Bob Kramer - President, Chief Executive Officer Rich Lindahl - Chief Financial Officer Syed Husain - Senior Vice President, CDMO Business Unit Head Laura Saward - Senior Vice President, Therapeutics Business Unit Head Bob Burrows - VP of Investor Relations

Ladies and gentlemen, thank you for standing by and welcome to the Emergent BioSolutions Fourth Quarter 2020 Earnings Conference Call. At this time all participants’ lines are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to management. Please go ahead.

Thank you, Catharine, and good afternoon everyone. My name is Bob Burrows, VP of Investor Relations for the company. Thank you for joining us today as we discuss the operational and financial results for the fourth quarter and 12 months ended December 31, 2020. As is customary, today's call is open to all participants and the call is being recorded and is copyrighted by Emergent BioSolutions. In addition to today’s press release, there are slides accompanying this webcast available to all webcast participants. Turning to slides three and four, during today's call we may make projections and other forward-looking statements related to our business, future events, our prospects or future performance. These forward-looking statements are based on our current intentions, beliefs and expectations regarding future events. Any forward-looking statement speaks only as of the date of this conference call and except as required by law we do not undertake to update any forward-looking statement to reflect new information, events or circumstances. Investors should consider this cautionary statement, as well as the risk factors identified in our periodic reports filed with the SEC when evaluating our forward-looking statements. During today's call, we may also refer to certain non-GAAP financial measures that involve adjustments to GAAP figures in order to provide greater transparency regarding Emergent's operating performance. Please refer to the tables found in today's press release regarding our use of adjusted net income, adjusted EBITDA, and adjusted gross margin and the reconciliations between our GAAP financial measures and these non-GAAP financial measures. Turning to slide five, the agenda for today's call will include Bob Kramer, President and Chief Executive Officer; who will comment on the current state of the company and Rich Lindahl, Chief Financial Officer, who will speak to the financials for 4Q and full year 2020, as well as our forecast for 2021. This will then be follow by a Q&A session where additional members of the senior team are present and available as needed. Finally, for the benefit of those who may be listening to the replay of this webcast, this call was held and recorded on February 18, 2021. Since then Emergent may have made announcements related to topics discussed during today's call. And with that introduction, I would now like to turn the call over to our President and CEO, Bob Kramer, whose segment begins with slide six. Bob?

Thank you, Bob, and good afternoon to everyone. Thank you for joining with us this afternoon. Actually I’m going to start on slide seven and I'd like to start the call today by recognizing the extraordinary efforts of the entire Emergent team over the course of 2020. Inspire of the significant challenges created by the pandemic, we maintain our focus on the business. This has meant not only working on the production of COVID-19 vaccine candidates, but also innovating with the development of novel polyclonal COVID-19 treatments, all the while continuing to protect lives against a broad range of public health threats, including the worsening opioid epidemic. Our focus and strong execution on mission absolutely would not have been possible without the incredible contributions of the entire Emergent team that is now more than 2,300 employees strong and I’m pleased to report that it has resulted in the strongest year in our 22 year history. As you know, in early January we provided a 2021 financial forecast with total revenues of $2 billion and adjusted EBITDA of $780 million, both at the midpoint, which we are reaffirming today. Our current five year strategic plan targets $2 billion in revenue by 2024. With a significant growth in our business during last year, 2020, we're now reevaluating our long term objectives and expect to provide an update later this year. For the majority of my prepared remarks today, I want to focus on four key aspects of our current business, all of which we believe have important potential implications for the continued growth of the company. So turning to slide eight, first our key priority is to address the immediate need stemming from COVID-19 pandemic. We’re playing a critical role in the fight against COVID-19 with the development and manufacturing of clinical…

