahl: International MCM revenue was 37% of total MCM revenues in the quarter, representing continued strong demand and diversification beyond the U.S. government. On slide 15, we highlight the sustained improvements across our quarterly financial metrics. Liquidity and cash both improved by $11 million year-over-year, and we reduced net debt by $122 million, or approximately 22% versus Q1 2025. As a result, we continue to see improvement in our net leverage ratio, which was 2.4x adjusted EBITDA at Q1 2026 versus 2.7x at Q1 2025. This level gives us meaningful financial flexibility as we evaluate capital allocation priorities to further strengthen our long-term growth profile. This observation provides a good segue to our April 2026 debt refinancing transaction, which is highlighted on slide 16.

Speaker #2: On slide 15, we highlight the sustained improvements across our quarterly financial metrics. Liquidity and cash both improved by $11 million year over year, and we reduced net debt by $122 million, or approximately 22%, versus the first quarter of 2025.

Speaker #2: As a result, we continue to see improvement in our net leverage ratio, which was 2.4 times adjusted EBITDA at one Q26. Versus 2.7 times at the first quarter of '25.

Speaker #2: This level gives us meaningful financial flexibility as we evaluate capital allocation priorities to further strengthen our long-term growth profile. This observation provides a good segue to our April 2026 debt refinancing transaction, which is highlighted on slide 16.

Speaker #2: Also noted there, we decreased our total term loan debt by $100 million versus the first quarter of 2025. And we increased finance capacity with the addition of a new fully committed delayed draw term loan of $75 million.

Richard Lindahl: Also noted there, we decreased our total term loan debt by $100 million versus Q1 2025, and we increased finance capacity with the addition of a new, fully committed delayed draw term loan of $75 million. As Joe noted earlier, the April 2026 debt refinancing was an important milestone for Emergent. First, it strengthens our ability to preserve liquidity to support ongoing operations and advance long-term strategic initiatives. Second, it lowers our interest expense, freeing cash flow that can be redeployed into value-creating investments that support growth. Finally, it meaningfully extends our maturity profile and improves covenant terms. Taken together, these actions help establish a stronger financial foundation to support durable long-term growth. Turning to capital allocation, we have several strategic growth priorities in place for 2026: growing international MCM, internal R&D investments, and business development.

Rich Lindahl: Also noted there, we decreased our total term loan debt by $100 million versus Q1 2025, and we increased finance capacity with the addition of a new, fully committed delayed draw term loan of $75 million. As Joseph noted earlier, the April 2026 debt refinancing was an important milestone for Emergent. First, it strengthens our ability to preserve liquidity to support ongoing operations and advance long-term strategic initiatives. Second, it lowers our interest expense, freeing cash flow that can be redeployed into value-creating investments that support growth. Finally, it meaningfully extends our maturity profile and improves covenant terms. Taken together, these actions help establish a stronger financial foundation to support durable long-term growth. Turning to capital allocation, we have several strategic growth priorities in place for 2026: growing international MCM, internal R&D investments, and business development.

Speaker #2: As Joe noted earlier, the April 2026 debt refinancing was an important milestone for Emergent. First, it strengthens our ability to preserve liquidity to support ongoing operations and advance long-term strategic initiatives.

Speaker #2: Second, it lowers our interest expense, freeing cash flow that can be redeployed into value-creating investments that support growth. Finally, it meaningfully extends our maturity profile and improves covenant terms.

Speaker #2: Taken together, these actions help establish a stronger financial foundation to support durable long-term growth. Turning to capital allocation, we have several strategic growth priorities in place for 2026.

Speaker #2: Growing international MCM, internal R&D investments, and business development. Continued debt management will remain an important part of our turnaround in 2026. As noted, the April 2026 refinancing provides us with meaningfully greater financial flexibility and supports our long-term strategic growth planning.

Richard Lindahl: Continued debt management will remain an important part of our turnaround in 2026. As noted, the April 2026 refinancing provides us with meaningfully greater financial flexibility and supports our long-term strategic growth planning. As a reminder, we have a $50 million share repurchase program through 31 March 2027, and we continue to utilize it, repurchasing 900,000 shares for $9 million during Q1 2026. As of the end of Q1, 46.5 million of authorized repurchase capacity remains available under this program. At current valuation levels, we believe disciplined repurchases can be an attractive way to create shareholder value, and they reflect our confidence in Emergent's long-term prospects. One final note on our 31 March balance sheet.

Rich Lindahl: Continued debt management will remain an important part of our turnaround in 2026. As noted, the April 2026 refinancing provides us with meaningfully greater financial flexibility and supports our long-term strategic growth planning. As a reminder, we have a $50 million share repurchase program through 31 March 2027, and we continue to utilize it, repurchasing 900,000 shares for $9 million during Q1 2026. As of the end of Q1, 46.5 million of authorized repurchase capacity remains available under this program. At current valuation levels, we believe disciplined repurchases can be an attractive way to create shareholder value, and they reflect our confidence in Emergent's long-term prospects. One final note on our 31 March balance sheet.

