Emergent BioSolutions Reports Financial Results for Fourth Quarter and Full Year 2020
- Reports record fourth quarter and year to date 2020 performance, in line with prior guidance
- Reaffirms full year 2021 forecast
“Emergent’s financial and operational performance in 2020 reflects the impact we are making in addressing the growing public health threat landscape and meeting our mission to protect and enhance the lives of patients,” said
FINANCIAL HIGHLIGHTS (1)
| (in millions, except per share data) | Q4 2020 | Q4 2019 | % Change | |||
| Total Revenues | $ | 583.0 | $ | 360.4 | 62 | % |
| Net Income | $ | 185.4 | $ | 46.9 | * | |
| Net Income Per Diluted Share | $ | 3.44 | $ | 0.90 | * | |
| Adjusted Net Income (2) | $ | 198.8 | $ | 82.7 | * | |
| Adjusted Net Income Per Diluted Share (2) | $ | 3.67 | $ | 1.57 | * | |
| Adjusted EBITDA (2) | $ | 290.9 | $ | 134.3 | * | |
| (in millions, except per share data) | Full Year 2020 | Full Year 2019 | % Change | |||
| Total Revenues | $ | 1,555.4 | $ | 1,106.0 | 41 | % |
| Net Income | $ | 305.1 | $ | 54.5 | * | |
| Net Income Per Diluted Share | $ | 5.67 | $ | 1.04 | * | |
| Adjusted Net Income (2) | $ | 423.9 | $ | 152.3 | * | |
| Adjusted Net Income Per Diluted Share (2) | $ | 7.88 | $ | 2.91 | * | |
| Adjusted EBITDA (2) | $ | 630.4 | $ | 279.7 | * | |
| * % change greater than 100% | ||||||
SELECT Q4 2020 AND RECENT BUSINESS ACCOMPLISHMENTS
- Completed three-year,
$50 million expansion at the Company's Baltimore Camden drug product facility, including a new state-of-the-art fill/finish line that became operational inJanuary 2021 , intended to significantly increase contract development and manufacturing (CDMO) capacity and capability. - Signed a CDMO services agreement with Providence Therapeutics to provide drug product manufacturing services for their mRNA PTX-COVID19-B vaccine candidate at the Company's
Winnipeg, Manitoba facility. - Signed a CDMO services agreement for drug product manufacturing of Humanigen's COVID-19 therapeutic candidate, lenzilumab™, at the Company's Baltimore Camden facility.
- Initiated a Phase 3 clinical trial with the
National Institutes of Health to evaluate hyperimmune globulins, including the Company's COVID-19 human hyperimmune globulin (COVID-HIG) product candidate, as a potential treatment in adult patients hospitalized with COVID-19. - Initiated a clinical program to evaluate COVID-HIG to support its use for potential post-exposure prophylaxis in individuals at high risk of exposure to SARS-CoV-2 such as front-line health care workers and military personnel.
