Emergent BioSolutions Inc (EBS) 2012 Q4 法說會逐字稿

Good day, ladies and gentlemen. And welcome to the Emergent BioSolutions fourth quarter and full year 2012 financial results conference call. My name is Karris and I will be your coordinator for today. (Operator Instructions). At this time I would now like to hand the call over to your host today, Mr. Bob Burrows, Vice President of Investor Relations. Please proceed.

Thank you, Karris, and good afternoon ladies and gentlemen and thank you for joining us today as we discuss Emergent BioSolutions' full year 2012 financial results. 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 afternoon with prepared comments will be Dan Abdun-Nabi, our President and CEO, Bob Kramer, our Chief Financial Officer, and Dr. Scott Stromatt, our Chief Medical Officer. Following the prepared comments we will conduct a 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 or 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 those 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 the 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 March 7, 2013. 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.emergentbiosolutions.com under Investors/News.

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

Thank you, Bob. Good afternoon everyone, and thank you for joining our call today. During my prepared comments I want to review our financials and then discuss the 2012 operational performance and 2013 milestones for each of our operating divisions. That's BioDefense and BioSciences. To begin, total 2012 revenue was $282 million. This was within the $280 million to $284 million range that we provided in our preliminary financial results announced in January.

Our 2012 net income $23.5 million, also within the $21 million to $24 million range that we provided in January. For 2013, we reaffirm our guidance of total revenue of between $290 million and $310 million and net income of between $20 million to $30 million. Bob Kramer will provide more detail on both our 2012 financial performance and 2013 guidance in just a moment.

I will now cover our 2012 operational performance and what we are focused on achieving in the current year. Let me begin with the BioDefense division. There are four key drivers for this division. They are, BioThrax, Building 55, Grants and Contracts, and lastly, ADM.

First, BioThrax. 2012 proved to be another solid year of performance. During the year we shipped approximately $216 million worth of product to the strategic national stockpile under our current five year $1.25 billion contract with the CDC. This contract provides for deliveries of BioThrax through September 2016. In 2013 we anticipate another solid year of BioThrax shipments to the SNS and we intend to continue our programs designed to enhance the value of BioThrax.

Recall in 2012 we secured a three-dose primary schedule for BioThrax and are now focused on expanding the label to include a PEP indication. To that end, in 2012, we secured additional funding from BARDA for this important label expansion and we initiated a pivotal antibiotic non-interference clinical study. In 2013 we anticipate completing that study which would position us for submitting our sBLA in 2014. Also in 2013 we look to continue to expand international registration of BioThrax specifically in Europe.

Second, Building 55. In 2012 we continued to work closely with BARDA under our multi-year development contract to advance the program for large scale manufacturing of BioThrax in Building 55. In 2012 we initiated manufacturing of our consistency lots and in 2013 we plan to initiate the comparability and pivotal non-clinical studies. We plan to submit our sBLA filing to FDA in 2014 with regulatory approval possibly in late 2014 or into 2015. Timing for both the filing and approval of course are dependent upon interactions and feedback with FDA.

Third, Contracts and Grants. In 2012 we secured additional BARDA funding to support further work on a number of our BioDefense development programs, and this year we expect to continue to execute against program milestones while we seek additional development funding to further advance our BioDefense programs.

And fourth, ADM. In 2012 we were selected by BARDA as a center for innovation and Advanced Development and Manufacturing, otherwise known as ADM. Our Baltimore manufacturing facility was one of three sites selected across the country. The other two awardees were Novartis and GSK together with Texas A&M.

Under our ADM contract we will work with the US government to develop medical counter-measures against bio-terror and public health threats that they have identified and for which they believe countermeasures are required. This $163 million contract consists of an eight year base period of performance and is extendible by the government for up to 25 years. This award underscores the government's commitment to the bio-defense industry and to protect the nation, as well as their focus on enhancing the nation's manufacturing infrastructure through a public-private partnership. It also reflects the importance of our flexible manufacturing capability, our biologics manufacturing expertise, and our history of being a consistent development and manufacturing partner. In 2013 we intend to initiate proof of concept studies for a pandemic flu candidate and design for the further build out of the site.