Speaker #2: As a reminder, we have a $50 million share repurchase program through March 31, 2027, and we continue to utilize it, repurchasing 900,000 shares for $9 million during the first quarter of 2026.

Speaker #2: As of the end of the first quarter, $46.5 million of authorized repurchase capacity remains available under this program. A current valuation levels we believe disciplined repurchases can be an attractive way to create shareholder value, and they reflect our confidence to Emergent's long-term prospects.

Speaker #2: One final note on our March 31st balance sheet. We previously disposed that $50.4 million of contingent consideration could be owed to Ridgeback Bio in the second quarter of this year, assuming continued progress under our contract with Barta.

Richard Lindahl: We previously disclosed that $50.4 million of contingent consideration could be owed to Ridgeback Bio in Q2 of this year, assuming continued progress under our contract with BARDA. As we now expect those conditions will be met, we have reported that amount as an accrued acquisition obligation under current liabilities. On slide 19, we highlight our revenue and profitability guidance. We are maintaining our full year total revenue guidance of $720 million to $760 million. Commercial revenues are expected to be flat to slightly up, with volume offsetting the anticipated price adjustments. We expect NARCAN to maintain its leading market share. MCM revenues are consistent with prior guidance of flat to slightly down, with a significant contribution from international sales.

Rich Lindahl: We previously disclosed that $50.4 million of contingent consideration could be owed to Ridgeback Bio in Q2 of this year, assuming continued progress under our contract with BARDA. As we now expect those conditions will be met, we have reported that amount as an accrued acquisition obligation under current liabilities. On slide 19, we highlight our revenue and profitability guidance. We are maintaining our full year total revenue guidance of $720 million to $760 million. Commercial revenues are expected to be flat to slightly up, with volume offsetting the anticipated price adjustments. We expect NARCAN to maintain its leading market share. MCM revenues are consistent with prior guidance of flat to slightly down, with a significant contribution from international sales.

Speaker #2: As we now expect those conditions will be met, we have reported that amount as an accrued acquisition obligation under current liabilities. On slide 19, we highlight our revenue and profitability guidance.

Speaker #2: We are maintaining our full-year total revenue guidance of $720 million to $760 million. Commercial revenues are expected to be flat to slightly up, with volume offsetting anticipated price adjustments.

Speaker #2: And we expect NARCAN to maintain its leading market share. MCM revenues are consistent with prior guidance of flat to slightly down, with a significant contribution from international sales.

Speaker #2: Adjusted gross margin is expected to be between 45% and 47%, reflecting product mix and expected pricing dynamics. We are updating our adjusted EBITDA guidance to account for the non-cash stock compensation add-back, and we therefore expect full-year adjusted EBITDA to be in a range of $155 to $175 million.

Richard Lindahl: Adjusted gross margins is expected to be between 45% and 47%, reflecting product mix and expected pricing dynamics. We are updating our adjusted EBITDA guidance to account for the non-cash stock compensation add back, and we therefore expect full year adjusted EBITDA to be in a range of $155 to $175 million. For Q2, we expect total revenue to be between $170 million and $185 million. In summary, we have fully commenced the turnaround phase for our multi-year plan, and we are executing with focus and urgency. We delivered solid revenue and profitability in Q1, in line with our internal expectations. Our term loan re-refinancing extended maturities out to 2031 and enhanced our financial and operational flexibility.

Rich Lindahl: Adjusted gross margins is expected to be between 45% and 47%, reflecting product mix and expected pricing dynamics. We are updating our adjusted EBITDA guidance to account for the non-cash stock compensation add back, and we therefore expect full year adjusted EBITDA to be in a range of $155 to $175 million. For Q2, we expect total revenue to be between $170 million and $185 million. In summary, we have fully commenced the turnaround phase for our multi-year plan, and we are executing with focus and urgency. We delivered solid revenue and profitability in Q1, in line with our internal expectations. Our term loan re-refinancing extended maturities out to 2031 and enhanced our financial and operational flexibility.

Speaker #2: And for the second quarter, we expect total revenue to be between $170 million and $185 million. In summary, we have fully commenced the turnaround phase for our multi-year plan, and we are executing with focus and urgency.

Speaker #2: We delivered solid revenue and profitability in the first quarter, in line with our internal expectations. Our term loan refinancing extended maturities out to 2031 and enhanced our financial and operational flexibility.

Speaker #2: We also returned capital to shareholders through share repurchases during the quarter, and $46.5 million of authorized repurchase capacity remains available through March of 2027.

