Emergent BioSolutions Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and accompanying notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”). Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q includes information with respect to our plans and strategy for our business and financing, as well as forward-looking statements that involve risks and uncertainties. You should carefully review the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and accompanying notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”). For a similar discussion and analysis of our results for the quarter ended March 31, 2025 compared to our results for the quarter ended March 31, 2024, refer to Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Quarterly Report for the quarter ended March 31, 2025, filed with the United States (“U.S.”) Securities and Exchange Commission (“SEC”) on May 8, 2025. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q includes information with respect to our plans and strategy for our business and financing, as well as forward-looking statements that involve risks and uncertainties. You should carefully review the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Previous wording

We are currently focused on the following four PHT categories: chemical, biological, radiological, nuclear and explosives (“CBRNE”); emerging infectious diseases (“EID”); emerging health crises; and acute, emergency and community care. We have a portfolio of 11 products, 10 of which are owned by the Company, that contribute a substantial portion of our revenue and are sold to government and commercial customers. Additionally, we have a development pipeline consisting of a diversified mix of both pre-clinical and clinical stage product candidates. Finally, we have a fully integrated portfolio of CDMO services which cover development services, drug substance manufacturing and drug product manufacturing and packaging.

Current wording

We have a portfolio of 11 products, 10 of which are owned by the Company, that contribute a substantial portion of our revenue and are sold to government and commercial customers. Additionally, we have a development pipeline consisting of a diversified mix of both pre-clinical and clinical stage product candidates. Finally, we have a fully integrated portfolio of CDMO services which cover development services, drug substance manufacturing and drug product manufacturing and packaging.

Previous wording

The Company manages the business with a focus on three operating segments: (1) a Commercial Products segment consisting of NARCAN®Nasal Spray and KLOXXADO® Nasal Spray, (2) a MCM Products segment consisting of Anthrax - MCM, Smallpox - MCM and Other Products and (3) a Services segment consisting of our Bioservices offerings. Commercial Products and MCM Products are our two reportable segments (see Note 17, “Segment information” in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1, of this Form 10-Q for more information on our reportable segments).

Current wording

The Company manages the business with a focus on three operating segments: (1) a Commercial Products segment consisting of NARCAN®Nasal Spray 4 mg and KLOXXADO® Nasal Spray 8 mg, (2) a MCM Products segment consisting of Anthrax - MCM, Smallpox - MCM and Other Products and (3) a Services segment consisting of our Bioservices offerings. Commercial Products and MCM Products are our two reportable segments (see Note 15, “Segment information” in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1, of this Form 10-Q for more information on our reportable segments).

Previous wording

•NARCAN® (naloxone HCl) Nasal Spray, an intranasal formulation of naloxone approved by the United States Food and Drug Administration (“FDA”) (including in over-the-counter (“OTC”) form) and Health Canada for the emergency treatment of known or suspected opioid overdose as manifested by respiratory and/or central nervous system depression.

Current wording

•NARCAN® (naloxone HCl) Nasal Spray 4 mg is an intranasal formulation of naloxone approved as an over-the-counter (“OTC”) medicine by the United States Food and Drug Administration (“FDA”) and Health Canada for the emergency treatment of known or suspected opioid overdose as manifested by respiratory and/or central nervous system depression; and

Previous wording

•KLOXXADO®(naloxone HCl) Nasal Spray. On January 14, 2025, the Company announced an agreement with Hikma Pharmaceuticals Inc. (“Hikma”) in which the Company obtained exclusive commercial rights for product sales and marketing in the United States and Canada to Hikma’s KLOXXADO® (naloxone HCl) Nasal Spray, an 8 mg naloxone agent.

Current wording

•KLOXXADO®(naloxone HCl) Nasal Spray 8 mg is a prescription medicine. In January 2025, the Company announced an agreement with Hikma Pharmaceuticals Inc. (“Hikma”) in which the Company obtained exclusive commercial rights for product sales and marketing in the United States and Canada of Hikma’s KLOXXADO® (naloxone HCl) Nasal Spray, an 8 mg naloxone agent.

