(Mark One)
|
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended June 30, 2018
|
|
OR
|
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from to
|
Delaware
|
14-1902018
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
(I.R.S. Employer
Identification No.)
|
400 Professional Drive, Suite 400
|
|
Gaithersburg, Maryland
|
20879
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
Part I. Financial Information
|
|
|
|
Part II. Other Information
|
|
§ |
appropriations for the procurement of BioThrax® (Anthrax Vaccine Adsorbed) and our other products addressing public health threats;
|
§ |
our ability to perform under our contracts with the U.S. government related to BioThrax, our NuThrax product candidate, and our other public health threat products, including the timing of and specifications relating to deliveries;
|
§ |
our ability to obtain Emergency Use Authorization pre-approval for NuThrax™ (anthrax vaccine adsorbed with CPG 7909 adjuvant) from the U.S. Food and Drug Administration, or FDA;
|
§ |
the availability of funding for our U.S. government grants and contracts;
|
§ |
our ability to secure follow-on procurement contracts for our public health threat products that are under procurement contracts that have expired or will be expiring;
|
§ |
our ability to identify and acquire companies, businesses, products or product candidates that satisfy our selection criteria;
|
§ |
our ability to successfully identify and respond to new development contracts with the U.S. government, as well as successfully maintain, through achievement of development milestones, current development contracts with the U.S. government;
|
§ |
our ability and the ability of our contractors and suppliers to maintain compliance with current good manufacturing practices and other regulatory obligations;
|
§ |
the results of regulatory inspections;
|
§ |
the operating and financial restrictions placed on us and our subsidiaries under our senior secured credit facility;
|
§ |
the outcome of the class action lawsuit;
|
§ |
our ability to obtain and maintain regulatory approvals for our product candidates and the timing of any such approvals;
|
§ |
the procurement of products by U.S. government entities under regulatory exemptions prior to approval by the FDA and corresponding procurement by government entities outside of the United States under regulatory exemptions prior to approval by the corresponding regulatory authorities in the applicable country;
|
§ |
the success of our commercialization, marketing and manufacturing capabilities and strategy; and
|
§ |
the accuracy of our estimates regarding future revenues, expenses, capital requirements and needs for additional financing.
|
Emergent BioSolutions Inc. and Subsidiaries
|
||||||||
(in thousands, except share and per share data)
|
||||||||
June 30, 2018
|
December 31, 2017
|
|||||||
ASSETS
|
(unaudited)
|
|||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
190,237
|
$
|
178,292
|
||||
Restricted cash
|
1,043
|
1,043
|
||||||
Accounts receivable
|
189,489
|
143,653
|
||||||
Inventories
|
139,373
|
142,812
|
||||||
Income tax receivable, net
|
-
|
2,432
|
||||||
Prepaid expenses and other current assets
|
21,166
|
17,157
|
||||||
Total current assets
|
541,308
|
485,389
|
||||||
Property, plant and equipment, net
|
419,157
|
407,210
|
||||||
Intangible assets, net
|
111,773
|
119,597
|
||||||
Goodwill
|
49,130
|
49,130
|
||||||
Deferred tax assets, net
|
12,654
|
2,834
|
||||||
Other assets
|
4,869
|
6,046
|
||||||
Total assets
|
$
|
1,138,891
|
$
|
1,070,206
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
41,629
|
$
|
41,751
|
||||
Accrued expenses and other current liabilities
|
10,552
|
4,831
|
||||||
Accrued compensation
|
29,259
|
37,882
|
||||||
Contingent consideration, current portion
|
2,852
|
2,372
|
||||||
Income taxes payable, net
|
2,771
|
-
|
||||||
Deferred revenue, current portion
|
9,750
|
13,232
|
||||||
Total current liabilities
|
96,813
|
100,068
|
||||||
Contingent consideration, net of current portion
|
9,839
|
9,902
|
||||||
Long-term indebtedness
|
13,482
|
13,457
|
||||||
Income taxes payable
|
12,500
|
12,500
|
||||||
Deferred revenue, net of current portion
|
63,255
|
17,259
|
||||||
Other liabilities
|
4,656
|
4,675
|
||||||
Total liabilities
|
200,545
|
157,861
|
||||||
Stockholders' equity:
|
||||||||
Preferred stock, $0.001 par value; 15,000,000 shares authorized, 0 shares issued and outstanding at both June 30, 2018 and December 31, 2017
|
-
|
-
|
||||||
Common stock, $0.001 par value; 200,000,000 shares authorized, 51,231,814 shares issued and 50,014,528 shares outstanding at June 30, 2018; 50,619,808 shares issued and 49,405,365 shares outstanding at December 31, 2017
|
51
|
50
|
||||||
Treasury stock, at cost, 1,217,286 and 1,214,443 common shares at June 30, 2018 and December 31, 2017, respectively
|
(39,642
|
)
|
(39,497
|
)
|
||||
Additional paid-in capital
|
632,569
|
618,416
|
||||||
Accumulated other comprehensive loss
|
(4,415
|
)
|
(3,698
|
)
|
||||
Retained earnings
|
349,783
|
337,074
|
||||||
Total stockholders' equity
|
938,346
|
912,345
|
||||||
Total liabilities and stockholders' equity
|
$
|
1,138,891
|
$
|
1,070,206
|
(in thousands, except share and per share data)
|
||||||||||||||||
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
Revenues:
|
||||||||||||||||
Product sales
|
$
|
180,075
|
$
|
63,610
|
$
|
255,846
|
$
|
145,579
|
||||||||
Contract manufacturing
|
23,613
|
16,160
|
49,791
|
33,788
|
||||||||||||
Contracts and grants
|
16,512
|
21,002
|
32,377
|
38,263
|
||||||||||||
Total revenues
|
220,200
|
100,772
|
338,014
|
217,630
|
||||||||||||
Operating expenses:
|
||||||||||||||||
Cost of product sales and contract manufacturing
|
89,173
|
34,624
|
147,217
|
80,946
|
||||||||||||
Research and development
|
24,745
|
25,751
|
53,796
|
46,227
|
||||||||||||
Selling, general and administrative
|
39,506
|
31,868
|
79,710
|
67,018
|
||||||||||||
Income from operations
|
66,776
|
8,529
|
57,291
|
23,439
|
||||||||||||
Other income (expense):
|
||||||||||||||||
Interest income
|
306
|
583
|
528
|
956
|
||||||||||||
Interest expense
|
(1,008
|
)
|
(1,805
|
)
|
(1,242
|
)
|
(3,743
|
)
|
||||||||
Other expense, net
|
(253
|
)
|
(586
|
)
|
(179
|
)
|
(286
|
)
|
||||||||
Total other expense, net
|
(955
|
)
|
(1,808
|
)
|
(893
|
)
|
(3,073
|
)
|
||||||||
Income before provision for income taxes
|
65,821
|
6,721
|
56,398
|
20,366
|
||||||||||||
Provision for income taxes
|
15,677
|
2,105
|
11,162
|
5,265
|
||||||||||||
Net income
|
$
|
50,144
|
$
|
4,616
|
$
|
45,236
|
$
|
15,101
|
||||||||
Net income per share - basic
|
$
|
1.00
|
$
|
0.11
|
$
|
0.91
|
$
|
0.37
|
||||||||
Net income per share - diluted (1)
|
$
|
0.98
|
$
|
0.11
|
$
|
0.89
|
$
|
0.35
|
||||||||
Weighted-average number of shares - basic
|
49,896,124
|
41,013,764
|
49,738,980
|
40,871,540
|
||||||||||||
Weighted-average number of shares - diluted
|
51,162,909
|
50,078,594
|
51,039,195
|
49,899,291
|
Emergent BioSolutions Inc. and Subsidiaries
|
||||||||||||||||
(in thousands)
|
||||||||||||||||
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
Net income
|
$
|
50,144
|
$
|
4,616
|
$
|
45,236
|
$
|
15,101
|
||||||||
Foreign currency translations, net of tax
|
$
|
1,165
|
228
|
(717
|
)
|
812
|
||||||||||
Comprehensive income
|
$
|
51,309
|
$
|
4,844
|
$
|
44,519
|
$
|
15,913
|
(in thousands)
|
||||||||
Six Months Ended June 30,
|
||||||||
2018
|
2017
|
|||||||
Cash flows from operating activities:
|
(Unaudited)
|
|||||||
Net income
|
$
|
45,236
|
$
|
15,101
|
||||
Adjustments to reconcile to net cash provided by (used in) operating activities:
|
||||||||
Stock-based compensation expense
|
11,709
|
8,018
|
||||||
Depreciation and amortization
|
24,713
|
20,097
|
||||||
Income taxes
|
8,475
|
4,951
|
||||||
Change in fair value of contingent consideration
|
1,674
|
433
|
||||||
Impairment of long-lived assets
|
263
|
-
|
||||||
Other
|
966
|
464
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(46,251
|
)
|
36,160
|
|||||
Inventories
|
3,439
|
3,473
|
||||||
Income taxes
|
(3,239
|
)
|
-
|
|||||
Prepaid expenses and other assets
|
(6,120
|
)
|
276
|
|||||
Accounts payable
|
(4,394
|
)
|
4,245
|
|||||
Accrued expenses and other liabilities
|
5,607
|
(4,386
|
)
|
|||||
Accrued compensation
|
(8,621
|
)
|
(10,194
|
)
|
||||
Deferred revenue
|
134
|
17,035
|
||||||
Net cash provided by operating activities
|
33,591
|
95,673
|
||||||
Cash flows from investing activities:
|
||||||||
Purchases of property, plant and equipment and other
|
(25,217
|
)
|
(29,605
|
)
|
||||
Proceeds from sale of assets
|
2,624
|
-
|
||||||
Net cash used in investing activities
|
(22,593
|
)
|
(29,605
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Issuance of common stock upon exercise of stock options
|
8,465
|
4,605
|
||||||
Taxes paid on behalf of employees for equity activity
|
(6,020
|
)
|
(4,059
|
)
|
||||
Payments of notes payable to Aptevo
|
-
|
(20,000
|
)
|
|||||
Contingent consideration payments
|
(1,257
|
)
|
(2,405
|
)
|
||||
Purchase of treasury stock
|
(145
|
)
|
(83
|
)
|
||||
Net cash provided by (used in) financing activities
|
1,043
|
(21,942
|
)
|
|||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(96
|
)
|
(12
|
)
|
||||
Net increase in cash, cash equivalents and restricted cash
|
11,945
|
44,114
|
||||||
Cash, cash equivalents and restricted cash at beginning of period (1)
|
179,335
|
271,513
|
||||||
Cash, cash equivalents and restricted cash at end of period (1)
|
$
|
191,280
|
$
|
315,627
|
$0.001 Par Value Common Stock
|
Additional Paid-In
|
Treasury Stock
|
Accumulated Other Comprehensive
|
Retained
|
Total Stockholders'
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Shares
|
Amount
|
Loss
|
Earnings
|
Equity
|
|||||||||||||||||||||||||
Balance at December 31, 2017
|
50,619,808
|
$
|
50
|
$
|
618,416
|
(1,214,443
|
)
|
$
|
(39,497
|
)
|
$
|
(3,698
|
)
|
$
|
337,074
|
$
|
912,345
|
|||||||||||||||
Adoption of new accounting standard (ASC 606), net of tax
|
-
|
-
|
-
|
-
|
-
|
-
|
(32,527
|
)
|
(32,527
|
)
|
||||||||||||||||||||||
Balance at January 1, 2018
|
50,619,808
|
50
|
618,416
|
(1,214,443
|
)
|
(39,497
|
)
|
(3,698
|
)
|
304,547
|
879,818
|
|||||||||||||||||||||
Employee equity plans activity
|
612,006
|
1
|
14,153
|
-
|
-
|
-
|
-
|
14,154
|
||||||||||||||||||||||||
Treasury stock
|
-
|
-
|
-
|
(2,843
|
)
|
(145
|
)
|
-
|
-
|
(145
|
)
|
|||||||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
-
|
-
|
45,236
|
45,236
|
||||||||||||||||||||||||
Foreign currency translation, net of tax
|
-
|
-
|
-
|
-
|
-
|
(717
|
)
|
-
|
(717
|
)
|
||||||||||||||||||||||
Balance at June 30, 2018
|
51,231,814
|
$
|
51
|
$
|
632,569
|
(1,217,286
|
)
|
$
|
(39,642
|
)
|
$
|
(4,415
|
)
|
$
|
349,783
|
$
|
938,346
|
(in thousands)
|
||||
Balance at December 31, 2017
|
$
|
30,491
|
||
Adoption of new accounting standard (ASC 606)
|
42,379
|
|||
Balance at January 1, 2018
|
72,870
|
|||
Deferral of revenue
|
15,478
|
|||
Recognition of revenue included in beginning of year contract liability
|
(15,343
|
)
|
||
Balance at June 30, 2018
|
$
|
73,005
|
(in thousands)
|
Three Months Ended June 30, 2018
|
Six Months Ended June 30, 2018
|
||||||||||||||||||||||
U.S
|
Non-U.S.