Thank you, Bob. Good afternoon everyone and thank you for joining the call. I'll start on slide 11. I'm pleased to report that Emergent finished 2020 in a position of unprecedented strength. Our team is executing sharply across the entire enterprise, even as the world remains challenged by the COVID-19 pandemic. The company's financial outcomes during both the fourth quarter and full year of 2020 reflect the substantial strength and durability of our diversified business as evidenced by record total revenues, profitability and operating cash flow. Our balance sheet is in excellent shape with the liquidity and financial flexibility to pursue opportunistic investments in assets, capabilities and capacity to drive incremental returns on capital. As a consequence, we entered 2020 – 2021 confident that we will deliver another year of strong growth as we further extend our impact on the state of global preparedness and response to public health threats. With that, please turn to slide 12 and let's first look at the details of our fourth quarter performance. Highlights include total revenues of $583 million, an increase of $223 million or 62% versus the prior year. Adjusted EBITDA of $291 million, an increase of $157 million or 117% versus the prior year, and adjusted net income of $199 million, a $116 million or 140% improvement versus the prior year. Breaking down quarterly revenue into its components, let's first review the elements of our product sales. ACAM2000 sales were $129 million, as we resolved the timing delay discussed on our third quarter call and continued deliveries to the United States Strategic National Stockpile under the latest option exercise from Health and Human Services. Anthrax Vaccines sales were $116 million, reflecting once more the strong delivery volumes associated with the transition from BioThrax to AV7909 in the Strategic National Stockpile. A…

Thank you. [Operator Instructions] Our first question comes from Brandon Folkes with Cantor Fitzgerald. Your line is open.

Hi, thanks for taking my questions and congratulations on another good quarter. Maybe, just see what you can say about this, but I think we’ve seen some talk coming out about J&J Vaccine finally having a few million doses in March, and I think I see your 1Q guidance as well. [Inaudible] on J&J is getting sort of a reaffirmed target of supply to $100 million by June. So maybe is there anything you can comment in terms of if there are any manufacturing challenges or if this is just part of the timetable that was initially set? And then maybe secondly, I’ll just wrap this in, because it’s also CDMO related. Thank you for the backlog and opportunity funnel, I think that’s very helpful. Any color you can give around capacity utilization, you know maybe of the $1.3 billion and then you know in this opportunity funnel, could you add that on top of this $1.3 billion without additional capacity and if I'm correct, I recognize those one to three years. Thank you.

Thanks Brandon. I appreciate the question and thanks for joining the call. Let me say a few things about the first question related to J&J and our collaboration agreement with them, and then I'll ask Syed Husain who runs the CDMO business unit to comment a little bit about the backlog metric and the capacity question you raised Brandon. So just as a reminder to everyone, our two key deliverables to J&J, and it goes for AstraZeneca as well, as we stated before are pretty clear. First, we two have established a large scale manufacturing infrastructure and tech transfer their candidates to this infrastructure to our BayView facility outside of Baltimore during 2020 and early in to 2021 and that is essentially complete. The second commitment or obligation if you will is to manufacture and supply drug substance for their vaccine candidates in support of their global supply chain goals, which they have been pretty open about in terms of the number and we're right on line Brandon with doing that timing wise as well as capability for both J&J and AstraZeneca. Specific to J&J, you know what they said in terms of their short term goal is to provide as many as 100 million doses to the U.S. Government in the first half of 2021 and we're right on schedule to support that. So that's really all of the update, other than to say and acknowledge that, you know companies like Emergent and many other companies have done yeoman's work over the last 10 to 12 months in bringing this additional capacity online and being on the verge of literally being able to make available hundreds of millions of doses of multiple vaccine candidates, and we couldn't – I couldn't be more proud of our team who has played a critical role in doing that. And maybe what that Syed, I'll turn it over to you and let you talk a little bit about the backlog and the capacity portion of Brandon’s question.

