Friday, August 14, 2009

Emergent BioSolutions Inc., Q2 2009 Earnings Call Transcript

Emergent BioSolutions Inc., (EBS)

Q2 2009 Earnings Call

August 6, 2009 5:00 pm ET


Executives


Robert G. Burrows - Vice President, Investor Relations

Fuad El-Hibri - Chairman of the Board, Chief Executive Officer

R. Don Elsey - Chief Financial Officer

Daniel J. Abdun-Nabi - President, Chief Operating Officer

W. James Jackson, Ph.D. - Senior Vice President and Chief Scientific Officer


Analysts


Eric Schmidt - Cowen & Company

David Moskowitz - Caris & Company

Mona Ashiya - J.P. Morgan

Sean Long – Kennedy Capital Management


Presentation


Operator


Welcome to the Emergent BioSolutions Incorporated second quarter 2009 financial results conference call. (Operator Instructions) I would now like to turn the call over to Mr. Robert Burrows.


Robert Burrows


Good afternoon ladies and gentlemen. My name is Robert Burrows, Vice President of Investor Relations for Emergent. Thank you for joining us today as we discuss Emergent BioSolutions financial results for the second quarter and first six months of 2009. As is customary, our call today is open to all participants. In addition, the call is being recorded and is copyrighted by Emergent BioSolutions.

Joining me on the call this afternoon will be Fuad El-Hibri, Chairman and Chief Executive Officer, and Don Elsey, Chief Financial Officer. Additional members of our senior management team will be present on the call for purposes of the Q&A session.

Before we begin, however, I am compelled to remind everyone that during the all management may make projections and other forward-looking statements regarding future events and the company’s prospects or future performance. These forward-looking statements reflect Emergent’s current perspective on existing trends and information. Any such forward-looking statements are not guarantees of future performance and involve substantial risks and uncertainties. Actual results may differ materially from those projected in any forward-looking statements.

You are encouraged to review Emergent’s filings with the SEC on Forms 10-K, 10-Q, and 8-K for more information on the risks and uncertainties that could cause actual results to differ.

Emergent BioSolutions Inc. (EBS) CEO & Chairman, 10% Owner Fuad El-hibri sells 15,000 Shares

CEO & Chairman, 10% Owner of Emergent BioSolutions Inc. (EBS) Fuad El-hibri sells 15,000 shares of EBS on 08/11/2009 at an average price of $16.78 a share.

EMERGENT BIOSULUTIONS INC. is a leading biopharmaceutical company dedicated to one simple mission - to protect life. EBS develops manufactures and commercializes vaccines and therapeutics that assist the body\'s immune system to prevent or treat disease. Their products target infectious diseases and other medical conditions that have resulted in significant unmet or underserved public health needs. Their marketed product BioThrax? (Anthrax Vaccine Adsorbed) is the only vaccine approved by the U.S. Food and Drug Administration for the prevention of anthrax infection. Emergent BioSolutions Inc. has a market cap of $511.8 million; its shares were traded at around $16.91 with a P/E ratio of 13.1 and P/S ratio of 2.8.

Monday, August 10, 2009

EMERGENT BIOSOLUTIONS INC Profile

Emergent BioSolutions protects your thorax against anthrax. Emergent BioSolutions develops and produces, for government and commercial markets, drugs that treat or protect against infectious diseases and bio-agents. The company supplies BioThrax (the US's only FDA-approved anthrax vaccine) primarily to the departments of Defense and Health and Human Services (HHS). Its biodefense unit is also developing a post-exposure treatment for anthrax and a preventive vaccine for botulinum toxin. For commercial markets, Emergent is working on therapies and vaccines for typhoid, Group B strep, and hepatitis B, among other things. Chairman and CEO Fuad El-Hibri controls more than half of the company....

