Emergent BioSolutions: Strategic Turnaround Proving Tricky, But I'm Still Hopeful

(14min)

Summary

  • Emergent stock is down >40% since my last update. I had given the stock a "Buy" rating but noted that 2025 may be a difficult year.
  • Emergent's MCM business has performed well, but Narcan sales fell drastically in Q1.
  • Management believes revenues will increase in the second half of the year and expects to generate a net income of $750m–$850m of revenues in 2025.
  • It's vital that happens, as the company's debt repayments are onerous. Missed revenue and income targets could endanger the company's future in my opinion.
  • This is a risky buy call - investors should be aware this is a heavily indebted company. Nevertheless, a successful, share price accretive turnaround may be completed.

Ladder to Cloud, Ladder of Success Concept

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Investment Overview

I last covered Emergent Biosciences (NYSE:EBS) in a note for Seeking Alpha in November last year. I discussed how the Gaithersburg, Maryland-based biotech, focused on "providing innovative preparedness and response solutions addressing accidental, deliberate, and naturally occurring

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This article was written by

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Edmund Ingham is a biotech consultant. He has been covering biotech, healthcare, and pharma for over 5 years, and has put together detailed reports of over 1,000 companies. He leads the investing group Haggerston BioHealth.

The group is for both novice and experienced biotech investors. It provides catalysts to look out for and buy and sell ratings. It also provides product sales and forecasts for all the Big Pharmas, forecasting, integrated financial statements, discounted cash flow analysis and market by market analysis. Learn more.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in EBS over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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