Absolutely! Thank you Bob and thank you Brandon for the question. So I'll touch on both of those, starting off first on capacity. So as we said, our CDMO services utilizes a network of multiple development and manufacturing facilities, so we look at capacity across the entire network. Currently of our network of nine sites, five are CDMO revenue generating. Of these five revenue generating sites, our BayView drug substance facility is highly utilized. But our other four revenue generating facilities have available capacity and they have been on, rapidly onboarding new projects as the part of the new business that we've been winning between new project and existing project extensions. When it comes to the backlog and the opportunity funnel, so the backlog does take into account secured business that is spread across our network of development and manufacturing sites, specifically the revenue generating sties that we’ve mentioned out of those lines. The opportunity funnel takes into account proposals that we have issued and discussions that we are in across those – across that network of nine development and manufacturing sites. Those are potential opportunity that if awarded would be additive to the backlog over the next one to three years.

Right, thank you very much to both of you.

Thank you. Our next question comes from Jacob Hughes with Wells Fargo Securities. Your line is open.

Hey, good afternoon. Can you hear me?

We hear you fine Jake. Thanks for joining.

Hey, just a couple of questions and thanks for the additional disclosure. Just on the backlog, is there a breakout or some directional commentary around COVID-19 versus non-COVID work in the backlog. Secondly, I think Novavax announced a memorandum of understanding with a company called Gavi. I was just wondering if that was part of your partnership with them. And then finally just on NARCAN, I think you reiterated the guidance, but some of the commentary around generic entry change versus what you indicated at the beginning the year. So I was just trying to get some additional clarity on that thanks? Thanks.

Sure, thanks for the questions Jake. So I’ll take the Novavax question and comment also about NARCAN and then Syed, I’ll throw it back to you for the backlog question of Jake's. So I think first of all, Jake when it comes to Novavax, just to be really clear, we did some early work with the Novavax COVID-19 vaccine candidate in the, kind of the middle of 2020 to tech transfer that candidate into our BayView facility and do some development, later stage development work and then manufacture the Phase 2 clinical trial material for that candidate. They are now working with a number of other contractors, both on drug substance, as well as final drug product services, so I really can't comment on exactly what they're doing and with whom. On the NARCAN Nasal Spray question, again I think we've been pretty clear that our guidance number for 2021 assumes as Rich indicated as part of his prepared comments, that there will be a generic entrant as soon as the appeal process is complete. We can't exactly say the month and date of that timing, but we expect it in the second half and hence our revenue range for NARCAN is predicated on some generic entrant into that market in the second half of this year. We also know that as I said in my prepared remarks, unfortunately the opioid epidemic is getting more critical, not less. The number of overdoses and unfortunately overdose related deaths is increasing, so it's imperative even more so that we, Emergent, make sure that we fulfill our commitment and obligation around education of the individuals who are at risk of an opioid overdose. We educate and most importantly we make available as many units of NARCAN as we can while we're doing that education process. So we're committed to that as we ever have been and it's making a difference. So with that, Syed I’ll let you handle the backlog question that Jake raised.

Thank you, Bob, and thank you Jake for the question. So first off with respect to the backlog, we don't provide a further breakdown of that number, but what I can comment on is that the backlog is a mix of COVID and non-COVID. It's a mix of clinical and commercial scope projects. It also includes a mixture of the two customer segments that we target; one is pharma and biotech with small, mid and large size innovators, as well as governments and NGOs. Just as a reminder, the CDMO services business continues to be indication agnostic and we deploy these services to a mix of COVID and non-COVID opportunity. The critical thing from a COVID-19 standpoint is that it reiterates the importance of mammalian and viral vaccine technology platform within the industry, which are at the heart of our CDMO offerings.

Yeah, thanks for taking my questions guys.

Thanks Jake.

Our next question comes from Jessica Fye with JPMorgan. Your line is open.

Hey guys, good evening. Hope you're well. I had another one on the CMO backlog. Specifically, how does the backlog number of $1.34 billion reported today translate from the $1.8 billion of, I think you're calling it as establish current portfolio that was reported with 3Q. Are these metrics representing the same thing, and with about $200 million sort of converted to revenue recognized over the fourth quarter and about $50 million added to the backlog in 4Q, what else would have contributed to the $500 million decline if they are representing the same concept?