Richard Lindahl: We also returned capital to shareholders through share repurchases during the quarter, and $46.5 million of authorized repurchase capacity remains available through March 2027. With that, I'd like to turn the call back over to Joseph Papa for a 2026 business outlook update and closing remarks before we go into Q&A. Joseph Papa?

Rich Lindahl: We also returned capital to shareholders through share repurchases during the quarter, and $46.5 million of authorized repurchase capacity remains available through March 2027. With that, I'd like to turn the call back over to Joseph Papa for a 2026 business outlook update and closing remarks before we go into Q&A. Joseph Papa?

Speaker #2: And with that, I'd like to turn the call back over to Joe for a 2026 business outlook update and closing remarks before we go into Q&A.

Speaker #2: Joe?

Speaker #1: Thanks, Rich. Moving to slide 21. Let me now walk through what we see as the key growth driver to ahead, both near-term and strategic.

Joseph Papa: Thanks, Rich. Moving to slide 21. Let me now walk through what we see as the key growth drivers ahead, both near term and strategic. We entered 2026 with a stronger cash and liquidity position, further reinforced by the April refinancing. We are well-positioned to invest in sustainable long-term growth via four levers. Organic growth through internal R&D investments in TEMBEXA, Ebanga, and Raxibacumab. Number 2, line extension for NARCAN. Number 3, growing the MCM business internationally. Number 4, accelerating our business development opportunities like projects such as KLOXXADO. Like now, we just announced the Japanese Encephalitis vaccine and more for the future. Moving to our pipeline of assets on slide 22. TEMBEXA, Ebanga, and Raxibacumab are all approved with incremental development programs underway.

Joseph Papa: Thanks, Rich. Moving to slide 21. Let me now walk through what we see as the key growth drivers ahead, both near term and strategic. We entered 2026 with a stronger cash and liquidity position, further reinforced by the April refinancing. We are well-positioned to invest in sustainable long-term growth via four levers. Organic growth through internal R&D investments in TEMBEXA, Ebanga, and Raxibacumab. Number two, line extension for NARCAN. Number three, growing the MCM business internationally. Number four, accelerating our business development opportunities like projects such as KLOXXADO. Like now, we just announced the Japanese Encephalitis vaccine and more for the future. Moving to our pipeline of assets on slide 22. TEMBEXA, Ebanga, and Raxibacumab are all approved with incremental development programs underway.

Speaker #1: We entered 2026 with a stronger cash and liquidity position, further reinforced by the April refinancing. We are well positioned to invest in sustainable long-term growth via four levers.

Speaker #1: Organic growth through internal R&D investments in Temexa, Evanga, and Raxi Bacumet. Number two, line extensions for NARCAN. Number three, growing the MCM business internationally.

Speaker #1: And number four, accelerating our business development opportunities like projects such as Colexado, like the now we just announced the Japanese encephalitis vaccine, and more for the future.

Speaker #1: Moving to our pipeline and assets on slide 22, Temexa, Evanga, and Raxi Bacumet are all approved. With incremental development programs underway. As I previously mentioned, look forward to serving as the distributor of the substitute farm biologics, Japanese encephalitis vaccine, for the US government opportunity following FDA regulatory approval.

Joseph Papa: As I previously mentioned, we look forward to serving as the distributor of the Substipharm Biologics Japanese Encephalitis vaccine for the US government opportunity following FDA regulatory approval. Finally, we're pleased to share that just this week, ACAM2000 received Singapore Health Sciences Authority expanded approval to include TEMBEXA. On slide 23 to close. Q1 2026 has been a steady and successful continuation of the turnaround efforts in these past two years. We believe we have made significant headway and now have the opportunity to pursue growth both organically and inorganically. We have successfully stabilized the business. We have divested non-core assets. We have dramatically reduced our debt while returning capital to shareholders. Today, we are investing for segment revenue growth, investing in promising internal R&D pipeline, expanding our international MCM footprint, and pursuing accretive external opportunities, all from a position of improved financial strength.

Speaker #1: Finally, we're pleased to share that just this week, ATN 2000 received Singapore Health Sciences Authority expanded approval to include EMPOC. On slide 23, to close, Q1 2026 has been a steady and successful continuation of the turnaround efforts in these past two years.

Speaker #1: We believe we have made significant headway and now have the opportunity to pursue growth both organically and inorganically. We have successfully stabilized the business.

Speaker #1: We have invested non-core assets. We have dramatically reduced our debt, while returning capital to shareholders. Today, we are investing for segment revenue growth, investing in promising internal R&D pipeline, expanding our international MCM footprint, and pursuing a creative external opportunities all from a position of improved financial strength.

Speaker #1: All the while, we are committed to patient safety, quality, and compliance across the operations. With that operator, please open the lines for questions.