Friday, August 7, 2009

Fuad El-Hibibri on Business Week

Fuad El-Hibri has been Chairman and Chief Executive Officer of Emergent Biodefense Operations Lansing Inc., a subsidiary of Emergent Biosolutions Inc. since June 2004. Mr. El-Hibri founded Emergent Biosolutions Inc. in 2004 and has been its Chairman and Chief Executive Officer since June 2004. He served as President of Emergent BioSolutions, Inc. from March 2006 to April 2007. He is a successful business entrepreneur with extensive experience in telecommunications and

Fuad El-Hibri on Corridor Inc.

Fuad El-Hibri, chairman and chief executive officer at Emergent BioSolutions Inc., is a finalist for the Ernst & Young Entrepreneur of the Year® 2009 Award in the Greater Washington region. The awards program recognizes extraordinary innovation, financial performance and personal commitment to a businesses and its community. Emergent BioSolutions, based in Rockville, is a biopharmaceutical company focused on the development, manufacture and commercialization of immunobiotics.

Fuad El-Hibri on Ttiqq

Username: Avatar fuadelhibri
User: Fuad El-Hibri
Homepage: http://www.emergentbiosolutions.com/
Public email: fuadelhibri@aim.com
Location: Rockville, MD

2007 Executive Compensation Report

Fuad El-Hbri
Title:
Chairman and CEO
Company: Emergent BioSolutions
Industry: Biotechnology
Category: Public Companies

2007 Compensation Details

Total Compensation $868,010
Salary $509,100

Emergent Biosolutions’ Typhoid Vaccine Candidate Achieves Endpoints In Phase II Clinical Study

Vaccine well tolerated and immunogenic in double-blind, placebo-controlled study in pediatric population

ROCKVILLE, MD, October 10, 2007— Emergent BioSolutions Inc. (NYSE: EBS) announced today that preliminary results from a recently completed, randomized, placebo-controlled Phase II clinical study demonstrated that its single-dose, drinkable typhoid vaccine candidate achieved the study endpoints for safety and immunogenicity. In this clinical study, which recruited children between 5 and 14 years of age, a total of 101 children received the vaccine candidate and 50 children received placebo. The vaccine candidate and placebo were allocated in a blinded manner. This clinical study, which was conducted in Viet Nam, is the first study of this product candidate in a pediatric population in a region in which typhoid is endemic and was performed in collaboration with Oxford University and the Hospital for Tropical Diseases, Ho Chi Minh City, Viet Nam, and financially supported by the Wellcome Trust.

The data from this Phase II clinical study, which is still being analyzed, support the following key findings:

  • The vaccine was immunogenic and met the predefined criterion of an overall immune response rate of greater than 50%, with 95% confidence.
  • The vaccine induced significantly higher antibody concentrations, indicative of systemic responses, in children in the vaccine group compared to the placebo control group.
  • The vaccine was well tolerated with no serious adverse events or deaths reported, and no subjects withdrew due to adverse events.
  • Overall, there were no statistical differences in the incidence of adverse events between the vaccinated and placebo treated groups.

“We are very pleased to have met the objectives of this Phase II study of our typhoid vaccine candidate. This data is encouraging and indicates great promise for what would be the first single-dose, drinkable typhoid vaccine. We are particularly grateful to the Wellcome Trust for their partnership and generous support of this important project,” stated Fuad El-Hibri, chairman and chief executive officer of Emergent BioSolutions. “Typhoid is endemic in many developing countries, putting countless international travelers and families who visit these nations at risk. With typhoid claiming 200,000 lives each year, continued progress in the development of this vaccine is an important milestone in our company’s efforts to protect life. Emergent BioSolutions remains committed to addressing significant underserved health needs,” he continued.

About the Typhoid Vaccine Candidate


The company’s typhoid vaccine candidate is a live, attenuated strain of the Salmonella typhi bacterium designed to eliminate virulence by deletion of two specific genes. The vaccine is intended to be administered in a single, drinkable dose prior to travel to countries where typhoid is endemic. If approved, this method of administration could provide a competitive advantage compared to currently approved typhoid vaccines.

