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OFFON

EMERGENT BIOSOLUTIONS INC.

(EBS)
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EMERGENT BIOSOLUTIONS : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

07/30/2021 | 06:09am EDT
The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our unaudited condensed
consolidated financial statements and accompanying notes and other financial
information included elsewhere in this quarterly report on Form 10-Q and our
audited consolidated financial statements and related notes included in our
Annual Report on Form 10-K for the year ended December 31, 2020. Some of the
information contained in this discussion and analysis or set forth elsewhere in
this quarterly report on Form 10-Q, includes information with respect to our
plans and strategy for our business and financing, as well as forward-looking
statements that involve risks and uncertainties. You should carefully review the
"Special Note Regarding Forward-Looking Statements" and "Risk Factors" sections
of this quarterly report on Form 10-Q for a discussion of important factors that
could cause actual results to differ materially from the results described in or
implied by the forward-looking statements contained in the following discussion
and analysis.
Business Overview
We are a global life sciences company focused on providing to civilian and
military populations a portfolio of innovative preparedness and response
products and solutions that address accidental, deliberate and naturally
occurring PHTs.
We are currently focused on the following five distinct PHT categories: CBRNE,
EID, travel health, emerging health crises, acute/emergency care; and CDMO. We
have a product portfolio of ten products (vaccines, therapeutics, and
drug-device combination products) that contribute a substantial portion of our
revenue. We also have two procured product candidates that are procured under
special circumstances by certain government agencies, although they are not
approved by the FDA. Additionally, we have a development pipeline consisting of
a diversified mix of both pre-clinical and clinical stage product candidates
(vaccines, therapeutics, devices and combination products). Finally, we have a
fully-integrated portfolio of contract development and manufacturing services.
Our CDMO service offerings cover development services, drug substance
manufacturing and drug product manufacturing across pharmaceutical and
biotechnology industries as well as the USG and non-governmental organizations.
The majority of our product revenue comes from the following products and
procured product candidates:
                                       23
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                           EMERGENT BIOSOLUTIONS INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

                                   OPERATIONS
      (unaudited, amounts in millions, except share and per share amounts)
Vaccines
•Anthrax vaccines, including our AV7909 (Anthrax Vaccine Adsorbed with Adjuvant)
procured product candidate being developed as a next-generation anthrax vaccine
for post-exposure prophylaxis and BioThrax® (Anthrax Vaccine Adsorbed), the only
vaccine licensed by the FDA for the general use prophylaxis and post-exposure
prophylaxis of anthrax disease. AV7909 has not been approved by the FDA, but is
procured by certain authorized government buyers for their use;
•ACAM2000® (Smallpox (Vaccinia) Vaccine, Live), the only single-dose smallpox
vaccine licensed by the FDA for active immunization against smallpox disease for
persons determined to be at high risk for smallpox infection;
•Vivotif® (Typhoid Vaccine Live Oral Ty21a), the only oral vaccine licensed by
the FDA for the prevention of typhoid fever; and
•Vaxchora® (Cholera Vaccine, Live, Oral), the only single-dose oral vaccine
approved by the FDA and EMA for the prevention of cholera.
Devices
•NARCAN® (naloxone HCl) Nasal Spray, the first needle-free formulation of
naloxone approved by the FDA and Health Canada, for the emergency treatment of
known or suspected opioid overdose as manifested by respiratory and/or central
nervous system depression;
•RSDL® (Reactive Skin Decontamination Lotion Kit), the only medical device
cleared by the FDA to remove or neutralize the following chemical warfare agents
from the skin: tabun, sarin, soman, cyclohexyl sarin, VR, VX, mustard gas and
T-2 toxin; and
•Trobigard®, a combination drug-device auto-injector procured product candidate
that contains atropine sulfate and obidoxime chloride. It has not been approved
by the FDA, but is procured by certain authorized government buyers under
special circumstances for potential use as a nerve agent countermeasure.
Therapeutics
•raxibacumab (Anthrax Monoclonal), the first fully human monoclonal antibody
therapeutic licensed by the FDA for the treatment and prophylaxis of
inhalational anthrax;
•Anthrasil® (Anthrax Immune Globulin Intravenous (Human)), the only polyclonal
antibody therapeutic licensed by the FDA and Health Canada for the treatment of
inhalational anthrax;
•BAT® (Botulism Antitoxin Heptavalent (A,B,C,D,E,F,G)-(Equine)), the only
heptavalent antibody therapeutic licensed by the FDA and Health Canada for the
treatment of botulism;  and
•VIGIV (Vaccinia Immune Globulin Intravenous (Human)), the only polyclonal
antibody therapeutic licensed by the FDA and Health Canada to address certain
complications from smallpox vaccination.
Contract Development and Manufacturing Services
Our CDMO business unit consists of a fully integrated molecule-to-market
contract development and manufacturing services business, with offerings across
development services, drug substance manufacturing and drug product
manufacturing. These services include process development, formulation and
analytical development, and packaging for supply. Our customers for such
services include pharmaceutical and biotechnology organizations as well as the
USG and non-governmental organizations ranging from small to mid to large whose
programs range from clinical stage to commercial stage. We compete for CDMO
service business with a number of biopharmaceutical product development
organizations, contract manufacturers of biopharmaceutical products and
university research laboratories. We also compete with in-house research,
development and support service departments of other biopharmaceutical
companies.
                                       24
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                           EMERGENT BIOSOLUTIONS INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