|
U.S
|
Non-U.S.
|
|||||||||||||||||||||
Government
|
Government
|
Total
|
Government
|
Government
|
Total
|
|||||||||||||||||||
Product sales
|
$
|
169,897
|
$
|
10,178
|
$
|
180,075
|
$
|
235,922
|
$
|
19,924
|
$
|
255,846
|
||||||||||||
Contract manufacturing
|
-
|
23,613
|
23,613
|
-
|
49,791
|
49,791
|
||||||||||||||||||
Contracts and grants
|
15,250
|
1,262
|
16,512
|
30,055
|
2,322
|
32,377
|
||||||||||||||||||
Total revenues
|
$
|
185,147
|
$
|
35,053
|
$
|
220,200
|
$
|
265,977
|
$
|
72,037
|
$
|
338,014
|
(in thousands)
|
||||
Amount of cash paid to Sanofi
|
$
|
117,500
|
||
Fair value of contingent purchase consideration
|
2,200
|
|||
Total purchase price
|
$
|
119,700
|
(in thousands)
|
||||
Fair value of tangible assets acquired:
|
||||
Inventory
|
$
|
74,876
|
||
Property, plant and equipment
|
19,995
|
|||
Total fair value of tangible assets acquired
|
94,871
|
|||
|
||||
Acquired intangible asset
|
16,700
|
|||
Goodwill
|
8,129
|
|||
Total purchase price
|
$
|
119,700
|
(in thousands)
|
||||
Balance at December 31, 2017
|
$
|
12,274
|
||
Expense included in earnings
|
1,674
|
|||
Settlements
|
(1,257
|
)
|
||
Balance at June 30, 2018
|
$
|
12,691
|
June 30,
|
December 31,
|
|||||||
(in thousands)
|
2018
|
2017
|
||||||
Raw materials and supplies
|
$
|
34,426
|
$
|
36,069
|
||||
Work-in-process
|
79,546
|
76,610
|
||||||
Finished goods
|
25,401
|
30,133
|
||||||
Total inventories
|
$
|
139,373
|
$
|
142,812
|
June 30,
|
December 31,
|
|||||||
(in thousands)
|
2018
|
2017
|
||||||
Land and improvements
|
$
|
21,848
|
$
|
21,843
|
||||
Buildings, building improvements and leasehold improvements
|
159,264
|
160,005
|
||||||
Furniture and equipment
|
213,445
|
206,819
|
||||||
Software
|
52,343
|
50,829
|
||||||
Construction-in-progress
|
124,832
|
100,088
|
||||||
Property, plant and equipment, gross
|
571,732
|
539,584
|
||||||
Less: Accumulated depreciation and amortization
|
(152,575
|
)
|
(132,374
|
)
|
||||
Total property, plant and equipment, net
|
$
|
419,157
|
$
|
407,210
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
(in thousands, except share and per share data)
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
Numerator:
|
||||||||||||||||
Net income
|
$
|
50,144
|
$
|
4,616
|
$
|
45,236
|
$
|
15,101
|
||||||||
Interest expense on convertible debt, net of tax
|
-
|
835
|
-
|
1,742
|
||||||||||||
Amortization of convertible debt issuance costs, net of tax
|
-
|
195
|
-
|
391
|
||||||||||||
Net income, adjusted
|
$
|
50,144
|
$
|
5,646
|
$
|
45,236
|
$
|
17,234
|
||||||||
Denominator:
|
||||||||||||||||
Weighted-average number of shares—basic
|
49,896,124
|
41,013,764
|
49,738,980
|
40,871,540
|
||||||||||||
Dilutive securities—equity awards
|
1,266,785
|
968,354
|
1,300,215
|
931,263
|
||||||||||||
Dilutive securities—convertible debt
|
-
|
8,096,476
|
-
|
8,096,488
|
||||||||||||
Weighted-average number of shares—diluted
|
51,162,909
|
50,078,594
|
51,039,195
|
49,899,291
|
||||||||||||
Net income per share - basic
|
$
|
1.00
|
$
|
0.11
|
$
|
0.91
|
$
|
0.37
|
||||||||
Net income per share - diluted
|
$
|
0.98
|
$
|
0.11
|
$
|
0.89
|
$
|
0.35
|
§ |
BioThrax® (Anthrax Vaccine Adsorbed), the only vaccine licensed by the U.S. Food and Drug Administration, or FDA, for the general use prophylaxis and post-exposure prophylaxis of anthrax disease;
|
§ |
ACAM2000® (Smallpox (Vaccinia) Vaccine, Live), the only smallpox vaccine licensed by the FDA for active immunization against smallpox disease for persons determined to be at high risk for smallpox infection (acquired from Sanofi Pasteur Biologics, LLC in October 2017);
|
§ |
Raxibacumab (Anthrax Monoclonal), the first fully human monoclonal antibody therapeutic licensed by the FDA for the treatment and prophylaxis of inhalational anthrax (acquired from GlaxoSmithKline LLC in October 2017);
|
§ |
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;
|
§ |
VIGIV [Vaccinia Immune Globulin Intravenous (Human)], the only antibody therapeutic licensed by the FDA and Health Canada to address certain complications from smallpox vaccination;
|
§ |
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™ (atropine sulfate, obidoxime chloride), an auto-injector device designed for intramuscular self-injection of atropine sulfate and obidoxime chloride, as a nerve agent countermeasure. This product is not currently approved or cleared by the FDA or any similar regulatory body, and is only distributed to authorized government buyers for use outside the United States. This product is not distributed in the United States.
|
§ |
NuThrax™ (anthrax vaccine adsorbed with CPG 7909 adjuvant), a next generation anthrax vaccine;
|
§ |
FLU-IGIV (NP025), a human polyclonal antibody therapeutic being developed for the treatment of serious influenza A infection in hospitalized patients;
|
§ |
ZIKV-IG (NP024), a human polyclonal antibody therapeutic being developed as a prophylaxis for Zika infections in at risk populations;
|
§ |
FILOV (NP026), an equine polyclonal antibody therapeutic being developed to treat hemorrhagic fever caused by Filoviruses (Ebola, Marburg and Sudan);
|
§ |
VLA1601, a highly purified inactivated vaccine against the Zika virus;
|
§ |
UNI-FLU, a universal influenza vaccine;
|
§ |
EBX-205, an oral therapeutic to treat acute bacterial skin and skin structure infection, including those caused by methicillin-resistant Staphylococcus aureus, or MRSA, as well as to treat other serious bacterial infections caused by biothreat pathogens;
|
§ |
EBI-001, a pan respiratory antiviral from our iminosugar-based discovery program;
|
§ |
GC-072, an oral and intravenous treatment for Burkholderia pseudomallei infection (GC-072 is the lead compound in the EV-035 series of broad-spectrum antibiotics);
|
§ |
D4, a multi-drug delivery device being developed for nerve agent antidote delivery (atropine and pralidoxime chloride in combination); and
|
§ |
SIAN (stabilized isoamyl nitrite), a stabilized form of isoamyl nitrite in an intra-nasal spray device being developed as a treatment for known or suspected acute cyanide poisoning.
|
Development Programs
|
Funding Source
|
Award Date
|
Performance Period
|
Anthrasil
|
BARDA
|
09/2005
|
09/2005 — 04/2021
|
BARDA
|
09/2013
|
09/2013 — 09/2018
|
|
Auto-injector platform
|
DoD
|
07/2017
|
07/2017 — 06/2022
|
BAT
|
BARDA
|
05/2006
|
05/2006 — 12/2027
|
CIADM
|
BARDA
|
06/2012
|
06/2012 — 06/2037
|
GC-072
|
DTRA
|
08/2014
|
08/2014 — 08/2019
|
NuThrax
|
NIAID
|
08/2014
|
08/2014 — 01/2020
|
BARDA
|
03/2015
|
03/2015 — 10/2018
|
|
BARDA
|
09/2016
|
09/2016 — 09/2021
|
|
SIAN
|
BARDA
|
09/2017
|
09/2017 — 09/2022
|
UV-4B
|
NIAID
|
09/2011
|
09/2011 — 09/2018
|
VIGIV
|
CDC
|
02/2018
|
02/2018 — 02/2019
|
|
Three Months Ended June 30,
|
|||||||||||||||
(in millions)
|
2018
|
2017
|
Change
|
% Change
|
||||||||||||
Product sales:
|
||||||||||||||||
BioThrax
|
$
|
77.6
|
$
|
52.3
|
$
|
25.3
|
48
|
%
|
||||||||
Other
|
102.5
|
11.3
|
91.2
|
807
|
%
|
|||||||||||
Total Product sales
|
180.1
|
63.6
|
116.5
|
183
|
%
|
|||||||||||
Contract manufacturing
|
23.6
|
16.2
|
7.4
|
46
|
%
|
|||||||||||
Contracts and grants
|
16.5
|
21.0
|
(4.5
|
)
|
(21
|
%)
|
||||||||||
Total revenues
|
$
|
220.2
|
$
|
100.8
|
$
|
119.4
|
118
|
%
|
§ |
sales of ACAM2000 (which was acquired in October 2017) to the CDC;
|
§ |
sales of Raxibacumab (which was acquired in October 2017) to BARDA;
|
§ |
the timing of sales of BAT to the SNS;
|
§ |
sales of Trobigard to the U.S. Department of State;
|
§ |
sales of RSDL to the DoD; and
|
§ |
sales of Anthrasil to the Canadian National Defence ministry.