Yep, thanks Jess. So Syed, maybe a combination of you and Rich can kind of reconcile the numbers for Jess?

Sure. Why don’t I take the first cut at that Bob and then Syed, you can jump in and fill in any gaps, but Jess, first of all thanks for the question. So the secured portfolio represented the total number of contracts that had been secured and put in place. On any change during any given period, the backlog is going to represent revenue that's been realized from those contracts, so that serves to reduce the backlog and then it will be increased by any contract value that has moved from the opportunity funnel into backlog itself. So it's really again representing an ongoing point in time figure that gives you the outlook for the next one to three years in terms of revenue generation potential of the CDMO business.

Can you help me bridge from the 1.8 to the 1.34, when it seems like there is $200 million of revenue recognized. That’s where I’m kind of struggling with.

So the 1.8 was a full year, so from the beginning of January and so you take the full $450 million of CDMO revenue that was recognized and subtract that from the 1.8 and then you add back in the revenue, the new contracts business that had been realized.

Okay, so then thinking ahead, just to make sure I understand, with north of $900 million of CDMO revenues set to be recognized this year assuming you're somewhere in line with the guidance out of that $1.3 billion backlog. It seems like that would leave about $400 million of kind of locked in business for the CDMO in the future, beyond which you would have to kind of secure more business from the funnel. Is that the right way to think about it?

That is right, yes. And as Syed indicated, you know we are working hard and securing new business as we move through the year, and we'll continue to update you each quarter in terms of the amount of new business that has been secured each quarter.

Okay, perfect. And maybe just the last one on the numbers, you mentioned something about the midpoint of the first quarter revenue guidance that comes up to about 18% of the full year projection. Can you just talk about which revenue lines in particulate you expect to be more back end weighted?

Yes, so a couple of things there. So if you look at kind of the first quarter performance last year versus this year, there's similar patterns on a year-over-year basis across the portfolio, with the exception of CDMO, which we expect to be meaningfully higher in the first quarter than it was in the first quarter of last year. The medical countermeasure products related to anthrax vaccines and ACAM2000 are the ones that are going to be a little bit lower in the first quarter than you saw in the fourth quarter of last year and so – and the reasons for that on ACAM being as we mentioned in the prepared remarks, we have fulfilled the last option exercise, so we are working towards another option exercise for ACAM2000, which we fully expect to obtain here, consistent with the long term commitment of the 10-year contract that we signed back in 2019. And then with the anthrax vaccines, there's some seasonality in the production and delivery patterns that is consistent here with prior years as well and so you'll see a similar type of pattern unfold there.

And I think Rich, you comment on but Jess, I think you all should expect that 2021 will have a similar quarterly revenue cadence to what we've had for the last four or five years, which is roughly 40% in the first half, 60% in the second half and as Rich said, the midpoint of that Q1 revenue number of 18%. It’s right in line with where we were last year as well as the last couple of years. So as hard as we try to remove some of the lumpiness, it tends to stick with us.

Okay, great, and maybe if I could just follow-up on, I think it was Brandon's question from the beginning relate related to J&J timing within the CDMO business and just the kind of quarter-to-quarter variability. Is that a factor in the kind of quarterly cadence CDMO revenue or should we think of that revenue line as being fairly stable over the course of 2021?

Yeah Rich, you want to comment on that? And I would just remind you Jess and Brandon and everyone else that you know for 2021 we’re operating against a couple of CDMO contracts, including the task order with HHS, as well as the commercial supply agreements with AZ and J&J, which are more I’ll say production slot driven as opposed to dose driven. So back to Brandon's question, if folks are thinking that our revenue for CDMO is overly tied to the delivery of doses by J&J or AZ, that's probably not the best way to think about it.