Joseph Papa: All the while, we are committed to patient safety, quality, and compliance across the operations. With that, operator, please open the line for questions.

Speaker #3: Thank you. As mentioned, at this time we'll conduct the question-and-answer session. As a reminder, to ask a question, you'll need to press star one-one on your telephone and wait for your name to be announced.

Operator: Thank you. As mentioned, at this time, we'll conduct the question and answer session. As a reminder, to ask a question, you'll need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Your first question comes from the line of Jessica Fye with JPMorgan. Your line is now open.

Speaker #3: To withdraw your question, please press star one, one again. Please stand by while we compile our Q&A roster. Your first question comes from the line of Jessica Five with JPMorgan. Your line is now open.

Jessica Fye: Hey, guys. Good afternoon. Thanks for taking my question. I had a question on your just longer term perspective on the naloxone franchise. I know you talked about that business being like flat to slightly up for 2026. How should we think about it taking like a, maybe like a several year time horizon?

Jessica Fye [MD, Equity Research Analyst: Hey, guys. Good afternoon. Thanks for taking my question. I had a question on your just longer term perspective on the naloxone franchise. I know you talked about that business being like flat to slightly up for 2026. How should we think about it taking like a, maybe like a several year time horizon?

Speaker #4: Hey, guys. Good afternoon. Thanks for taking my question. I had a question on your just longer-term perspective on the naloxone franchise. I know you talked about that business being flat to slightly up for 2026.

Speaker #4: How should we think about it taking maybe a several-year time horizon?

Joseph Papa: Sure. Thanks for the question. The way we're looking at NARCAN is a couple of things are happening. Number one, we're excited about our ability to launch new innovations with NARCAN. We do have the launch opportunity we have with the carrying case. We think that's perfect for college campuses. We also looked at the multi-pack. We think the multi-pack will be a more efficient way to deliver the naloxone NARCAN for especially high volume users. We do think there's still some significant upside internationally, especially in Canada. We're also looking at the Q2, Q3 as being an upside from where we are in Q1 simply because the seasonality of our business. We know that like, for example, Q2 is the fiscal year end for about 70% of the state.

Speaker #1: Sure. Thanks for the question. The way we're looking at NARCAN is a couple of things that are happening. Number one, we're excited about our ability to launch new innovations with NARCAN.

Speaker #1: We do have just the launch opportunity we have with the carrying case. We think that's perfect for college campuses. We also looked at the multi-pack.

Speaker #1: We think the multi-pack will be a more efficient way to deliver the naloxone NARCAN for especially high-volume users. We do think there's still some significant upside internationally, especially in Canada.

Speaker #1: And we're also looking at the Q2, Q3 as being an upside from where we are in Q1, simply because the seasonality of our business.

Speaker #1: We know that, for example, Q2 is the fiscal year end for about 70% of the states. So we think there is some upside there in the near term.

Joseph Papa: We think there is some upside there in the near term. There's always gonna be a little bit of seasonality. Beyond that, clearly getting to the longer term part of your question, we do think the market's gonna continue to grow because unfortunately, there's still so many deaths that are occurring because of opioid overdoses. We do expect to see continued dollar spend there by the federal government. We saw that in 2026 budget for the US government, the SOR grants and the other grants that are coming from the federal government have either increased or at least staying stable. There's continued bipartisan support for this area of overcoming opioid overdoses. We do expect that.

Speaker #1: And so there's always going to be a little bit of seasonality. Beyond that, though, clearly getting to the longer-term part of your question, we do think the market's going to continue to grow because, unfortunately, there's still so many deaths that are occurring because of opioid overdoses.

Speaker #1: So we do expect to see continued dollar expense there. By the federal government, we saw that in 2026 budget for the US government, the SOAR grant and the other grants that are coming from the federal grants, federal government has either increased or at least staying stable.

Speaker #1: So there's continued bipartisan support for this area of overcoming opioid overdoses. So we do expect that. And then on top of that, the other reason we expect the volume to go up is just simply the class action settlements by large pharma companies are about $50 billion all that we think, especially now that the Purdue just settled this week, I guess it was, with about $5 billion of their settlement funds coming in.

Joseph Papa: On top of that, the other reason we expect the volume to go up is just simply the class-action settlements by large pharma companies are about $50 billion. All that we think, especially now that Purdue just settled this week, I guess it was, with about $5 billion of their settlement funds coming in. Those funds are to be directed towards things like educational programs for states and local municipalities, and/or the use or purchase of procurement of naloxone. We think for those reasons, the market will grow. We expect to hold on to the leading market position. We're gonna stay competitive on pricing, so we can't exactly say where pricing's gonna go.