|
§ |
decreased development funding of $2.9 million for our large-scale manufacturing of BioThrax, primarily due to the timing of contract close out activities associated with the development contract from BARDA;
|
§ |
decreased revenue of $3.4 million related to our CIADM program, primarily due to adoption of a new revenue accounting standard effective January 1, 2018. The $3.4 million decrease includes a decrease of $1.6 million in funding for CIADM task orders (related to Ebola and Zika); and
|
§ |
decreased revenue of $1.6 million for our NuThrax program related to the timing of clinical trial activities, partially offset by an increase in manufacturing development activities.
|
§ |
development funding of $1.9 million for BAT primarily related to the timing of stability testing; and
|
§ |
development funding of $1.7 million for SIAN related to a non-clinical pharmacokinetics study and manufacturing development.
|
§ |
timing of manufacturing development activities associated with non-clinical guinea pig studies for our NuThrax product candidate; and
|
§ |
timing of license fees for VLA1601 (a highly purified inactivated vaccine against the Zika virus).
|
§ |
technology transfer activities for Raxibacumab (acquired in October 2017), related to moving the manufacturing from GlaxoSmithKline's facility to our Bayview facility; and
|
§ |
manufacturing and pharmacokinetic activities for our SIAN product candidate.
|
|
Six Months Ended June 30,
|
|||||||||||||||
(in millions)
|
2018
|
2017
|
Change
|
% Change
|
||||||||||||
Product sales:
|
||||||||||||||||
BioThrax
|
$
|
97.8
|
$
|
96.1
|
$
|
1.7
|
2
|
%
|
||||||||
Other
|
158.0
|
49.4
|
108.6
|
220
|
%
|
|||||||||||
Total Product sales
|
255.8
|
145.5
|
110.3
|
76
|
%
|
|||||||||||
Contract manufacturing
|
49.8
|
33.8
|
16.0
|
47
|
%
|
|||||||||||
Contracts and grants
|
32.4
|
38.3
|
(5.9
|
)
|
(15
|
%)
|
||||||||||
Total revenues
|
$
|
338.0
|
$
|
217.6
|
$
|
120.4
|
55
|
%
|
§ |
sales of ACAM2000 (which was acquired in October 2017) to the CDC;
|
§ |
sales of Raxibacumab (which was acquired in October 2017) to BARDA;
|
§ |
sales of BAT to the SNS;
|
§ |
sales of Trobigard to the U.S. Department of State;
|
§ |
sales of RSDL to the DoD; and
|
§ |
sales of Anthrasil to the Canadian National Defence ministry.
|
§ |
decreased development funding of $3.5 million for our large-scale manufacturing of BioThrax, primarily due to the timing of contract close out activities associated with the development contract from BARDA;
|
§ |
decreased revenue of $6.6 million related to our CIADM program primarily due to adoption of a new revenue accounting standard effective January 1, 2018. The $6.6 million decrease includes a decrease of $2.5 million in funding for CIADM task orders (related to Ebola and Zika); and
|
§ |
decreased revenue of $2.0 million for our NuThrax program related to the timing of clinical trial activities, partially offset by an increase in manufacturing development activities.
|
§ |
development funding of $3.5 million for ACAM2000 (acquired October 2017) primarily related to development contract closeout activities with the CDC; and
|
§ |
development funding of $2.9 million for SIAN related to a non-clinical pharmacokinetics study and manufacturing development.
|
§ |
technology transfer activities for Raxibacumab (acquired in October 2017), moving the manufacturing from GlaxoSmithKline's facility to our Bayview facility;
|
§ |
manufacturing and pharmacokinetic activities for our SIAN product candidate; and
|
§ |
proof of concept activities for our UNI-FLU program.
|
§ |
clinical trial activity to evaluate safety and tolerability related to UV-4B; we anticipate a reduction in funding by the U.S. government and, as a result, we will cease further development work on UV-4B and expect the spending to be minimal in the future; and
|
§ |
license fees associated our Ebola/Marburg programs.
|
|
Six Months Ended
|
|||||||
June 30,
|
||||||||
(in millions)
|
2018
|
2017
|
||||||
Net cash provided by (used in):
|
||||||||
Operating activities(i)
|
$
|
33.5
|
$
|
95.7
|
||||
Investing activities
|
(22.6
|
)
|
(29.6
|
)
|
||||
Financing activities
|
1.0
|
(21.9
|
)
|
|||||
Net increase in cash and cash equivalents
|
$
|
11.9
|
$
|
44.2
|
§ |
existing cash and cash equivalents;
|
§ |
net proceeds from the sale of our products and contract manufacturing services;
|
§ |
development contracts and grants funding; and
|
§ |
our senior secured credit facility and any other lines of credit we may establish from time to time.
|
§ |
the level, timing and cost of product sales and contract 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 repurchase additional common stock under our authorized share repurchase program; and
|
§ |
the costs of commercialization activities, including product marketing, sales and distribution.
|
§ |
the possibility that we may be ineligible to respond to a request for proposal issued by the government;
|
§ |
the commitment of substantial time and attention of management and key employees to the preparation of bids and proposals for contracts that may not be awarded to us;
|
§ |
the need to accurately estimate the resources and cost structure that will be required to perform any contract that we might be awarded;
|
§ |
the submission by third parties of protests to our responses to requests for proposal that could result in delays or withdrawals of those requests for proposal; and
|
§ |
in the event our competitors protest or challenge contract or grant awards made to us pursuant to competitive bidding, the potential that we may incur expenses or delays, and that any such protest or challenge could result in the resubmission of bids based on modified specifications, or in the termination, reduction or modification of the awarded contract.
|
§ |
the Federal Acquisition Regulation, or FAR, and agency-specific regulations supplemental to FAR, which comprehensively regulate the award, formation, administration and performance of government contracts;
|
§ |
the Defense Federal Acquisition Regulations, or DFARs, and agency-specific regulations supplemental to DFARs, which comprehensively regulate the award, formation, administration and performance of U.S. Department of Defense, or DoD, government contracts;
|
§ |
the Department of State Acquisition Regulation, or DOSAR, which regulates the relationship between a Department of State organization and a contractor or potential contractor;
|
§ |
business ethics and public integrity obligations, which govern conflicts of interest and the hiring of former government employees, restrict the granting of gratuities and funding of lobbying activities and incorporate other requirements such as the Anti-Kickback Act, the Procurement Integrity Act, the False Claims Act and the Foreign Corrupt Practices Act;
|
§ |
export and import control laws and regulations, including but not limited to International Traffic in Arms Regulations; and
|
§ |
laws, regulations and executive orders restricting the use and dissemination of information classified for national security purposes and the exportation of certain products and technical data.
|
§ |
terminate existing contracts, in whole or in part, for any reason or no reason;
|
§ |
unilaterally reduce or modify contracts or subcontracts, including by imposing equitable price adjustments;
|
§ |
cancel multi-year contracts and related orders, if funds for contract performance for any subsequent year become unavailable;
|
§ |
decline, in whole or in part, to exercise an option to purchase product under a procurement contract or to fund additional development under a development contract;
|
§ |
decline to renew a procurement contract;
|
§ |
claim rights to facilities or to products, including intellectual property, developed under the contract;
|
§ |
require repayment of contract funds spent on construction of facilities in the event of contract default;
|
§ |
take actions that result in a longer development timeline than expected;
|
§ |
direct the course of a development program in a manner not chosen by the government contractor;
|
§ |
suspend or debar the contractor from doing business with the government or a specific government agency;
|
§ |
pursue civil or criminal remedies under acts such as the False Claims Act and False Statements Act; and
|
§ |
control or prohibit the export of products.
|
§ |
warning letters and other communications;
|
§ |
product seizure or withdrawal of the product from the market;
|
§ |
restrictions on the marketing or manufacturing of a product;
|
§ |
suspension or withdrawal of regulatory approvals or refusal to approve pending applications or supplements to approved applications;
|
§ |
fines or disgorgement of profits or revenue; and
|
§ |
injunctions or the imposition of civil or criminal penalties.
|
§ |
equipment malfunctions or failures;
|
§ |
technology malfunctions;
|
§ |
cyber-attacks;
|
§ |
work stoppages or slow-downs;
|
§ |
protests, including by animal rights activists;
|
§ |
injunctions;
|
§ |
damage to or destruction of the facility; and
|
§ |
product contamination or tampering.
|
§ |
retaining existing customers and attracting new customers;
|
§ |
retaining key employees;
|
§ |
diversion of management attention and resources;
|
§ |
conforming internal controls, policies and procedures, business cultures and compensation programs;
|
§ |
consolidating corporate and administrative infrastructures;
|
§ |
successfully executing technology transfers and obtaining required regulatory approvals;
|
§ |
consolidating sales and marketing operations;
|
§ |
identifying and eliminating redundant and underperforming operations and assets;
|
§ |
assumption of known and unknown liabilities;
|
§ |
coordinating geographically dispersed organizations; and
|
§ |
managing tax costs or inefficiencies associated with integrating operations.
|
§ |
successful development, formulation and cGMP scale-up of manufacturing that meets FDA or other foreign regulatory requirements;
|
§ |
successful program partnering;
|
§ |
successful completion of clinical or non-clinical development, including toxicology studies and studies in approved animal models;
|
§ |
receipt of marketing approvals from the FDA and equivalent foreign regulatory authorities;
|
§ |
establishment of commercial manufacturing processes and product supply arrangements;
|
§ |
training of a commercial sales force for the product, whether alone or in collaboration with others;
|
§ |
successful registration and maintenance of relevant patent and/or other proprietary protection; and
|
§ |
acceptance of the product by potential government and other customers.
|
§ |
our inability to manufacture sufficient quantities of materials for use in trials;
|
§ |
the unavailability or variability in the number and types of subjects for each study;
|
§ |
safety issues or inconclusive or incomplete testing, trial or study results;
|
§ |
drug immunogenicity;
|
§ |
lack of efficacy of product candidates during the trials;
|
§ |
government or regulatory restrictions or delays; and
|
§ |
greater than anticipated costs of trials.
|
§ |
requiring us to dedicate a substantial portion of any cash flow from operations to payment on our debt, which would reduce the amounts available to fund other corporate initiatives;
|
§ |
increasing the amount of interest that we have to pay on debt with variable interest rates, if market rates of interest increase;
|
§ |
subjecting us, as under our senior secured revolving credit facility, to restrictive covenants that may reduce our ability to take certain corporate actions, acquire companies, products or technology, or obtain further debt financing;
|
§ |
requiring us to pledge our assets as collateral, which could limit our ability to obtain additional debt financing;
|
§ |
limiting our flexibility in planning for, or reacting to, general adverse economic and industry conditions; and
|
§ |
placing us at a competitive disadvantage compared to our competitors that have less debt, better debt servicing options or stronger debt servicing capacity.