2020 FINANCIAL PERFORMANCE (1)
(I) Quarter Ended
Revenues
Total Revenues
For Q4 2020, total revenues were
Product Sales
For Q4 2020, total product sales were
| Three Months Ended |
||||||
| (in millions) | 2020 | 2019 | % Change | |||
| Product Sales: | ||||||
| ACAM2000® | $ | 129.3 | $ | 78.5 | 65 | % |
| Anthrax Vaccines | $ | 115.7 | $ | 92.9 | 25 | % |
| NARCAN® Nasal Spray | $ | 77.4 | $ | 66.9 | 16 | % |
| Other | $ | 18.5 | $ | 72.5 | (74 | )% |
| Total Product Sales | $ | 340.9 | $ | 310.8 | 10 | % |
For Q4 2020, revenue from CDMO services was
Contracts and Grants
For Q4 2020, revenue from development-based contracts and grants was
Operating Expenses
Cost of Product Sales and
For Q4 2020, cost of product sales and CDMO services was
Research and Development (Gross and Net) (2)
For Q4 2020, gross R&D expenses were
For Q4 2020, net R&D expense, which reflects investments made in development programs that are not currently funded in whole or in part by third-party partners, was
Selling, General and Administrative
For Q4 2020, selling, general and administrative expenses were
Additional Financial Information
Gross Margin (2)
For Q4 2020, gross margin was
CDMO Backlog and Opportunity Funnel
CDMO backlog, defined as estimated future services revenues for 2021 and beyond under signed contracts, was $1.34 billion at
The CDMO opportunity funnel, defined as the initial contract value to potentially be realized in 2021 and beyond based on issued proposals as well as the value of extensions associated with existing contracts, was approximately
(II) Full Year 2020
Revenues
Total Revenues
For the full year 2020, total revenues were
Product Sales
For the full year 2020, product sales were
| Year Ended |
||||||
| (in millions) | 2020 | 2019 | % Change | |||
| Product Sales: | ||||||
| Anthrax Vaccines | $ | 373.8 | $ | 172.8 | * | |
| NARCAN® Nasal Spray | $ | 311.2 | $ | 280.4 | 11 | % |
| ACAM2000® | $ | 200.3 | $ | 242.6 | (17 | )% |
| Other | $ | 104.5 | $ | 207.7 | (50 | )% |
| Total Product Sales | $ | 989.8 | $ | 903.5 | 10 | % |
For the full year 2020, revenue from CDMO services was
Contracts and Grants
For the full year 2020, revenue from development-based contracts and grants was
Operating Expenses
Cost of Product Sales and
For the full year 2020, cost of product sales and CDMO services was
Research and Development (Gross and Net) (2)
For the full year 2020, gross R&D expenses were
For the full year 2020, net R&D expense was
Selling, General and Administrative
For the full year 2020, selling, general and administrative expenses were
Additional Financial Information
Gross Margin (2)
For the full year 2020, gross margin was
Operating Cash Flow
For the full year 2020, operating cash flow was
Capital Expenditures
For the full year 2020, capital expenditures were
2021 FINANCIAL FORECAST
For full year 2021, the Company reaffirms its forecast of the following financial metrics, originally announced on
| (in millions) | 2021 Forecast (As of 2/18/2021) |
| Total Revenues | |
| • NARCAN® Nasal Spray | |
| • Anthrax Vaccines | |
| • ACAM2000® | |
| • CDMO | |
| Adjusted EBITDA (2) | |
| Adjusted Net Income (2) | |
| Gross Margin (2) | 65% |
The Company's financial forecast for 2021 includes the following additional considerations:
- Anthrax vaccine revenues are expected at a more normalized annual level and continue to primarily reflect procurement of AV7909 (Anthrax Vaccine Adsorbed, adjuvanted) under the Company’s existing contract with the
Biomedical Advanced Research and Development Authority (BARDA). - ACAM2000® (Smallpox (Vaccinia) Vaccine, Live) vaccine deliveries are expected to continue under the terms of the Company’s existing contract with the
U.S. Department of Health and Human Services (HHS) at unit volume levels consistent with 2020 deliveries. - Narcan® (naloxone HCl) Nasal Spray revenues assume an appellate decision related to its pending patent litigation in the second half of 2021 followed by the entry of at least one competitor.
- CDMO Services assume continued performance of contracted services for Development Services (DVS), Drug Substance (DS) manufacturing, and Drug Product (DP) manufacturing and Packaging for both clinical- and commercial-stage projects on behalf of a growing list of pharmaceutical and biotechnology innovators and government/NGO customers.
- Pipeline progress is expected across the vaccines, therapeutics, and devices portfolios, anticipating at least one Phase 3 launch and one Biologics License Application (BLA)/Emergency Use Authorization (EUA) filing.
- Capital expenditures, net of reimbursement, are expected to be in a range of 8% to 9% of total revenues, reflecting ongoing investments in capacity and capability expansions in support of the Company's CDMO services business and product portfolio.
