Good day, ladies and gentlemen, and welcome to the Emergent BioSolutions Second Quarter 2013 financial results conference call. My name is Philip, and I will be your operator for today. At this time all participants are in listen-only mode. Later we will conduct a question-and-answer session. (Operator Instructions). As a reminder this conference is being recorded for replay purposes. I would now like to turn the call over to your host for today, Mr. Robert Burrows, Vice President of Investor Relations. Please proceed, sir.

Thank you, Philip. Good afternoon, ladies and gentlemen. Again, my name is Bob Burrows. Thank you for joining us today as we discuss Emergent BioSolutions' financial results for the second quarter and first six months of 2013. 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; and Bob Kramer, our Chief Financial Officer. Following 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 of 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 a replay this call is held and recorded on August 5, 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. And 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 will briefly touch on our financial performance for Q2 and year-to-date and our guidance for the third quarter and the full year of 2013. I will then discuss the Q2 performance and operational developments related to our biodefense and biosciences divisions. Finally I will review the key milestones for the remainder of the year. To begin, total revenue for the second quarter was $82 million, which is slightly above the 70 to 80 million range that we provided on our call in May. Total revenues for the first six months was a 125.5 million. Net income for the second quarter was 10.5 million or $0.29 per share and year-to-date net income was $2.4 million or $0.07 per share. In terms of guidance we are reaffirming our full year 2013 forecast for total revenue of 290 million to 310 million and net income of between $20 million to $30 million. For the third quarter we forecast total revenues of between $70 million to $80 million. Bob Kramer, our CFO will provide more detail on both our financial performance and guidance in a moment. Let me now provide a summary of the key developments for each of our operating divisions and let me start with BioDefense. Last Friday we closed on the acquisition of the Healthcare Protective Products Division from Bracco Diagnostics and with it the RSDL products. RSDL is cleared for marketing by the FDA for removal or neutralization of chemical warfare agents from the skin and is the only personal chemical skin decontamination deployed by the U.S. Department of Defense to protect military personnel. The acquisition of RSDL diversifies our product revenues with the addition of a second licensed countermeasure in…

Thank you, Dan. Good afternoon everyone. Let me start by adding a bit of color to Dan's earlier comment on our revenue and net income guidance for 2013 and then I will turn to our performance for the quarter, for the first six months of 2013. We are reaffirming our forecast for full year 2013 total revenues of between 290 million and 310 million and net income between 20 million and 30 million. With respect to revenue mix we forecast product sales of 235 million to 245 million, inclusive of RSDL sales which we anticipate will contribute approximately $5 million to $8 million in additional product sales over the remainder of this year. We also forecast contracts and grants of between $55 million and $65 million. Lastly we anticipate third quarter total revenue of between $70 million and $80 million. I will now turn to our financial performance for the quarter and year-to-date. Let me start out by saying that our core business generated another solid quarter of financial results as evidenced by our total revenue for the quarter coming in at 82.4 million, which included 65.6 million in product sales and 16.8 million in grants and contracts. This is 17% better than Q2 of the prior year which was 70.4 million in total revenue. The year-over-year increase was a result of increased BioThrax sales and the higher average selling price per dose. The gross margin for the quarter was 74% within our typical 70% to 80% range. Our gross R&D expenses were slightly lower than prior year, our SG&A expense was higher than the prior year by approximately 2.6 million. I will touch on this variance when I give the year-to-date performance as the explanation is essentially the same both quarter and year-to-date. To conclude the Q2 P&L discussion…

Hey, guys. Good afternoon. Thank you for taking the questions. I guess my first question is on the FDA feedback you received regarding the ongoing work to validate Building 55. So I am wondering if you expand the number of proteins to be used as the agency suggested how might that impact the timelines you gave or does it?

Yeah, good afternoon, Cory, this is Dan. Thanks for joining us today. So it does, the way we look at it now, first we want to sit down and talk to the FDA about their comment to us. But as I mentioned in the prepared remarks we have initiated the analytical work that would support moving forward in the face of that comments and then what we'll look to do is complete the non-clinical as well as the comparability testing for the facility in 2014. So the reality was we had previously split up our non-clinical and comparability into two separate steps. We are now going to do those in the same -- at the same time period. So we've collapsed those [in some respects] [ph].

