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Emergent BioSolutions Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 5, 2011 10:48AM

Emergent BioSolutions Inc. (EBS) filed Quarterly Report for the period ended 2011-08-03. Emergent Biosolutions has a market cap of $646.6 million; its shares were traded at around $18.21 with a P/E ratio of 20.9 and P/S ratio of 2.2. Emergent Biosolutions had an annual average earning growth of 10.4% over the past 5 years.



Highlight of Business Operations:

Product sales revenues increased by $15.6 million, or 28%, to $71.5 million for the three months ended June 30, 2011 from $55.9 million for the three months ended June 30, 2010. This increase in product sales revenues was primarily due to a 25% increase in the number of doses of BioThrax delivered. Product sales revenues for the three months ended June 30, 2011 consisted of BioThrax sales to HHS of $70.7 million and aggregate international and other sales of $738,000. Product sales revenues for the three months ended June 30, 2010 consisted of BioThrax sales to HHS of $53.5 million and aggregate international and other sales of $2.3 million.

Research and development expenses increased by $12.9 million, or 69%, to $31.5 million for the three months ended June 30, 2011 from $18.6 million for the three months ended June 30, 2010. This increase primarily reflects higher contract service and personnel-related costs, and includes increased expenses of $12.4 million for product candidates and technology platform development activities that are categorized in the biosciences segment, increased expenses of $170,000 for product candidates that are categorized in the biodefense segment, and increased expenses of $330,000 in other research and development, which are in support of central research and development activities. For the three months ended June 30, 2011 and 2010, we incurred research and development expenses net of development contract and grant revenues along with the net loss attributable to noncontrolling interests of $13.1 million and $12.0 million, respectively.

Selling, general and administrative expenses increased by $2.7 million, or 15%, to $20.4 million for the three months ended June 30, 2011 from $17.6 million for the three months ended June 30, 2010. This increase is primarily due to approximately $2.2 million in restructuring charges related to our UK operations. The majority of the expense is attributable to the biodefense segment, in which selling, general and administrative expenses increased by $479,000, or 4%, to $13.1 million for the three months ended June 30, 2011 from $12.6 million for the three months ended June 30, 2010. Selling, general and administrative expenses related to our biosciences segment increased by $2.3 million, or 45%, to $7.3 million for the three months ended June 30, 2011 from $5.0 million for the three months ended June 30, 2010, reflecting the charge for the UK restructuring.

Product sales revenues decreased by $17.7 million, or 19%, to $77.1 million for the six months ended June 30, 2010 from $94.7 million for the six months ended June 30, 2010. This decrease in product sales revenues was primarily due to a 22% decrease in the number of doses of BioThrax delivered due to the redeployment of our potency testing capacity from BioThrax release testing to qualification of replacement reference standards and other development testing during the first quarter 2011. Product sales revenues for the six months ended June 30, 2011 consisted of BioThrax sales to HHS of $75.8 million and aggregate international and other sales of $1.3 million. Product sales revenues for the six months ended June 30, 2010 consisted of BioThrax sales to HHS of $92.4 million and aggregate international and other sales of $2.4 million.

Contracts and grants revenues increased by $15.4 million, or 108%, to $29.6 million for the six months ended June 30, 2011 from $14.2 million for the six months ended June 30, 2010. The increase in contracts and grants was primarily due to revenues from our contract with BARDA for large-scale manufacturing for BioThrax and our collaborations with Abbott and Pfizer, along with increased activity and associated revenue from our development contracts with NIAID and BARDA for NuThrax and PreviThrax. Contracts and grants revenues for the six months ended June 30, 2011 consisted of $22.0 million in development contract and grant revenue from NIAID and BARDA and $7.5 million from Abbott and Pfizer. Contracts and grants revenues for the six months ended June 30, 2010 consisted of $13.5 million in development contract and grant revenue from NIAID and BARDA and $750,000 from a milestone payment related to the 2008 sale of technology rights and related materials and documentation pertaining to our Pertussis technology.

Research and development expenses increased by $27.7 million, or 72%, to $66.2 million for the six months ended June 30, 2011 from $38.5 million for the six months ended June 30, 2010. This increase primarily reflects higher contract service and personnel-related costs, and includes increased expenses of $26.0 million for product candidates and technology platform development activities that are categorized in the biosciences segment, increased expenses of $1.1 million for product candidates categorized in the biodefense segment, and increased expenses of $664,000 in other research and development, which are in support of central research and development activities. For the six months ended June 30, 2011 and 2010, we incurred research and development expenses net of development contract and grant revenues along with the net loss attributable to noncontrolling interests of $33.2 million and $23.3 million, respectively.

Read the The complete Report



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