Q1 2021 REVENUE FORECAST
For Q1 2021, the Company expects total revenues of
FOOTNOTES
(1) All financial information incorporated within this release is unaudited
(2) See "Reconciliation of Net Income to Adjusted Net Income and Adjusted EBITDA, Gross Margin and
CONFERENCE CALL AND WEBCAST INFORMATION
Company management will host a conference call at
| Live Teleconference Information: Dial in: [US] (855) 766-6521; [International] (262) 912-6157 Conference ID: 3948196 Live Webcast Information: Visit https://edge.media-server.com/mmc/p/hmesjhe3 for the webcast. |
A replay of the call can be accessed at www.emergentbiosolutions.com under “Investors.”
ABOUT
RECONCILIATION OF NON-GAAP MEASURES
This press release contains financial measures (Adjusted Net Income, Adjusted EBITDA (Earnings Before Depreciation and Amortization, Interest and Taxes, Gross Margin,
The determination of the amounts that are excluded from these non-GAAP financial measures are a matter of management judgment and depend upon, among other factors, the nature of the underlying expense or income amounts. Because non-GAAP financial measures exclude the effect of items that will increase or decrease the Company’s reported results of operations, management strongly encourages investors to review the Company’s consolidated financial statements and publicly filed reports in their entirety.
SAFE HARBOR STATEMENT
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements, other than statements of historical fact, including, without limitation, our financial guidance and related projections and statements regarding our ability to meet such projections in the anticipated timeframe, if at all; statements regarding continuing to execute on our strategy across all four of our business units; remaining leaders in the market and creating long-term shareholder value; the effectiveness of COVID-HIG at treating adult patients hospitalized with COVID-19 and its effectiveness as potential post-exposure prophylaxis in individuals at high risk of exposure to COVID-19, such as front-line health care workers and military personnel; normalized annual anthrax vaccine revenue levels and continued procurement under the Company’s existing contract with BARDA; continued ACAM2000 vaccine deliveries consistent with 2020 deliveries; the results of the appellate decision related to pending patent litigation followed by the entry of at least one competitor for NARCAN® Nasal Spray 4mg/spray; continued performance of CDMO services for both clinical- and commercial-stage projects on behalf of a growing list of pharmaceutical and biotechnology innovators and government/NGO customers; pipeline progress and at least one BLA or EUA submission in 2021; the percentage of capital expenditures as a percentage of total revenues (net of reimbursement), ongoing investments in capacity and capability expansions in support of the Company's CDMO services business and product portfolio; our CDMO backlog and opportunity funnel and any other statements containing the words “will,” “believes,” “expects,” “anticipates,” “intends” “plans,” “targets,” “forecasts,” “estimates” and similar expressions in conjunction with, among other things, discussions of the Company’s outlook, financial performance or financial condition, financial and operation goals, strategic goals, growth strategy, product sales, government development or procurement contracts or awards, government appropriations, manufacturing capabilities, and the timing of certain regulatory approvals or expenditures are forward-looking statements. These forward-looking statements are based on our current intentions, beliefs and expectations regarding future events. We cannot guarantee that any forward-looking statement will be accurate.