Speaker #1: Those funds are to be directed towards things like educational programs in states and local municipalities and/or the use or purchase of procurement of naloxone.

Speaker #1: So we think for those reasons, the market will grow. We expect to hold on through the leading market position. We're going to stay competitive on pricing.

Speaker #1: So we can't exactly say we're pricing is going to go, but that's the reason why we said for the full year, flat to up slightly.

Joseph Papa: That's the reason why we said, you know, for a full year, flat to up slightly, and that's how we're looking at the future. Volume growth, we'll continue to be market leader, and then obviously, we'll have to be competitive on pricing. That's really how we talked about the future. Volume growth, hold on market share, and expect to be competitively priced, and that's what we're thinking. Does that answer the question?

Speaker #1: And that's how we're looking at the future. Volume growth, we'll continue to be market leader. And then obviously, we'll have to be competitive on price and that's really how we talked about the future.

Speaker #1: Volume growth, hold on the market share. And expect to be competitively priced and that's how we're thinking. But thanks for the question.

Jessica Fye: Yeah. Maybe switching to the MCM business as you kind of drive the international side there, can you just remind us how to think about the margin you keep on international MCM sales and kind of how that compares to the US legacy MCM business?

Jessica Fye [MD, Equity Research Analyst: Yeah. Maybe switching to the MCM business as you kind of drive the international side there, can you just remind us how to think about the margin you keep on international MCM sales and kind of how that compares to the US legacy MCM business?

Speaker #4: Yeah. And then maybe switching to the MCM business, as you kind of drive the international side there, can you just remind us how to think about the margin you keep on international MCM sales and kind of how that compares to the US legacy MCM business?

Speaker #1: Sure. Well, I'll start, Rich. You may want to add to it. I guess the first and foremost thing is that one of the things that we've agreed to, especially with the current administration, is that we offer a most-favored nation pricing type of arrangement to the US government.

Joseph Papa: Sure. Well, I'll start, and Rich, you may wanna add to it. I guess the first and foremost thing is that one of the things that we've agreed to, especially with the current administration, is that we offer a most favored nation pricing type of arrangement to the U.S. government, so our price has to be by agreement with the U.S. government. We have to give them the lowest price, which means by definition, our prices for other countries around the world will be, you know, slightly higher or depending on the product, of course. We think that obviously, as we develop more international business, will help us as well on the gross margin. As I said, this year, for Q1, about 37% of our MCM revenue came from international.

Speaker #1: So our price has to be by agreement with the US government. We have to give them the lowest price. Which means by definition, our price is for other countries around the world will be slightly higher depending on the product, of course.

Speaker #1: So we think that obviously, as we develop more international business, will help us as well on the gross margin. And as I said, this year, for the first quarter, about 37% of our MCM revenue came from international.

Joseph Papa: We think that's a big powerful part of how we're thinking about what's happening on the margin side. Rich, anything you wanna add?

Speaker #1: So we think that's a big powerful part of how we're thinking about what's happening on the margin side. But Rich, anything you want to add?

Joseph Papa: We think that's a big powerful part of how we're thinking about what's happening on the margin side. Rich, anything you wanna add?

Richard Lindahl: I think, logically, just the fact that we're offering the US most favored nation pricing, and therefore we have higher prices on the international MCM business, that drives higher margins. You should assume that the international sales are above the average for the MCM segment in total.

Speaker #2: Yeah. I think logically, Jess, the fact that we're offering the US most-favored nation pricing and therefore we have higher prices on the international MCM business, that drives higher margins and so you should assume that the international sales are above the average for the MCM segment in total.

Rich Lindahl: I think, logically, just the fact that we're offering the US most favored nation pricing, and therefore we have higher prices on the international MCM business, that drives higher margins. You should assume that the international sales are above the average for the MCM segment in total.

Speaker #4: Thank you.

Jessica Fye: Thank you.

Jessica Fye [MD, Equity Research Analyst: Thank you.

Joseph Papa: Operator, next question. Operator, are there any more questions?

Speaker #1: Operator, next question. Operator, is there any more questions?

Operator: Oh, excuse me. Your next question comes from Raghuram Selvaraju with H.C. Wainwright & Co. Your line is now open.

Speaker #3: Oh, excuse me. Your next question comes from Raghuram Salveraju with HC Wainwright. Your line is now open.

Speaker #5: Thanks so much for taking my questions. Firstly, I wanted to ask about the tie-up with SAB and if we should be thinking about this as an indication of interest in the type 1 diabetes space strategically or if this is really more of a contractual business arrangement and not indicative of a broader strategic shift.

Raghuram Selvaraju: Thanks so much for taking my questions. Firstly, I wanted to ask about the tie-up with SAB.

Joseph Papa: All right.