Before I move to our BioSciences division I want to address two recent events coming out of Washington, D.C., sequestration and reauthorization of PAHPA. In terms of sequestration, despite the fact that it took effect on March 1 we expect there will be no impact on BioThrax procurement because the funds have already been obligated for purchases in 2013. Funding for 2014 and beyond will be subject to annual appropriations as is customary. We anticipate that procurement of BioThrax under the current contract will continue unaffected given the government's recent strategy and implementation plan for medical counter measures as well as the importance of BioThrax in terms of what it plays in the nation's anthrax preparedness plan.

Unlike BioThrax procurement, our development contracts and grants are dependent on 2013 appropriations. If you assume the approximately 8% across-the-board cuts are put into effect and are applied to our current bio-defense development contracts, we remain confident there will be no material impact on our financial operations in 2013. Accordingly we have reaffirmed our 2013 guidance.

Second, late last week Congress passed and the President is expected to sign shortly, the Pandemic and All-Hazards Preparedness Reauthorization Act of 2013 otherwise known as PAHPRA. This is a key piece of legislation for the BioDefense sector as it authorizes funding for the development and procurement of life saving medical countermeasures against chemical, biological, radiological, and nuclear weapons, and in so doing helps to build an even more prepared nation. Specifically it authorizes BARDA at $415 million annually for five years as well as the SNS at $533 million annually for five years to replenish the stockpiles.

It also reauthorizes the BioShield special reserve fund at $2.8 billion over five years which demonstrates the government's commitment to developing and procuring countermeasures.

Turning now to our BioSciences division let me address our two clinical candidates. First MVA-85a, our tuberculosis vaccine candidate. During 2012 we completed the Phase IIb infant efficacy study, and earlier this year announced the clinical results. MBA-85a was well tolerated, however, the data showed that a single dose of our product candidate was not sufficient to confer statistically significant protection against TB in infants who have been vaccinated at birth with BCG.

With these results, and recognizing the state of scientific understanding of TB disease, the undeterminable development path and the extended time lines and escalating costs associated with this program we have ceased further development of MVA-85a. In addition, we have taken initial steps to close our UK office which we expect be finalized by mid this year. These actions are in accordance with our growth plan which focuses only on those programs that demonstrate the greatest promise and value both to public health and to the Company. The cost savings in 2013 will be further discussed by Bob Kramer.

Second is TRU-016, our humanized protein therapeutic candidate in clinical testing for both front line and relapsed refractory CLL. In 2012 we initiated two exciting clinical trials for TRU-016, a Phase Ib study that combined TRU-016 with rituximab in front line CLL, and a Phase II study that combined TRU-016 with bendamustine in relapsed refractory CLL. We are very excited about the progress of both of these open label studies and we expect to announce data later this year. Scott Stromatt, our Chief Medical Officer, will provide a more detailed update on TRU-016 in just a moment.

Finally I want to briefly touch on our approach to M&A. We are targeting the acquisition of revenue generating products with appeal to US and foreign governments for potential dual use across both government and commercial settings. We are also targeting products with application in other niche settings, namely hospitals and specialty clinics. This approach is in accordance with our growth plan which clearly emphasizes acquisitions as a significant part of our growth, particularly products already on the market that are focused on bio-defense as well as infectious disease, hematology, oncology, and autoimmune disorders. I look forward to reporting our continued progress on all of these fronts throughout the year. That concludes my prepared comments and I will turn it over to Scott, our CMO, who will give you a more detailed update on TRU-016.

Thank you, Dan. Good afternoon. Before I discuss the status of current clinical trials let me take a few moments to review the basics of TRU-016. TRU-016 is a humanized ADAPTIR modular protein technology therapeutic directed against CD37. ADAPTIR protein formerly known as SMIP and SCORPION are based on a proprietary platform technology that starts with a monoclonal antibody and makes significant modifications with the effector regions, the hinge, and binding domains.