|
§ |
the level, timing and cost of product sales and contract 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 repurchase additional common stock under our authorized share repurchase program; and
|
§ |
the costs of commercialization activities, including product marketing, sales and distribution.
|
§ |
decreased demand or withdrawal of a product;
|
§ |
injury to our reputation;
|
§ |
withdrawal of clinical trial participants;
|
§ |
costs to defend the related litigation;
|
§ |
substantial monetary awards to trial participants or patients;
|
§ |
loss of revenue; and
|
§ |
an inability to commercialize products that we may develop.
|
§ |
the classification of our directors;
|
§ |
limitations on changing the number of directors then in office;
|
§ |
limitations on the removal of directors;
|
§ |
limitations on filling vacancies on the board;
|
§ |
advance notice requirements for stockholder nominations of candidates for election to the Board of Directors and other proposals;
|
§ |
the inability of stockholders to act by written consent;
|
§ |
the inability of stockholders to call special meetings; and
|
§ |
the ability of our Board of Directors to designate the terms of and issue a new series of preferred stock without stockholder approval.
|
§ |
contracts, decisions and procurement policies by the U.S. government affecting BioThrax and our other products and product candidates;
|
§ |
the success of competitive products or technologies;
|
§ |
results of clinical and non-clinical trials of our product candidates;
|
§ |
announcements of acquisitions, financings or other transactions by us;
|
§ |
litigation or legal proceedings;
|
§ |
public concern as to the safety of our products;
|
§ |
termination or delay of a development program;
|
§ |
the recruitment or departure of key personnel;
|
§ |
variations in our product revenue and profitability; and
|
§ |
the other factors described in this "Risk Factors" section.
|
Exhibit
Number
|
Description
|
Emergent BioSolutions Inc. Stock Incentive Plan (incorporated by reference to Exhibit 99 to Registration Statement on Form S-8, filed on May 30, 2018.)
|
|
10.2#†
|
Modification No. 9, effective June 6, 2018, to the Solicitation/Contract/Order for Commercial Items, effective December 8, 2016, from the Centers for Disease Control and Prevention to Emergent Biodefense Operations Lansing LLC (the "CDC BioThrax Procurement Contract").
|
10.3#†
|
Modification No. 10, effective June 18, 2018, to the CDC BioThrax Procurement Contract.
|
10.4#†
|
Modification No. 11, effective June 20, 2018, to the CDC BioThrax Procurement Contract.
|
10.5#†
|
Modification No. 12, effective June 21, 2018, to the CDC BioThrax Procurement Contract.
|
12#
|
Ratio of Earnings to Fixed Charges.
|
31.1#
|
Certification of the Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a).
|
31.2#
|
Certification of the Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a).
|
32.1#
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2#
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101. INS
|
XBRL Instance Document.
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
XBRL Taxonomy Calculation Linksbase Document.
|
101.DEF
|
XBRL Taxonomy Definition Linksbase Document.
|
101.LAB
|
XBRL Taxonomy Label Linksbase Document.
|
101.PRE
|
XBRL Taxonomy Presentation Linksbase Document.
|
† |
Confidential treatment requested with the Securities and Exchange Commission as to certain portions. Confidential materials omitted and filed separately with the Securities and Exchange Commission.
|
1.
|
Decrease the number of doses for SubCLIN 2002 by [**] from [**]to [**].
|
2.
|
Decrease the cost and funding of SubCLIN 2002 by $[**] from $[**] to $[**].
|
3.
|
Add SubCLIN 2003 to cover the cost to purchase [**] doses at a lower rate of $[**].
|
4.
|
Increase and fund [**] doses on SubCLIN 2003 in the amount of $[**].
|
ITEM
|
SUPPLIES / SERVICES
|
QTY / UNIT
|
UNIT PRICE
|
EXTENDED PRICE
|
||||||
2002
|
BioThrax [**] product
[**] upon date of delivery:
[**] product at a unit price of $[**]
Delivery Address: Contractor's Facility
Delivery to be NLT [**]
|
[**] Doses
|
$
|
[
|
**]
|
$
|
[
|
**]
|
||
Line(s) Of Accounting:
939ZWUX 2642 2018 75-X-0956 5664711101 $[**]
|
ITEM
|
SUPPLIES / SERVICES
|
QTY / UNIT
|
UNIT PRICE
|
EXTENDED PRICE
|
||||||
2003
|
BioThrax [**] product
[**] upon date of delivery:
[**] product at a unit price of $[**]
Delivery Address: Contractor's Facility
Delivery to be NLT [**]
|
[**] Doses
|
$
|
[
|
**]
|
$
|
[
|
**]
|
||
Line(s) Of Accounting:
939ZWUX 2642 2018 75-X-0956 5664711101 $[**]
|
ITEM
|
SUPPLIES / SERVICES
|
QTY / UNIT
|
UNIT PRICE
|
EXTENDED PRICE
|
||||||||
0002
|
BioThrax [**] product
[**] upon date of delivery:
[**] product at a unit price of $[**]
Delivery Address: Contractor's Facility
Delivery to be [**] from the date of exercise of option.
|
[**] Doses
|
$
|
[
|
**]
|
$
|
[
|
**]
|
ITEM
|
SUPPLIES / SERVICES
|
QTY / UNIT
|
UNIT PRICE
|
EXTENDED PRICE
|
||||||
2004
|
BioThrax [**] product
[**] upon date of delivery:
[**] product at a unit price of $[**]
Delivery Address: Contractor's Facility
Delivery to be NLT [**]
|
[**] Doses
|
$
|
[
|
**]
|
$
|
[
|
**]
|
||
Line(s) Of Accounting:
939ZWUX 2642 2018 75-X-0956 5664711101 $[**]
|
ITEM
|
SUPPLIES / SERVICES
|
QTY / UNIT
|
UNIT PRICE
|
EXTENDED PRICE
|
||||||||
0002
|
BioThrax [**] product
[**] upon date of delivery:
[**] product at a unit price of $[**]
Delivery Address: Contractor's Facility
Delivery to be [**] from the date of exercise of option.
|
[**]Doses
|
$
|
[
|
**]
|
$
|
[
|
**]
|
ITEM
|
SUPPLIES / SERVICES
|
QTY / UNIT
|
UNIT PRICE
|
EXTENDED PRICE
|
||||||
2004
|
BioThrax [**] product
[**] upon date of delivery:
[**] product at a unit price of $[**]
Delivery Address: Contractor's Facility
Delivery to be NLT [**]
|
[**]Doses
|
$
|
[
|
**]
|
$
|
[
|
**]
|
||
Line(s) Of Accounting:
9390AX3 2642 2018 75-18-0943 5623RF1101 $[**]
939ZWUX 2642 2018 75-X-0956 5664711101 ($[**]
|
ITEM
|
SUPPLIES / SERVICES
|
QTY / UNIT
|
UNIT PRICE
|
EXTENDED PRICE
|
||||||
2005
|
BioThrax [**] product
[**] upon date of delivery:
[**] product at a unit price of $[**]
Delivery Address: Contractor's Facility
Delivery to be NLT [**]
|
[**] Doses
|
$
|
[
|
**]
|
$
|
[
|
**]
|
||
Line(s) Of Accounting:
9390AX3 2642 2018 75-18-0943 5623RF1101 $[**]
|
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT
|
1. CONTRACT ID CODE
|
PAGE
1 |
OF PAGES
2 |
|||||||
2. AMENDMENT/MODIFICATION NO.
00012 |
3. EFFECTIVE DATE
06/21/2018 |
4. REQUISITION/PURCHASE NO.
|
5. PROJECT NO. (If applicable)
|
|||||||
6. ISSUED BY CODE
|
2543
|
7. ADMINISTERED BY (If other than Item 6) CODE
|
2543
|
|||||||
Centers for Disease Control and Prevention
|
Centers for Disease Control and Prevention
|
|||||||||
Office of Acquisition Services (OAS)
|
Office of Acquisition Services (OAS)
|
|||||||||
2920 Brandywine Rd, RM 3000
|
2920 Brandywine Rd, RM 3000
|
|||||||||
Atlanta, GA 30341-5539
|
Atlanta, GA 30341-5539
|
|||||||||
8. NAME AND ADDRESS OF CONTRACTOR (No., Street, county, State and ZIP Code)
|
☑
|
9A. AMENDMENT OF SOLICITATION NO.
|
||||||||
EMERGENT BIODEFENSE OPERATIONS LANSING LLC
|
||||||||||
3500 N MARTIN LUTHER KING JR BLVD
|
9B. DATED (SEE ITEM 11)
|
|||||||||
LANSING, MI 48906-2933
|
10A. MODIFICATION OF CONTRACT/ORDER NO.
|
|||||||||
200-2017-92634
|
||||||||||
X
|
10B. DATED (SEE ITEM 13)
|
|||||||||
CODE 026489018
|
FACILITY CODE
|
12/08/2016
|
||||||||
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
|
||||||||||
The above numbered solicitation is amended as set forth in Item 14. The hour and date specified for receipt of Offers is extended, is not extended.
Offers must acknowledge receipt of this amendment prior to the hour and date specified in the solicitation or as amended, by one of the following methods:
(a) By completing Items 8 and 15, and returning copies of the amendment; (b) By acknowledging receipt of this amendment on each copy of the offer submitted; or
(c) By separate letter or telegram which includes a reference to the solicitation and amendment numbers. FAILURE OF YOUR ACKNOWLEDGMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this amendment you desire to change an offer already submitted, such change may be made by telegram or letter, provided each telegram or letter makes reference to the solicitation and this amendment, and is received prior to the opening hour and date specified.
|
||||||||||
12. ACCOUNTING AND APPROPRIATION DATA (If required)
See Section B |
||||||||||
13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS,
IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14. |
||||||||||
☑
|
A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.
|
|||||||||
X
|
B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE ADMINISTRATIVE CHANGES (such as changes in paying office, appropriation date, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF FAR 43.103(b). Change in appropriation data
|
|||||||||
C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:
|
||||||||||
D. OTHER (Specify type of modification and authority)
|
||||||||||
E. IMPORTANT: Contractor ☒ is not, is required to sign this document and return ________ copies to the issuing office.
|
||||||||||
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings, including solicitation/contract subject matter where feasible.)