Raghuram Selvaraju: If we should be thinking about this as an indication of interest in the type 1 diabetes space strategically, or if this is really more of a contractual business arrangement and not indicative of a broader strategic shift. Secondly, I was wondering if you could comment on the evolving geopolitical situation generally and how you see that potentially driving international demand for MCM products under the Emergent banner. Lastly, was wondering if at this juncture you could comment on the scope and footprint of the manufacturing operations at Emergent, and if you feel that those are optimally right sized for the company going forward. Thank you.

Speaker #5: Secondly, I was wondering if you could comment on the evolving geopolitical situation generally and how you see that potentially driving international demand for MCM products under the emergent banner.

Speaker #5: And lastly, I was wondering if at this juncture you could comment on the scope and footprint of the manufacturing operations at Emergent, and if you feel that those are optimally right-sized for the company going forward.

Speaker #5: Thank you.

Joseph Papa: Okay. I'm gonna try to make sure I get all of them, please remind me if I miss anything. First, on SAB. We're delighted to partner. They're a great company. They have a specific area of focus on the diabetes side. What we're focused on really is our technology and the technology that we have in Winnipeg that is perfectly situated to help them to advance their products. We view it as very much an alignment of our capability and what we have in Winnipeg with what they're looking for. It wasn't as much disease category as it was an alignment around our technology, what they're looking for, and how we could quickly expedite their operations or their products.

Speaker #1: Okay. I'm going to try to make sure I get all of them, but please remind me if I miss any up front. First, on SAB, we're July to partner.

Speaker #1: They're a great company. They have a specific area of focus on the diabetes side. What we're focused on really is our technology and the technology that we have in Winnipeg that is perfectly situated to help them to advance their product.

Speaker #1: So we view it as very much in alignment with our capability and what we have in Winnipeg with what they're looking for. And it really wasn't so much disease category as it was in alignment around our technology, what they are looking for, and how we can quickly expedite their operations and their products.

Joseph Papa: It was really more of a technology than it was a therapeutic area approach. The second question I think is really about the international and what's happening out there in what we refer to as increasingly dangerous world. You know it. You've seen it in your reports. It is a more dangerous world that we live in. I think the world has very appropriately worried about, you know, the risk of nuclear weapons, and we hear about it every day in the news.

Speaker #1: So it was really more of a technology than it was a therapeutic area approach. The second question I think is really about the international, what's happening out there and what we refer to as increasingly dangerous world.

Speaker #1: And you know it. I've seen it in your reports. It is a more dangerous world that we live in. And I think the world has very appropriately worried about the risk of nuclear weapons and we hear about it every day in the news.

Joseph Papa: One of the things that we believe, and I, and I think you might also believe, is that while nuclear weapons are absolutely a terrible risk, the risk of bioterror is maybe as risky, if not worse, in the sense that while nuclear weapons will be terrible, devastating to a location or whatever could happen. However, bioterrorism, once it gets started, it's very difficult to stop. It is perhaps even easier to do a bioterrorist activity in terms of the speed at which you can do it and the cost at which you can do it than it is nuclear weapons. We believe it's a dangerous world. We believe bioterrorism could, you know, once it gets started, could be devastating to society.

Speaker #1: But one of the things that we believe, and I think you might also believe, is that while nuclear weapons are absolutely a terrible risk, the risk of biochar is maybe as risky, if not worse, in the sense that nuclear weapons will be terribly devastating to a location or whatever could happen.

Speaker #1: However, biochar is—once it gets started, it's very difficult to stop. So, and it's perhaps even easier to do biochar in terms of activity, in terms of the speed at which you can do it, and the cost at which you can do it, than it is nuclear weapons.

Speaker #1: So we believe it's a dangerous world. We believe biochar is a good once it gets started, it can be devastating to society. And that's why we think it's really important to continue to work with the US government and other governments around the world to make sure that everyone is prepared for these types of risks as we think about the future.

Joseph Papa: That's why we think it's really important to continue to work with the US government and other governments around the world to make sure that everyone is prepared for these types of risks as we think about the future, because one bad actor gets their hands on anthrax spores or smallpox, the results could be devastating. That, that's really-- We certainly think the world is more dangerous and we have to be prepared for it. The last question on the manufacturing footprint, we've streamlined our footprint to be clear. However, we still have the ability to source all of our products, our existing products, and our ability to ramp up our Canton facility, we think is a great opportunity to bring some additional drug substance capabilities for very difficult products.

Speaker #1: Because one bad actor gets their hands on anthrax spores or smallpox and the results could be devastating. So that's really we certainly think the world is more dangerous than what we have to be prepared for it.

Speaker #1: The last question on the manufacturing footprint, we've streamlined our footprint to be clear. However, we still have the ability to source all of our products, our existing products, and our ability to ramp up our camping facility.