CD37 is a cell surface protein expressed in mature human B-cells as well as on malignant B-cells that comprise B-cell leukemias and lymphomas. When TRU-016 binds to CD-37 cells are killed by three different mechanisms. What is most exciting about TRU-016 is that its mechanism of action is unique and is different from any other drug on the market including anti-CD-20 antibodies, fludarabine, PI3K inhibitors, and BTK inhibitors. Based on the pre-clinical activity of TRU-016 a molecule is taken into the clinic. TRU-016 has been studied in several clinical trials. In the first clinical trial in humans as a single agent six of seven previously untreated patients with CLL had a partial response. And in those with one or two prior treatment regimes, the partial response was 37%.

Even in patients that did not reach a partial response the malignant lymphocytes were reduced. Overall lymphocyte reduction of greater than 50% was observed in 55% of all patients treated. That is very encouraging give than this is only the first study in humans with the molecule and the study was focused on dose ranging for safety. So a lot of low doses were tested. Results of the combination trial of TRU-016 with bendamustine were presented at ASH at the end of last year.

In the Phase Ib portion of the study in 12 patients with relapsed CLL, the NCI overall response was 83% with a CR rate of 33%. These results are very encouraging and as Dan mentioned a randomized Phase II trial is ongoing. This trial which we refer to as study 16201 is enrolling 60 patients with relapsed CLL in Phase II, is a randomized, open label study and compares the overall response rate for bendamustine alone to the bendamustine and TRU-016 in patients with relapsed CLL. The secondary endpoints include safety, complete response rate, duration of response, progression-free survival, and PK/PD parameters.

Patients are treated for six months and then followed for 18 months. We are almost finished with enrollment and expect to present preliminary response data at ASH this year. In October of last year we announced the initiation of a combination trial of TRU-016 with rituximab in front line CLL. The trial is an open label study with a primary endpoint of overall response.

The secondary endpoints are the same again -- safety, complete response rate, duration of response, progression-free survival and PK/PD parameters. Patients are treated for six months with the combination and then followed for another year. The study enrollment has been remarkably fast. We have already enrolled 21 of 24 patients. Physicians and patients are keenly interested in alternatives to standard chemotherapies.

With a developing safety profile TRU-016 may well make it an ideal partner with several agents in the field as the field moves towards a relatively less toxic therapy for CLL. Developing safety and efficacy data are very promising and we look forward to presenting this trial data at ASH this year. That concludes my prepared comments and I will turn it over to Bob Kramer, our CFO, who will take you through the 2012 numbers in greater detail. Bob?

Thank you, Scott. Good afternoon, everyone. I would first like to make some general comments about our consolidated performance for 2012 compared to prior year and then turn to some highlights of our two operating divisions. Total revenue for year was up -- was $282 million, slightly up from prior year of $273 million due to higher BioThrax sales.

At the operating income line we generated a profit of $30 million which was 11% of our total revenue. This is down slightly, about $2 million from prior year due in part -- due to a $9.6 million charge we took in Q2 of 2012 related to the write down of SBI-087. We were able to offset part of this additional charge with lower R&D spending in the BioSciences division, in particular certain of our pre-clinical programs.

Our gross margin was in line with prior year as was our SG&A. In fact, since 2009, our total SG&A expenses have increased by a modest 3% or on average 1% per year. For 2012 our net income was $23.5 million, at the upper end of the range we communicated in early January but essentially flat compared to 2011. Please keep in mind that this performance included a $9.6 million write down of -- pre-tax write down in IP R&D.

A quick comment about our effective tax rate for 2012. Our effective tax rate was 37% which is not materially different from the combined statutory federal and state rate. If we are able to take further advantage of tax credits such as R&D and orphan drug status programs in the future we expect that this rate would decrease. At year end our balance sheet continued to reflect a strong capital position for the Company.

On the asset side our combined cash and accounts receivable totaled $238 million, up from $220 million in 2011. In terms of fixed assets our PP&E was $241 million, up $33 million over 2011, primarily a result of our investment in capacity expansion at our Baltimore site and risk mitigation at our Lansing site. Part of the increase in PP&E is also due to a redundant and expanded testing facility, Building 56, built to support our BioThrax operations in Lansing.

On the debt and equity side of the balance sheet we ended the year with primarily real estate-backed long-term debt of $63 million which was 6% over prior year. So while our cash and accounts receivables expanded by $18 million, our debt remained steady despite the fact that we made significant and strategic investments in additional manufacturing infrastructure.