                                   OPERATIONS
      (unaudited, amounts in millions, except share and per share amounts)
Financial Operations Overview
Revenues
We generate product revenues from the sale of our marketed products and procured
product candidates which include vaccines, therapeutics and devices which have
been described above. The USG is the largest purchaser of our CBRNE products and
primarily purchases our products for the SNS, a national repository of medical
countermeasures including critical antibiotics, vaccines, chemical antidotes,
antitoxins, and other critical medical supplies. The USG primarily purchases our
products under long-term, firm fixed-price procurement contracts, generally with
annual options. Our opioid overdose reversal product, NARCAN® Nasal Spray and
our travel health products, comprising Vivotif and Vaxchora, are sold
commercially through wholesalers and distributors, physician-directed or
standing order prescriptions at retail pharmacies, as well as to other state and
local community healthcare agencies, practitioners and hospitals.
We also generate revenue from our CDMO business unit, which is based on our
established development and manufacturing infrastructure, technology platforms
and expertise. Our services include a fully integrated molecule-to-market
contract development and manufacturing services business offering across
development services, drug substance and drug product for small to mid to large
pharmaceutical and biotechnology industry and government
agencies/non-governmental organizations.
We have received contracts and grants funding from the USG and other
non-governmental organizations to perform research and development activities,
particularly related to programs addressing certain CBRNE threats and EIDs.
Our revenue, operating results and profitability vary quarterly based on the
timing of production and deliveries and the nature of our business to provide
large scale bundles of products and services as needs arise. Since early 2020,
our revenues from the sales of our vaccine products that target travelers have
also declined due to the reduction of international travel caused by the
COVID-19 pandemic. We expect continued variability in our quarterly financial
statements.
Cost of Product Sales and CDMO Services
The primary expenses that we incur to deliver our products and to perform CDMO
services consist of fixed and variable costs. We determine the cost of product
sales for products sold during a reporting period based on the average
manufacturing cost per unit in the period those units were manufactured. Fixed
manufacturing costs include facilities, utilities and amortization of intangible
assets. Variable manufacturing costs primarily consist of costs for materials
and personnel-related expenses for direct and indirect manufacturing support
staff, contract manufacturing operations, sales-based royalties, shipping and
logistics. In addition to the fixed and variable manufacturing costs described
above, the cost of product sales depends on utilization of available
manufacturing capacity. For our commercial sales, other associated expenses
include sales-based royalties (which include fair value adjustments associated
with contingent consideration), shipping, and logistics.
We use the same manufacturing facilities and methods of production for our own
products as well as for fulfillment of our CDMO service contracts. We operate
nine manufacturing facilities, five of which perform manufacturing activities
for CDMO services customers. As a result, management reviews expenses associated
with manufacturing our own products as well CDMO service contracts on an
aggregate basis when analyzing the financial performance of its manufacturing
and development facilities. Our manufacturing process for our own products and
our CDMO service business includes the production of bulk material and
performing "fill finish" work for containment and distribution of biological
products. For "fill finish" customers, we receive work in process inventory to
be prepared for distribution. When producing bulk material, we generally procure
raw materials, manufacture the product and retain the risk of loss through the
manufacturing and review process until delivery.
Research and Development Expenses
We expense research and development costs as incurred. Our research and
development expenses consist primarily of:
?personnel-related expenses;
?fees to professional service providers for, among other things, analytical
testing, independent monitoring or other administration of our clinical trials
and obtaining and evaluating data from our clinical trials and non-clinical
studies;
                                       25
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                           EMERGENT BIOSOLUTIONS INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

