Emergent BioSolutions Inc (EBS) 2012 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Emergent BioSolutions third-quarter 2012 financial results conference call. My name is Grant, and I will be your operator for today. At this time, all participants are in listen-only more. We will conduct a question-and-answer session toward the end of this conference. (Operator Instructions).

As a reminder, this call is also being recorded for replay purposes. I'd now like to turn the call over to Mr. Bob Burrows, Vice President, Investor Relations. Please proceed.

Thank you, Grant. Good morning, ladies and gentlemen, and thank you for joining us today as we discuss Emergent BioSolutions' third-quarter and year-to-date 2012 financial and recently announced growth plan through 2015.

As is customary, our call today is open to all participants. In addition, the call is being recorded and is copyrighted by Emergent BioSolutions.

Participating on the call this morning with prepared comments will be our President and CEO, Dan Abdun-Nabi, and Chief Financial Officer, Don Elsey. Several other members of senior management will be available to respond to your questions during the Q&A session.

Before we begin, I am compelled to remind everyone that during the call management may make projections and other forward-looking statements regarding future events and the Company's prospects for future performance. These forward-looking statements reflect Emergent's current perspective on existing trends and information. Any such forward-looking statements are not guarantees of future performance and involve substantial risks and uncertainties. Actual results may differ materially from these projected in any forward-looking statements. You are encouraged to review Emergent's filings with the SEC on Forms 10-K, 10-Q and 8-K for more information on risks and uncertainties that could cause actual results to differ.

For the benefit of those who may be listening to the replay, this call was held and recorded on November 1, 2012. Since then, Emergent may have made announcements relating to topics discussed during today's call. So, again, please reference our most recent press releases and SEC filings. Emergent BioSolutions assumes no obligation to update the information in today's press release or as presented on this call, except as may be required by applicable laws or regulations. Today's press release may be found on our website at www.emergentsolutions.com under investors/news.

And with that introduction, I would now like to turn the call over to Dan Abdun-Nabi, Emergent BioSolutions' President and CEO. Dan?

Well, thank you, Bob. Good morning, everyone, and thank you for joining our call today.

During my prepared comments, I will cover two broad topics. First, I will discuss our financial and operational performance for the past quarter and the year-to-date. Then I will discuss in greater detail the growth plan through 2015 that we announced this morning.

To begin, let me review our financials for the period. Our total revenues for the third quarter were approximately $67 million. This is within the guidance that we provided during our August conference call. Year-to-date total revenues were just over $187 million.

Net income for the quarter was $6.6 million, and net income for the first nine months of the year was $7.4 million.

Turning to our achievements during the third quarter, we've made significant progress in a number of areas. In our BioDefense Division, we completed the manufacturing of BioThrax consistency lots in Building 55, and final product testing of these lots continues to move forward.

Regarding PreviThrax, our recombinant anthrax vaccine candidate, we announced that BARDA exercised a one-year contract option to further advance the development of this program. This option was exercised based upon PreviThrax having meet all the key development milestones and after BARDA completed an inter-agency process review.

In our BioSciences Division, we initiated a Phase 2 study of TRU-016 in combination with bendamustine for relapsed refractory CLL. Recruiting for this study is on track with data expected next year.

Meanwhile, we completed the Phase 1b comparative study evaluating TRU-016 in combination with bendamustine and rituximab in relapsed indolent NHL. The data from that study indicated that the combination therapy had an acceptable safety profile, and there was evidence of clinical activity.

Finally, during the quarter, we initiated our $35 million share repurchase program.

Now I would like to discuss our near-term milestones, first for our BioDefense programs. We anticipate completing all testing for our Building 55 consistency lots in Q1 2013. Once completed, the consistency lot material will be used in our pivotal nonclinical study, which we expect to initiate in Q2 of 2013. Data from that study, together with other comparability data, will be reviewed by FDA as part of our licensing package. We continue to anticipate that we will be in a position to file for regulatory approval for Building 55 in 2014.

