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Fuad El-Hibri EBS IPO and BioThrax

June 21st, 2009 admin No comments

“When you have two parties you can maybe exercise control over one party, which is ourselves. Our relationship with HHS continues to be strong, and we’re excited about this opportunity,” said Fuad El-Hibri, chief executive officer, in a conference call with analysts. “These are half-billion-dollar types of contracts. They just take time to negotiate.”

Delayed orders of its anthrax product drastically cut into Emergent BioSolutions Inc.’s fourth-quarter revenue and profits.

The Rockville biotech earned nearly $35.8 million in revenue in the fourth quarter last year, a 60 percent drop from the $89.6 million it pulled in during the same period of 2007. That also resulted in a nearly 95 percent plunge in fourth-quarter profits, from $27.7 million to nearly $1.5 million.

The company said it had expected to ship three additional lots of its BioThrax anthrax vaccine to the U.S. Department of Health and Human Services during the fourth quarter — representing $12 million worth of product sales — but that delivery was delayed.

“Such an event is further evidence that our revenues fluctuate quarter to quarter based on the timing of deliveries of BioThrax to HHS,” said Don Elsey, chief financial officer, in a statement.

Despite that drop, Emergent’s revenue for the full year in 2008 dipped only 2 percent, from $182.9 million to $178.5 million, and profit fell 10 percent, from $22.9 million to $20.7 million. Nearly all of the company’s product sales came from BioThrax, and Emergent said it saw a 16 percent drop in BioThrax doses delivered to HHS. That was offset, though, by an 18 percent rise in Emergent’s BioThrax dose price.

The company earns most of its money from HHS contracts. While Emergent still has two contracts outstanding, worth a total $853 million, to deliver more than 33 million doses to HHS, the larger of those two contracts, worth $448 million, will be completed in the third quarter of this year.

Emergent is awaiting an HHS decision on its bid last year to sell 25 million doses of a separate anthrax vaccine to the agency — a negotiation process that has been delayed by a protest from one of the other bidders on the HHS request for proposals, Emergent officials said.

Emergent thinks its revenue this year will grow by 25 to 35 percent and lie between $225 million and $240 million. It also expects profits to exceed $20 million this year.

Emergent had plans to expand its manufacturing space into Frederick, Md., but those plans have been put on hold as it concentrates its work at a current plant in Lansing, Mich. Emergent officials have been wary of giving any timelines for further manufacturing expansions but did say nothing would occur before the end of next year.

“We would be using existing manufacturing process, existing scale, existing equipment,” El-Hibri said. “We have plenty of space.”

By the end of last year, the company had $91.5 million in cash and equivalents.

Emergent’s share price (NYSE: EBS) dropped $1.08, or a little more than 6 percent, in trading after closing bell Thursday, when the company released its earnings.

Fuad El-Hibri and EBS Initial Public Offering

A Gaithersburg drug company that makes most of its money selling the only federally approved vaccine against anthrax is in the final stages of preparing an initial public offering to raise up to $92 million.

Late last month, Emergent Biosolutions Inc. set the range of its offering at $14 to $16 a share. The company said it intends to use the money on its manufacturing facilities in Frederick and Michigan and to fund development of several products, according to documents filed with the Securities and Exchange Commission.

The company is tightly controlled by Fuad El-Hibri, its chairman and chief executive. El-Hibri, who lives in Potomac, has an extensive background in the telecommunications industry. He and his father have also had significant involvement with a British provider of anthrax vaccines. El-Hibri, who became a U.S. citizen in 1999, was born in Germany and grew up around Europe and the Middle East before attending Stanford and Yale universities.

El-Hibri controls 99.5 percent of the Emergent’s outstanding stock. After going public, he will control 81.4 percent. In SEC documents, the company said El-Hibri “will continue to have substantial control over us after this offering, including through his ability to control the election of the members of our board of directors, and could delay or prevent a change of control.”

Biotech analysts said Emergent could have a tough time with its initial public offering. Just two biotech companies — Osiris Therapeutics, a Baltimore biotechnology firm working on stem-cell therapies, is one — went public in the third quarter, and the market for IPOs in general has been spotty.

According to Thomson Financial, more companies have withdrawn IPOs this year than in any of the previous five years, indicating investors are skeptical of new company stock offerings despite the generally strong market for stocks. And venture capital-backed IPOs, traditionally the most prolific source of new company issues, fell significantly in the third quarter.

Companies that have managed to go public are in a broad range of industries, and those that have had the most success are in tried-and-true money-making or technologically hot industries. For example, locally, government contracting giant SAIC Inc. is up 33 percent since its Oct. 12 IPO. And Osiris Therapeutics is up 89 percent since its August IPO.

Emergent Biosolutions’ effort to finish its IPO comes as federal health officials deal with a troubled $877.5 million contract for another anthrax vaccine, made by VaxGen Inc. VaxGen is supposed to provide 75 million doses for the national stockpile, but the Food and Drug Administration recently halted human testing of the California company’s vaccine because of concerns about its potency, throwing the entire contract into doubt.

