Emergent BioSolutions Awarded Procurement Contract Valued up to $235.8 Million to Supply BioThrax® (Anthrax Vaccine Adsorbed) to the U.S. Department of Defense
Emergent BioSolutions Inc. (EBS) secures a $235.8 million contract with the U.S. Department of Defense to supply BioThrax for anthrax prevention. The contract includes a five-year base agreement and an additional five-year option, highlighting the importance of Emergent's medical countermeasures portfolio.
The procurement contract awarded to Emergent BioSolutions for the BioThrax® Anthrax Vaccine represents a significant revenue stream and strengthens the company's position within the biodefense sector. The contract's structure as an indefinite-delivery, indefinite-quantity (IDIQ) with the U.S. Department of Defense ensures a stable demand for the product over the next five to ten years. This stability is crucial for Emergent's financial forecasting and resource allocation, as it provides a predictable cash flow that can be reinvested in R&D or used for strategic expansions. The guaranteed purchase minimum of $20.1 million sets a solid baseline for revenue, while the potential to reach $235.8 million showcases the scalability of the contract based on the DoD's needs.
From a market perspective, this contract could bolster investor confidence in Emergent's stock, reflecting the government's trust in their product and their capability as a reliable supplier. Given the long-term nature of the contract, it could also provide a competitive edge over other biotech firms in securing future government contracts, as it demonstrates a track record of successful partnership with a high-profile client like the U.S. military.
The endorsement of BioThrax® by the U.S. military as a Pre-Exposure Prophylaxis (PrEP) for anthrax is a strong validation of the vaccine's efficacy and safety profile. Anthrax is a serious infectious disease caused by Bacillus anthracis bacteria and the use of BioThrax® in a military context emphasizes its critical role in biodefense. The contract reflects the ongoing need for effective medical countermeasures against biological threats, a domain that is of high priority for national security.
Emergent's focus on medical countermeasures, such as BioThrax®, aligns with the broader industry trend of increasing investment in biodefense. The contract may also drive further innovation and development within the company, as sustained funding could enable Emergent to invest in next-generation vaccines and therapeutics. This could have downstream effects on public health preparedness, as advancements in biodefense often translate to improved responses to emerging infectious diseases.
The financial implications of the IDIQ contract for Emergent BioSolutions are substantial. With a minimum guaranteed purchase and the possibility of an extension, the contract provides a clear long-term financial horizon. The initial guaranteed purchase of $20.1 million, while modest relative to the maximum contract value, offers a foundation for revenue projections. It's important to note that the actual financial impact will depend on the annual orders placed by the DoD, which are estimated to be at least $20 million annually.
Investors should consider the impact of this contract on Emergent's balance sheet and earnings per share (EPS). As the company fulfills the contract over the coming years, it could lead to an improved EPS, assuming costs are managed effectively. The long-term nature of the contract may also allow for operational efficiencies in production and distribution. However, it's essential to monitor how the company manages the scalability of the contract and whether they can maintain profit margins as order volumes increase.
01/11/2024 - 08:00 AM
GAITHERSBURG, Md., Jan. 11, 2024 (GLOBE NEWSWIRE) -- Emergent BioSolutions Inc. (NYSE:EBS) today announced that it has secured an indefinite-delivery, indefinite-quantity (IDIQ) procurement contract with a maximum value up to $235.8 million to supply BioThrax® (Anthrax Vaccine Adsorbed) for use by all branches of the U.S. military as Pre-Exposure Prophylaxis (PrEP) for anthrax disease. The new contract with the U.S. Department of Defense (DoD) and led by the Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense, is comprised of a five-year base agreement ending on September 30, 2028, and an additional five-year option that would extend the contract to September 30, 2033.
“As a part of our mission to protect and enhance lives, Emergent is proud to continue supporting and preparing our nation’s service members who have a high risk of exposure to anthrax bacteria by supplying BioThrax vaccine,” said Paul Williams, senior vice president, products head at Emergent. “This new contract award is a testament to the importance of Emergent’s medical countermeasures portfolio, and we look forward to delivering on our commitments to the U.S. DoD.”
Under the initial five-year IDIQ contract, there is a guaranteed purchase minimum of $20.1 million , with future orders estimated to be at least $20 million for each following year for a total award value up to $235.8 million .
About BioThrax® (Anthrax Vaccine Adsorbed) Bacillus anthracis in persons 18 through 65 years of age. BioThrax is approved for pre-exposure prophylaxis of disease in persons at high risk of exposure. BioThrax is approved for post-exposure prophylaxis of disease following suspected or confirmed Bacillus anthracis exposure, when administered in conjunction with recommended antibacterial drugs.
The efficacy of BioThrax for post-exposure prophylaxis is based solely on studies in animal models of inhalational anthrax.
Please see full Prescribing Information here .
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Safe Harbor Statement ® vaccine and the continued development of Emergent’s anthrax franchise, are forward-looking statements. We generally identify forward-looking statements by using words like “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “plan,” “should,” “will,” “would,” and similar expressions or variations thereof, or the negative thereof, but these terms are not the exclusive means of identifying such statements. Forward-looking statements are based on our current intentions, beliefs, and expectations regarding future events based on information that is currently available. We cannot guarantee that any forward-looking statement will be accurate. Readers should realize that if underlying assumptions prove inaccurate or if known or unknown risks or uncertainties materialize, actual results could differ materially from our expectations. Readers are, therefore, cautioned not to place undue reliance on any forward-looking statement. Any forward-looking statement speaks 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. Readers should consider this cautionary statement, as well as the risk factors identified in our periodic reports filed with the U.S. Securities and Exchange Commission, when evaluating our forward-looking statements.
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Emergent BioSolutions Inc. secured an indefinite-delivery, indefinite-quantity (IDIQ) procurement contract with a maximum value up to $235.8 million to supply BioThrax for use by all branches of the U.S. military as Pre-Exposure Prophylaxis (PrEP) for anthrax disease.
The ticker symbol for Emergent BioSolutions Inc. is EBS.
The contract consists of a five-year base agreement ending on September 30, 2028, and an additional five-year option that would extend the contract to September 30, 2033.
Under the initial five-year IDIQ contract, there is a guaranteed purchase minimum of $20.1 million.
Paul Williams is the senior vice president, products head at Emergent BioSolutions Inc.