                                   OPERATIONS
      (unaudited, amounts in millions, except share and per share amounts)
?costs of CDMO services for clinical trial material; and
?costs of materials used in clinical trials and research and development.
In many cases, we plan to seek funding for development activities from external
sources and third parties, such as governments and non-governmental
organizations, or through collaborative partnerships. We expect our research and
development spending will be dependent upon such factors as the results from our
clinical trials, the availability of reimbursement of research and development
spending, the number of product candidates under development, the size,
structure and duration of any clinical programs that we may initiate, the costs
associated with manufacturing and development of our product candidates on a
large-scale basis for later stage clinical trials, and our ability to use or
rely on data generated by government agencies.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist primarily of
personnel-related costs and professional fees in support of our executives,
sales and marketing, business development, government affairs, finance,
accounting, information technology, legal, human resource functions and other
corporate functions. Other costs include facility costs not otherwise included
in cost of product sales and CDMO services or research and development expense.
Income Taxes
Uncertainty in income taxes is accounted for using a recognition threshold and
measurement attribute for the financial statement recognition and measurement of
a tax position taken or expected to be taken in a tax return. We recognize in
our financial statements the impact of a tax position if that position is more
likely than not of being sustained on audit, based on the technical merits of
the position.
Management believes that the assumptions and estimates related to the provision
for income taxes are critical to the Company's results of operations.
New Accounting Standards
For a discussion of new accounting standards please read Note 2. Basis of
Presentation, to our condensed consolidated financial statements included in
this report.
Critical Accounting Policies and Estimates
The preparation of our condensed consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in the
U.S., requires us to make estimates, judgments and assumptions that may affect
the reported amounts of assets, liabilities, equity, revenues and expenses and
related disclosure of contingent assets and liabilities. On an ongoing basis we
evaluate our estimates, judgments and methodologies. We base our estimates on
historical experience and on various other assumptions that we believe are
reasonable, the results of which form the basis for making judgments about the
carrying values of assets, liabilities and equity and the amount of revenues and
expenses. Actual results may differ from these estimates. During the six months
ended June 30, 2021, there have been no significant changes to our critical
accounting policies and estimates contained in our Annual Report on Form 10-K
for the year ended December 31, 2020, as filed with the SEC, (see Note 2 to the
accompanying condensed consolidated financial statements).
                                       26
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                           EMERGENT BIOSOLUTIONS INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

                                   OPERATION
      (unaudited, amounts in millions, except share and per share amounts)
Results of Operations
                                                Three Months Ended June 30,                                                     Six Months Ended June 30,
                               2021                2020           $ Change            % Change                2021               2020            $ Change            % Change
Product sales net:
NARCAN Nasal Spray       $    106.2              $ 72.8          $   33.4                   46  %        $   180.4            $ 145.0          $    35.4                   24  %
Anthrax vaccines               51.5               132.3             (80.8)                 (61)  %           106.5              184.2              (77.7)                 (42)  %
ACAM2000                          -                70.0             (70.0)                (100)  %               -               70.0              (70.0)                (100)  %
Other product sales            23.5                23.4               0.1                    -   %            32.2               47.5              (15.3)                 (32)  %
Total product sales, net      181.2               298.5            (117.3)                 (39)  %           319.1              446.7             (127.6)                 (29)  %
Contract development and
manufacturing services        190.9                72.6             118.3                       NM           374.7               94.3              280.4                       NM
Contracts and grants           25.4                23.6               1.8                    8   %            46.7               46.2                0.5                    1   %
Total revenues                397.5               394.7               2.8                    1   %           740.5              587.2              153.3                   26   %