Previously published studies have shown the vaccine candidate to be immunogenic and well-tolerated. In addition to this Phase II clinical study, the following clinical trials have been completed:

  • An open-label, non-placebo controlled, pilot study conducted in the United Kingdom in healthy adults in which the vaccine candidate was well tolerated and immunogenic, eliciting both cell mediated and humoral immunogenicity.
  • A double-blind, placebo controlled, single dose, dose escalating clinical trial conducted in the United States in which 100% of the trial participants in the highest dose group and 56% of the participants in the lowest dose group had an immune response on the scheduled testing days.
  • An open-label, controlled, single dose clinical trial conducted in the United States in healthy adults to evaluate the safety and immunogenicity of two different presentations of the vaccine. The vaccine candidate was similarly immunogenic in both presentations and both were well tolerated.
  • A single-blind, placebo controlled clinical trial in Viet Nam in healthy adults. The Wellcome Trust provided funding for the trial. The vaccine met the criterion for immunogenicity and was well tolerated, with no serious adverse events reported.

About Typhoid

Typhoid, also known as typhoid fever, is caused by infection with the bacterium Salmonella typhi. Typhoid is characterized by fever, headache, constipation, malaise, stomach pains, anorexia and myalgia. Severe cases of typhoid can result in confusion, delirium, intestinal perforation and death. Typhoid is transmitted by consuming contaminated food or drinks.

Contamination usually results from poor hygiene and sanitation. Typhoid is often endemic in developing countries in which there is limited access to treated water supplies and sanitation.

An estimated 22 million cases of typhoid occur per year worldwide. The Centers for Disease Control (CDC) recommends that all persons from the United States traveling to developing countries consider receiving a typhoid vaccination, with travelers to Asia, Africa and Latin America deemed to be especially at risk. U.S. military personnel deployed in these areas are also at risk of infection.

About Emergent BioSolutions Inc.

Emergent BioSolutions Inc. is a biopharmaceutical company dedicated to one simple mission — to protect life. We develop, manufacture and commercialize immunobiotics, consisting of vaccines and therapeutics that assist the body’s immune system to prevent or treat disease. Our biodefense business focuses on immunobiotics for use against biological agents that are potential weapons of bioterrorism and biowarfare. Our marketed product, BioThrax® (Anthrax Vaccine Adsorbed), is the only vaccine approved by the U.S. Food and Drug Administration for the prevention of anthrax disease. Our commercial business focuses on immunobiotics for use against infectious diseases and other medical conditions that have resulted in significant unmet or underserved public health needs. More information on the company is available at www.emergentbiosolutions.com.

Safe Harbor Statement

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements, other than statements of historical fact, including statements regarding our strategy, future operations, prospects, plans and objectives of management, including clinical trial results and development plans, and any other statements containing the words “believes”, “expects”, “anticipates”, “plans”, “estimates” and similar expressions, are forward-looking statements. There are a number of important factors that could cause the company’s actual results to differ materially from those indicated by such forward-looking statements, including the rate and degree of market acceptance and clinical utility of our products; our ongoing and planned development programs, preclinical studies and clinical trials, including future clinical data for our typhoid vaccine candidate; our ability to identify and acquire or in-license products and product candidates that satisfy our selection criteria; the potential benefits of our existing collaboration agreements and our ability to enter into selective additional collaboration arrangements; the timing of and our ability to obtain and maintain regulatory approvals for our product candidates; our commercialization, marketing and manufacturing capabilities and strategy; our intellectual property portfolio; our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; and other factors identified in the company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 and subsequent reports filed with the SEC. The company disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this press release.

Emergent looks to buy Maryland lab

Emergent BioSolutions Inc. hopes to ramp up production of its anthrax vaccine in Lansing.

The Rockville, Md.-based company said Thursday it plans to sell two unused buildings and purchase a manufacturing facility and laboratory in Maryland.