Previous wording

As of the first quarter of 2025, the Company’s Services operating segment no longer met the quantitative thresholds of a reportable segment and did not meet the aggregation criteria set forth in Accounting Standards Codification 280, Segment Reporting, and as such is categorized within “All other revenues” along with “Contracts and Grants”. See Note 17, “Segment information” in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1, of this Form 10-Q for more information about the Company’s reportable segments.

Current wording

As of the first quarter of 2025, the Company’s Services operating segment no longer met the quantitative threshold of a reportable segment and did not meet the aggregation criteria set forth in Accounting Standards Codification (“ASC”) 280, Segment Reporting, and as such is categorized within “All other revenues” along with “Contracts and Grants”. See Note 15, “Segment information” in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for more information about the Company’s reportable segments.

Previous wording

On March 31, 2025, the Company announced that its Board of Directors had authorized the repurchase of up to $50.0 million of the Company’s common stock (the “2025 Share Repurchase Program”) on or before March 27, 2026. During the three and nine months ended September 30, 2025, the Company utilized $8.9 million and $15.8 million to repurchase 1.1 million and 2.3 million shares, respectively, at an average price of $7.87 and $7.00 per share, excluding commissions and excise taxes, respectively. As of September 30, 2025, the Company had $34.2 million available to repurchase shares under the 2025 Share Repurchase Program.

Current wording

In March 2025, the Company announced that its Board of Directors had authorized the repurchase of up to $50.0 million of the Company’s common stock (the “2025 Share Repurchase Program”) on or before March 27, 2026. In February 2026, the Company reauthorized the 2025 Share Repurchase Program for the repurchase of up to $50.0 million of the Company's common stock (the “Reauthorized Share Repurchase Program”) through March 31, 2027. During the three months ended March 31, 2026, the Company utilized $9.1 million to repurchase 0.9 million shares at an average price of $10.21 per share, excluding commissions and excise taxes. As of March 31, 2026, the Company had $46.5 million available to repurchase shares under the Reauthorized Share Repurchase Program.

Previous wording

The Board has authorized the Company to use up to $30.0 million to repurchase Senior Unsecured Notes in open market purchases, privately negotiated transactions or otherwise. During the three and nine months ended September 30, 2025, there was $6.9 million in principal repurchases of the Company’s Senior Unsecured Notes for $5.8 million in cash, including fees, and the Company recognized a gain on extinguishment of approximately $1.1 million. As of September 30, 2025, the Company had $23.1 million available to repurchase additional Senior Unsecured Notes.

Current wording

In May 2025, the Board authorized the Company to use up to $30.0 million to repurchase Senior Unsecured Notes in open market purchases, privately negotiated transactions or otherwise. During the year ended December 31, 2025, there were $10.3 million in principal repurchases of the Company’s Senior Unsecured Notes for $8.7 million in cash, including fees, and the Company recognized a gain on extinguishment of approximately $1.6 million. The Company did not have any principal repurchases during the three months ended March 31, 2026 and 2025. As of March 31, 2026, the Company had $19.7 million available to repurchase additional Senior Unsecured Notes.

Previous wording

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law in the United States. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. These impacts did not have a material effect on the tax rate for the three and nine months ended September 30, 2025.

Current wording

In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law in the United States. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. These impacts did not have a material effect on our tax rate for the three months ended March 31, 2026.

Previous wording

Management believes that the assumptions and estimates related to the provision for income taxes are critical to the Company’s results of operations.

Current wording

Management believes that the assumptions and estimates related to the provision for income taxes are material to the Company’s results of operations.

Previous wording

The preparation of our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S., requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis we evaluate our estimates, judgments and methodologies. We base our estimates on historical experience and on various other assumptions that we believe are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenues and expenses. Actual results may differ from these estimates. There have been no significant changes to our critical accounting policies and estimates contained in “Critical Accounting Policies and Estimates” in Management’s Discussion and Analysis of Financial Condition and Results of Operations, in Part II, Item 7, of the 2024 Form 10-K, as filed with the SEC.