Operating expenses:
Cost of product sales
and contract development
and manufacturing
services                      227.8               129.8              98.0                   76  %            327.1              206.7              120.4                   58  %
Research and development       48.9                47.9               1.0                    2  %            101.4               90.6               10.8                   12  %
Selling, general and
administrative                 91.2                76.0              15.2                   20  %            172.1              145.7               26.4                   18  %
Amortization of
intangible assets              15.1                15.0               0.1                    1  %             30.0               29.8                0.2                    1  %
Total operating expenses      383.0               268.7             114.3                   43  %            630.6              472.8              157.8                   33  %

Income from operations         14.5               126.0            (111.5)                 (88  %)           109.9              114.4               (4.5)                  (4  %)

Other income (expense):
Interest expense               (8.6)               (6.4)             (2.2)                  34  %            (17.1)             (15.0)              (2.1)                  14  %
Other, net                      1.3                 1.1               0.2                   18  %             (0.4)                 -               (0.4)                      NM
Total other income
(expense), net                 (7.3)               (5.3)             (2.0)                  38  %            (17.5)             (15.0)              (2.5)                  17  %

Income before income
taxes                           7.2               120.7            (113.5)                 (94  %)            92.4               99.4               (7.0)                  (7  %)
Income taxes                   (2.6)              (28.0)             25.4                  (91  %)           (18.1)             (19.2)               1.1                   (6  %)
Net income               $      4.6              $ 92.7          $  (88.1)                 (95  %)       $    74.3            $  80.2          $    (5.9)                  (7  %)
NM - Not meaningful



                                       27
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                           EMERGENT BIOSOLUTIONS INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

                                   OPERATION

(unaudited, amounts in millions, except share and per share amounts) Total Revenues

                     [[Image Removed: ebs-20210630_g2.jpg]]
     Legend
           NARCAN nasal spray      Other product sales
           Anthrax vaccines        Contract development and manufacturing services
           ACAM2000                Contracts and Grants


Product Sales, net
NARCAN Nasal Spray
The increase in NARCAN Nasal Spray sales for the three and six months ended
June 30, 2021 was largely driven by growth in sales to the U.S. public interest
and commercial retail markets as well as an increase in sales to customer
channels in Canada.
Anthrax Vaccines
The decrease in Anthrax vaccine sales for the three and six months ended
June 30, 2021 was primarily due to the timing of deliveries to the U.S
government. Anthrax vaccine product sales are made under procurement contracts
with the USG and fluctuation in revenues are dictated by the timing of delivery
of orders to the USG.

ACAM2000

The decrease in ACAM2000 sales for the three and six months ended June 30, 2021
was largely driven by timing of deliveries to the U.S. government. ACAM2000
product sales are made under procurement contracts with the USG and fluctuation
in revenues are dictated by the timing of delivery of orders to the USG.
Other Product Sales
Other product sales for the three months ended June 30, 2021 remained consistent
compared to the three months ended June 30, 2020. Other product sales for the
six months ended June 30, 2021 decreased due to primarily due to a decrease in
sales of BAT due to timing of deliveries to the SNS.
CDMO Services
The increase in contract development and manufacturing services revenue for the
three and six months ended June 30, 2021 is due to the public-private
partnership with BARDA and arrangements with innovators to address the COVID-19
pandemic. These arrangements were entered into during the second and third
quarters of 2020.
Contracts and Grants
Contracts and grants revenue for the three and six months ended June 30, 2021
remained consistent compared to the three and six months ended June 30, 2020.
Cost of Product Sales and CDMO Services
                     [[Image Removed: ebs-20210630_g3.jpg]]

Cost of product sales and contract development and manufacturing services

l Gross profit margin for product sales and contract development and manufacturing

         services


                                       28
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                           EMERGENT BIOSOLUTIONS INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

                                   OPERATION
      (unaudited, amounts in millions, except share and per share amounts)
Cost of product sales and contract development and manufacturing services
increased for the three and six months ended June 30, 2021. The increase
primarily consists of an increase in costs associated with our contract
development and manufacturing services due to a higher volume of CDMO services,
largely the Company's arrangements to address the COVID-19 pandemic.
Additionally, the Company recorded inventory write-offs at its Bayview facility
of $41.5 million during three and six months ended June 30, 2021. The inventory
write-off was due to raw materials and in-process batches that the Company plans
to discard as they were deemed unusable. These increases were partially offset
by decreases in the cost of product sales due to less volume.
Research and Development Expenses (Gross and Net)
                     [[Image Removed: ebs-20210630_g4.jpg]]