The purpose of this modification is to correct appropriation data.
|
||||||||||
Except as provided herein, all terms and conditions of the document referenced in Item 9A or 10A, as heretofore changed, remains unchanged and in full force and effect.
|
||||||||||
15A. NAME AND TITLE OF SIGNER (Type or print)
|
16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)
Christine N Godfrey |
|||||||||
15B. CONTRACTOR/OFFEROR
(Signature of person authorized to sign)
|
15C. DATE SIGNED
|
16B. UNITED STATES OF AMERICA
By /s/ Christine N Godfrey (Signature of Contracting Officer)
|
16C. DATE SIGNED
06/21/2018
|
ITEM
|
SUPPLIES / SERVICES
|
QTY / UNIT
|
UNIT PRICE
|
EXTENDED PRICE
|
||||||
2004
|
Biothrax/AVA
|
[**] Doses
|
$
|
[
|
**]
|
$
|
[
|
**]
|
||
Line(s) Of Accounting:
9390AX3 2642 2018 75-18-0943
5623RF1101 ($[**]
939ZWUX 2642 2018 75-X-0956
5664711101 $[**]
|
Ratio of Earnings to Fixed Charges
|
|||||||||||||||||||||||
Year to Date
|
|||||||||||||||||||||||
|
June 30,
|
Year Ended December 31,
|
|||||||||||||||||||||
(in thousands)
|
2018
|
2017
|
2016
|
2015
|
2014
|
2013
|
|||||||||||||||||
|
|||||||||||||||||||||||
Pretax income from continuing operations (1)
|
$
|
56,398
|
|
$
|
118,633
|
$
|
99,221
|
$
|
135,716
|
$
|
84,194
|
$
|
83,439
|
||||||||||
Fixed charges
|
|||||||||||||||||||||||
Interest expense
|
1,200
|
6,987
|
8,270
|
7,834
|
7,480
|
1,973
|
|||||||||||||||||
Debt issuance cost
|
190
|
1,759
|
1,526
|
1,564
|
3,290
|
319
|
|||||||||||||||||
Total fixed charges (2)
|
1,390
|
8,746
|
9,796
|
9,398
|
10,770
|
2,292
|
|||||||||||||||||
Noncontrolling interest in pretax income (3)
|
-
|
-
|
-
|
-
|
-
|
876
|
|||||||||||||||||
Capitalized interest (4)
|
148
|
2,156
|
2,179
|
2,875
|
2,530
|
1,973
|
|||||||||||||||||
Earnings ((1) + (2) -(3) -(4))
|
57,640
|
|
125,223
|
106,838
|
142,239
|
92,434
|
82,882
|
||||||||||||||||
Fixed charges
|
1,390
|
8,746
|
9,796
|
9,398
|
10,770
|
2,292
|
|||||||||||||||||
Ratio of earnings to fixed charges
|
41.5
|
14.3
|
10.9
|
15.1
|
8.6
|
36.2
|
|||||||||||||||||
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jul. 27, 2018 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Emergent BioSolutions Inc. | |
Entity Central Index Key | 0001367644 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 50,019,935 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 15,000,000 | 15,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 51,231,814 | 50,619,808 |
Common stock, shares outstanding (in shares) | 50,014,528 | 49,405,365 |
Treasury stock ( in shares) | 1,217,286 | 1,214,443 |
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|||
Revenues: | ||||||
Total revenues | $ 220,200 | $ 100,772 | $ 338,014 | $ 217,630 | ||
Operating expenses: | ||||||
Cost of product sales and contract manufacturing | 89,173 | 34,624 | 147,217 | 80,946 | ||
Research and development | 24,745 | 25,751 | 53,796 | 46,227 | ||
Selling, general and administrative | 39,506 | 31,868 | 79,710 | 67,018 | ||
Income from operations | 66,776 | 8,529 | 57,291 | 23,439 | ||
Other income (expense): | ||||||
Interest income | 306 | 583 | 528 | 956 | ||
Interest expense | (1,008) | (1,805) | (1,242) | (3,743) | ||
Other expense, net | (253) | (586) | (179) | (286) | ||
Total other expense, net | (955) | (1,808) | (893) | (3,073) | ||
Income before provision for income taxes | 65,821 | 6,721 | 56,398 | 20,366 | ||
Provision for income taxes | 15,677 | 2,105 | 11,162 | 5,265 | ||
Net income | $ 50,144 | $ 4,616 | $ 45,236 | $ 15,101 | ||
Net income per share - basic (in dollars per share) | $ 1.00 | $ 0.11 | $ 0.91 | $ 0.37 | ||
Net income per share - diluted (in dollars per share) | [1] | $ 0.98 | $ 0.11 | $ 0.89 | $ 0.35 | |
Weighted-average number of shares - basic (in shares) | 49,896,124 | 41,013,764 | 49,738,980 | 40,871,540 | ||
Weighted-average number of shares - diluted (in shares) | 51,162,909 | 50,078,594 | 51,039,195 | 49,899,291 | ||
Product Sales [Member] | ||||||
Revenues: | ||||||
Total revenues | $ 180,075 | $ 63,610 | $ 255,846 | $ 145,579 | ||
Contract Manufacturing [Member] | ||||||
Revenues: | ||||||
Total revenues | 23,613 | 16,160 | 49,791 | 33,788 | ||
Contracts and Grants [Member] | ||||||
Revenues: | ||||||
Total revenues | $ 16,512 | $ 21,002 | $ 32,377 | $ 38,263 | ||
|
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Condensed Consolidated Statements of Comprehensive Income [Abstract] | ||||
Net income | $ 50,144 | $ 4,616 | $ 45,236 | $ 15,101 |
Foreign currency translation, net of tax | 1,165 | 228 | (717) | 812 |
Comprehensive income | $ 51,309 | $ 4,844 | $ 44,519 | $ 15,913 |
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Condensed Consolidated Statements of Cash Flows (Unaudited) [Abstract] | ||
Restricted cash | $ 1,043 | $ 1,043 |
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands |
$0.001 Par Value Common Stock [Member] |
Additional Paid-in Capital [Member] |
Treasury Stock [Member] |
Accumulated Other Comprehensive Loss [Member] |
Retained Earnings [Member] |
Total |
---|---|---|---|---|---|---|
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Adoption of new accounting standard (ASC 606), net of tax | ASC 606 [Member] | $ (32,527) | $ (32,527) | ||||
Balance at Dec. 31, 2017 | $ 50 | $ 618,416 | $ (39,497) | $ (3,698) | 337,074 | 912,345 |
Balance (ASC 606 [Member]) at Dec. 31, 2017 | $ 50 | 618,416 | $ (39,497) | (3,698) | 304,547 | $ 879,818 |
Balance (in shares) at Dec. 31, 2017 | 50,619,808 | (1,214,443) | 49,405,365 | |||
Balance (in shares) (ASC 606 [Member]) at Dec. 31, 2017 | 50,619,808 | (1,214,443) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Employee equity plans activity | $ 1 | 14,153 | $ 14,154 | |||
Employee equity plans activity (in shares) | 612,006 | |||||
Treasury stock | $ (145) | (145) | ||||
Treasury stock (in shares) | (2,843) | |||||
Net income | 45,236 | 45,236 | ||||
Foreign currency translation, net of tax | (717) | (717) | ||||
Balance at Jun. 30, 2018 | $ 51 | $ 632,569 | $ (39,642) | $ (4,415) | $ 349,783 | $ 938,346 |
Balance (in shares) at Jun. 30, 2018 | 51,231,814 | (1,217,286) | 50,014,528 |
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Condensed Consolidated Statement of Changes in Stockholders' Equity [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Summary of significant accounting policies |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Summary of significant accounting policies [Abstract] | |
Summary of significant accounting policies | 1. Summary of significant accounting policies Basis of presentation and consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of Emergent BioSolutions Inc. ("Emergent" or the "Company") and its wholly owned and majority owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The unaudited consolidated financial statements included herein have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X issued by the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the SEC. In the opinion of the Company's management, any adjustments contained in the accompanying unaudited condensed consolidated financial statements are of a normal recurring nature and are necessary to present fairly the financial position of the Company as of June 30, 2018. Interim results are not necessarily indicative of results that may be expected for any other interim period or for an entire year. Significant accounting policies During the six months ended June 30, 2018, there have been no significant changes to the Company's summary of significant accounting policies contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the SEC, except for the new revenue recognition standard the Company adopted effective January 1, 2018. See Note 2. "Revenue recognition" for further details. Recently issued accounting standards ASU No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting In June 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting ("ASU No. 2018-07"). ASU No. 2018-07 expands the scope of Topic 718 to include share-based payments issued to nonemployees for goods and services. ASU No. 2018-07 is intended to reduce cost and complexity and to improve financial reporting for share-based payments issued to nonemployees (for example, service providers, external legal counsel, suppliers, etc.). The standard will be effective after December 15, 2018 for the Company, with early adoption permitted, but no earlier than the Company's adoption date of Topic 606. The Company early adopted the new standard effective April 1, 2018. The adoption of this standard did not have a material impact on the Company's condensed consolidated financial statements. ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting ("ASU No. 2017-09"). ASU No. 2017-09 clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The Company adopted the new standard effective January 1, 2018, which did not have a material impact on its condensed consolidated financial statements. ASU 2016-18, Restricted Cash (Topic 230): Statement of Cash Flows In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash (Topic 230): Statement of Cash Flows ("ASU No. 2016-18"). ASU No. 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Restricted cash and restricted cash equivalents will be included with cash and cash equivalents when reconciling the beginning of period and end of period balances on the statement of cash flows upon adoption of this standard. The Company adopted the new standard effective January 1, 2018. Restricted cash primarily consists of collateralized cash for a standby letter of credit and guarantee arrangement with a bank. ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ("ASU No. 2016-15"). ASU No. 2016-15 eliminates the diversity in practice related to the classification of certain cash receipts and payments for debt prepayments or extinguishment costs, the maturing of a zero-coupon bond, the settlement of contingent liabilities arising from a business combination, proceeds from insurance settlements, distributions from certain equity method investees and beneficial interests obtained in a financial asset securitization. ASU No. 2016-15 designates the appropriate cash flow classification, including requirements to allocate certain components of these cash receipts and payments among operating, investing and financing activities. The Company adopted the new standard effective January 1, 2018 and has determined the impact of ASU No. 2016-15 on its condensed consolidated financial statements will be related to the settlement of contingent liabilities arising from a business combination. ASU 2016-02, Leases (Topic 842) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASU No. 2016-02"). ASU No. 2016-02 increases transparency and comparability among organizations by requiring the recognition of lease assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements for both lessees and lessors. The standard will be effective January 1, 2019 for the Company, with early adoption permitted. The standard will be applied using a modified retrospective approach to the beginning of the earliest period presented in the financial statements. The Company's implementation efforts are primarily focused on the review of its existing lease contracts, identification of other contracts that may fall under the scope of the new guidance and performing a gap analysis on the current state of lease-related activities compared with the future state of lease-related activities. The Company has identified the lease agreements that will be impacted by the new standard and is currently evaluating the overall impact on its condensed consolidated financial statements and related disclosures. There are no other recently issued accounting pronouncements that are expected to have a material impact on the Company's financial position, results of operations or cash flows. |
Revenue Recognition |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | 2. Revenue recognition In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU No. 2014-09"). ASU No. 2014-09 (known as ASC 606) supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, as well as most industry-specific guidance, and significantly enhances comparability of revenue recognition practices across entities and industries by providing a principles-based, comprehensive framework for addressing revenue recognition issues. In order for a provider of promised goods or services to recognize as revenue the consideration that it expects to receive in exchange for the promised goods or services, the provider should apply the following five steps: (1) identify the contract with a customer(s); (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. ASU No. 2014-09 also specifies the accounting for some costs to obtain or fulfill a contract with a customer and provides enhanced disclosure requirements. The Company adopted the requirements of the new standard as of January 1, 2018 using the modified retrospective method. The modified retrospective method requires companies to recognize the cumulative effect of initially applying the new standard as an adjustment to opening retained earnings. A performance obligation is a promise in a contract to transfer a distinct product or service to a customer and is the unit of account under ASC 606. For contracts with multiple performance obligations, the Company allocates the contract's transaction price to each performance obligation on a relative standalone selling price basis using the Company's best estimate of the standalone selling price of each distinct product or service in the contract. The primary method used to estimate standalone selling price is the price observed in standalone sales to customers, however when prices in standalone sales are not available the Company may use third-party pricing for similar products or services or estimate the standalone selling price. Allocation of the transaction price is determined at the contracts' inception. Once the performance obligations in the contract have been identified, the Company estimates the transaction price of the contract. The estimate includes amounts that are fixed as well as those that