With respect to a post-exposure prophylaxis or PEP indication for BioThrax, we expect to initiate a Phase 2 antibiotic non-interference study by year end. We anticipate this will be the final clinical study required in order to secure the PEP indication. That trial is expected to be completed in mid-2014.

In addition, in Q1 next year, we expect to initiate a Phase 2 immunogenicity study for NuThrax, also for a PEP indication.

Finally, with respect to our recently-announced ADM contract with HHS, we are currently evaluating several potential flu vaccine candidates that meet HHS's requirements and that could be manufactured in our Baltimore facility. We expect to make our final selection before year end.

We also have several near-term milestones for our BioSciences program. We have three abstracts accepted for presentation at the ASH conference in December, two for TRU-016, one in CLL and one in NHL, as well as one for our SCORPION technology platform. These abstracts will be made public on November 5 on the ASH website. The data is very encouraging, and we look forward to discussing these results once the abstracts are released.

For MVA-85A, our tuberculosis vaccine candidate, we anticipate receiving the data from the 2800 infant Phase 2b efficacy study in early first quarter of 2013. As you may recall, MVA-85A is a one-dose booster to BCG. The vaccination phase of the trial has been completed, and these infants are now being observed. Given the heavy disease burden worldwide and the recognized need for new TB vaccines, we may, depending on the data from the ongoing study, be in a position to pursue accelerated or conditional approval for MVA-85A in selected countries.

In addition, for TRU-016 and CLL, enrollment is ongoing, and patient dosing continues, and the Phase 2 comparative study evaluating TRU-016 in combination with bendamustine in relapsed CLL. We recently received approval from our data monitoring committee to continue this trial unchanged. Data from this study will determine whether a Phase 3 study is warranted, and we anticipate making that determination next year.

As you may have seen, yesterday we announced the start of a Phase 1b comparative study evaluating TRU-016 in combination with the rituximab in front-line CLL. We expect to complete enrollment of this study in the first half of next year with data being available by the end of 2013.

Finally, we reaffirmed our 2012 full-year guidance of total revenues of $280 million to $300 million split between product sales of $220 million to $230 million and grants and contracts revenue of between $60 million to $70 million and net income of between $15 million to $25 million.

Let me now move on to discussing the growth plan that we announced this morning. Since my appointment as CEO of Emergent in April, my team and I have developed a growth plan that continues and expands upon our history of success. This plan establishes the key drivers for how we intend to pursue growth and clearly defines our vision for our midterm goals and the overall future direction of the Company. The plan was developed after evaluating and assessing a number of inputs, including our business definition -- specifically, who we are and what we seek to achieve, along with our core competencies -- what capabilities do we have that are unique or specialized that can be leveraged or deployed to advantage.

We assessed the expectations of our stakeholders -- how can we best deliver on commitments to and the expectations of our customers, our employees, and other key stakeholders. We evaluated external market and competitive factors, as well as the views, opinion, and expectations of our stockholders as I have heard them expressed over the course of the past six months.

With this backdrop, I would like to share with you my views on how we define our business, what are the strategic goals, how we assess our core competencies, and what are the core strategies we intend to use to achieve these goals.

Our business definition is simple. Our mission is to protect and enhance life by offering specialized products to healthcare providers and governments to address medical needs and emerging health threats.

Under the growth plan, we intend to advance our leadership position in the BioDefense field and to expand our product offerings in specialty pharma markets. This will enable us to expand revenues, grew net income, and create shareholder value.

To that end, we have established the following key financial and operational goals to be achieved by the end of 2015. First, generate annual product revenue of greater than $500 million. Second, achieve a three-year -- and that is 2012 to 2015 -- compound net income growth rate of greater than 15%. And third, secure diversified revenues from at least three marketed specialty products.

The core competencies that we intend to build upon to support and enable our growth includes our recognized leadership position in the BioDefense field that we can leverage to advance our existing pipeline and to acquire new products for the specialty market; the breadth and depth of our resources and expertise in biologics manufacturing and advanced-stage product development; the expertise and capabilities that we possess in government and NGO contracting and partnering; and lastly, our experience and expertise in structuring and closing acquisition transactions.