VaxGen’s contract was awarded under the Project Bioshield initiative, which seeks to develop modern vaccines and drugs for chemical, biological, radiological or nuclear attacks. VaxGen’s proposed anthrax vaccine, if successful, would require fewer doses over a shorter period of time to produce immunity than the older version made by Emergent.

Emergent has been urging Congress and federal health officials to buy more of its anthrax vaccine, called BioThrax, for the stockpile. The efforts are being aided by Louis W. Sullivan, who was health and human services secretary from 1989 to 1993, and Jerome M. Hauer, a former senior HHS official who oversaw public health emergency preparedness. Both men are on Emergent’s board.

So far, the government has purchased 10 million doses.

In its SEC filings, Emergent said the government’s efforts to stockpile a newer version “would limit, possibly significantly, the market for BioThrax.” The company said it is in the early stages of developing a next-generation anthrax vaccine and products for other diseases and bioterrorism agents.

Emergent officials could not comment because the company is in a quiet period before its offering.

While the $5.6 billion Project Bioshield program is potentially the most lucrative outlet for BioThrax, Emergent also sells the vaccine to the Defense Department. Since 1998, the Defense Department has vaccinated 1.5 million people with more than 5.7 million doses, according to SEC documents. It is providing 1.5 million doses to the military through September 2007.

BioThrax has been controversial in the military. Some soldiers have complained of significant side effects and have refused to use the vaccine, leading to a court battle that temporarily stopped mandatory vaccinations. The government recently resumed mandatory vaccinations with BioThrax after the FDA said the vaccine was safe and effective.

John T. McCamant, editor of the Medical Technology Stock Letter, said Emergent’s IPO could be particularly difficult because the only customer for bioterrorism products is the government.

“That’s a tall trick because the money will come in lumps at best,” he said.

Staff writer Terence O’Hara contributed to this report.

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Fuad El-Hibri on Anthrax Vaccine Contract

June 21st, 2009 admin No comments

“We strongly support this step by HHS, which potentially reduces development risk for our rPA vaccine candidate. We remain confident that we are well-positioned and competitive to receive any award granted by HHS for the development and procurement of the rPA vaccine. We look forward to continuing our long-standing relationship with the US Government as the proven and preeminent supplier of medical countermeasures to protect our nation,” said Fuad El-Hibri, chairman and chief executive officer of Emergent BioSolutions.

Emergent BioSolutions Inc. (NYSE:EBS) announced that late on April 15th, HHS requested that each bidder in the competitive range for the rPA contract submit its product development plans to FDA for review in advance of an award. Emergent had already requested and is presently scheduling a meeting with the FDA as part of its pre-award activity. The Company intends to incorporate any FDA comments into its rPA development plan. Emergent will continue to move its rPA program forward to position the company to execute on the anticipated contract, once awarded.

As with any government solicitation of this size and scope, there are no assurances that HHS will not impose additional requirements, which may further extend contract negotiations.

This action has no impact on the company’s existing contracts with HHS to supply BioThrax®, the only FDA licensed anthrax vaccine, for the Strategic National Stockpile (SNS). This year Emergent is completing the delivery of 18.75 million doses of BioThrax for inclusion in the SNS. Also this year, following the completion of that delivery, Emergent will begin to supply HHS with an additional 14.5 million doses of BioThrax under a follow-on contract. The total value of these two procurement contracts with HHS for BioThrax exceeds $800 million.

About Emergent BioSolutions Inc.

Emergent BioSolutions Inc. is a biopharmaceutical company focused on the development, manufacture and commercialization of vaccines and therapeutics that assist the body’s immune system to prevent or treat disease. Emergent’s marketed product, BioThrax® (Anthrax Vaccine Adsorbed), is the only vaccine licensed by the U.S. Food and Drug Administration for the prevention of anthrax. Emergent’s development pipeline includes programs focused on anthrax, botulism, tuberculosis, typhoid, hepatitis B and chlamydia. Additional information may be found at http://www.emergentbiosolutions.com.

Safe Harbor Statement

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements, other than statements of historical fact, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, including any potential future securities offering, and any other statements containing the words “believes,” “expects,” “anticipates,” “plans,” “estimates” and similar expressions, are forward-looking statements. There are a number of important factors that could cause the company’s actual results to differ materially from those indicated by such forward-looking statements, including the success of our clinical programs; our plans to expand our manufacturing facilities and capabilities; the rate and degree of market acceptance and clinical utility of our products; the timing of and our ability to obtain and maintain regulatory approvals for our other product candidates; our commercialization, marketing and manufacturing capabilities and strategy; our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; and other factors identified in the company’s annual report on Form 10-K for the year ended December 31, 2008 and subsequent reports filed with the SEC. The company disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this press release.

