Good afternoon, everyone. I'm the operator for today's call. Thank you for joining today as Emergent discusses their Operational and Financial Results for the Second Quarter of 2024. 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 is a series of slides accompanying this webcast available to all webcast participants. Turning to Slide 3. During today's call, Emergent may make projections and other forward-looking statements related to their business, future events, their prospects, or future performance. These forward-looking statements are based on their 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, Emergent does not undertake to update any forward-looking statements to reflect new information, events or circumstances. Investors should consider this cautionary statement as well as the risk factors identified in Emergent's periodic reports filed with the SEC when evaluating their forward-looking statements. During today's call, Emergent may also discuss 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. Turning to Slide 4. The agenda for today's call will include Joe Papa, President and Chief Executive Officer, who will comment on the multiyear plan update. Key product highlights and future catalyst. Rich Lindahl, EVP and Chief Financial Officer, who will speak to the current state of the company and financials for second quarter as well as 2024 full year guidance excluding guidance for the third quarter. This will be followed by Q&A. Finally, and for the benefit of those who may be listening to the replay of this webcast, this call was held and recorded on August 6, 2024. Since then, Emergent may have made announcements related to topics discussed during today's call. And with that, I would now like to turn the call over to Joe Papa, for opening remarks. Joe?

Hello, everyone, and thank you for joining us today to discuss our second quarter results and our 2024 financial outlook. I'm joined today by Rich Lindahl, our Chief Financial Officer. Following my opening remarks, Rich will detail our Q2 performance, provide guidance for the third quarter as well as our full year guidance. I'll then review our future growth drivers providing summarizing thoughts on our multi-year plan and then we will open it up for Q&A. First, I would like to start by thanking our Emergent team members, who have been hard at work, executing on our multiyear plan to stabilize, turn around and transform the business. It's been a great team effort in the first half of this year, and specifically our quarter 2 efforts enabled us to exceed our quarter 2 revenue guidance without a significant ACAM2000 shipment that we were able to recognize in early July. I appreciate the dedication of our team, especially their support for our mission and our values. Turning to Slide 6, I'd like to review our progress against our multi-year plan focused on stabilizing Emergent. Based on the first half performance, we are raising the midpoint of our 2024 revenue and adjusted EBITDA guidance, which Rich will walk through in great detail. While there are some one-time items in Q2 numbers, we made great progress against our plan, including making a significant reduction to our debt, as well as operating performance and working capital improvements. We focused on our product core business drivers and delivered for our customers and patients. We created a customer-focused, leaner, more flexible organization and we streamlined our site network. And finally, leveraging our product and internal capabilities to support future growth. Turning to Slide 7, I'd like to call several activities that have been critical during the…

Thanks, Joe, and good afternoon everyone. We appreciate you joining the call today. As Joe has just discussed, we're making significant progress against our near-term priorities of stabilizing the business and strengthening our financial foundation. Our report today reflects several key proof points. We delivered solid second quarter results with continued momentum of NARCAN, shipments of Anthrax, and an international sale of ACAM2000. We received over $250 million of contract modifications to continue supplying CYFENDUS, ACAM2000, VIGIV and BAT to the U.S. government. We announced a confidential settlement agreement with Janssen Pharmaceuticals, which resulted in a $50 million payment to Emergent on July 31. We announced $112 million in asset sales. We entered into a definitive agreement to divest our Baltimore Camden facility to Bora Pharmaceuticals for $30 million, sold an underutilized warehouse at our Camden facility for $7 million, and sold our chemical decontamination product, RSDL to SERB Pharmaceuticals for $75 million. These transactions, once fully completed, will satisfy the capital raise requirement in our amended credit facility. We received notification that the EMA accepted the Bavarian Nordic submission for the Chikungunya vaccine, which was part of the travel health divestiture in 2023. This acceptance triggers the first milestone payment of $10 million, which we expect to receive in the third quarter. We'll go into further detail on the balance sheet, but the influx of cash from these items is expected to provide approximately $200 million that can be used for debt repayment this year. Since the beginning of 2023, we have also announced actions to reduce annual expenses by roughly $250 billion. This reinforces our commitment to improving our overall financial foundation and setting the business up for stronger profitability and shareholder value going forward. And finally, we are again raising the midpoints of our revenue and adjusted…