Investors should realize that if underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could differ materially from our expectations. Investors are, therefore, cautioned not to place undue reliance on any forward-looking statement. Any forward-looking statements speak only as of the date of this press release, and, except as required by law, we do not undertake to update any forward-looking statement to reflect new information, events or circumstances. There are a number of important factors that could cause our actual results to differ materially from those indicated by such forward-looking statements, including the impact of global economic conditions and public health crises and epidemics, such as the global pandemic that arose from COVID-19, on the markets, our operations, and employees as well as those of our customers and suppliers; availability of
| Investor Contact Vice President, Investor Relations (o) 240/631-3280; (m) 240/413-1917 burrowsr@ebsi.com |
Media Contact SVP, mediarelations@ebsi.com |
|
Consolidated Balance Sheets
(unaudited in millions, except per share data)
| 2020 | 2019 | |||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 621.3 | $ | 167.8 | ||
| Restricted cash | 0.2 | 0.2 | ||||
| Accounts receivable, net | 230.9 | 270.7 | ||||
| Inventories | 307.0 | 222.5 | ||||
| Prepaid expenses and other current assets | 36.5 | 25.0 | ||||
| Total current assets | 1,195.9 | 686.2 | ||||
| Property, plant and equipment, net | 644.1 | 542.3 | ||||
| Intangible assets, net | 663.1 | 712.9 | ||||
| In-process research and development | — | 29.0 | ||||
| 266.7 | 266.6 | |||||
| Other assets | 113.4 | 90.3 | ||||
| Total assets | $ | 2,883.2 | $ | 2,327.3 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | 136.1 | 94.8 | ||||
| Accrued expenses | 46.9 | 39.5 | ||||
| Accrued compensation | 84.6 | 62.4 | ||||
| Debt, current portion | 33.8 | 12.9 | ||||
| Other current liabilities | 83.1 | 6.7 | ||||
| Total current liabilities | 384.5 | 216.3 | ||||
| Contingent consideration, net of current portion | 34.2 | 26.0 | ||||
| Debt, net of current portion | 841.0 | 798.4 | ||||
| Deferred tax liability | 53.2 | 63.9 | ||||
| Contract liabilities, net of current portion | 55.5 | 85.6 | ||||
| Other liabilities | 67.8 | 48.6 | ||||
| Total liabilities | $ | 1,436.2 | $ | 1,238.8 | ||
| Stockholders’ equity: | ||||||
| Preferred stock, |
— | — | ||||
| Common stock, |
0.1 | 0.1 | ||||
| (39.6 | ) | (39.6 | ) | |||
| Additional paid-in capital | 784.9 | 716.1 | ||||
| Accumulated other comprehensive loss, net | (25.3 | ) | (9.9 | ) | ||
| Retained earnings | 726.9 | 421.8 | ||||
| Total stockholders’ equity | 1,447.0 | 1,088.5 | ||||
| Total liabilities and stockholders’ equity | $ | 2,883.2 | $ | 2,327.3 | ||
Consolidated Statements of Operations
(unaudited in millions, except per share data)
| Three Months Ended |
||||||
| 2020 | 2019 | |||||
| Revenues: | ||||||
| Product sales, net | $ | 340.9 | $ | 310.8 | ||
| Contract development and manufacturing services | 199.1 | 25.5 | ||||
| Contracts and grants | 43.0 | 24.1 | ||||
| Total revenues | 583.0 | 360.4 | ||||
| Operating expenses: | ||||||
| Cost of product sales and contract development and manufacturing services | 168.3 | 132.8 | ||||
| Research and development | 59.5 | 62.8 | ||||
| Selling, general and administrative | 82.1 | 72.2 | ||||
| Amortization of intangible assets | 15.0 | 14.8 | ||||
| Total operating expenses | 324.9 | 282.6 | ||||
| Income from operations | 258.1 | 77.8 | ||||