At the division level, the BioDefense unit had another solid year of performance led by our BioThrax sales of approximately $216 million, an increase of $14 million over 2011.

Please recall that 2012 was their first full year of deliveries to the US government under the current 44.75 million dose contract. The 8.1 million doses delivered in 2012 were in line with our expectations.

Also, our gross margin for 2012 of 79% was in line with historical levels of 75% to 80%. In addition to BioThrax sales the BioDefense division also contributed over $60 million in grant and contract revenue. While low margin in nature, this revenue source is an important way for us to partner with the US government in the development of much needed medical countermeasures.

For our BioSciences division, 2012 included the investment of approximately $45 million in R&D, down $17 million from 2011. This reduction was the result of our ongoing efforts to prioritize our R&D investments which we look to continue in 2013. As mentioned earlier, we are discontinuing the development of our TB product based on the disappointing Phase II results announced in early February which will result in a reduction in 2013 R&D spending in the range of $8 million to $10 million. There will, however, be costs associated with winding down these development efforts such that the net impact, while positive, is not anticipated to be material to our net income performance for the year.

I would now like to turn to our 2013 guidance and talk a little bit about our revenue and net income forecasts for the year. Our expectations for 2013 are for continued performance as seen in 2012 across our operating divisions. For 2013 we are forecasting total revenues of between $290 million and $310 million, split between product sales of $230 million to $240 million and grants and contract revenue of $60 million to $70 million.

This forecast does not reflect the impact of possible M&A transactions. We are confident in our ability to deliver doses to the SNS in line with our product sales revenue projections of $230 million to $240 million this year. We are also confident in our ability to continue to generate contract and grant revenue as we perform under these important development contracts funded by BARDA.

We anticipate our gross margin and operating margin for 2013 to be in line with those in 2012. We will look for opportunities to continue to control our R&D and SG&A spending where appropriate while we continue to perform under our government funded con -- programs. And we will continue to focus on securing licensing partners and funding from external parties as we continue to evaluate our current platform technologies.

Lastly for the first quarter of 2013 we are forecasting total revenues of between $40 million and $50 million. As we look at our historical financials it is fairly typical range for our first quarter. In summary, our expectation is that our performance for 2013 will largely be in line with 2012 as we take steps to unwind certain aspects of our business and expand others, all leading toward achieving the financial and operating goals in our growth plan.

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). Your first question comes from the line of Cory Kasimov with JPMorgan. Please proceed.

Hi there. It's actually Matt Lowe in for Cory today. Just a couple of questions.

First one on Building 55. I know you mentioned that there's the potential to have that licensed in late 2014 or early 2015. Just wondering do you expect or foresee a new contract to be agreed then or do you think the existing contract will run until September 2016, and with the potential for a new contract once that one is concluded?

And then a second question is just I know you mentioned about M&A possibilities this year. Just wondering if you could give us more details on what you think the best use of cash is to build the Company whilst also building shareholder value in terms of M&A versus some of the other options? Thanks.

Yes, thank you, Matt. I appreciate your participation this afternoon and let me see if I can answer both of those questions. So in terms of the timing on the contract, as you know, our existing contract with CDC goes through September 2016 and covers production out of Building 12. So all of the delivery schedules and the pricing are really tied to that scale of production. We do anticipate there will be some feathering in of Building 55 production as that facility comes online so that the government can maximize the availability of doses to achieve their stated requirements ultimately of 75 million doses in -- of an anthrax vaccine in the strategic national stockpile.

The actual mechanics and the timing and the level of deliveries out of Building 55, we don't have clear visibility. We have some ideas as to how this might work but as of yet we have not had any discussions with the government about that transition and what it would look like. So we do not expect that we are going to have to wait until 2016 before we start delivering out of 55 but in terms of the total deliveries of 55, together with Building 12 it is not exactly clear what that will look like.

So on your second question with respect to M&A and the best use of cash to build the business and to drive the Company forward. So I think we have made it pretty clear over the course of the last several months about our growth plan for 2013 to 2015 in terms of top line as well as bottom line growth. Both are key objectives for the organization. We do believe that in order to achieve the top line growth that we have targeted M&A is a requirement.