The pending moves could free up space in Lansing for additional production of BioThrax, the only federally approved anthrax vaccine.

"From a strategic perspective, the new Maryland manufacturing facility broadens our options," CEO Fuad El-Hibri said. Terms of the deals were not disclosed.

Nearly 400 employees work for Emergent in Lansing. About 30 have been hired since the company announced plans to add up to 93 new hires as part of an expansion announced in March that included state tax incentives.

Emergent hopes to ramp up the nation's stockpile of doses for use in case of a biological terrorist attack.

"The government has previously stated they want a stockpile of at least 75 million doses. Our calculations would show the stockpile is way short of that," Chief Financial Officer Don Elsey said.

He wouldn't provide details on the stockpile's shortfall, but said the Department of Defense also draws from the supply.

Emergent currently makes the anthrax vaccine in a Lansing facility with a capacity for roughly 7 million doses a year, Elsey said.

In September, the company will start producing 14.5 million doses as part of a $405 million government contract for the national drug stockpile. It will take two years to complete the contract.

A new $75 million large-scale manufacturing plant in Lansing could handle an additional 30 million doses a year.

The building, completed last year, originally was slated to produce the next-generation anthrax vaccine once it received government approval. But Emergent now is proposing production of the new vaccine be moved to the new Maryland facility, allowing Lansing to make more BioThrax - something that also needs a government OK.

"We have shared with the government our thoughts on this and the new capabilities that this will bring and they are considering it," Elsey said. "It's definitely not something that's firm yet."








Thursday, August 6, 2009

EMERGENT BIOSOLUTIONS ANNOUNCES RESULTS FROM ANNUAL MEETING OF STOCKHOLDERS

Annual Stockholders Meeting Emergent Biosolutions Inc.

ROCKVILLE, MD, June 14, 2007—Emergent BioSolutions Inc. (NYSE: EBS), a biopharmaceutical company, announced today the results of the company’s 2007 annual meeting of stockholders, which took place today at the Hyatt Regency Bethesda at 10:00 am Eastern.

There were present, in person or represented by proxy, the holders of more than a majority of the shares of the outstanding common stock of the company, thus constituting a quorum.

Proposal 1—Election of Directors

The following individuals were elected Class I directors of the company to serve for a three-year term expiring 2010: Fuad El-Hibri, Jerome M. Hauer and Ronald B. Richard.

Proposal 2—Ratify Selection of Ernst & Young LLP as the Company’s Independent Registered Public Accounting Firm

The proposal to select Ernst & Young LLP as the company’s independent registered public accounting firm for the fiscal year ending December 31, 2007 successfully passed.

About Emergent BioSolutions Inc.

Emergent BioSolutions Inc. is a biopharmaceutical company dedicated to one simple mission–to protect life. We develop, manufacture and commercialize immunobiotics, consisting of vaccines and therapeutics that assist the body’s immune system to prevent or treat disease. Our biodefense business focuses on immunobiotics for use against biological agents that are potential weapons of bioterrorism and biowarfare. Our marketed product, BioThrax® (Anthrax Vaccine Adsorbed), is the only vaccine approved by the U.S. Food and Drug Administration for the prevention of anthrax infection. Our commercial business focuses on immunobiotics for use against infectious diseases and other medical conditions that have resulted in significant unmet or underserved public health needs. More information on the company is available at www.emergentbiosolutions.com.

Fuad El-Hibri -Speaker Life Science Alliances World 2007

Mr Fuad El-Hibri,
Chief Executive Officer and Chairman,
Emergent BioSolutions Inc.