By leveraging these core competencies, we plan to execute on the following core strategy. First, we seek to acquire revenue-generating products that are synergistic with our existing operations and competencies. This approach is designed to secure revenue-generating products in the BioDefense and other specialty markets where our existing infrastructure can improve product performance and contributions. This approach will advance us toward the achievement of our 2015 goals by increasing top-line product revenue, enhancing contributions to net income growth, and providing product revenue diversification.

Secondly, we will focus product development efforts on promising late-stage candidates that satisfy well-defined criteria and limit earlier-stage development activities unless funded by external sources. This approach is designed to advance us toward the achievement of our 2015 goals by advancing only those programs that have achieved clinically-important milestones that justify further research and development investments, also by enhancing the value of development expenditures by focusing on products that have the potential for nearer-term regulatory approval and further by minimizing early-stage research and development costs that are not funded by third parties.

Lastly in terms of the core strategy, we will continue to partner with third parties such as governments and NGOs. This approach is designed to advance us toward the achievement of our 2015 goals by mitigating operational risks through the knowledge, capabilities and expertise provided by partners and collaborators and by offsetting development expenditures through non-diluted funding.

Critical to the success of this growth plan will be to focus on revenue expansion, a disciplined R&D spending plan and controlling total G&A costs, all of which will contribute to the targeted growth in net income.

As you know, we operate in two separate business divisions, BioDefense and BioSciences. The growth plan impacts operations of these divisions in slightly different ways.

In the BioDefense division will focus on the following -- continue to increase BioThrax revenues from our existing facility, Building 55, and we will further expand BioThrax product sales following licensure of Building 55, which we anticipate in late 2014 or early 2015. We will also seek to leverage manufacturing resources and capabilities to contribute to revenue growth and product expansion. We will seek to target the acquisition of revenue-generating products, which means we will be evaluating products that broaden our focus beyond just anthrax and beyond biologics to address the US government's requirements across the entire BioDefense spectrum.

We are also looking at revenue-generating products that have dual use potential across both BioDefense and commercial markets, as well as products that are currently sold or have ready appeal to both US and foreign government agencies. We're evaluating products that leverage our core competencies in government contracts and negotiations and products that capitalize on our status as a proven, respected, and trusted partner in allied governments.

We also look to continue R&D where it is funded or substantially funded under government contracts in advance. And finally, we will further control costs in G&A and unfunded R&D.

For the BioSciences division operation, we'll focus on the following. First, we'll target acquiring product revenues within specialty focus areas such as products that are used by specialty physicians in targeted disease areas or products that are used in a hospital setting. We will look to partner out our late-stage product candidates as appropriate to provide immediate and long-term value enhancements as progress is achieved. We will also look to partner out our platform technologies that mitigate development risks and drive future value. And lastly, we will look to limit early-stage R&D costs that are not supported by external funding sources.

In our corporate operations generally, we will focus on controlling our G&A costs to operate more efficiently while supporting our program priorities.

In summary, we have established definitive financial and operational goals to be achieved by the end of 2015.

Please note -- and this is important -- we will not achieve these growth targets in one year, nor do we anticipate that our growth toward these targets will be evenly spread year to year as we approach 2015. Thus, investors should not expect that all of our growth will happen in the last year of this plan nor should investors expect that our revenue growth will be linear or that we will achieve 15% net income growth every year. Rather, we intend to drive toward these goals by expanding revenues from our marketed product; acquiring synergistic revenue generating products in BioDefense and other specialty markets; focusing product development efforts on promising late-stage candidates; expanding collaborations with third parties such as governments and NGOs; limiting early-stage R&D costs that are not supported by external funding; and further controlling our G&A expenditures.

By remaining focused on who we are, this plan describes how best to tap into our core competencies, while simultaneously focusing on astute and judicious spending in order to continue our history of growth and success.