Okay, so you don't know how long it may push timelines back if you have to do what the FDA is currently asking?

So again in my prepared remarks I did anticipate that we will be in a position to complete all of our work next year and then file for the BLA late next year or into 2015.

Okay, and then with the German approval of BioThrax I guess this really applies to any other country internationally, at what point do you believe international sales could become a material revenue driver for Emergent. Is this all contingent on Building 55 or is it even contingent on the second train in Building 55.

No, I think Building 55 will provide sufficient capacity for us to meet the U.S. government's requirement and still have a meaningful number of doses for international sales. As we have discussed with investors in the past we don't see the international market as large as the U.S. market. While we see it as a significant contributor we do believe that Building 55 capacity will allow us to address that market opportunity. But this is without -- to get to your last point, without the need for a second train.

Okay. And then my last question is just wondering why you lowered the dose of TRU-016 in front line CLL study.

Yeah I mean generally what we are looking do is see if we achieve the same levels of efficacy with the lower dose which could have significant commercial advantages for us. It is unrelated to any adverse event profile; thus far we have not seen any issues at all on the safety side with the product. So this is really more around being able to expand the number of doses that we can deliver out of our manufacturing facility than for any other reason. Scott Stromatt, our Chief Medical Officer is on the line as well. Scott do you want to add to that.

You have covered it perfectly Dan. There were no adverse event signals and so we are doing basically dose exploration to see if we can replicate the same type of efficacy that we are seeing at the higher dose with a lower dose. We will be presenting this data at ASH in December.

All right. Sounds good. Thanks for taking the questions.

Thank you.

And your next question comes from the line of Eric Schmidt from Cowen & Company. Please proceed. Eric Schmidt – Cowen & Company: Thanks for taking my questions. Dan maybe another follow up on that Building 55 process going forward. What do you think led the FDA to ask for your inclusion of a greater number of proteins?

Thanks for the joining the call today, Eric. I appreciate the question. It’s an excellent question. So what we put together was a protein profile of the product that we thought was decisive and demonstrated full comparability. The product dose consists of quite a number proteins and I think what the FDA wanted to do was to expand the list maybe to generate a broader and more robust comparability profile. But the dataset we put together I think comprises a substantial portion of the product in terms of the composition of it, from an efficacy standpoint, that profile in the non-clinical so that it wasn’t efficacious with our product. So we think that the initial list that we assembled and submitted to FDA was appropriate and adequate. So we need to understand when we sit down with FDA what they are trying to get at with the expanded list. I am pretty confident they looked at the world perhaps a little differently than we do sometimes but they are always rational and they are open to scientific explanations and discussion. And I think they have a key objective here of getting this accomplished. So I am pretty confident that our dialog with them will be productive and we will find an appropriate solution to next steps. Eric Schmidt – Cowen & Company: So you are not absolutely sure that at the end of the day they are actually going to require you to generate these data on greater numbers of proteins, is that right?

No, that’s right, we are not because they haven’t seen all the data that we have. We have a fair amount of data. It's caused -- leads us to question the appropriateness on some of the proteins that they have identified and they haven’t seen that data. So and supporting some of the proteins that we have in our list that they may not have focused on. So it will take just a bit of a dialog to educate them on the science behind it and as I said they are very science oriented, they are driven by data. So I think once we sit down and share all the information we have got we'll come up with an appropriate list that satisfies both parties. Eric Schmidt – Cowen & Company: And did you just say the data that you have on an incremental number of proteins or larger set suggest that you are seeing consistency across the building materials?

Yeah, we believe there is a strong body of evidence demonstrating consistency between the products produced in both buildings. And that was the dataset in earlier studies, the non-clinical studies, that's supportive of how we structured those studies and supports the efficacy that we are seeing over 55. So I think at this point we have a tremendous amount of proteomics and other data on the configuration of the product out of 55. We just need to get that data in front of the FDA and have the dialog. Eric Schmidt – Cowen & Company: So you essentially know even inclusive of the larger data set of proteins that the material is going to be consistent?