Research and development expense

l Research and development expense, net of contracts and grants revenue



Research and development expense for the three months ended June 30, 2021
remained consistent compared to the three months ended June 30, 2020. Research
and development expense for the six months ended June 30, 2021 increased due to
due to costs associated with the development of the COVID-HIG therapeutic
product candidate, offset by the decline in development costs associated with
the AV7909 product candidate.





Selling, General and Administrative Expenses

                     [[Image Removed: ebs-20210630_g5.jpg]]
                     Selling, general and administrative expenses
                  l  SG&A as a percentage of total revenue

The increase in selling, general and administrative expenses for the three and six months ended June 30, 2021 is due to an increase in costs related to defending and supporting the Company's corporate reputation. Amortization of Intangible Assets

                     [[Image Removed: ebs-20210630_g6.jpg]]
                                Amortization expense


Amortization of intangible assets and the composition of intangible assets amortized during the three and six months ended June 30, 2021 were consistent with the three and six months ended June 30, 2020.

                                       29
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                           EMERGENT BIOSOLUTIONS INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

                                   OPERATION

(unaudited, amounts in millions, except share and per share amounts) Other Income (Expense), Net

                     [[Image Removed: ebs-20210630_g7.jpg]]
                                Interest expense
                                Other income (expense)


Total other income (expense), net decreased for the three and six months ended June 30, 2021 largely due to an increase in interest expense as a result of increases in total outstanding debt and interest rates during the periods. Income Taxes

                     [[Image Removed: ebs-20210630_g8.jpg]]
                                  Income taxes
                               l  Effective tax rate



During the three and six months ended June 30, 2021, and 2020, the estimated
effective annual tax rates was 26%. The actual effective tax rates includes the
impact of discrete tax benefits during the six months ended June 30, 2021 and
2020 of $5.5 million and $6.6 million, respectively. Income taxes decreased
during the periods due to a decline in income before income taxes and the timing
of the discrete tax benefits.
Financial Condition, Liquidity and Capital Resources
Our financial condition is summarized as follows:
                                       30
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                           EMERGENT BIOSOLUTIONS INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

                                   OPERATION

(unaudited, amounts in millions, except share and per share amounts) (in millions, except percentages) June 30, 2021 December 31, 2020

     Change %
Financial assets:
Cash and cash equivalents           $        447.5      $            621.3          (28) %

Borrowings:
Debt, current portion                         28.8                    33.8          (15) %
Debt, net of current portion                 825.2                   841.0           (2) %
Total borrowings                             854.0                   874.8           (2) %

Working capital:
Current assets                             1,162.1                 1,195.9           (3) %
Current liabilities                          377.8                   384.5           (2) %
Total working capital                        784.3      $            811.4           (3) %


Sources of Liquidity
We have historically financed our operating and capital expenditures through
cash on hand, cash from operations, debt financing and development funding. We
also obtain financing from the sale of our common stock upon exercise of stock
options. We have operated profitably for each of the last five annual fiscal
years through the period ended December 31, 2020. As of June 30, 2021, we had
unrestricted cash and cash equivalents of $447.5 million and capacity under our
revolving credit facility of $597.2 million. As of June 30, 2021, we believe
that we have sufficient liquidity to fund our operations over the next 12
months.
Cash Flows
The following table provides information regarding our cash flows for the six
months ended June 30, 2021 and 2020:
                                                                     Six 

Months Ended June 30,

                                                                     2021                   2020
Net cash provided by (used in):
Operating activities                                           $        (24.6)         $     185.7
Investing activities                                                   (123.1)               (69.3)
Financing activities                                                    (26.0)               (15.3)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

                                                          (0.1)                (0.1)