I believe this approach is smart, aggressive and achievable, and I see great opportunities ahead for our Company, for our employees, and for our customers and partners and for creating shareholder value both in the near- and the long-term.

This concludes my prepared comments, and I will now turn it over to John, who will take you through the third-quarter numbers in greater detail. Don?

Thank you, Dan. Good morning, everyone. Prior to the open of the markets today, we released our financial results for the third quarter of 2012. I encourage everyone to take a look at the press release, which is currently available on our website. We plan to file our quarterly report on Form 10-Q at the SEC no later than the close of business tomorrow, Friday, November 2. The 10-Q will also be available on our website.

Let me now briefly discuss the numbers. Third-quarter 2012 total revenues were $66.6 million versus $58.8 million in the third quarter of 2011. Total revenues for the first nine months of 2012 were $187.3 million versus $165.4 million in the first nine months of 2011.

Diving a little deeper, year-to-date product sales revenues were $141.5 million versus $120.7 million for the first nine months of last year. This increase was primarily due to an increase in doses of BioThrax delivered, partially offset by a lower sales price per dose. Year-to-date contracts and grants revenues were $45.8 million versus $44.7 million in the same period last year. This increase was primarily due to increased activity and associated revenue from our BARDA development contracts.

Turning to gross margins, our gross margin in Q3 2012 was approximately 81%, which is modestly higher than our typical range of between 70% and 80%. Gross margin for the first nine months of 2012 was approximately 78%.

Turning to the bottom line, third-quarter 2012 net income was $6.6 million or $0.18 per basic share as compared to $1.5 million or $0.04 per basic share in the third quarter of 2011. Net income for the first nine months of 2012 was $7.4 million or $0.21 per share as compared to a net loss of $5.6 million or a loss of $0.16 per share for the first nine months of 2011.

As you may recall, the year-to-date net income reflects the impact of a $9.6 million non-cash charge in the first quarter related to the impairments of in-process R&D.

Turning now to spending, our R&D expenses for the third-quarter 2012 were $27.4 million compared to $29.2 million in the same period last year. I'd like to highlight that contracts and grants revenues and costs associated with noncontrolling interest in our joint ventures offset a portion of our gross R&D expenses. When we take these into account, our net R&D for Q3 2012 was $13.8 million.

R&D expenses for the first nine months of 2012 were $84.3 million compared to $95.5 million in the first nine months of 2011. Again, adjusting for contracts and grants, revenues and noncontrolling interest in our joint ventures, the net R&D for the first nine months of 2012 was $34.3 million.

Our SG&A expenses for the third-quarter 2012 were $19.2 million compared to $17.4 million in the third-quarter 2011. The increase in this period is primarily attributable to increased personnel and professional services. SG&A expenses for the first nine months of 2012 were $56.5 million compared to $56 million for the first nine months of 2011.

Turning now to the balance sheet, we ended the third-quarter 2012 with cash and cash equivalents of $197.9 million and an accounts receivable balance of $17.1 million. Just wrapping up on our share repurchase, at this point in time, we repurchased approximately 400,000 shares at a price of $5.9 million.

That concludes my comments. I will now turn the call over to the operator so that we can begin the question and answer portion of the call. Operator, please proceed.

(Operator Instructions). Cory Kasimov, JPMorgan.

It's actually Matt Lowe in for Cory today. Just a couple of questions. The first one, when the Phase 2 TB vaccine gets released, just wondering how much detail you'll be able to give us in that release, what might be in it?

And then secondly, just any more comments on potential ongoing BD efforts that is contributing to the 2015 growth plan? Thanks.

Sure. So in terms of the release itself, I think we are working out with our partners the actual plan for releasing the data. As you can appreciate dates through the Aeras Institute is very interested as is Oxford and the Wellcome Trust, and there are also the South African partners that we work with.

So the actual details of the communication plan are apparently being finalized. So I can't give you specifics yet in terms of how that's going to look, but certainly in early Q1 next year, you will see the details.