Current wording

The preparation of our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis we evaluate our estimates, judgments and methodologies. We base our estimates on historical experience and on various other assumptions that we believe are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenues and expenses. Actual results may differ from these estimates. There have been no significant changes to our critical accounting policies and estimates contained in “Critical Accounting Policies and Estimates” in Management’s Discussion and Analysis of Financial Condition and Results of Operations, in Part II, Item 7, of the 2025 Form 10-K, as filed with the SEC.

Previous wording

Gain (loss) on sale of business and assets held for sale decreased $36.5 million, or 150%, to a $12.2 million loss for the nine months ended September 30, 2025. The loss on assets held for sale in the current period is related to warehouse space in Maryland and the gain on sale of business in the prior period is related to the sale of RSDL® to SERB, partially offset by a loss the sale of the Company’s drug product facility in Baltimore-Camden to Bora.

Current wording

Loss on assets held for sale

Previous wording

Income tax provision decreased $21.2 million, or 77%, to $6.4 million for the three months ended September 30, 2025. The decrease was primarily due to a change in jurisdictional mix of income and losses, and a decrease of profitability in the third quarter of 2025 relative to 2024.

Current wording

Income tax provision decreased $18.1 million, or 73%, to $6.6 million for the three months ended March 31, 2026. The decrease was primarily due to a change in jurisdictional mix of income and losses, and a decrease of profitability in the first quarter of 2026 relative to 2025.

Previous wording

Anthrax MCM sales decreased $21.5 million, or 65%, to $11.4 million for the three months ended September 30, 2024. The decrease reflects the impact of timing of sales related to CYFENDUS®and Anthrasil®, partially offset by an increase in BioThrax®sales, due to timing. Anthrax vaccine product sales are primarily made under annual purchase options exercised by the USG. Fluctuations in revenues result from the timing of the exercise of annual purchase options, the timing of USG purchases, the availability of governmental funding and the Company’s delivery of orders that follow.

Current wording

Anthrax MCM sales decreased $26.3 million, or 55%, to $21.6 million for the three months ended March 31, 2026. The decrease was primarily due to lower international sales of ANTHRASIL®, mainly to the Canadian government, coupled with lower volumes of CYFENDUS®sales to the USG, primarily due to the impact of timing. These decreases were partially offset by an increase in USG BioThrax® sales due to timing of exercised purchase options. Anthrax vaccine product sales are primarily made under annual purchase options exercised by the USG. Fluctuations in revenues result from the timing of the exercise of annual purchase options, the timing of USG purchases, the availability of governmental funding and the Company’s delivery of orders that follow.

Previous wording

Services revenues decreased $9.7 million, or 68%, to $4.6 million for the three months ended September 30, 2025. The decrease was primarily attributable to a decrease in revenue from the Company’s Camden facility in the current year period, which was sold to Bora in the third quarter of 2024, partially offset by an increase in production at the Company's Winnipeg facility.

Current wording

Services revenues decreased $2.2 million, or 31%, to $5.0 million for the three months ended March 31, 2026. The decrease was primarily attributable to a decline in production at the Company’s Winnipeg facility.

Previous wording

We have historically financed our operating and capital expenditures through existing cash and cash equivalents, cash from operations, development contracts and grant funding and borrowings under various credit agreements, including our Term Loan Agreement and other lines of credit we have established from time to time. We also occasionally obtain financing from the sale of our common stock upon exercise of stock options. As of September 30, 2025, we had unrestricted cash and cash equivalents of $245.5 million and available borrowing capacity of up to $100.0 million under the Revolving Credit Agreement. As of September 30, 2025, the Company believes that its sources of liquidity, including debt and cash flows from operating activities, are adequate to fund its operations for at least the next twelve months from the issuance of these condensed consolidated financial statements.