Net change in cash, cash equivalents and restricted cash $ (173.8) $ 101.0



Operating Activities
Net cash used in operating activities of $24.6 million for the six months ended
June 30, 2021 was due to net income excluding non-cash items of $160.6 million
offset by negative working capital changes of $185.2 million due to accumulation
of inventory, reduced accrued expenses, other liabilities and accrued
compensation, and increases in receivables.
Net cash provided by operating activities of $185.7 million for the six months
ended June 30, 2020 was due to net income excluding non-cash items of $168.0
million and positive working capital changes of $17.7 million due to increases
in contract liabilities and accrued expenses and other liabilities and decreases
in accounts receivable, offset by increases in inventory, prepaid expenses and
other assets and decreases in accounts payable.
Investing Activities
Net cash used in investing activities relates to purchases of property, plant
and equipment and was $123.1 million and $69.3 million for the six months ended
June 30, 2021 and 2020, respectively. The cash used in investing activities
increased during the six months ended June 30, 2021 largely due to
infrastructure and equipment investments related to continued investments
associated with increased
                                       31
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                           EMERGENT BIOSOLUTIONS INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

                                   OPERATION
      (unaudited, amounts in millions, except share and per share amounts)
capacity and capabilities at our Rockville and Bayview facilities.
Financing Activities
Net cash used in financing activities of $26.0 million for the six months ended
June 30, 2021 was primarily due to payments on debt of $21.9 million and net
payments related to employee share-based compensation activity of $3.0 million.
Net cash used in financing activities of $15.3 million for the six months ended
June 30, 2020 was primarily due to $25.6 million of principal payments on the
term loan and credit facility, primarily offset by cash provided by employee
share-based compensation activity of $11.4 million.
Funding Requirements
We expect to continue to fund our anticipated operating expenses, capital
expenditures, debt service requirements and any future repurchase of our common
stock from the following sources:
?existing cash and cash equivalents;
?net proceeds from the sale of our products and contract development and
manufacturing services;
?development contracts and grants funding; and
?our Senior Secured Credit Facilities and any other lines of credit we may
establish from time to time.
There are numerous risks and uncertainties associated with product sales,
delivery of CDMO services and with the development and commercialization of our
product candidates. We may seek additional external financing to provide
additional financial flexibility. Our future capital requirements will depend on
many factors, including (but not limited to):
?the level, timing and cost of product sales and contract development and
manufacturing services;
?the extent to which we acquire or invest in and integrate companies,
businesses, products or technologies;
?the acquisition of new facilities and capital improvements to new or existing
facilities;
?the payment obligations under our indebtedness;
?the scope, progress, results and costs of our development activities;
?our ability to obtain funding from collaborative partners, government entities
and non-governmental organizations for our development programs;
?the extent to which we adopt a share repurchase program and repurchase shares
of our common stock and;
?the costs of commercialization activities, including product marketing, sales
and distribution.
If our capital resources are insufficient to meet our future capital
requirements, we will need to finance our cash needs through public or private
equity or debt offerings, bank loans or collaboration and licensing
arrangements.
If we raise funds by issuing equity securities, our stockholders may experience
dilution. Public or bank debt financing, if available, may involve agreements
that include covenants, like those contained in our Senior Unsecured Notes due
2028 and the Senior Secured Credit Facilities, which could limit or restrict our
ability to take specific actions, such as incurring additional debt, making
capital expenditures, pursuing acquisition opportunities, buying back shares or
declaring dividends. If we raise funds through collaboration and licensing
arrangements with third parties, it may be necessary to relinquish valuable
rights to our technologies or product candidates or grant licenses on terms that
may not be favorable to us.
Economic conditions, including market volatility and adverse impacts on
financial markets as a result of the COVID-19 pandemic, may make it more
difficult to obtain financing on attractive terms, or at all. If financing is
unavailable or lost, our business, operating results, financial condition and
cash flows would be adversely affected, and we could be forced to delay, reduce
the scope of or eliminate many of our planned activities.
Unused Credit Capacity
Available room under the revolving credit facility for the periods ended
June 30, 2021 and December 31, 2020 was:
(in millions)
                                    Outstanding Letters of      Outstanding Indebtedness on
      Total Capacity                     Credit                  Revolving Credit Facility             Unused Capacity
                                                      June 30, 2021
          $600.0                          2.8                                -                            $597.2
                                                    December 31, 2020
          $600.0                          2.8                                -                            $597.2


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                           EMERGENT BIOSOLUTIONS INC.

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