And so to answer your question Jess, I think on balance we do expect a smoother and more leveled pattern of revenue in CDMO. You know having said that, there is some ramping as well that is occurring as we go through the year, so there will be – you know the first quarter is likely to be a little bit less for the full year than the other quarters of the year. I did want to also just go back and make one additional comment to our backlog and opportunity funnel conversation, and just to make sure it's clear, that the opportunity funnel does not include any potential value of the extensions of the existing commercial service agreements with either J&J or AstraZeneca, so those are additional potential opportunities that are not captured in the opportunity funnel as we sit here today.

Got it. Thanks so much for taking my questions.

Thanks Jess.

Thank you. Our next question comes from Dana Flanders with Guggenheim. Your line is open.

Great! Thank you very much for the questions. My first is, I was wondering if you could just elaborate a little bit on your COVID-HIG program, which I know you mentioned Bob in your prepared remarks. I was wondering if you could just help frame for people, kind of a dataset that you're expect you here shortly and just the level of benefit you're hoping to show, and then how you see that sitting into the treatment paradigm potentially and I guess also kind of the amount of data you'd expect to see in different strains as well, and then I have a follow-up.

Okay, great. So I'm going to introduce and invite Dr. Laura Saward who runs our therapeutics business unit and is shepherding this critically important HIG treatment to answer the questions. So Laura, if you could weigh in here that would be great.

Okay, thank you and thanks for the questions Dana. I’ll try to add a little bit of extra color from the remarks that Bob included. You can probably tell that our trial that was in collaboration with NIH, The INSIGHT-013 trial has the finished its recruitment, so we're sort of in that successful stage of getting to review the data soon and we'll be looking at the opportunity to move forward then to EUA. And then that dataset that we'll be seeing, this is a trial that was run with NIH with a number of hyperimmune products in it, so there will be a combined dataset as well as individual data sets for each product. And what we were looking for, you know this is hospitalized patients, so it is looking at patients that are further through the course of the disease, so within 12 days of symptoms and it uses an ordinal scale, so looking at meaningful benefit across some of the factors that contribute to the disease outcomes. So in hospital whether they're on respiratory support, whether they're in ICU and looking for a meaningful shift, so that there's less time in hospital or a faster recovery for those patients. In terms of your variant question, you know this is an interesting question and certainly an evolving landscape. I mean we are seeing a number of variants come up with COVID. This is an unexpected, but certainly there is a mixture as we’re seeing different strains of the virus emerge. So the trial was an international trial. It did run in the number of sites and countries and so we will be looking at that data set to try to understand if there may be some data reflective of different variants, but we're not expecting the clinical data set to be able to sort of tease that out. I will say we have collaborations on going to test the product against variants and I think this will be an important dataset to understand how a polyclonal product can help to address some of this additional challenge. So hopefully I answered your question, but let me know if I missed anything Dana.

Okay. No, that was great, thank you. And then just as a follow-up on the anthrax franchise, can you just comment on timing of when you’d expect to get a new contract in place and price expectations?

Yeah Dana, you know as I think we’ve talked about the transition for the strategic national stockpile from BioThrax to AV7909 and BioThrax we started in 2019, it really kind of kicked into higher gear in 2020. We'll continue to execute in 2021. I think our expectation is that the Phase 3 clinical trial for AV7909 will likely run through the end of this year, 2021, and we’ll be sharing that data obviously with the government and we'll start some discussions around the follow-on contract, perhaps in the second half of this year or first half of next year. I think we’ve been pretty clear about what the pricing expectations are from our prior conversations and as you know, initially we negotiated a slightly lower price per dose for AV7909 versus BioThrax given the EUA nature of the use and as well as the fact that the U.S. government had committed a fair amount of development capital to co-develop that product. So that all will be taken in consideration when we sit down and talk to them about the longer term contract.