can vary based on expected outcomes of the activities or contractual terms. The Company's variable consideration primarily includes consideration transferred under its development contracts with the U.S. government as consideration received can vary based on developmental progression of the product candidate(s). When a contract's transaction price includes variable consideration, the Company evaluates the estimate of the variable consideration to determine whether the estimate needs to be constrained; therefore, the Company includes the variable consideration in the transaction price only to the extent that it is probable that a significant reversal of the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Variable consideration estimates are updated at each reporting date. There were no constraints or material changes to the Company's variable consideration estimates as of or during the six months ended June 30, 2018. To indicate the transfer of control for the Company's product sales and contract manufacturing services, it must have a present right to payment, legal title must have passed to the customer, and the customer must have the significant risks and rewards of ownership. Revenue for long-term development contracts is generally recognized based upon the cost-to-cost measure of progress, provided that the Company meets the criteria associated with transferring control of the good or service over time. The Company derives revenues primarily from the sale of its marketed medical countermeasures ("MCMs") products and contract revenues associated with development of its MCMs. The primary customer for the Company's MCM products and the development of the Company's MCM product candidate portfolio is the U.S. government. The Company's contracts for the sale of its MCM products generally have single performance obligation. Certain product sales contracts with the U.S. government include multiple performance obligations, which generally include the marketed product, stability testing associated with that product, expiry extensions and plasma collection. The Company's development contracts for its MCM product candidates generally are cost plus fixed fee arrangements, which the Company treats a single performance obligation with variable consideration. The U.S. government contracts for the sale and development of the Company's MCM products and product candidates are normally multi-year contracts. In addition, the Company performs contract manufacturing services for third parties, which includes pharmaceutical product process development, manufacturing and filling services for injectable and other sterile products, inclusive of process design, technical transfer, manufacturing validations, laboratory analytical development support, aseptic filling, lyophilization, final packaging and accelerated and ongoing stability studies. These contracts generally include a single performance obligation with a duration that is less than one-year. The Company finalized the review of its portfolio of revenue contracts that were not complete as of the adoption date and made its determination of its revenue streams as well as completed extensive contract specific reviews to determine the impact of the new standard on its historical and prospective revenue recognition. Because many of the Company's contracts with customers have unique contract terms, the Company reviewed all of its non-standard agreements in order to determine the effect of adoption. The Company determined its Centers for Innovation in Advanced Development and Manufacturing ("CIADM") contract with the Biomedical Advanced Research and Development Authority ("BARDA") will have a material change in revenue recognition under the new guidance. Under ASC 606, the Company determined that there is one performance obligation to provide ongoing manufacturing capability to the U.S. government and will recognize the consideration received in the base period on a straight-line basis over a 24-year period as the capability being created during the base period of the contract is being provided to the customer over both the base period contract term as well as 17 additional option periods. In addition, the Company determined the CIADM contract includes a significant financing component which is included in the transaction price. The Company calculated the financing component using an interest rate the Company had on its other debt obligations at inception of the contract. Prior to the adoption of ASC 606, the Company recognized revenue under the CIADM contract on a straight-line basis, based upon its estimate of the total payments to be received under the contract. The Company analyzed the estimated payments to be received on a quarterly basis to determine if an adjustment to revenue was required. As a result of the adoption of ASC 606, as of January 1, 2018, there was an increase in the deferred revenue liability of $42.4 million and an increase in deferred tax assets of $9.9 million with an offsetting reduction to retained earnings of $32.5 million. The Company considers accounts receivables and deferred costs associated with revenue generating contracts, that are not included in inventory or property, plant and equipment, as contract assets. As of June 30, 2018 and December 31, 2017, the Company had $189.5 million and $143.7 million, respectively, in contract assets associated with accounts receivable which is included in accounts receivable on the company's condensed consolidated balance sheets. As of June 30, 2018 and December 31, 2017, the Company had contract assets associated with deferred costs of $3.4 million and $2.9 million, respectively, which is included in prepaid and other current assets on the Company's condensed consolidated balance sheets. When performance obligations are not transferred to a customer at the end of a reporting period, the amount allocated to those performance obligations are deferred until control of these performance obligations is transferred to the customer. The following table presents the rollforward of the contract liabilities, which is included in the Company's current and long-term deferred revenue line items in the condensed consolidated balance sheets:
We operate in one business segment. Therefore, results of our operations are reported on a consolidated basis for purposes of segment reporting, consistent with internal management reporting. For the three and six months ended June 30, 2018, there was a nominal difference between revenues recognized under ASC 606 and revenues recognized based on the prior revenue recognition guidance for the same period. For the three and six months ended June 30, 2018, the Company's revenues disaggregated by the major sources was as follows:
As of June 30, 2018, the Company had expected future revenues associated with performance obligations that have not been satisfied of approximately $630 million. The Company expects to recognize a majority of its revenues within the next 24 months with the remainder recognized thereafter. However, the amount and timing of recognition of revenue for unsatisfied performance obligations can materially change due to timing of funding appropriations from the U.S. government and the overall success of the Company's development activities associated with its MCM product candidates. In addition, the amount of future revenues associated with unsatisfied performance obligations excludes the value associated with unexercised option periods in the Company's contracts (which are not performance obligations as of June 30, 2018). |
Acquisitions |
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Acquisitions | 3. Acquisitions Acquisition of ACAM2000 business On October 6, 2017, the Company completed the acquisition of the ACAM2000® (Smallpox (Vaccinia) Vaccine, Live) business of Sanofi Pasteur Biologics, LLC ("Sanofi"). This acquisition included ACAM2000, the only smallpox vaccine licensed by the FDA, a current good manufacturing practices ("cGMP") live viral manufacturing facility and office and warehouse space, both in Canton, Massachusetts, and a cGMP viral fill/finish facility in Rockville, Maryland. With this acquisition, the Company also acquired an existing 10-year contract with the Centers for Disease Control and Prevention ("CDC"), which under the terms expired in March 2018. This contract had a stated value of up to $425 million, with a remaining contract value of up to approximately $160 million as of the acquisition date, for the delivery of ACAM2000 to the U.S. Strategic National Stockpile ("SNS") and the establishment of U.S.-based manufacturing of ACAM2000. This acquisition added to the Company's product portfolio and expanded the Company's manufacturing capabilities. At the closing, the Company paid $97.5 million in an upfront payment and $20 million in milestone payments earned as of the closing date tied to the achievement of certain regulatory and manufacturing-related milestones, for a total payment in cash of $117.5 million. The agreement included an additional milestone payment of up to $7.5 million upon achievement of a regulatory milestone, which was achieved in November 2017. The $7.5 million milestone payment was made during the fourth quarter of 2017. This transaction was accounted for by the Company under the acquisition method of accounting, with the Company as the acquirer. Under the acquisition method of accounting, the assets and liabilities of the ACAM2000 business were preliminarily recorded as of October 6, 2017, the acquisition date, at their respective fair values, and combined with those of the Company. The contingent purchase consideration obligation is based on a regulatory milestone. At October 6, 2017, the contingent purchase consideration obligation related to the regulatory milestone was recorded at a fair value of $2.2 million. The fair value of this obligation is based on a present value model of management's assessment of the probability of achievement of the regulatory milestone as of the acquisition date. This assessment is based on inputs that have no observable market (Level 3). The total purchase price is summarized below:
The table below summarizes the preliminary allocation of the purchase price based upon estimated fair values of assets acquired at October 6, 2017. The Company did not assume any liabilities in the acquisition. This preliminary allocation is based upon the finalization of valuation reports and as management gathers additional information on the acquired assets.
The Company determined the fair value of the intangible asset using the income approach, which is based on the present value of future cash flows. The fair value measurements are based on significant unobservable inputs that are developed by the Company using estimates and assumptions of the respective market and market penetration of the Company's products. The Company determined the fair value of the ACAM2000 intangible asset using the income approach with a present value discount rate of 15.5%; this discount rate is derived from the estimated weighted-average cost of capital for substantially similar companies and assets. This is comparable to the estimated internal rate of return for the acquisition and represents the rate that market participants would use to value these intangible assets. The projected cash flows from the ACAM2000 intangible asset were based on key assumptions, including: estimates of revenues and operating profits, the life of the potential commercialized product and associated risks, and risks related to the viability of and potential alternative treatments in any future target markets. The Company has determined the ACAM2000 intangible asset will be amortized over 10 years. The Company determined the fair value of the inventory using the probability adjusted comparative sales method, which estimates the expected sales price reduced for all costs expected to be incurred to complete and dispose of the inventory with a profit on those costs. The Company determined the fair value of the property, plant and equipment utilizing either the cost approach or the sales comparison approach. The cost approach is derived by determining replacement cost of the asset and then subtracting any value that has been lost due to economic obsolescence, functional obsolescence, or physical deterioration. The sales comparison approach is derived by the determination that an asset is equal to the market price of an asset of comparable features such as design, location, size, construction, materials, use, capacity, specification, operational characteristics and other features or descriptions. The Company recorded approximately $8.1 million in goodwill related to the ACAM2000 acquisition, representing the purchase price paid in the acquisition that was in excess of the fair value of the tangible and intangible assets acquired. There is no goodwill for tax purposes. |
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Fair value measurements [Abstract] | ||||||||||||||||||||||||||
Fair value measurements | 4. Fair value measurements Contingent consideration consists of liabilities measured at fair value on a recurring basis. For the three and six months ended June 30, 2018, the contingent purchase consideration obligations associated with RSDL increased by $0.7 million and $1.6 million, respectively. During the three and six months ended June 30, 2017, the contingent purchase consideration obligations associated with RSDL increased by $0.2 million and $0.5 million, respectively. The changes in the fair value of the RSDL contingent consideration obligations are primarily due to the expected amount and timing of future net sales, which are inputs that have no observable market (Level 3). These changes are classified in the Company's statement of operations as cost of product sales and contract manufacturing. The following table is a reconciliation of the beginning and ending balance of the liabilities, consisting only of contingent consideration, measured at fair value, using significant unobservable inputs (Level 3) during the six months ended June 30, 2018.