Current wording

As of March 31, 2026, our capital resources included $160.3 million of cash and cash equivalents and an available borrowing capacity of up to $100.0 million under the Revolving Credit Agreement. We have historically financed our operating and capital expenditures through existing cash and cash equivalents, cash from operations, development contracts and grant funding and borrowings under various credit agreements, including the Term Loan Agreement, the Prior Term Loan Agreement and other lines of credit we have established from time to time. We also occasionally obtain financing from the sale of our common stock upon exercise of stock options. As of March 31, 2026, the Company believes that its sources of liquidity, including debt and cash flows from operating activities, are adequate to fund its operations for at least the next twelve months from the issuance of these condensed consolidated financial statements.

Previous wording

Available room under the Revolving Loans as of September 30, 2025 and December 31, 2024 was:

Current wording

Available room under the commitments with respect to the Revolving Credit Agreement (the “Revolving Loans”) as of March 31, 2026 and December 31, 2025 was:

Previous wording

On March 31, 2025, the Company announced that its Board of Directors had authorized the repurchase of up to $50.0 million of the Company’s common stock (the “2025 Share Repurchase Program”) on or before March 27, 2026. Repurchases under the 2025 Share Repurchase Program may be made from time to time on the open market or in privately negotiated transactions. The timing and amount of any shares repurchased will be determined by the Company’s management based on its evaluation of market conditions and other factors, including the market price of the Company’s common shares, macroeconomic environment and other investment opportunities, consistent with the Company’s insider trading policy. The 2025 Share Repurchase Program may be suspended or discontinued at any time. The Inflation Reduction Act of 2022, which was enacted on August 16, 2022, imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022. Excise tax accrued during the three and nine months ended September 30, 2025 was $0.2 million.

Current wording

In March 2025, the Company announced that its Board of Directors had authorized the repurchase of up to $50.0 million of the Company’s common stock on or before March 27, 2026. In February 2026, the Company reauthorized the 2025 Share Repurchase Program for the repurchase of up to $50.0 million of the Company's common stock through March 31, 2027. Repurchases under the Reauthorized Share Repurchase Program may be made from time to time on the open market or in privately negotiated transactions. The timing and amount of any shares repurchased will be determined by the Company’s management based on its evaluation of market conditions and other factors, including the market price of the Company’s common shares, macroeconomic environment and other investment opportunities, consistent with applicable law. The Reauthorized Share Repurchase Program may be suspended or discontinued at any time. The Inflation Reduction Act of 2022, which was enacted on August 16, 2022, imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022. Excise tax accrued during the three months ended March 31, 2026 was $0.1 million.

Previous wording

During the three and nine months ended September 30, 2025, the Company utilized $8.9 million and $15.8 million to repurchase 1.1 million and 2.3 million shares, respectively, at an average price of $7.87 and $7.00 per share, excluding commissions and excise taxes, respectively. As of September 30, 2025, the Company had $34.2 million available to repurchase shares under the 2025 Share Repurchase Program.

Current wording

During the three months ended March 31, 2026, the Company utilized $9.1 million to repurchase 0.9 million shares at an average price of $10.21 per share, excluding commissions and excise taxes, respectively. As of March 31, 2026, the Company had $46.5 million available to repurchase shares under the Reauthorized Share Repurchase Program.

Previous wording

On May 7, 2025, the Board of Directors authorized the Company to repurchase up to $30.0 million aggregate principal amount of the Company’s Senior Unsecured Notes. The Company may seek to opportunistically use this authority to repurchase its Senior Unsecured Notes in open market purchases, privately negotiated transactions or otherwise. Any such repurchases will depend upon prevailing market conditions, our liquidity requirements, contractual restrictions, applicable securities law and other factors. During the three and nine months ended September 30, 2025, we repurchased $6.9 million aggregate principal amount of the Company’s Senior Unsecured Notes for $5.8 million in cash, including fees, and recognized a gain on extinguishment of approximately $1.1 million. As of September 30, 2025, we had $23.1 million available to repurchase additional Senior Unsecured Notes.