Okay, and if I could just squeeze in one last quick one. Rich, I know you just mentioned that the commercial options with AZN and J&J are not assumed or not included in that opportunity funnel, and I assume those kind of discussions are ongoing, but just wondering if there's any kind of trigger points that we should think about for potential extension of those commercial contracts. I think AZN if I'm not mistaken just goes through 2021 as it is now, so I was just wondering if you could frame that for us. Thanks.

Sure, and so you know these contracts as you recognized, Johnson & Johnson is a five year contract. Now the first two years have been committed and then AstraZeneca is a three year contract with the first year only being committed at this point in time. You know clearly as we are planning for production in the facilities, you know there's a point in time at which we need to obtain commitments for that capacity that's available and so with a sufficient lead time in advance of when that would otherwise be available, that's when those discussions would commence. So we will certainly keep you posted if and when we have additional information to provide you on that front.

Okay, thank you.

Thank you. Our next question comes from Keay Nakae with Chardan. Your line is open.

Yes thanks. So Rich, you gave us an estimate for gross margin for the year, and specific to CDMO activities. You know as you move more into the drug substance parts of your contract, you know we would expect that to be – to remain at the higher end of what we would see from CDMO. My question is, how should we think about OWS activity as it pertains to scheduling the slot as Bob mentioned with your commitments to J&J and AZ?

So, I just want to make sure I understand the question, so how should we think about available drug substance capacity as it relates to those contracts?

Well, just the activities you are performing under those contracts that are going to produce the gross margin guidance that you gave us. How do you think about when the OWS activities layer in to what you're already committed to doing for J&J and AZ?

So, if what you're asking is how does the BARDA task order relate to all of that? Certainly there is still an element of the task order that remains in place for 2021. As you know there were two components there the – of the $628 million task order there was the reservation fee, which is being amortized monthly from May of 2020 through December 31, so there is a portion of revenue that's contributing to both revenue and gross margin in ’21, and then there was reimbursement for certain capital expenditures as we invest in expanding the capabilities and capacity primarily in Rockville, but also in our Camden facility. So you know those in combination with the production activities under the other two commercial service agreements are all influencing along with other business that we continue to produce outside of those contracts, all of that is combined to influence the margins in 2021.

Okay. Switching to the follow-on contracts, starting with ACAM options, is COVID impacting the ability to conduct and secure agreement on the exercise of the option?

Yeah, Ken it’s a great question. We haven't seen any evidence of a slowdown or delay or a de-prioritization of kind of business as usual and that medical countermeasure part of our business, so we're not expecting any delay there.

Okay, and then for raxi, Bob, I know you are looking to move forward the next contract there. So are you guiding – is the expectation you'll secure that late second half or help us out in the timing of that, if you can give us a little more clarity.

Sure, it will all be driven okay by the U.S. Government initiating the request for proposal process to which we will quickly respond, and then they will follow the normal back and forth response with the U.S. Government in contract negotiations. It’s really difficult to predict with any level of precision the exact timing, but our expectation is that the RP will come out, will respond, we will be engaged in contact negotiations during this year 2021 and we expect to put the new contract in place this year.

Okay, thanks.

Sure. Thank you.

Thank you. Our next question comes from Boris Peaker with Cowen. Your line is open.

Great, thanks it's squeezing me in. A lot of questions have been already answered. So I just want to maybe probe a little further into the CDMO business. How does the Margin – I’m just curious, in its future, potential future CDMO revenue compare to margin that you observe in 2020. And then kind of in the similar contact, are you seeing more competition at CDMO business now and going forward than there was in 2020?

Yeah Boris, great questions, thanks for joining the call. So Rich, you want to respond to the margin portion of Boris’s question and then maybe Syed you can weigh in on the level of the competitive landscape for some of these contract opportunities in the funnel.

Sure. Thanks Bob and thanks Boris for the question. So the way we think about gross margins in the CDMO business on a normalized basis, on a go-forward basis would be approximately 45% or potentially better CDMO gross margins. That would not come into play in all likelihood until 2022 or beyond depending on – based on the fact that in 2021 we are getting some support and lift to the gross margin profile from the BARDA task order as we’ve highlighted and discussed in prior conversations.

