- Emergent BioSolutions Inc's EBS Q3 sales fell 27% Y/Y to $240 million, missing the consensus of $268.30 million.
- Revenues from CDMO services decreased $76.4 million, largely due to lower combined revenues of $59.1 million from AstraZeneca Plc AZN and Johnson & Johnson's JNJ Janssen, reflecting the impact of reduced production activities for the companies' COVID-19 vaccines.
- The company reported an adjusted EPS loss of $(1.27), compared to $(0.36) a year ago and missing the consensus of $(0.06).
- Related: FDA Issues Warning Letter For Emergent Bio's Manufacturing Facility.
- Guidance: Emergent BioSolutions forecasts FY22 sales of $1.05-$1.10 billion, down from $1.15-$1.25 billion expected earlier, compared to the consensus of $1.20 billion.
- Post 3Q22 results, Cantor Fitzgerald, reiterated its Neutral rating and revised the price target to $23 from $33.
- Analyst Reaction: The analyst writes that while on the surface, Emergent BioSolutions' stock looks attractive, trading at ~2x 2022E sales on an EV/revenue basis, there remain multiple overhangs that the company will need to work through.
- Narcan continues to do well, but that is a genericized market. The company's medical countermeasures business will remain an integral part but with several overhangs, such as the likelihood and timing of the next option getting exercised.
- Price Action: EBS shares are down 29.80% at $13.86 on the last check Wednesday.
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