Speaker #1: We think is a great opportunity to bring some additional drug substance capabilities for a very difficult product. We have the ability to work with live virus and are technically live viruses there.

Joseph Papa: We have the ability to work with live virus or attenuated live viruses there. Bring drug substance capability and bring that capability into the US. We look throughout the country to see who else has that kind of capabilities. There's not a lot of it. We think having some additional capabilities for the US is important. It's important for this particular product, but it's also going to be important for other development candidates and/or products that the US government, BARDA, and Strategic National Stockpile are looking for. We do think expanding the footprint and bringing Canton back online with additional capacity and expansions is an absolutely worthwhile endeavor, and we're delighted to get started with that as we speak.

Speaker #1: So bring drug substance capability and bring that capability into the US. And we looked around the country to see who else has that kind of capabilities.

Speaker #1: There's not a lot of it. So we think having some additional capabilities for the US is important. It's important for this particular product, but it's also going to be important for other development candidates and/or products that the US government, BARDA, Strategic National Stockpile are looking for.

Speaker #1: So we do think expanding the footprint and bringing cancer back online with additional capacity and expansion is an absolute worthwhile endeavor and we're delighted to get started with that as we speak.

Joseph Papa: I think I got three, all three of them, but did I leave anything out, Frank? Okay, I'll take that as we got all of it.

Speaker #1: So I think I got all three of them, but do I need anything out from? Okay. I'll take that as we got all of it.

Joseph Papa: I think I got three, all three of them, but did I leave anything out, Frank? Okay, I'll take that as we got all of it.

Operator: Okay. Thank you.

Joseph Papa: Operator, do we have any other questions?

Speaker #1: Operator, do you have any other questions?

Operator: Yes, we do. Your next question comes on line of Rishi Parekh with J.P. Morgan. Your line is now open.

Operator: Yes, we do. Your next question comes on line of Rishi Parekh with JPMorgan. Your line is now open.

Speaker #3: Yes, we do. Your next question comes online every with JPMorgan. Your line is now open.

Speaker #5: Hi. Most of my questions have been asked, but just out of curiosity, as you think about all the international opportunities that you're working on, is there any way to quantify what the backlog of those opportunities look like as they try to or attempt to leverage your technology?

Rishi Parekh: How are you doing? Most of my questions have been asked, but, just out of curiosity, as you think about all the international opportunities that you're working on, is there any way to quantify what the backlog of those opportunities look like as they try to or attempt to leverage your technology? How should we just think about that margin potential as you continue to ramp on that backlog?

Speaker #5: And how should we just think about that margin potential as you continue to ramp on that backlog?

Joseph Papa: Do we have ongoing discussions on international opportunities to bring additional products to the market on the MCM product? The answer is absolutely yes. Those are our ongoing discussions. It's a little bit harder to answer the backlog question, but some of those projects, you know, some take 6 months, some take, you know, 2 years. I mean, there's a process that we get involved with, but there's no doubt there's incremental interest for some of our products. For example, in Europe, there used to be another manufacturer of an anthrax vaccine. Our knowledge is that that manufacturer is no longer operating. Anybody who's looking for an anthrax vaccine, in many ways, Emergent's the place to go for it.

Speaker #1: Sure. So do we have ongoing discussions on international opportunities to bring additional products to the market on the MCM product? The answer is absolutely yes.

Speaker #1: Those are ongoing discussions. It's a little bit harder to answer the backlog question because some of those projects still take six months. Some take two years.

Speaker #1: I mean, there's a process that we get involved with, but there's no doubt there's incremental interest for some of our products. For example, in Europe, there used to be another manufacturer of an anthrax vaccine.

Speaker #1: Our knowledge is that that manufacturer is no longer operating. So anybody who's looking for an anthrax vaccine in many ways emerges the place to go for it.

Speaker #1: So we do think there are some developing opportunities. We're working on continuing to reinforce those. And we're doing it not just in Europe. We're doing it in the Middle East.

Joseph Papa: We do think there are some developing opportunities we're working on continuing to reinforce those. And we're doing it not just in Europe, we're doing it in the Middle East, we're doing it in Asia. We're really trying to make sure that wherever the demand is, wherever countries look at, you know, this risk of bioterrorism, biodefense, we're gonna be there with our products. And as I said earlier in the presentation, we have the leading portfolio of products, whether it's in smallpox, whether it be vaccine for smallpox, therapeutic for smallpox, whether you need a vaccine for anthrax or a therapeutic for anthrax, whether you need something for botulism, something for Ebola, we've got it.

Speaker #1: We're doing it in Asia. We're really trying to make sure that wherever the demand is, wherever countries look at this risk of bioterrorism, biodefense, we're going to be there with our products and, as I said earlier in the presentation, we have the leading portfolio of products—whether it's in smallpox with the vaccine for smallpox, therapeutic for smallpox, whether you need a vaccine for anthrax or a therapeutic for anthrax, whether you need something for botulism, something for Ebola, we've got it.