Gotcha. And on the competitive side?

Yeah, thanks Boris for the question. So on the competitive landscape side, what we've seen in across our technology platforms and certainly the acceleration is our credibility as a viable and reliable Tier 1 Biologics CDMO option. There continues to be more demand out there than available capacity from credible Tier 1 biologic CDMO options or outsourcing decisions. So right now we see ourselves in a leading position from a competitive landscape and our value proposition that Bob had mentioned in the prepared remarks, where we take into account the best of both worlds from the fair play CDMO and embedded CDMO has been very well received in the discussion today with potential new opportunities.

Got you. And my last question also on CDMO space, when you outline these numbers, background numbers for example, does that include any additional costs that would need to be made to invest in a facility to accommodate the specific requirements or would that be on top of that and whoever the other side of the contract would pay for it?

Yes, sorry. I think in general Boris, the opportunity, the backlog represents the remaining value that we have yet to be recognized. The opportunity funnel, right now the $689 million number, I think that represents the revenue opportunity for contracts that we are competing on. It does not address I think potential additional capital expenditure that we might have to invest or get reimbursed on from the other side. So hopefully that helps a little bit. I know it doesn't exactly answer your question.

Yeah, gotcha. Okay, well thanks for the answers.

Sure.

Thank you. [Operator Instructions]. Our next question comes from Lisa Springer with Singular Research. Your line is open.

Thank you for taking my question. Given the company’s very strong balance sheet and unused borrowing capacity, I'm wondering how likely it is we're going to see some return to M&A in 2021 and if we might see acquisitions in the COVID space?

Yeah, thank you Lisa for joining and thank you for the question. I think we, in general as we talked about with analysts and investors a little over a year ago, we remain keen on looking at strategic assets where we can build upon or establish new leadership positions across the niche markets of the large public health threat market where we think we can best compete in, whether that's in the areas of vaccines or therapeutics or devices or even the CDMO space. So we remain very active in assessing and doing diligence on opportunities. So again, it all is fact dependent upon kind of valuation expectations of the seller, but we continue to see interesting opportunities across all four business units to build and to scale those leadership positions. In addition to that, we remain interested in looking at development candidate opportunities for purposes of building a durable robust pipeline of development candidates that will also help fuel our growth well into the future. So it will be a combination of both those activities, Lisa.

Could we see the company acquiring more manufacturing capacity?

You know I think that's always a possibility Lisa, but I think as I and my colleagues have talked about, sometimes given the unique nature of our infrastructure, as well as the technology platforms and our three pillars of the service offering, it might be more economical for us to build rather than buy. So I think we'll continue to evaluate all options for growing that CDMO business unit.

Okay. Well thank you and congratulations on a very good year.

Thanks Lisa. I appreciate it.

Thank you. And I'm showing no further questions in the queue. I’d like to turn the call back to Mr. Burrows for any closing remarks.

So Bob, maybe before you do that I just wanted to clarify one thing about the NARCAN guidance for this year, and that is first and foremost as you all know we are appealing that to have a litigation decision and we are mounting a very strong appeal and we are making every effort to turn that back in our favor. So I just wanted to make sure that that was clear, number one. Number two, our guidance does assume that there will be competition in 2021, but the earliest that there could be any generic competition would be if and only if we were to lose the appeal process, and that's what is implied by the commentary that we made, both in the press release as well as on the scripted call. So I just wanted to make sure that that was clear.

Terrific! Thanks Rich. Thanks everybody, and with that ladies and gentlemen, we now conclude the call. Thank you for your participation and please note an archived version of today's webcast as well as a PDF version of this slides, using during today's call will be available later today and accessible to the investors landing page on the company website. Once again, thanks everybody and we look for to speaking with all of you in the future. Good bay.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect. Everyone have a great day.