I think the team is also anticipating that there would be a publication in a well-recognized journal before the full results of the study. So stay tuned for more on that one.

In terms of the BD efforts, we have a number of ongoing activities with respect to potential targets. And they are numerous and, I would say, broad. And I'm pleased with the progress that's being made there at various stages of evolution from early-stage to later-stage. But stay tuned for further announcements on that.

I think the priority for us, as I indicated, is we would like to complete the ABM selection process and make that announcement by year end. So you can look for that.

Okay. That's great. Thank you.

Nicholas Bishop, Cowen and Company.

I have a couple of questions on the three-year growth plan. The first one is just to clarify, of the three marketed specialty products you talk about, one of those is BioThrax, I assume. Just confirm that's correct.

And then I wonder if you can provide any more granularity on the $500 million-plus revenue guidance? How much of that do you envision being BioThrax versus something else? Because it seems to me you could get there on BioThrax alone if Building 55 is approved.

Thank you for joining us this morning. So BioThrax is certainly one of the three. So your observation is correct.

In terms of the allocation of the breakdown of the products, revenue, again, I think we set a target for ourselves. I'm not at this point prepared to give you an assessment of how it works. Remember that our current contract with the CDC runs through 2016. And we still have yet to work out how we are going to introduce Building 55 material into the mix. So I am really not in a position to give you specifics on that.

But our evaluation, as we look at it, is we should be able to achieve the target that we set out to there. We're comfortable with that. We've done the analysis. We've looked at the potential product opportunities for an acquisition. And on balance, I think we'll be able to hit the target that we set out there for you.

Okay. And then I think just two follow-ups on the plan. I guess I'll ask the first one and let you respond.

And that is, can you get to your revenue targets just on the basis of programs that are extending your pipeline today, or do you need to make external acquisitions to get there?

Yes, so, as we look at our pipeline today, we don't see beyond the BioThrax and Building 55, other products coming to market within the plan period by the end of 2015. So we are looking at acquisitions to support expanded BioThrax sales.

Okay. And then one bigger picture sort of strategy question, and that is if you could just explain the motivation for providing us guidance today, especially taking into account that it assumes acquisition of products you don't yet own. What's the intent of just providing this big picture now as opposed to maybe after you have closed something?

Yes, and I think that's a good question. We've been evaluating the direction of the Company. What are the ways in which we want to build and grow on our history of success?

And a couple of things. We felt it was very important to be transparent with our shareholders and investors in terms of where we are taking the Company and to lay out their specific milestones that we set for ourselves and allow our investors to measure our progress toward those milestones.

A couple of other things that I think are unique refinements, which is we've given real financial goals. We put out there now a growth target for the bottom line, which historically we've not said. We put out a top-line growth figure. Again, historically we've not given that kind of granularity and specificity. So I think that is an important element of the communication today.

Also, we've communicated to you what we think our core competencies are and how we think we can leverage those core competencies. Our confidence in the BioDefense field as a specialty market. We think that is a growth opportunity, and we believe that we have competencies which cut across other specialty fields that we can leverage to build the business.

I am quite confident that the acquisition strategy that we've laid out here can be implemented successfully both in the near- and mid-term. So my view on it is, yes, while there is some risk -- and I'm glad you recognize there is some risk -- I think the risk is manageable and the plan is achievable.

So the point here was really to lay out for you how we see the path forward, give you some milestones down the road that we're targeting and we're seeking to achieve, tell you how we're going to get there, and allow you then to measure our progress as a management team in achieving those goals.

Okay. That's really helpful. Thanks a lot. And if I can just sneak in one last one on the fourth quarter either for Dan or Don, looking at our model, if we put revenues even near the low end of guidance, the net income seems to come toward the top or even above guidance. Is there a possibility that there could be a spike in one of the expense items in the fourth quarter, or could there even be P&L-related acquisition expenses as soon as that, or could you comment on that?