| Other income (expense): | ||||||
| Interest expense | (8.7 | ) | (9.1 | ) | ||
| Other, net | 3.4 | 2.8 | ||||
| Total other income (expense), net | (5.3 | ) | (6.3 | ) | ||
| Income before income taxes | 252.8 | 71.5 | ||||
| Income taxes | 67.4 | 24.6 | ||||
| Net income | $ | 185.4 | $ | 46.9 | ||
| Net Income per common share | ||||||
| Basic | $ | 3.51 | $ | 0.91 | ||
| Diluted | $ | 3.44 | $ | 0.90 | ||
| Shares used in computing income per share | ||||||
| Basic | 53.1 | 51.7 | ||||
| Diluted | 54.2 | 52.6 | ||||
Consolidated Statements of Operations
(unaudited in millions, except per share data)
| Year Ended |
||||||
| 2020 | 2019 | |||||
| Revenues: | ||||||
| Product sales, net | $ | 989.8 | $ | 903.5 | ||
| Contract development and manufacturing services | 450.5 | 80.0 | ||||
| Contracts and grants | 115.1 | 122.5 | ||||
| Total revenues | 1,555.4 | 1,106.0 | ||||
| Operating expenses: | ||||||
| Cost of product sales and contract development and manufacturing services | 524.0 | 433.5 | ||||
| Research and development | 234.5 | 226.2 | ||||
| Selling, general and administrative | 303.3 | 273.5 | ||||
| Amortization of intangible assets | 59.8 | 58.7 | ||||
| Total operating expenses | 1,121.6 | 991.9 | ||||
| Income from operations | 433.8 | 114.1 | ||||
| Other income (expense): | ||||||
| Interest expense | (31.3 | ) | (38.4 | ) | ||
| Other, net | 4.7 | 1.7 | ||||
| Total other income (expense), net | (26.6 | ) | (36.7 | ) | ||
| Income before income taxes | 407.2 | 77.4 | ||||
| Income taxes | 102.1 | 22.9 | ||||
| Net income | $ | 305.1 | $ | 54.5 | ||
| Net Income per common share | ||||||
| Basic | $ | 5.79 | $ | 1.06 | ||
| Diluted | $ | 5.67 | $ | 1.04 | ||
| Shares used in computing income per share | ||||||
| Basic | 52.7 | 51.5 | ||||
| Diluted | 53.8 | 52.4 | ||||
Consolidated Statements of Cash Flows
(unaudited in millions)
| Year Ended |
||||||||
| 2020 | 2019 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 305.1 | $ | 54.5 | ||||
| Adjustments to reconcile to net cash provided by operating activities: | ||||||||
| Stock-based compensation expense | 51.0 | 26.7 | ||||||
| Depreciation and amortization | 114.5 | 110.7 | ||||||
| Impairment of intangible asset | 29.0 | 12.0 | ||||||
| Change in fair value of contingent obligations, net | 31.7 | 24.8 | ||||||
| Amortization of deferred financing costs | 3.5 | 3.0 | ||||||
| Deferred income taxes | (2.4 | ) | (1.1 | ) | ||||
| Other | (5.2 | ) | (0.2 | ) | ||||
| Changes in operating assets and liabilities, net of business acquisitions: | ||||||||
| Accounts receivable | 49.0 | (8.2 | ) | |||||
| Inventories | (83.2 | ) | (16.7 | ) | ||||
| Prepaid expenses and other assets | (29.2 | ) | (39.1 | ) | ||||
| Accounts payable | 19.8 | 16.5 | ||||||
| Accrued expenses and other liabilities | 19.4 | (15.1 | ) | |||||
| Accrued compensation | 21.8 | 4.2 | ||||||
| Contract liabilities | 11.2 | 16.0 | ||||||
| Net cash provided by operating activities | 536.0 | 188.0 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchases of property, plant and equipment and other | (141.0 | ) | (86.9 | ) | ||||
| Milestone payment from asset acquisition | (10.0 | ) | (10.0 | ) | ||||
| Net cash used in investing activities | (151.0 | ) | (96.9 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from revolving credit facility | — | 130.0 | ||||||
| Principal payments on revolving credit facility | (373.0 | ) | (105.0 | ) | ||||
| Proceeds from term loan facility | — | — | ||||||