Joseph Papa: We're looking to continue to work with all those governments around the world in terms of making sure we have products, and we're working through a backlog. As we answered before, anything that we sell outside the US by definition is gonna have a higher price and therefore a higher margin, since the relative cost will be the same. We're excited what that means and the fact that normally our business on international for MCM historically has been in the mid-teens as a percentage of business. The fact now that we're operating in Q1 at about 37%, I think last year was about 34% by recollection, you can see that we're making good progress with this international expansion footprint that we put in place in 2024 and 2025.

Speaker #1: So we're looking to continue to work with all those governments around the world. In terms of making sure we have products that we're working through a backlog as we answered before.

Speaker #1: Anything that we sell outside the US by definition is going to have a higher price. And therefore, a higher margin since the relative cost will be the same.

Speaker #1: So we're excited what that means. And the fact that normally our business on international for MCM historically has been in the mid-teens as a percentage of business.

Speaker #1: The fact now that we're operating in the first quarter at about 37%, I think last year was about 34% of my recollection. You can see that we're making good progress with this international expansion footprint that we put in place in 2024 and 2025.

Speaker #5: Thank you.

Rishi Parekh: Thank you.

Speaker #1: Thank you. And good questions.

Joseph Papa: Thank you. Thanks for the question.

Speaker #3: Yeah. Thank you. Your next question comes to the line of Alex Kelsey with Wells Fargo. Your line is now open.

Operator: Yeah. Thank you. Your next question comes to the line of Alex Kelsey with Wells Fargo. Your line is now open.

Speaker #5: Hey, Joel. Rich, Frank, good to hear from you guys. Rich, I think I missed it when you were talking about the accrued acquisition obligation.

Alex Kelsey: Hey, Joe, Rich, Frank, good to hear from you guys. Rich, I think I missed it when you were talking about the accrued acquisition obligation. Can you just mention again what exactly that's related to? Then maybe more importantly, is that a cash outflow that we should expect in 2026?

Alex Kelsey: Hey, Joseph, Rich, Frank, good to hear from you guys. Rich, I think I missed it when you were talking about the accrued acquisition obligation. Can you just mention again what exactly that's related to? Then maybe more importantly, is that a cash outflow that we should expect in 2026?

Speaker #5: Can you just mention again what exactly that's related to? And then maybe more importantly, is that a cash outflow that we should expect in 2026?

Speaker #1: Yeah. Thanks for the question, Alex. That relates to the Ibanga program. And so this is under our acquisition of the rights to Ibanga from Richback Bio.

Richard Lindahl: Yeah. Thanks for the question, Alex. That relates to the Ebanga program. This is under our acquisition of the rights to Ebanga from Ridgeback Bio. Once we were awarded the BARDA contract back in 2023, we disclosed that part of that arrangement was ultimately a payment to Ridgeback Bio, assuming that we continue to make progress under the contract. That is going to be a cash outflow in Q2.

Rich Lindahl: Yeah. Thanks for the question, Alex. That relates to the Ebanga program. This is under our acquisition of the rights to Ebanga from Ridgeback Bio. Once we were awarded the BARDA contract back in 2023, we disclosed that part of that arrangement was ultimately a payment to Ridgeback Bio, assuming that we continue to make progress under the contract. That is going to be a cash outflow in Q2.

Speaker #1: Once we were awarded the BARDA contract back in 2023, we disclosed that part of that arrangement was ultimately a payment to Richback Bio, assuming that we continue to make progress under the contract.

Speaker #1: And that's going to be a cash outflow in the second quarter. Joel, thank you for the question. Operator, any additional questions?

Joseph Papa: Thank you for the question. Operator, any additional questions?

Operator: At this time, I'm showing no further questions and would now like to turn it back to Joseph Papa for closing remarks.

Speaker #3: At this time, I'm showing no further questions. And would now like to turn it back to Joe Papa for closing remarks.

Speaker #1: Thank you, Operator. Thank you, everyone, for joining us on the call today. I'd like to thank all of our investors, customers, and employees for your strong and continued support of our company.

Joseph Papa: Thank you, operator. Thank you everyone for joining us on the call today. I'd like to thank all of our investors, customers, employees for your strong and continued support of our company and look forward to providing further updates throughout the year. Thank you and have a great day, everyone. Thanks for joining us. Have a great day, everyone.

Speaker #1: And we look forward to providing further updates throughout the year. Thank you and have a great day, everyone. Thanks for joining us. Have a great day, everyone.

Operator: Yes. Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.

Q1 2026 Emergent BioSolutions Inc Earnings Call

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