This is simply the best chart I can find out there...
- Rockville, Md.-based Emergent has the sole U.S. approved vaccine for the deadly disease (anthrax). Over the last decade, it has sold 30 million dosages of its BioThrax vaccine, mostly to the Department of Defense and the Department of Health and Human Services. About 2 million of those doses have gone to troops. The rest have gone to strategic stockpiles to be used in case of a biological attack.
- "Hurricane Katrina still rings loudly in politicians' ears. Not being prepared for disaster is something no politician wants to be linked with," said Caris & Co. analyst David Moskowitz.
- In the past year alone, Emergent has signed two large contracts to deliver more than 33 million dosages of its vaccine over the next three years at almost $25 each. The price increases to about $27 per dose if the company can deliver vaccines with a four-year shelf life instead of the current three years.
- Emergent's results, tied to the timing of such large orders, have been lumpy. But the deals show the government's long-term commitment to combating the anthrax threat. And they give investors sight of some revenue through 2011. "In today's market environment, that's something that investors find pretty attractive," said Cowen & Co. analyst Eric Schmidt.
- Emergent is one of several companies now racing to answer the government's call for a better next-generation anthrax vaccine. The hope is that a recombinant vaccine, a different vaccine technology than the current BioThrax, will offer immunity faster and with fewer risks or side effects. That market could be huge. In 2004, the government set aside $5.6 billion under its Project BioShield to develop and stockpile next-generation vaccines to protect Americans from bioterrorism.
- In May, Emergent bought a recombinant vaccine formula from former rival VaxGen (OTC BB:VXGN.OB - News) for a mere $2 million. VaxGen had spent millions developing its vaccine, but it lost a government contract worth $877.5 million for 75 million doses because of problems with the drug's stability. Since buying the vaccine, Emergent has invested millions more to improve its stability.
- Emergent has other products in the pipeline as well. It is working on two drugs to treat the anthrax toxins for people already infected. It has two botulinum vaccines in development and other vaccines or treatments for typhoid, tuberculosis, chlamydia and hepatitis B.
- Earlier this year, Emergent tried to buy Protein Sciences and its promising flu vaccine that is in the late stages of testing and approval. But after both sides announced the deal worth up to $78 million in May, Protein Sciences appears to have balked. It said in July that the deal was off. Emergent says it's still on, and analysts say the deal is now in the hands of lawyers.
- The company posted third-quarter earnings per share of 34 cents, up 240% from a year ago. Analysts polled by Thomson Reuters had expected just 18 cents. Sales were $56.6 million, up 30%.
- Emergent's future isn't certain. There's no guarantee that the company will win the race for the more-advanced anthrax vaccine. But analysts think it will probably get at least part of some future contracts. Also, being so closely tied to any one customer is dangerous. But in the current market, there are worse customers than Uncle Sam. "It's nice to have a customer like the U.S. government, which at this point still a pretty creditworthy entity," Moskowitz said. (oh, is it?)
[Nov 6: Emergent BioSolutions Earnings - Blowout Quarter]
[Oct 22: Readers Idea - Emergent BioSolutions]
Long Emergent BioSolutions in fund and personal account