Thank you, Rich. Our hard working team at Emergent made significant progress executing on the strategic operational changes to stabilize our financial position and position us well for the future. This is critical to our turnaround, but as we look forward, we see meaningful opportunities for Emergent growth drivers that have the potential to impact lives around the world. Turning to Slide $23, I'd like to focus on the future growth drivers for our organization based on the potential expansion of our in-line products. This will look like international expansion and line extensions of our current products, strategic partnerships that leverage our own capabilities or identify unique public-private partnerships, increased focus on health -- public health preparedness and funding and willingness to address the opioid epidemic. In closing, our transformation will take time, it's not linear. But that said, I'm pleased with the progress our team has made and the value created over the past month and importantly, the debt pay down that we have achieved. We are planning to finish out the year strong by paying down a significant amount of additional debt, while we prepare to enter our turnaround phase and move towards an exciting future. With that, Operator, let's open up the line for questions.

[Operator Instructions] Our question will be coming from Jessica Fye of J.P. Morgan. Your line is open.

Hey, this is Nick on for Jess. Thanks for taking our questions. First, with the decision to expand NARCAN distribution capabilities with the new center in Nevada, can you kind of talk about the long-term growth opportunity for NARCAN and both OTC as well as the PIP market? Kind of how are you thinking about the overall market opportunity across OTC and PIP? What do you see as the current and future growth driver there and maybe could you comment on potential peak sales for NARCAN?

Sure. You got a lot of questions there. I'm also joined by Paul Williams who's here who can help us to address these questions. This is Joe Papa. I'll start, Paul, and then feel free to add in. I think first and foremost what we're most excited about is that this is a real public health problem and that we've got to solve it. We've got to help solve it. We believe NARCAN has shown some good progress in solving this. The fact I point to that there was a 3% reduction in total amount of deaths in the United States last year, but that still means there's a lot more to do when you're talking about still remaining 100,000 deaths. We think it's going to get solved by a number of things. Number one, in terms of our ability to continue to expand access to NARCAN, we believe that the amount of funding that will go towards the public interest market from some of the opioid drug settlements from the big pharma companies will come into this category and that will help the state expand their educational program but also their purchase and the ability to make NARCAN more available to all the markets I think is first and foremost one of the big items for us. Beyond that, we clearly are working very closely with the states and we believe that our NARCAN, our NARCAN direct program are embedded into many of these public interest markets and that's going to allow us, we believe, to continue to be a very important provider of NARCAN to all the states. So I think that those are probably the first and foremost things I would add. We clearly believe the brand itself is a very important part of it. But, Will, other things you want to add to answer that question?

Yes, and maybe, Joe, I think a couple of things. One is, I don't think you can understate the emphasis coming out of the White House, and we recently attended the Office of National Drug Control Policy Naloxone Roundtable discussion, where really talking about we're barely just starting to see a decrease in deaths, but 100,000 deaths is way too much. And we've got to solve that, one, through the states. We've started to address that by expanding access with over-the-counter, which is going to allow us, I think, to expand into businesses. Obviously, we're online and on retail shelves, and continue to drive a level of awareness and understanding around fentanyl poisoning, around accidental overdose as well as in the addiction space. And I think all of those point to, we've got a long way to go before NARCAN -- before we actually start seeing a plateau in the market and the demand for naloxone.

And I think what Paul is saying is, what I think you have to comment on in the world we live in today, but the U.S has bipartisan support for solving this problem. I mean, there's not often we can get bipartisan support, but we do have bipartisan support for solving the opioid epidemic that we see out there right now. And I think that's an important part of it. And I think one doesn't have to look any further than the Lancet article that came out a week ago that says the overall impact of opioid-related death is reducing the life expectancy of the United States population by almost a year, just because of opioids. That just says volumes about how important this issue is and volumes about why we believe NARCAN can make a real difference. So I think that's what's going to help us with the growth. We clearly believe our distribution capabilities is why we added the Nevada Distribution Center and we announced that today. It just makes it allows us to be faster and more customer responsive, which is what we're trying to do with the future [indiscernible] and leaner, customer-focused organization that has more flexibility. So I think all those things are the reasons why we see NARCAN as being a great opportunity for the future.