Current wording

In May 2025, the Board of Directors authorized the Company to repurchase up to $30.0 million aggregate principal amount of the Company’s Senior Unsecured Notes. The Company may seek to opportunistically use this authority to repurchase its Senior Unsecured Notes in open market purchases, privately negotiated transactions or otherwise. Any such repurchases will depend upon prevailing market conditions, our liquidity requirements, contractual restrictions, applicable securities law and other factors. The Company did not have any principal repurchases of its Senior Unsecured Notes during the three months ended March 31, 2026. As of March 31, 2026, we had $19.7 million available to repurchase additional Senior Unsecured Notes.

Previous wording

As of September 30, 2025, the Company has $693.1 million of fixed and variable rate debt with varying maturities. See Note 10, “Debt” in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1, of this Form 10-Q for further discussion.

Current wording

Our future contractual obligations as of March 31, 2026 primarily included long-term obligations related to our outstanding borrowings under our Prior Term Loan Agreement, which was repaid in April 2026 with proceeds from the Term Loan Agreement, and the Senior Unsecured Notes, as well as lease arrangements and purchase commitments. As of March 31, 2026, the Company had $589.7 million of fixed and variable rate debt with varying maturities. See Note 8, “Debt” in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1, of this Form 10-Q for further discussion.

Previous wording

The following table provides information regarding our cash flows for the nine months ended September 30, 2025 and 2024:

Current wording

The following table provides information regarding our cash flows for the three months ended March 31, 2026 and 2025:

Previous wording

Net cash provided by investing activities for the nine months ended September 30, 2025 decreased $23.3 million as compared with the nine months ended September 30, 2024. The decrease in net cash provided by investing activities was primarily attributable to the significant cash inflows in 2024 related to the RSDL®Transaction and the sale of the Baltimore-Camden facility, partially offset in 2025 by the $50.0 million in aggregate milestone payments received in connection with the sale of the Company’s travel health business to Bavarian Nordic, proceeds from the sale of property, plant and equipment, including the sale of our Baltimore-Bayview facility to Syngene, and a reduction in capital expenditures compared to the prior year.

Current wording

Net cash used in investing activities for the three months ended March 31, 2026 decreased $61.9 million from net cash provided activities for three months ended March 31, 2025. The decrease was primarily attributable to prior year proceeds from the sale of property, plant and equipment, including proceeds from the sale of our Baltimore-Bayview facility to Syngene and milestone payments received related to the sale of our travel health business to Bavarian Nordic, partially offset by the purchase of a note receivable in the prior year.

Previous wording

We expect to continue to fund our short-term and long-term anticipated operating expenses, capital expenditures, debt service requirements, any potential debt repurchases and any future repurchase of our common stock from the following sources:

Current wording

We expect to continue to fund our short-term and long-term anticipated operating expenses, capital expenditures and debt service requirements, any future debt repurchases and any future repurchases of our common stock from the following sources:

Previous wording

•the level, timing and cost of product and services sales;

Current wording

•the level, timing and cost of product sales and services sales;

Previous wording

Economic conditions, including market volatility and adverse impacts on financial markets, may make it more difficult to obtain financing on attractive terms, or at all. Any new debt funding, if available, may be on terms less favorable to us than our Senior Unsecured Notes, our Term Loan Agreement or our Revolving Credit Agreement. If financing is unavailable or lost, our business, operating results, financial condition and cash flows would be adversely affected, and we could be forced to delay, reduce the scope of or eliminate many of our planned activities.

Current wording

Economic conditions, including market volatility and adverse impacts on financial markets, may make it more difficult to obtain financing on attractive terms, or at all. Any new debt funding, if available, may be on terms less favorable to us than our Senior Unsecured Notes, our Credit Agreement or our Revolving Credit Agreement. If financing is unavailable or lost, our business, operating results, financial condition and cash flows would be adversely affected, and we could be forced to delay, reduce the scope of or eliminate many of our planned activities.