Mr. El-Hibri has served as chief executive officer and as chairman of the board of directors of Emergent BioSolutions since June 2004 and as president since March 2006. Mr. El-Hibri served as chief executive officer and chairman of the board of directors of BioPort Corporation from May 1998 until June 2004, when, as a result of a corporate reorganization, BioPort became a wholly owned subsidiary of Emergent. The Company subsequently renamed BioPort as Emergent BioDefense Operations Lansing Inc. Mr. El-Hibri served as chairman of Digicel Holdings, Ltd., a privately held telecommunications firm, from August 2000 to October 2006. He served as president of Digicel from August 2000 to February 2005. Mr. El-Hibri has served as chairman of East West Resources Corporation, a venture capital and financial consulting firm, since June 1990. He served as president of East West Resources from September 1990 to January 2004. Mr. El-Hibri is a member of the board of trustees of American University and a member of the board of directors of the International Biomedical Research Alliance, an academic joint venture among the NIH, Oxford University and Cambridge University. He also serves as chairman and treasurer of El-Hibri Charitable Foundation. Mr. El-Hibri received a master's degree in public and private management from Yale University and a B.A. in economics from Stanford University.

Fuad El-Hibri Chief Executive Officer and Chairman of the Board of Directors

Mr. Fuad El-Hibri has served as chief executive officer and chairman of the board of directors since June 2004 and as president from March 2006 to April 2007. Mr. El-Hibri served as chief executive officer and chairman of the board of directors of BioPort Corporation from May 1998 until June 2004, when, as a result of our corporate reorganization, BioPort became a wholly owned subsidiary of Emergent. We subsequently renamed BioPort as Emergent BioDefense Operations Lansing Inc. Mr. El-Hibri served as chairman of Digicel Holdings, Ltd., a privately held telecommunications firm, from August 2000 to October 2006. He served as president of Digicel from August 2000 to February 2005.
Mr. El-Hibri has served as chairman of East West Resources Corporation, a venture capital and financial consulting firm, since June 1990. He served as president of East West Resources from September 1990 to January 2004. Mr. El-Hibri is a member of the board of trustees of American University and a member of the board of directors of the International Biomedical Research Alliance, an academic joint venture among the NIH, Oxford University and Cambridge University. He also serves as chairman and treasurer of El-Hibri Charitable Foundation. Mr. El-Hibri received a master’s degree in public and private management from Yale University and a B.A. in economics from Stanford University.

Local Fuad El-Hibri Named EY Entrepreneur of the Year

Ever since the dot-COM bubble burst almost ten years ago, Maryland has been bragging about how biotech would not only become the next big thing in innovation and business but would put Maryland on the map. Well, while it has mostly been hyperbole, Rockville, Maryland, based Emergent BioSolutions has been the bright-burning exception under the leadership of Chairman and CEO, Mr. Fuad El-Hibri. Well, Ernst & Young has named Fuad El-Hibri the Ernst & Young Entrepreneur of the Year 2009

Fuad El-Hibri on Backtype

Fuad El-Hibri

Name
Fuad El-Hibri
Web
www.emergentbiosolutions.com
About Me
Mr. Fuad El-Hibri is the Chairman and Chief Executive Officer of Emergent BioSolutions Inc. (Emergent).

Fuad El-Hibri discusses challenges of marketing overseas

BioPort is the only FDA-licensed producer of the anthrax vaccine.

Fuad El-Hibri, chairman and CEO of Emergent BioSolutions Inc., speaks March 9 in Sage Hall. Kevin Stearns/University Photography

On March 9, MBA students taking International Political Risk Management, a course taught by Elena Iankova, a lecturer at the S.C. Johnson Graduate School of Management, heard Fuad El-Hibri, chairman and CEO of Bioport’s parent company, Emergent BioSolutions Inc., discuss the hurdles his firm faces in making and marketing its products abroad.

His guest lecture was titled “Managing International Risk in the Bio-Defense and Telecommunications Industries.”

Using his own company as an example, El-Hibri outlined six areas of risk in international business, among them export/import regulations, politics at home and abroad and financial issues. Much of his talk focused on political issues ranging from export regulations to how to deal with foreign governments.