Great. And with that in mind, a few months back, a competitor announced a distribution agreement with the state of California to supply OTC NARCAN. How are you contemplating that with your current outlook for the OTC product? And are you seeing any other trends amongst other states?

Sure. We're working very closely -- we still work very closely with the state of California to be clear. California has some very aggressive opioid reduction targets, which obviously we support the importance of that. We continue to supply products to the state of California. Once again, having a distribution center in Nevada makes it easier for us to deliver to the state of California. And we also believe that, as I said before, the NARCAN direct program is embedded into the public service process because we make it easier for them to essentially have a one-stop shop for getting access to our products. So we're going to continue to work with the state of California just like we work with the other states. We believe the brand NARCAN is important. We believe our manufacturing capacity and capabilities is important. And we believe our distribution capability to 18,000 locations around the United States. They're all very important reasons why we're going to be successful with the state of California, but for other states as well. And that's how we're approaching this in terms of, we are the leader, we're going to continue to try to improve the overall access. And as that total market expands, we believe we're going to get our fair share of that market expansion as well.

Great. And maybe could you provide some additional detail on some of the steps you're taking to improve long-term margins and maybe provide some color on what you see as an achievable margin profile for the current business?

Are you asking specifically about NARCAN or just total business, so I understand just the question?

Total business, but NARCAN as well, if you want to comment on that specifically.

Yes, well, let me start with NARCAN because that's where the base of your questions are. We are clearly working with our partners on the contract manufacturing of our product and continuing to work to reduce the total cost of goods sold for our product. We have a good understanding of what we can do and we already have made some progress this year. We expect to and we've targeted even more progress for the future, but we're working very closely to look at those specific vehicles in terms of where the cost is by -- what's the cost for the raw material, what's the cost for the actual nasal device, and then also the assembly, et cetera, looking at all avenues for NARCAN to bring down that cost. I think on the rest of our business, Rich probably may want to make some comments, but I think one of the things we're doing looking at overall gross margin is just creating a leaner, more efficient network in terms of our manufacturing site. We believe that will give us significant reductions in our cost of goods sold just as we become more efficient at each site. As we've talked about during the call, we're going to shut down the Rockville, we're shutting down the Bayview, as we divest the Camden site, as we sell the Camden site. All those action steps we believe are going to help us with our overall gross margin improvement and I think that's the way we'll mostly get to those relative savings over time. Obviously, each site -- the remaining Lansing site, the remaining Winnipeg site will become much more important and obviously more, we believe, efficient as we go forward.

Yes, I think that's right. And I think sort of the major driver is really the cost that we've taken out in terms of the manufacturing site network so that we have less unutilized capacity or excess capacity in the network. That's really helping cost of goods sold as we come through the end of this year and into next year. And then we're being very disciplined about our R&D spending as we go forward. And then finally, on the SG&A side, we are working very hard to reduce our overall level of SG&A, which again will flow through as we come out of this year into next year.

Okay. Maybe just the last one from us then. Could you provide some color on when we should expect an option for Tembexa and Ebanga?

So I think on Ebanga, that is still a few years out into the future, based on the nature of the contract, which really had several years of development and commercialization or scale up, I should say, followed by procurement options following that. On Tembexa, we continue to have conversations with the United States government about the timing and magnitude of the next option exercise. We don't have anything to report today, but we are working hard to maintain the continuity of supply of that product as we move forward.

Great. Thanks so much.

Thank you. [Operator Instructions] I'm showing no further questions. I would now like to turn the call back to Joe for closing remarks.

So, thank you again everyone for joining us today. As I mentioned, onset [ph], I'd like to thank our Emergent team for all the great work during the quarter to help us to achieve the milestones we've achieved. Importantly, we look forward to finishing the second half of the year strong, continuing to debt pay down that we're already adding to that debt pay down, of course, and then importantly, continue to improve our overall operational performance for the business and to reduce debt by the working capital improvement. So all those things will be important parts of our future. We look forward to any additional questions as we have a chance to go out and talk to all of you. Thank you. Have a great day, everyone.

Thank you all. And with that, ladies and gentlemen, we now conclude the call. Thank you for your participation. Please note an archived version of today's webcast as well as a PDF version of the slides used during today's call will be available later today and accessible through the investors landing page on the company's website. Thank you again. We look forward to speaking with you all in the future. Goodbye.