Separate disclosure is required for assets and liabilities measured at fair value on a recurring basis from those measured at fair value on a non-recurring basis. As of June 30, 2018 and 2017 and for the quarters then ended, the Company had no significant assets or liabilities that were measured at fair value on a non-recurring basis. |
Inventories |
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Inventories | 5. Inventories Inventories consisted of the following:
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Property, plant and equipment |
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Property, plant and equipment | 6. Property, plant and equipment Property, plant and equipment consisted of the following:
In the table presented above, as of June 30, 2018 and December 31, 2017, construction-in-progress primarily includes costs related to construction of the Company's CIADM facility. |
Intangible assets |
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Intangible assets [Abstract] | |
Intangible assets | 7. Intangible assets During the three months ended June 30, 2018 and 2017, the Company recorded amortization expense for intangible assets of $3.9 million and $1.6 million, respectively. During the six months ended June 30, 2018 and 2017, the Company recorded amortization expense for intangible assets of $7.8 million and $3.1 million, respectively. Amortization expense has been recorded in operating expenses, specifically selling, general and administrative and cost of product sales and contract manufacturing. As of June 30, 2018, the weighted average amortization period remaining for intangible assets was 8.3 years. |
Equity |
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Jun. 30, 2018 | |
Equity [Abstract] | |
Equity | 8. Equity During the six months ended June 30, 2018, the Company granted 0.4 million shares of stock options and 0.4 million shares of restricted stock units under the Fourth Amended and Restated Emergent BioSolutions Inc. 2006 Stock Incentive Plan (the "Plan"). The grants vest over three equal annual installments beginning on the day prior to the anniversary of the grant date. On May 24, 2018, the Company's stockholders approved an increase in the number of shares issuable under the Plan by 3.0 million shares, to a total of 21.9 million shares, and extended the plan term to May 23, 2028. |
Income taxes |
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Income taxes [Abstract] | |
Income taxes | 9. Income taxes The estimated effective annual tax rate for the Company, which excludes discrete adjustments, was 25% and 31% for the six months ended June 30, 2018 and 2017, respectively. The decrease in the estimated effective annual tax rate is primarily due to the impact of the Tax Reform Act enacted on December 22, 2017 which reduced the U.S. federal corporate income tax rate from 35% to 21%, offset by state taxes, non-deductible expenses, international provisions from the U.S. tax reform and the impact of a change in the Company's jurisdictional mix of earnings. For the six months ended June 30, 2018 and 2017, the Company recorded a discrete tax benefit primarily associated with equity awards activity of $3.2 million and $1.1 million, respectively. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act. For the six months ended June 30, 2018, the Company did not change the provisional estimates recognized in 2017. Additional work is necessary for a more detailed analysis of the Company's deferred tax assets and liabilities and its historical foreign earnings as well as potential correlative adjustments. Any adjustment to these amounts will be recorded to current tax expense in the quarter of 2018 when the analysis is complete. |
Purchase commitments |
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Purchase commitments [Abstract] | |
Purchase commitments | 10. Purchase commitments During the first quarter of 2018, the Company entered into a three year contract with Norwood Laboratories Inc. ("Norwood") to purchase approximately $12.0 million of raw materials related to the Company's RSDL product. As of June 30, 2018, the Company had not purchased any materials under this commitment. |
Earnings per share |
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Earnings per share | 11. Earnings per share The following table presents the calculation of basic and diluted net income per share:
For the three and six months ended June 30, 2018 and 2017, basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. For the three and six months ended June 30, 2018, diluted earnings per share was computed using the "treasury method" by dividing the net income by the weighted average number of shares of common stock outstanding during the period. The weighted average number of shares is adjusted for the potential dilutive effect of the exercise of stock options, and the vesting of restricted stock units and performance stock units. For the three and six months ended June 30, 2017, diluted earnings per share is computed using the "if-converted" method by dividing the net income adjusted for interest expense and amortization of debt issuance cost, both net of tax, associated with the 2.875% Convertible Senior Notes due 2021 (the "Notes") by the weighted average number of shares of common stock outstanding during the period. The weighted average number of shares is adjusted for the potential dilutive effect of the exercise of stock options; and the vesting of restricted stock units and performance stock units along with the assumption of the conversion of the Notes, at the beginning of the period. For the three and six months ended June 30, 2018, there were no stock options excluded from the calculation of diluted earnings per share. For the three and six months ended June 30, 2017, approximately 0.4 million stock options were excluded from the calculation of diluted earnings per share due to the fact that the exercise prices were in excess of the average per share closing price during the period. |
Litigation |
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Litigation [Abstract] | |
Litigation | 12. Litigation On July 19, 2016, Plaintiff William Sponn ("Sponn"), filed a putative class action complaint in the United States District Court for the District of Maryland on behalf of purchasers of the Company's common stock between January 11, 2016 and June 21, 2016, inclusive (the "Class Period"), seeking to pursue remedies under the Securities Exchange Act of 1934 against the Company and certain of its senior officers and directors, collectively, the Defendants. The complaint alleges, among other things, that the Company made materially false and misleading statements about the government's demand for BioThrax and expectations that the Company's five-year exclusive procurement contract with HHS would be renewed and omitted certain material facts. Sponn is seeking unspecified damages, including legal costs. On October 25, 2016, the Court added City of Cape Coral Municipal Firefighters' Retirement Plan and City of Sunrise Police Officers' Retirement Plan as plaintiffs and appointed them Lead Plaintiffs and Robins Geller Rudman & Dowd LLP as Lead Counsel. On December 27, 2016, the Plaintiffs filed an amended complaint that cites the same class period, names the same defendants and makes similar allegations to the original complaint. The Company filed a Motion to Dismiss on February 27, 2017. The Plaintiffs filed an opposition brief on April 28, 2017. The Company's Motion to Dismiss was heard and denied on July 6, 2017. The Company filed its answer on July 28, 2017. The parties are currently in the process of exchanging discovery. The Plaintiffs filed an amended motion for class certification and appointment of Sponn and Geoffrey L. Flagstad as lead plaintiffs on December 20, 2017. A hearing on that motion was heard on May 2, 2018. On June 8, 2018 the Court granted class certification with a shortened class period, May 5, 2016 to June 21, 2016. The Defendants believe that the allegations in the complaint are without merit and intend to defend themselves vigorously against those claims. As of the date of this filing, the range of potential loss cannot be determined or estimated. |
Summary of significant accounting policies (Policies) |
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Summary of significant accounting policies [Abstract] | |
Basis of presentation and consolidation | Basis of presentation and consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of Emergent BioSolutions Inc. ("Emergent" or the "Company") and its wholly owned and majority owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The unaudited consolidated financial statements included herein have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X issued by the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the SEC. In the opinion of the Company's management, any adjustments contained in the accompanying unaudited condensed consolidated financial statements are of a normal recurring nature and are necessary to present fairly the financial position of the Company as of June 30, 2018. Interim results are not necessarily indicative of results that may be expected for any other interim period or for an entire year. Significant accounting policies During the six months ended June 30, 2018, there have been no significant changes to the Company's summary of significant accounting policies contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the SEC, except for the new revenue recognition standard the Company adopted effective January 1, 2018. See Note 2. "Revenue recognition" for further details. |
Recently issued accounting standards | Recently issued accounting standards ASU No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting In June 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting ("ASU No. 2018-07"). ASU No. 2018-07 expands the scope of Topic 718 to include share-based payments issued to nonemployees for goods and services. ASU No. 2018-07 is intended to reduce cost and complexity and to improve financial reporting for share-based payments issued to nonemployees (for example, service providers, external legal counsel, suppliers, etc.). The standard will be effective after December 15, 2018 for the Company, with early adoption permitted, but no earlier than the Company's adoption date of Topic 606. The Company early adopted the new standard effective April 1, 2018. The adoption of this standard did not have a material impact on the Company's condensed consolidated financial statements. ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting ("ASU No. 2017-09"). ASU No. 2017-09 clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The Company adopted the new standard effective January 1, 2018, which did not have a material impact on its condensed consolidated financial statements. ASU 2016-18, Restricted Cash (Topic 230): Statement of Cash Flows In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash (Topic 230): Statement of Cash Flows ("ASU No. 2016-18"). ASU No. 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Restricted cash and restricted cash equivalents will be included with cash and cash equivalents when reconciling the beginning of period and end of period balances on the statement of cash flows upon adoption of this standard. The Company adopted the new standard effective January 1, 2018. Restricted cash primarily consists of collateralized cash for a standby letter of credit and guarantee arrangement with a bank. ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ("ASU No. 2016-15"). ASU No. 2016-15 eliminates the diversity in practice related to the classification of certain cash receipts and payments for debt prepayments or extinguishment costs, the maturing of a zero-coupon bond, the settlement of contingent liabilities arising from a business combination, proceeds from insurance settlements, distributions from certain equity method investees and beneficial interests obtained in a financial asset securitization. ASU No. 2016-15 designates the appropriate cash flow classification, including requirements to allocate certain components of these cash receipts and payments among operating, investing and financing activities. The Company adopted the new standard effective January 1, 2018 and has determined the impact of ASU No. 2016-15 on its condensed consolidated financial statements will be related to the settlement of contingent liabilities arising from a business combination. ASU 2016-02, Leases (Topic 842) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASU No. 2016-02"). ASU No. 2016-02 increases transparency and comparability among organizations by requiring the recognition of lease assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements for both lessees and lessors. The standard will be effective January 1, 2019 for the Company, with early adoption permitted. The standard will be applied using a modified retrospective approach to the beginning of the earliest period presented in the financial statements. The Company's implementation efforts are primarily focused on the review of its existing lease contracts, identification of other contracts that may fall under the scope of the new guidance and performing a gap analysis on the current state of lease-related activities compared with the future state of lease-related activities. The Company has identified the lease agreements that will be impacted by the new standard and is currently evaluating the overall impact on its condensed consolidated financial statements and related disclosures. There are no other recently issued accounting pronouncements that are expected to have a material impact on the Company's financial position, results of operations or cash flows. |
Revenue Recognition (Tables) |
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Revenue Recognition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rollforward of Contract Liabilities | When performance obligations are not transferred to a customer at the end of a reporting period, the amount allocated to those performance obligations are deferred until control of these performance obligations is transferred to the customer. The following table presents the rollforward of the contract liabilities, which is included in the Company's current and long-term deferred revenue line items in the condensed consolidated balance sheets:
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Disaggregation of Revenue | We operate in one business segment. Therefore, results of our operations are reported on a consolidated basis for purposes of segment reporting, consistent with internal management reporting. For the three and six months ended June 30, 2018, there was a nominal difference between revenues recognized under ASC 606 and revenues recognized based on the prior revenue recognition guidance for the same period. For the three and six months ended June 30, 2018, the Company's revenues disaggregated by the major sources was as follows:
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Acquisitions (Tables) |
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Total Purchase Price | The total purchase price is summarized below:
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Allocation of Purchase Price Based Upon Estimated Fair Values of Assets Acquired and Liabilities Assumed | The table below summarizes the preliminary allocation of the purchase price based upon estimated fair values of assets acquired at October 6, 2017. The Company did not assume any liabilities in the acquisition. This preliminary allocation is based upon the finalization of valuation reports and as management gathers additional information on the acquired assets.