Yeah we believe that is true. What we need to do is talk to the FDA about what is the agreed upon profile, protein profile for the products out of 12 versus 55. Eric Schmidt – Cowen & Company: Great thanks. And one more question, Dan just on the M&A outlook, now you have completed the RDSL acquisition. Can you give us an update on your discussions out there with folks whether you are still seeing opportunities that look to be as good a fit as that one, when we might sort of expect another milestone from you?

Well, we continue to target this year as a milestone for announcing another transaction and we do believe that there are opportunities out there that are transactable. So we believe that's a realistic timetable. Eric Schmidt – Cowen & Company: Thanks a lot.

(Operator Instructions). And your next question comes from the line of James Molloy from Janney. Please proceed.

Hey, thanks for taking my question, could you go through the time of the filing, the timing of the filing between the BLA and the expected potential approval of licensure Building 55? And then if you could talk a little bit about -- I know you said very clear in the last question that you expect the FDA will come around to your way of thinking but what are the odds that they may not, they will say, listen that's not enough, we need some more proteins or some other data post your meeting with them.

Yeah, thanks for joining the call today, Jim and good to hear from you. So as to your first question on the time period from filing to approval, the PDUFA requirement is four months, I have been informed. So we typically, and I typically plan for somewhere between six and possibly out to nine months between our filing submission and approval in our normal product development plans. So I think that's a reasonable time period we are targeting. Of course a lot depends on the interactions at that point and what they see in the filing and to the questions they may have. But those are the data points that we look at. And then the second question with respect to reaching agreement with FDA, it's not so much convincing them that we are right and that they are not. That's really not what I was trying to suggest. What I am suggesting is that there are potentially additional proteins that may sense and others that may not make sense and what we need to do is discuss with the agency the right dataset to be evaluating. And I am not saying that we are not opposed to increasing the number of proteins that we would evaluate but we want to make sure that as we increase the proteins that we are looking at are really meaningful from the standpoint of demonstrating comparability. And I think that is where the dialog is going to be most productive, to be able to demonstrate why a particular protein may or may not be indicative of comparability. It's not so much the numbers. It's which ones are the right ones and for what reasons. And they look at science will prevail.

Fair enough. And then I know that you have discussed in the past that should Building 55 come on board and tripling of, potential tripling of production. At some point you would expect it's likely that you and U.S. government will sit down and discuss how that production would come on board and what a new contract might look like. What are the timelines, I know that typically last contract about a year before the contract is to start you guys hammer out the negotiations, what the time that you think might happen should building 55 be poised to come on line and you have in service and we can triple our production at some point you guys will need to sit down and talk about what the U.S. government would want from you guys. When do you think that might happen?

No, it's a great point and one that we think about often. And typically you are right; it's about a year ahead of expiration of the ongoing contract where they sit down. We are in an unusual circumstance given 55 and the timing for 55. So I would expect as we get close to filing the BLA, at filing we will be in a position to really sit down and discuss with them a new contract or delivery schedule for product coming out of 55. Our preference is to be ahead of it but let's see what CBCs aptitude is or appetite I should say, appetite is for having those discussions.

Great and last question I know that the gross margin in the quarter was down. It does tend to fluctuate and we've seen that in past quarters. Any in particular that jumped out or is it sort of a fluctuation that tends to happen here.

Yeah, Jim this is Bob. I will take that one. I think when you look at the operating performance you really need to look at it more than just quarter-by-quarter. It was 74% margin for the quarter and year-to-date, 76%. If you look at the trailing 12 months it was closer to 79%. If you go back further the last couple of quarters and look at trailing 12 months it's been around 79% as well. So I would say that it's not indicative of anything that happened uniquely during the quarter. But I just caution you guys to look at things more on a six month or 12 month basis.

Okay, thanks for taking the questions.

And ladies and gentlemen this will conclude the question-and-answer portion of today's conference. I would now like to turn the call over to Robert Burrows for closing remarks.

Thank you, Philip. And ladies and gentlemen, that's 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 August 12. Alternatively there is available a webcast for today's call, an archived version of which will be available later today, accessible through the Company's website. Thank you again and we look forward to speaking to all of you in the future. Goodbye.

Ladies and gentlemen that concludes today's conference. Thank you for your participation. And you may now disconnect. Have a wonderful day.