We don't have a portfolio of products that would contribute to BioThrax to get us to that $500 million level so M&A is a fact of life for us over the next year to two and so our objective is to do that in the most efficient manner, recognizing that we don't want to be in a position where we are suffering dilution or significant dilution and that we are looking for transactions that are accretive either immediately or within a very short period of time following acquisition. So we anticipate that cash will be used as part of those acquisitions and that we think that is a very valuable and important tool for us in order to achieve the stated plan that we have laid out there for 2015. So hopefully that helps clarify both fronts for you.

That was great. Just as a quick follow-up on the R&D spend. Wondering if it you could give us some details around the split between BioDefense and other R&D spend now that the TB vaccine program is going to be closed down.

Yes, I think the -- the way that -- we don't give breakouts, by the way, on a go-forward basis for the R&D. But the way that you certainly should look at it is we do have some grants and contracts revenue which are offsetting a significant portion of our BioDefense spend. And our approach to BioD R&D is if it is not funded then we tend not to do it unless it is very modest amounts to get it to an inflexion point where we can secure additional funding. But right now the BioD is substantially funded. I think that is about as much as I want to say with respect to prospective allocation between the two divisions on R&D.

That's helpful. Thank you.

And your next question comes from the line of Ian Somaiya with Piper Jaffray. Please proceed.

Thanks, I had a couple of questions. Maybe just one follow-up on the R&D spending. I understand there is not an incremental benefit on the bottom line this year. How should we think about the potential for those cost savings to lead to an improvement of the net income outlook for the next couple of years? Is there any carry forward on that front?

Maybe I will ask Bob Kramer to comment further after I speak to it. Certainly we have given guidance for the year and we've incorporated the savings associated with the shutdown of the TB program and the UK operations which are anticipated sometime mid this year. We have incorporated that in our guidance.

So in terms of the impact for 2013 I think it is baked into the figures that we have disclosed today and discussed. In terms of a go-forward basis, well, certainly we are no longer incurring the costs associated with the MVA-85A. So those costs will no longer be there and I don't know, Bob, whether you have any further comment to add for next year.

I think you hit it correctly, Dan. Again, and as we commented earlier there will be some savings in R&D in 2013 because of the discontinuance of the program. 2013 will be a bit of a wind down year for that program. So while we expect that net-net there will be some savings to 2013 it is not going to be material to the bottom line and it is not going to change our guidance on net income.

But -- and my question is a more specific to 2014 and beyond and this is in relation to the guidance you have already given for those years. Obviously you have cost savings in place because you are not pursuing the product any more. Should we assume that that leads to -- represents a source of upside to your net income guidance?

So, let me just comment on our 2015 goal or plan because I think it is very important that we recognize that we are not forecasting 2014 as part of that and we have specifically indicated we don't expect this to be incremental, even stepwise progress towards that goal of top line and bottom line. It will be -- it will be more of a gradual in the early years and a steeper in the later years. So I don't think you should be thinking of this as an even stepwise progress year-over-year to the 2015 plan numbers that we put out there.

Okay. Another question I had was just on sequestration and how we should think about that in terms of your ongoing relationship with the US government or more specifically BARDA.

The sequestration impact I think we've covered that at least with respect to BioThrax procurement. We don't anticipate any impact of all as a result of the funds already being fully obligated. And even with respect to grants and contracts, I take great comfort in the recent authorization of PAHPA that was both houses of Congress, both sides of the aisle. We do anticipate the President is going to sign this so I think this is broad-based support and what we are seeing is no reduction at all in funding compared to 2012 levels and they have maintained funding for the next five years in the program.

Of course, we have to go through the appropriations process but what we are seeing is broad-based support for the BioDefense industry which is one of the very reasons that we have indicated as part of our plan that we intend to extend our reach within BioDefense. We think it is a very viable and healthy marketplace. We have a leadership position. We have very close ties with BARDA on a number of programs that we are working on collaboratively with them. So I think the picture overall despite the news and the stories regarding sequestration is very positive for the BioDefense industry.

Okay. If I could just ask one last question for Scott on TRU-016. Give us a sense is of where do you see this drug fitting in. You mentioned or alluded in your prepared remarks we are seeing a change in the treatment algorithm for CLL, lymphoma or B-cell malignancies broadly speaking. Where does 016 fit in? How much --At what point do you seek either a partner or seek to potentially just out-license the opportunity?