| Principal payments on term loan facility | (14.1 | ) | (11.3 | ) | ||||
| Proceeds from senior unsecured notes | 450.0 | — | ||||||
| Debt issuance costs | (8.4 | ) | — | |||||
| Proceeds from share-based compensation activity | 31.6 | 8.2 | ||||||
| Taxes paid for share-based compensation activity | (13.8 | ) | (7.4 | ) | ||||
| Contingent consideration payments | (2.8 | ) | (50.4 | ) | ||||
| Net cash (used in) provided by financing activities | 69.5 | (35.9 | ) | |||||
| Effect of exchange rate changes on cash and cash equivalents | (1.0 | ) | 0.4 | |||||
| Net change in cash and cash equivalents and restricted cash | 453.5 | 55.6 | ||||||
| Cash and cash equivalents and restricted cash at beginning of year | 168.0 | 112.4 | ||||||
| Cash and cash equivalents and restricted cash at end of year | $ | 621.5 | $ | 168.0 | ||||
Reconciliation of Net Income to Adjusted Net Income
| Three Months Ended |
|||||||
| (in millions, except per share value) | 2020 | 2019 | Source | ||||
| Net Income | $ | 185.4 | $ | 46.9 | |||
| Adjustments: | |||||||
| + Non-cash amortization charges | 16.2 | 15.6 | Intangible Asset Amortization, Other Income | ||||
| + Changes in fair value of contingent consideration | 0.4 | 12.4 | COGS | ||||
| + Exit and disposal costs | 0.1 | — | COGS, SG&A, Other Income | ||||
| + Acquisition-related costs (transaction & integration) | 0.1 | 2.0 | SG&A | ||||
| + Impairment of IPR&D intangible asset | — | 12.0 | R&D | ||||
| Tax effect | (3.4 | ) | (6.2 | ) | |||
| Total Adjustments: | 13.4 | 35.8 | |||||
| Adjusted Net Income | $ | 198.8 | $ | 82.7 | |||
| Adjusted Net Income Per Diluted Share | $ | 3.67 | $ | 1.57 | |||
| Year Ended |
|||||||
| (in millions, except per share value) | 2020 | 2019 | Source | ||||
| Net Income | $ | 305.1 | $ | 54.5 | |||
| Adjustments: | |||||||
| + Non-cash amortization charges | 63.4 | 61.7 | Intangible Asset Amortization, Other Income | ||||
| + Change in fair value of contingent consideration | 31.7 | 24.8 | COGS | ||||
| + Impairment of IPR&D | 29.0 | 12.0 | R&D | ||||
| + Exit and disposal costs | 17.2 | — | COGS, SG&A, Other Income | ||||
| + Acquisition-related costs (transaction & integration) | 0.6 | 12.6 | SG&A | ||||
| + Impact of purchase accounting on inventory step-up | — | 6.1 | COGS | ||||
| Tax effect | (23.1 | ) | (19.4 | ) | |||
| Total Adjustments: | 118.8 | 97.8 | |||||
| Adjusted Net Income | $ | 423.9 | $ | 152.3 | |||
| Adjusted Net Income Per Diluted Share | $ | 7.88 | $ | 2.91 | |||
| Full Year Forecast | |||
| (in millions) | 2021F | Source | |
| Net Income | |||
| Adjustments: | |||
| + Non-cash amortization charges | 64.0 | Intangible Asset Amortization, Other Income | |
| + Changes in fair value of contingent consideration | 3.0 | COGS | |
| + Acquisition-related costs (transaction & integration) | 2.0 | SG&A | |
| Tax effect | (14.0 | ) | |
| Total Adjustments: | 55.0 | ||
| Adjusted Net Income | |||
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
| Three Months Ended |
||||
| (in millions) | 2020 | 2019 | ||
| Net Income | $ | 185.4 | $ | 46.9 |
| Adjustments: | ||||
| + Depreciation & amortization | 28.9 | 27.9 | ||
| + Income Taxes | 67.4 | 24.6 | ||
| + Total interest expense, net* | 8.6 | 8.5 | ||
| + Change in fair value of contingent consideration | 0.4 | 12.4 | ||
| + Exit and disposal costs* | 0.1 | — | ||
| + Acquisition-related costs (transaction & integration) | 0.1 | 2.0 | ||
| + Impairment of IPR&D intangible asset | — | 12.0 | ||
| Total Adjustments | 105.5 | 87.4 | ||