Thank you for the question. With respect to Q4, with respect to our guidance for the full year, there are no acquisition expenses anticipated in there. I can't comment on your model per se, but with the expenses that we project for fourth quarter, which are normal anticipated expenses in support of our programs going forward and the revenues that we're projecting, we see the guidance as being appropriate.

Okay. That's great. Thanks a lot, guys.

Jason Kantor, Credit Suisse.

I was just wondering if you could give us some idea of what kind of hurdle you are looking for in your go/no go decision in CLL. It seems like it's an increasingly crowded space with lots of different drugs. What do you need to see to make that -- to determine to make that investment in? Would you make that a divestment yourself, or does that require a partner?

Thank you for the question. In terms of the actual target end points, maybe Scott Stromatt, our CMO, Chief Medical Officer, can take that piece, and then I'll come back on the partnering question.

In terms of response rates, we're looking at 30% to 50% response rate. What's interesting is that, although it is a crowded field, there's no curative agent, and even the newer kinase inhibitors, they have nice activity, but again, they are not curative. I think the real promise in the field lies in combinations. And that's what's very encouraging with TRU-016 that when we do common studies in animals, we see a marked efficacy. And our goal is to move toward non-chemotherapy combinations, which won't have the myeloma suppression and won't have the secondary malignancies that current chemotherapy combinations have.

In terms of partnering out as part of my comments on the growth plan, that's absolutely on the table. We will evaluate the data from this study, make a determination as to next steps. And my expectation is we would look to have some discussions around partnering and make a determination whether it's the right time, it's the deal, whether we should invest on our own to get to the next inflection point or partner at that point. So stay tuned.

But in terms of overall strategy, partnering late stage candidates is certainly part of the approach that we're taking. And it really depends on the product, the market and the vehicle.

Matthew Luchini, Piper Jaffray.

Just a couple, if I may. So the first is, as it relates to the TB vaccine and the data there, is the definition of success in your mind black or white? Is there a specific hurdle rate that you are looking for relative to the booster plus vaccine versus vaccine alone, or is there a gray outcome as well? I think in the past you've mentioned maybe a 40% to 50% improvement. Is that a hard and fast line? What happens if the data comes in a little bit below that? If you could just share your thoughts on that, that would be great. Thank you.

Yes, that's a great question. And, as you know, as we commented before, there are a lot of eyes on this trial and the results of this study. The end point is vaccine efficacy of 50% or greater. That's what we are hoping the trial will provide.

However, I think there is widespread acceptance of the fact that even below 50% this vaccine could have tremendous public health benefits, and we've heard numbers as low as 30%.

So 30% to 50%, is that the gray zone? Yes, very well could be the gray zone. We'd have to then evaluate what the data is telling us; look at the full scope of the data that is provided by the results of this study; have some discussions with key opinion leaders, public health authorities, and the regulatory agencies; and then devise a path forward based on that, I'll call it, use your words, the gray zone.

But from a public health perspective, even vaccine efficacy in that range could be very, very beneficial. And we'll just have to see how we developed the product at that point.

Okay. Thank you. And for -- looking at the things you laid out in the growth plan, I just was curious, you've outlined some core competencies and some other things here. And as it relates to the -- you talked a little bit about hoping to target on the BioSciences side, hospital-oriented products, and I was just wondering from your perspective, commercially or from a commercial point of view, what do you see as your competitive advantages in terms of selling into that space? If you could just share some thoughts on that, that would be great. Thanks.

Yes, that is a great question. We, as a team, have talked about that at length. And candidly, if we were going to do an acquisition for that space, it would be a product coupled with commercialization capability and expertise. Because we recognize that we don't have that internally and emerging now.

So the first foray into that market would be products coupled with commercialization capability. Followed by our hope would be we would continue to expand on that business by following up with other acquisitions that could be carried by the commercialization team to address that market.

So if I'm understanding you, then that would somewhat suggest Company acquisition, at least on the early side as opposed to a licensed strategy. Is that a correct interpretation of your last comment?