Well, the molecule is -- has good activity and very good safety and as you know, the disease cannot be cured. And so we see it being used in combination with a variety of agents. We have done it in combination with bendamustine, with rituximab, with PI3K inhibitors and we see active if not synergistic activity. So we see it definitely working in combination there.

As you know, the field is moving away from toxic chemotherapy regimes to more non-toxic. So I see it being used in combination with those type of drugs. In terms of partnering we are looking for a partner now and that is our goal, is to work with a partner because I think there are some good opportunities for the molecule.

Yes. And on the partnering front let me just add to that, Scott. We have indicated again tied to our growth plan that our preference for advanced clinical stage candidates is to partner up. It has a lot of benefits. It reduces -- it does reduce potential costs associated with a further development. It provides some significant commercialization capability. It may enable us to accelerate timelines. So we see a lot of benefits associated with partnering the candidate and to Scott's point we have started that process and we think there is a real opportunity to strike a valuable partnership for TRU-016.

Thank you.

(Operator Instructions). Your next question from the line of Eric Schmidt with Cowen and Company. Please proceed.

Thanks for taking my question. Dan, on PAHPA, has any money been specifically allocated for anthrax or is anthrax still prioritized within the BioDefense budget?

Yes. Under the PAHPA legislation there was over $500 million allocated to replenishment of the stockpile for the SNS for each of the next five years. So that is the specific dollar amount. And BioThrax is part of that replenishment. Indirectly the answer is yes, specific money identified for replenishing the stockpile at levels that we see today.

Okay. On the guidance, not to beat a dead horse, but what I'm struggling with, with regard to 2013 is that you've guided at the mid point of your revenue guidance to revenues that are about $20 million, nearly $20 million higher than what you just saw in 2012. You suggested that the expenses are going to be in the same ball park despite some cost savings both on the R&D and SG&A side that you might have. Yet your net income guidance really isn't any different from what we just saw in 2012. So where are the incremental -- where is the incremental revenue going?

Bob, do you want to take that question?

Eric, I'm not quite sure I follow the question.

It sounds like you are -- at the mid point, your revenue guidance is higher. Your expense guidance is certainly no higher, if anything a little bit lower yet your net income guidance is in line with what we just saw year-on-year.

Yes, so again, as we described, in -- 2013 will be a bit of a transition year. We have to -- as we implement our growth strategy it is not going to be done, as Dan indicated, overnight. It will take us some time to unwind the development programs, to the extent that we make those decisions in 2013 as well as wind up on the growth strategy the M&A activity we plan to pursue in 2013. So it will take a little bit of time for us to get things lined up in pursuit of those growth plan objectives.

Specifically on the tax rate side, Bob, would you think that the 37% you just posted in 2012 would be a good number? And if you had any R&D credits as you mentioned it could be a little less?

Well, again, we anticipate or expect that to the extent that we can more fully utilize those tax credits in 2013 and beyond, that that tax rate overall will begin to creep down. But as you know it is all dependent on our ability to take advantage of those credit opportunities. But, yes, I mean we would expect that to trend down.

Okay. And then last question. I assume you just put a pause on the share buyback program. I didn't see any further share count reductions in the quarter.

Through the end of the year the program was active, it is still active today. And we are occasionally in the market opportunistically exercising the program and we will give updates on a quarter by quarter basis going forward. But at the end of the year, we were -- we had purchased just short of 400,000 shares at $5.1 mill -- $5.8 million of value. So we will -- again, it is an active program. We assess from time-to-time the appropriateness of engaging in the activity and we will update you accordingly.

Thank you.

Sure.

At this time, there are no further questions in queue.

Great. Thank you, Karris. Ladies and gentlemen, that is all the time we have today. Thank you for your participation. Please note that today's call has been recorded, and a replay will be available beginning later today through March 21. Alternatively there is available a webcast of today's call, an archived 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 all of you in the future. Goodbye.

Ladies and gentlemen, that does conclude today's conference. Thank you for your participation. You may now disconnect. Have a wonderful day.