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Fair value measurements (Tables) |
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Fair value measurements [Abstract] | ||||||||||||||||||||||||||
Reconciliation of Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) | The following table is a reconciliation of the beginning and ending balance of the liabilities, consisting only of contingent consideration, measured at fair value, using significant unobservable inputs (Level 3) during the six months ended June 30, 2018.
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Inventories (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories consisted of the following:
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Property, plant and equipment (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, plant and equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | Property, plant and equipment consisted of the following:
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Earnings per share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic and Diluted Net Income per Share | The following table presents the calculation of basic and diluted net income per share:
|
Revenue Recognition (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2018
USD ($)
Period
Segment
|
Jun. 30, 2017
USD ($)
|
Dec. 31, 2017
USD ($)
|
|
Revenue [Abstract] | |||||
Transaction price | $ 630,000 | $ 630,000 | |||
Number of additional option periods | Period | 17 | ||||
Contract revenue | 220,200 | $ 100,772 | $ 338,014 | $ 217,630 | |
Number of operating segments | Segment | 1 | ||||
Contract with Customer, Asset and Liability [Abstract] | |||||
Accounts receivable | 189,489 | $ 189,489 | $ 143,653 | ||
Deferred costs | 3,400 | 3,400 | 2,900 | ||
Contract with Customer, Liability [Abstract] | |||||
Contract liability | 73,005 | 73,005 | |||
Deferral of revenue | 15,478 | ||||
Recognition of revenue included in beginning of year contract liability | (15,343) | ||||
Contract liability | $ 73,005 | $ 73,005 | |||
Accounting Standards Update 2014-09 [Member] | |||||
Contract with Customer, Liability [Abstract] | |||||
Contract liability | 72,870 | ||||
Contract liability | 72,870 | ||||
CIADM [Member] | |||||
Revenue [Abstract] | |||||
Term of contract | 24 years | ||||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | |||||
Contract with Customer, Liability [Abstract] | |||||
Contract liability | 42,379 | ||||
Contract liability | 42,379 | ||||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | CIADM [Member] | Accounting Standards Update 2014-09 [Member] | |||||
Revenue [Abstract] | |||||
Retained earnings | 32,500 | ||||
Deferred tax assets | 9,900 | ||||
Contract with Customer, Liability [Abstract] | |||||
Contract liability | 42,400 | ||||
Contract liability | 42,400 | ||||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | |||||
Contract with Customer, Liability [Abstract] | |||||
Contract liability | 30,491 | ||||
Contract liability | $ 30,491 |
Revenue Recognition, Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Disaggregation of revenue [Abstract] | ||||
Total revenues | $ 220,200 | $ 100,772 | $ 338,014 | $ 217,630 |
U.S. Government [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total revenues | 185,147 | 265,977 | ||
Non-U.S. Government [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total revenues | 35,053 | 72,037 | ||
Product Sales [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total revenues | 180,075 | 63,610 | 255,846 | 145,579 |
Product Sales [Member] | U.S. Government [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total revenues | 169,897 | 235,922 | ||
Product Sales [Member] | Non-U.S. Government [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total revenues | 10,178 | 19,924 | ||
Contract Manufacturing [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total revenues | 23,613 | 16,160 | 49,791 | 33,788 |
Contract Manufacturing [Member] | U.S. Government [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total revenues | 0 | 0 | ||
Contract Manufacturing [Member] | Non-U.S. Government [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total revenues | 23,613 | 49,791 | ||
Contracts and Grants [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total revenues | 16,512 | $ 21,002 | 32,377 | $ 38,263 |
Contracts and Grants [Member] | U.S. Government [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total revenues | 15,250 | 30,055 | ||
Contracts and Grants [Member] | Non-U.S. Government [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Total revenues | $ 1,262 | $ 2,322 |
Revenue Recognition, Performance Obligations (Details) $ in Millions |
Jun. 30, 2018
USD ($)
|
---|---|
Performance Obligations [Abstract] | |
Performance obligations expected to be satisfied | $ 630 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01 | |
Performance Obligations [Abstract] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 24 months |
Acquisitions (Details) - USD ($) $ in Thousands |
Oct. 06, 2017 |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Fair value of tangible assets acquired and liabilities assumed [Abstract] | |||
Goodwill | $ 49,130 | $ 49,130 | |
Sanofi [Member] | |||
Summary of total purchase price [Abstract] | |||
Amount of cash paid to Sanofi | $ 117,500 | ||
Fair value of contingent purchase consideration | 2,200 | ||
Total purchase price | 119,700 | ||
Fair value of tangible assets acquired and liabilities assumed [Abstract] | |||
Inventory | 74,876 | ||
Property, plant and equipment | 19,995 | ||
Total fair value of tangible assets acquired and liabilities assumed | 94,871 | ||
Acquired intangible asset | 16,700 | ||
Goodwill | 8,129 | ||
Total purchase price | $ 119,700 | ||
ACAM2000 [Member] | |||
Acquisitions [Abstract] | |||
Term of contract under acquisition | 10 years | ||
Value of contract | $ 425,000 | ||
Amount for deliveries of product to the SNS | 160,000 | ||
Upfront cash payment | 97,500 | ||
Amount of payment for manufacturing related milestones | 20,000 | ||
Amount of payment for regulatory related milestones | $ 7,500 | $ 7,500 | |
Fair value of tangible assets acquired and liabilities assumed [Abstract] | |||
Amortization period of intangible asset | 10 years | ||
ACAM2000 [Member] | Discount Rate [Member] | |||
Fair value of tangible assets acquired and liabilities assumed [Abstract] | |||
Present value discount rate | 15.50% |
Fair value measurements (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Unobservable Input Reconciliation [Roll Forward] | ||||
Balance, beginning of period | $ 12,274 | |||
Expense included in earnings | 1,674 | |||
Settlements | (1,257) | |||
Balance, end of period | $ 12,691 | 12,691 | ||
RSDL [Member] | ||||
Unobservable Input Reconciliation [Roll Forward] | ||||
Change in fair value of contingent obligations | $ 700 | $ 200 | $ 1,600 | $ 500 |
Inventories (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Inventories [Abstract] | ||
Raw materials and supplies | $ 34,426 | $ 36,069 |
Work-in-process | 79,546 | 76,610 |
Finished goods | 25,401 | 30,133 |
Total inventories | $ 139,373 | $ 142,812 |
Property, plant and equipment (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Property, plant and equipment [Abstract] | ||
Property, plant and equipment, gross | $ 571,732 | $ 539,584 |
Less: Accumulated depreciation and amortization | (152,575) | (132,374) |
Total Property, plant and equipment, net | 419,157 | 407,210 |
Land and Improvements [Member] | ||
Property, plant and equipment [Abstract] | ||
Property, plant and equipment, gross | 21,848 | 21,843 |
Buildings, Building Improvements and Leasehold Improvements [Member] | ||
Property, plant and equipment [Abstract] | ||
Property, plant and equipment, gross | 159,264 | 160,005 |
Furniture and Equipment [Member] | ||
Property, plant and equipment [Abstract] | ||
Property, plant and equipment, gross | 213,445 | 206,819 |
Software [Member] | ||
Property, plant and equipment [Abstract] | ||
Property, plant and equipment, gross | 52,343 | 50,829 |
Construction-In-Progress [Member] | ||
Property, plant and equipment [Abstract] | ||
Property, plant and equipment, gross | $ 124,832 | $ 100,088 |
Intangible assets (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Intangible assets [Abstract] | ||||
Amortization | $ 3.9 | $ 1.6 | $ 7.8 | $ 3.1 |
Weighted average amortization period | 8 years 3 months 18 days |
Equity (Details) - 2006 Plan [Member] shares in Millions |
6 Months Ended | |
---|---|---|
May 24, 2018
shares
|
Jun. 30, 2018
Installment
shares
|
|
Stock issued or granted during period [Abstract] | ||
Number of installments | Installment | 3 | |
Increase in number of shares issuable under the plan (in shares) | 3.0 | |
Total number of shares issuable under the plan (in shares) | 21.9 | |
Extended plan term date | May 23, 2028 | |
Stock Options [Member] | ||
Stock issued or granted during period [Abstract] | ||
Stock options granted (in shares) | 0.4 | |
Restricted Stock Units [Member] | ||
Stock issued or granted during period [Abstract] | ||
Restricted stock units granted (in shares) | 0.4 |
Income taxes (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Income taxes [Abstract] | |||
Effective annual tax rate | 25.00% | 31.00% | |
Federal corporate tax rate | 21.00% | 35.00% | |
Discrete tax benefit associated with equity activity | $ 3.2 | $ 1.1 |
Purchase commitments (Details) $ in Millions |
Jun. 30, 2018
USD ($)
|
---|---|
Purchase commitments [Abstract] | |
Total purchase commitment to Norwood Laboratories Inc. | $ 12.0 |
Earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|||
Numerator [Abstract] | ||||||
Net Income | $ 50,144 | $ 4,616 | $ 45,236 | $ 15,101 | ||
Interest expense, net of tax | 0 | 835 | 0 | 1,742 | ||
Amortization of debt issuance costs, net of tax | 0 | 195 | 0 | 391 | ||
Net income, adjusted | $ 50,144 | $ 5,646 | $ 45,236 | $ 17,234 | ||
Denominator [Abstract] | ||||||
Weighted-average number of shares-basic (in shares) | 49,896,124 | 41,013,764 | 49,738,980 | 40,871,540 | ||
Dilutive securities-equity awards (in shares) | 1,266,785 | 968,354 | 1,300,215 | 931,263 | ||
Dilutive securities-convertible debt (in shares) | 0 | 8,096,476 | 0 | 8,096,488 | ||
Weighted-average number of shares-diluted (in shares) | 51,162,909 | 50,078,594 | 51,039,195 | 49,899,291 | ||
Net income per share-basic (in dollars per share) | $ 1.00 | $ 0.11 | $ 0.91 | $ 0.37 | ||
Net income per share-diluted (in dollars per share) | [1] | $ 0.98 | $ 0.11 | $ 0.89 | $ 0.35 | |
Stock Options [Member] | ||||||
Antidilutive shares excluded from computation of earnings per share [Abstract] | ||||||
Antidilutive shares excluded from calculation (in shares) | 400,000 | 400,000 | ||||
Convertible debt [Member] | ||||||
Antidilutive shares excluded from computation of earnings per share [Abstract] | ||||||
Interest rate percentage | 2.875% | 2.875% | ||||
|
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