One hurdle: when BioPort sought to export its anthrax vaccine, BioThrax, the U.S. Department of Defense claimed the vaccine was primarily of military importance and should therefore fall under International Traffic in Arms Regulations (ITAR). Under ITAR, export of the vaccine is controlled by the Department of State and a license is required for each sale. BioPort succeeded in arguing that its product was non-military in nature and therefore belonged under Export Administration Regulations (EAR). Exportation under EAR is controlled by the Department of Commerce and has far fewer restrictions.

El-Hibri seemed to take such challenges in stride. “Obviously,” he said, “the U.S. government is interested in vaccines, especially bio-defense vaccines.” It controls which countries vaccines can be exported to and may use them as a bargaining chip in its own deals with foreign ministries of defense, he commented. “They like to throw our vaccine into the mix and say, ‘Listen, if you buy one more tank or one more fighter jet … we’ll throw in 10,000 doses of anthrax vaccine,’” he said. But such giveaways create problems for companies like BioPort by reducing demand for its products in foreign countries.

Some uncontrollable variables that affect the demand for vaccines are: Politics within the foreign country, the country’s relationship with the United States, its finances, its fears about external threats and regional geopolitics, noted El-Hibri.

He also repeatedly mentioned the importance of having local connections. “It is critical that you appoint or partner up with a local distributor,” he stressed. A local partner can help businesses stay abreast of the political situation and provide valuable insight into local culture and customs, he said, noting that acceptable business practices often vary widely between countries.

For example, in many countries it is common practice for businesses to offer bribes or gifts to government officials in return for their assistance, he commented. But under U.S. law, it is illegal for American companies to do so, with stiff penalties for violations. While the restriction can be circumvented by giving small gifts, under $25 in value, a better policy is to avoid gifts altogether, said El-Hibri, and instead get close to decision makers by developing relationships with them, helping them solve some of their problems.

He also stressed that the media can be either an important ally or a formidable enemy. “Many of our competitors aren’t as media savvy as we are and that gives us an edge.”

Iankova later said of El-Hibri’s talk: “I was impressed because he’s put a lot of effort into addressing exactly the issues we addressed in class. [It was] very helpful for my students.”

Gligor Tashkovich ‘87, MBA ‘91, who worked with El-Hibri in the telecommunications industry and helped to organize his visit to campus, called him “a brilliant businessman and entrepreneur.”

And Herb Lara, MBA ‘06, president of the Health Care and Biotechnology Club, a student group at the Johnson School, enjoyed having the opportunity to hear El-Hibri speak. “Bio-defense is something that’s not a widely available topic for discussion, so it was definitely a big deal to have someone of his stature come here to talk to us,” he said.

Before entering the biopharmaceutical industry 15 years ago, El-Hibri worked at Citicorp and Booz Allen & Hamilton.

Courtney Potts is an intern with the Cornell News Office.

Peace Prize awarded to Center for Nonviolence’s Kennedy

Scott Kennedy, cofounder and staff member of the Resource Center for Nonviolence, will receive the 2008 El-Hibri Peace Education Prize the first week of October in Washington, DC. The annual prize is given by the El-Hibri family, Nonviolence International, and the International Peace and Conflict Resolution program at American University.

In a letter notifying Kennedy tha he had been selected to receive the prize, Mubarak Awad, founder and director of Nonviolence International in Washington, DC, cited Kennedy’s “outstanding achievements as a peace educator,” including his role in co-founding and leading the Resource Center for Nonviolencce, work with the Fellowship of Reconcilation, and promoting the practice of peace education tours to the Middle East other parts of the world. Awad commented that together these activities “highlight a tremendous legacy of peace education, for which we are proud to recognize you with this prize.” Mr. Fuad El-Hibri established the El-Hibri Peace Education Prize in 2007 to honor individuals who have dedicated their lives to peace education in their community. The first prize was given to Professor Abdul Aziz Said of American University for his 50 years of teaching and advocating for peace through peace education…..