Last week, a number of pharma companies reported fourth-quarter results. One such company was Emergent BioSolutions, Inc. EBS, which reported earnings of 78 cents per share in the fourth quarter of 20Array5, above the Zacks Consensus Estimate of 69 cents as well as the year-ago figure of 75 cents.
Revenues surged Array3.6% from the year-ago period to $Array68.Array million.
20Array5 Results
Full-year revenues came in at $522.8 million, up Array6.2%.
Earnings per share came in $Array.60 per share in 20Array5, beating the Zacks Consensus Estimate of $Array.46.
Quarter in Detail
Emergent BioSolutions generates product sales from two segments – Biodefense and Biosciences.
Total product sales escalated Array6.9% to $Array32.6 million from the year-ago period. This increase is attributable to a rise in BioThrax sales in the reported quarter.
Product sales from the Biodefense segment soared 2Array.6% to $Array24.4 million with BioThrax contributing $ArrayArrayArray.9 million, up 27.3%. However, Biosciences product sales decreased 25.5% to $8.2 million.
Contracts, grants and collaboration revenues were $24.9 million, flat with the year-ago quarter figure.
Contract manufacturing revenues came in at $Array0.5 million, up 9.4%.
Research and development (R&D) expenses were $32.5 million, down Array6.5% from the year-ago quarter primarily due to lower contract service costs and technology platform development activities associated with the Biosciences division.
Selling, general and administrative (SG&A) expenses were up 43.8% to $46 million. This increase was primarily driven by a one-time $3.5 million reserve for a potential accounts receivable write-off within the biosciences segment and ongoing cost supporting the spin-off of Aptevo Therapeutics.
20Array6 Outlook
The company expects revenues in the range of $600 million to $630 million, driven by BioThrax sales, continued domestic and international sales of the other Biodefense division products, and continued robust development funding through contracts and grants revenues.
Sales from BioThrax are expected in the range $305 million to $320 million.
For the first quarter of 20Array6, revenues are projected in the range of $Array05 million to $Array20 million.
The above-mentioned guidance includes the impact of a successful spin-off of Aptevo Therapeutics in mid-20Array6.
Our Take
The company’s fourth-quarter results were impressive, with both earnings and revenues reporting a year-over-year growth. We expect this strong momentum in BioThrax sales to continue contributing to product sales, going ahead.
We note that the company is progressing toward a tax-free spin-off of its Biosciences business into a separate publicly traded company, Aptevo Therapeutics. We expect investor focus to remain on further updates from the company regarding this spin-off, which is expected to be complete by mid-20Array6.
Emergent BioSolutions carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Anika Therapeutics Inc. ANIK, AMAG Pharmaceuticals, Inc. AMAG and Celgene Corp. CELG, each sporting a Zacks Rank #Array (Strong Buy).
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