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Fuad El-Hibri’s Emergent BioSolutions’ Typhoid Vaccine

June 21st, 2009 admin No comments

We are very pleased to have met the objectives of this Phase II study of our typhoid vaccine candidate:

Fuad El-Hibri’s Emergent BioSolutions‘ Typhoid Vaccine Candidate Achieves Endpoints in Phase II Clinical Study

“We are very pleased to have met the objectives of this Phase II study of our typhoid vaccine candidate. This data is encouraging and indicates great promise for what would be the first single-dose, drinkable typhoid vaccine. We are particularly grateful to the Wellcome Trust for their partnership and generous support of this important project,” stated Fuad El-Hibri, chairman and chief executive officer of Emergent BioSolutions. “Typhoid is endemic in many developing countries, putting countless international travelers and families who visit these nations at risk. With typhoid claiming 200,000 lives each year, continued progress in the development of this vaccine is an important milestone in our company’s efforts to protect life. Emergent BioSolutions remains committed to addressing significant underserved health needs,” he continued.

About the Typhoid Vaccine Candidate

The company’s typhoid vaccine candidate is a live, attenuated strain of the Salmonella typhi bacterium designed to eliminate virulence by deletion of two specific genes. The vaccine is intended to be administered in a single, drinkable dose prior to travel to countries where typhoid is endemic. If approved, this method of administration could provide a competitive advantage compared to currently approved typhoid vaccines.

Fuad El-Hibri EBS Typhoid Vaccine

Jun 15
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Fuad El-Hibri EBS Typhoid Vaccine

Emergent BioSolutions is on the path to finding gold with its typhoid vaccine following positive results in a Phase II trial.

The Maryland-based biopharmaceutical company is developing a single-dose oral drinkable typhoid vaccine aimed to take on Crucell’s three to four dose oral formulation and Sanofi’s injectable formulation. The global travellers market was worth $130m (€92m) in 2003, and is expected to increase to $200m by 2014.

According to the company, the typhoid vaccine candidate achieved the study endpoints for safety and immunogenicity with an overall immune response rate of greater than 50 per cent, with 95 per cent confidence.

“We are very pleased to have met the objective of this Phase II study of our typhoid vaccine candidate. This data is encouraging and indicates great promise for what would be the first single-dose, drinkable typhoid vaccine,” Emergent BioSolutions chairman and chief executive Fuad El-Hibri said.

“Typhoid is endemic in many developing countries, putting countless international travellers and families who visit these nations at risk. With typhoid claiming 200,000 lives each year, continued progress in the development of this vaccine is an important milestone in our company’s efforts to protect life.”

The company’s typhoid vaccine candidate is a live, attenuated strain of the Salmonella typhi bacterium designed to eliminate virulence by deletion of two specific genes.

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Fuad El-Hibri and EBS Trading

June 21st, 2009 admin No comments
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Fuad El-Hibri and Emergent BioSolutions are handing our bonuses

Fuad El-Hibri and Emergent BioSolutions are handing our bonuses

Bonus may be a bad word right now — but not for a biotech that is actually making money.

Alongside minimal pay raises, Emergent BioSolutions Inc. execs received bonuses in 2008 that increased anywhere from 5 percent to 43 percent from their 2007 bonuses. Fuad El-Hibri, chief executive officer and chairman of the Rockville company, got the lowest increase, but the highest bonus at $323,250. The highest increase was doled out to Kyle Keese, senior vice president of manufacturing operations, who took home a $96,460 bonus for 2008.

Though, at least one manager’s perk wasn’t quite so perky last year. Robert Kramer, who stepped down in January as head of Emergent’s manufacturing subsidiary and instead will manage a contract that the company hopes to nail with the federal government this year, got a 48 percent decrease in his bonus from 2007, bringing his 2008 figure to $78,815.

While Emergent is one of the few biotechs netting a profit, its numbers did dip slightly from 2007 to 2008 — by 2 percent of revenue and 10 percent of profits — because of fewer or delayed shipments of its anthrax vaccine to the federal government. But whereas other biotechs have been shaving down their work forces, Emergent added people in 2008, up to 587 people from 560 in 2007.

Fuad El-Hibri at Yale School of Management

Jun 15
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Fuad El-Hibri celebrated its 25th Anniversary Class Reunion at Yale School of Management

The Class of 1982 celebrated its 25th Anniversary Class Reunion. Members of the Reunion Committee included: Laura Weisel ’82 (chair), Teresa Barger ’82, Michael Barzelay ’82, Molly Cole ’82, Trish Karter ’82, and Judy Samuelson ’82. The committee also participated in “Idea Exchanges” throughout Reunion Weekend, with classmates Fuad El-Hibri ’82, Michael Dowling ’82, Tim Collins ’82, Jay Harris ’82, Gail Harrity ’82, Amy Linden ’82, and Tinny Weintraub ’82 among the panelists.

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