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Emergent Down on ’18 View, Posts Preliminary ’17 Results

Zacks

Emergent BioSolutions Inc. EBS provided preliminary results for 2017 and its guidance for 2018. While the results exceeded management’s guidance issued in November 2017, the company’s shares fell almost 3% as the 2018 outlook lagged market expectations.

Shares of the company have outperformed the industry in a year’s time. The stock has soared 49.3% versus the industry’s decline of 2.8% during the period.

2017 Preliminary Results


The company expects total revenues in the range of $555-$560 million in 2017, the midpoint representing an increase of $69 million (14%) from the 2016 level. This increase is mainly on higher BioThrax sales to the tune of about $286 million from $237 million in 2016 along with higher other product sales and revenues from its contract manufacturing operations (CMO) services. This was, however, offset by lower Contract & Grant revenues.

The aforementioned guided range lies above the Zacks Consensus Estimate of $548.5 million.

Meanwhile, the company anticipates year-end 2017 cash and cash equivalents of approximately $180 million. The cash guidance includes the impact of acquisition of Sanofi's SNY smallpox vaccine, ACAM2000, and GlaxoSmithKline's GSK raxibacumab, a fully human monoclonal antibody, approved by the FDA for treatment of inhalational anthrax. This cash view also absorbs the impact of share purchase of its common stock in accordance with its share buyback program.

2018 Outlook

Emergent expects revenues in the range of $715-$755 million in 2018. This guided range also surpassed the Zacks Consensus Estimate of $683.5 million during the period.

In the first quarter of 2018, the company anticipates total revenues in the band of $145-$160 million.

The 2018 outlook includes the impact of continued deliveries of BioThrax to the Strategic National Stockpile (SNS) under the five-year follow-on procurement contract, signed with the Centers for Disease Control and Prevention in December 2016 besides the anticipated deliveries of raxibacumab and ACAM2000 to the SNS under the Biomedical Advanced Research and Development Authority procurement contract as well as continued expansion of CMO services.

Zacks Rank & Another Key Pick

Emergent sports a Zacks Rank #1 (Strong Buy). Another top-ranked stock in the health care sector is Exelixis, Inc. EXEL, carrying the same bullish Zacks Rank of 1 as Emergent. You can see the complete list of today’s Zacks #1 Rank stocks here.

Exelixis’ earnings per share estimates have been revised upward from 72 cents to 73 cents for 2018 over the last 30 days. The company pulled off positive earnings surprises in all the trailing four quarters with an average beat of 572.92%. Share price of the company has soared 68.5% in a year’s time.

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