It is somewhat correct. Because what we're seeing out there is that there are product opportunities that come with a sales force. There are small divisions of companies out there that are available, if you will, for transacting. And, of course, you're right, there could also be a quote Company acquisition, which would address that issue.

So it's not necessarily a Company. But certainly the capabilities around commercialization would be part of that initial foray.

Okay. Great. Thank you so much.

Greg Wade.

If I could just follow up on Nick's questions regarding the bogey for the delta in revenue. Existing products are quite expensive, trading at 3 to 5 times revenue. What type of revenue stream are you trying to pull in through an acquisition? And does your $500 million target -- are you expecting flu to be online by then? Will the TB vaccine play into that number? And some commentary around how much bigger you think BioThrax gets with Building 55 would be helpful as investors consider how much dilution you're willing to undertake in order to achieve your goals. Thanks.

Thank you for the question. Very helpful. Starting with the BioThrax piece, again, I think there's too much uncertainty right now about how 55 is going to get feathered into the deliverables to the CDC. So it is going to be very difficult until we start to have more specific conversations giving you specifics around that.

In terms of the other product opportunities, the targets that we are looking at are ways in which we can acquire product opportunities where we can actually build on the business and make it more valuable in our hands than in somebody else's hands. And that is where, if you look at, for example, our expertise in government contracting and delivering to governments, whether it's US or foreign, or creating a portfolio products that address stated requirements, whether it is health threats or biodefense targets. So what we are trying to do is really leverage what we've got, acquire at a value which is below what we think we can build internally, and create value to the acquisition.

And so my expectation is that the targets that you will see that we announced on, they at first blush not be as large as we think top-line and bottom-line contributions can be. Because that is, from my perspective, the rationale for doing the transaction. We've got to be able to acquire something that in our hands could be more valuable or would be more valuable than it is in the hands of the seller.

Second, I don't see this as one large acquisition that answers the mail across the board. I think this very well could be a series of acquisitions smaller in nature, which allows us to grow top-line and bottom-line and hopefully from a market perspective as well from a valuation perspective, as well.

So I think there are a number of ways to meander this flow to get to the endpoint. There isn't one model that answers the mail.

Okay. And then so with respect to the specifics around whether flu or TB is in the bottom in that $500 million estimate, you've obviously modeled all this out, and you know the bogey you are looking for in terms of revenue or else you wouldn't know what to shop for. Are those included?

I really don't want to comment on the roadmap or what the profile looks like in 2015 because undoubtedly whatever I say today ultimately is going to be different over the course of the next three years. So all I know is I think we have multiple ways to get there, and that's why we have the confidence that we can achieve it. And what we'll do is continue to deliver on this plan, and then you can better assess what that portfolio ultimately looks like.

Okay. Great. And then just one last question. With respect to Building 55, the government had a previously-stated goal of 70 million-plus doses of anthrax vaccine. You're doing your best to supply them with as much as you can at your existing facility. Have you seen a change in the posture of the government with respect to its plans that issue less visibility into the potential future demand that is Building 55? Thanks.

Thanks for the question. No, I think the government has been absolutely firm and committed to that number. And as you pointed out, we continue to deliver as much product as we can produce, and they've reiterated that figure several times. So we see no wavering on that commitment.

Thanks for taking my questions.

Sure.

We have no further questions at this time. (Operator Instructions). (multiple speakers)

We have no questions at this time, so I'd like to now turn it back to Bob.

Great. Thank you very much, ladies and gentlemen. That's all the time we have for today, and we really appreciate your participation.

Please note that today's call has been recorded, and a replay will be available beginning later today through November 8. Alternatively, there is available a webcast of today's call, an archive version of which will be available later today, accessible through the Company website at www.emergentbiosolutions.com and clicking on the Investors tab.

Thank you, again, and we look forward to speaking to you all in the future. Goodbye.

Thank you for your participation in today's conference. This now concludes the presentation. You may now disconnect. Have a good day.