| Adjusted EBITDA | $ | 290.9 | $ | 134.3 |
| * Includes interest income of |
||||
| Year Ended |
||||
| (in millions) | 2020 | 2019 | ||
| Net Income | $ | 305.1 | $ | 54.5 |
| Adjustments: | ||||
| + Depreciation & amortization | 114.5 | 110.7 | ||
| + Total interest expense, net* | 30.2 | 36.1 | ||
| + Income tax expense | 102.1 | 22.9 | ||
| + Change in fair value of contingent consideration | 31.7 | 24.8 | ||
| + Impairment of IPR&D intangible asset | 29.0 | 12.0 | ||
| + Exit and disposal costs | 17.2 | — | ||
| + Acquisition-related costs (transaction & integration) | 0.6 | 12.6 | ||
| + Impact of purchase accounting on inventory step-up | — | 6.1 | ||
| Total Adjustments | 325.3 | 225.2 | ||
| Adjusted EBITDA | $ | 630.4 | $ | 279.7 |
| * Includes interest income of |
||||
(in millions) |
Full Year Forecast |
| 2021F | |
| Net Income | |
| Adjustments: | |
| + Depreciation & amortization | 133.0 |
| + Income taxes | 161.0 - 171.0 |
| + Total interest expense | 31.0 |
| + Acquisition-related costs (transaction & integration) | 2.0 |
| + Change in fair value of contingent consideration | 3.0 |
| Total Adjustments | 330.0 - 340.0 |
| Adjusted EBITDA | |
Reconciliation of Gross Margin and Adjusted Gross Margin
| (in millions) | Three Months Ended |
Twelve Months Ended |
||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Total revenues | $ | 583.0 | $ | 360.4 | $ | 1,555.4 | $ | 1,106.0 | ||||
| Less: Contract and grants revenues | (43.0 | ) | (24.1 | ) | (115.1 | ) | (122.5 | ) | ||||
| Adjusted revenues | $ | 540.0 | $ | 336.3 | $ | 1440.3 | $ | 983.5 | ||||
| Cost of product sales and contract development and manufacturing services ("COGS") | $ | 168.3 | $ | 132.8 | $ | 524.0 | $ | 433.5 | ||||
| - Changes in fair value of contingent consideration | (0.4 | ) | (12.4 | ) | (31.7 | ) | (24.8 | ) | ||||
| - Inventory reserves related to |
1.5 | — | (12.6 | ) | — | |||||||
| Adjusted COGS | $ | 169.4 | $ | 120.4 | $ | 479.7 | $ | 408.7 | ||||
| Gross margin (adjusted revenues minus COGS) | $ | 371.7 | $ | 203.5 | $ | 916.3 | $ | 550.0 | ||||
| Gross margin % (gross margin divided by adjusted revenues) | 69 | % | 61 | % | 64 | % | 56 | % | ||||
| Adjusted gross margin (adjusted revenues minus adjusted COGS) | $ | 370.6 | $ | 215.9 | $ | 960.6 | $ | 574.8 | ||||
| Adjusted gross margin % (adjusted gross margin divided by adjusted revenues) | 69 | % | 64 | % | 67 | % | 58 | % | ||||
Reconciliation of
| (in millions) | Three Months Ended |
|||||||
| 2020 | 2019 | % Change | ||||||
| Research and Development Expenses | $ | 59.5 | $ | 62.8 | (5 | )% | ||
| Adjustments: | ||||||||
| Less: Contracts and Grants Revenue | 43.0 | 24.1 | 78 | % | ||||
| Less: Impairment of IPR&D | — | 12.0 | * | |||||
| 16.5 | 26.7 | (38 | )% | |||||
| Adjusted Revenue (Total Revenue less Contracts and Grants Revenue) | $ | 540.0 | $ | 336.3 | 61 | % | ||
| Net R&D as % of Adjusted Revenue (Net R&D Margin) | 3 | % | 8 | % | (63 | )% | ||
| (in millions) | Year Ended |
|||||||
| 2020 | 2019 | % Change | ||||||
| Research and Development Expenses | $ | 234.5 | $ | 226.2 | 4 | % | ||
| Adjustments: | ||||||||
| Less: Contracts and Grants Revenue | 115.1 | 122.5 | (6 | )% | ||||
| Less: Impairment of IPR&D | 29.0 | 12.0 | * | |||||
| 90.4 | 91.7 | (1 | )% | |||||
| Adjusted Revenue (Total Revenue less Contracts and Grants Revenue) | $ | 1,440.3 | $ | 983.5 | 46 | % | ||
| Net R&D as % of Adjusted Revenue (Net R&D Margin) | 6 | % | 9 | % | (33 | )% | ||
Source: Emergent BioSolutions