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, 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.

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 three and six months ended June 30, 2025 compared to our results for the three and six months ended June 30, 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 June 30, 2025, filed with the United States (“U.S.”) Securities and Exchange Commission (“SEC”) on August 7, 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

•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.

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 of Hikma’s KLOXXADO® (naloxone HCl) Nasal Spray, an 8 mg naloxone agent in the United States and Canada.

Previous wording

•ACAM2000®, (Smallpox (Vaccinia) Vaccine, Live), the only single-dose smallpox vaccine licensed by the FDA for active immunization against smallpox disease for persons determined to be at high risk for smallpox infection;

Current wording

•ACAM2000® (Smallpox and Mpox (Vaccinia) Vaccine, Live), the only single-dose smallpox vaccine licensed by the FDA for active immunization against smallpox and mpox disease for persons determined to be at high risk for smallpox or mpox infection;

Previous 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.

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 and six months ended June 30, 2026, the Company utilized $9.1 million and $18.2 million, including commissions and excise taxes, to repurchase 1.1 million and 1.9 million shares, respectively. The average price paid, excluding commissions and excise taxes, was $8.38 and $9.21 per share, respectively. As of June 30, 2026, the Company had $37.5 million available to repurchase shares under the Reauthorized Share Repurchase Program.

Previous 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.

Current wording

In August 2026, the Board authorized the Company to use up to $75.0 million to repurchase Senior Unsecured Notes in open market purchases, privately negotiated transactions or otherwise. During the second half of 2025, the Company repurchased $10.3 million principal amount of its outstanding Senior Unsecured Notes under a debt repurchase program that was in effect from May 2025 to May 2026 under which the Company was authorized to repurchase up to $30.0 million in aggregate principal amount of its Senior Unsecured Notes. The Company did not have any principal repurchases during the three and six months ended June 30, 2026 and 2025 under its prior debt repurchase program.

Previous wording

On April 16, 2026, subsequent to the three months ended March 31, 2026, the Company entered into a new term loan credit agreement (the “Term Loan Agreement”) by and among the Company, the lenders from time to time party thereto, and OrbiMed Royalty & Credit Opportunities V, LP, as administrative agent. The Term Loan Agreement provides for a term loan of $150.0 million that matures in April 2031, subject to certain earlier maturity provisions. The agreement also provides for up to $75.0 million of additional delayed draw availability, subject to the satisfaction of specified conditions. The Company used the net proceeds from the initial term loan, together with cash on hand, to repay and terminate its Term Loan Agreement with OHA Agency LLC, as administrative agent, and the lenders from time to time party thereto (the “Prior Term Loan Agreement”), including accrued interest and fees.

Current wording

In April 2026, the Company entered into a new term loan credit agreement (the “Term Loan Agreement”) by and among the Company, the lenders from time to time party thereto, and OrbiMed Royalty & Credit Opportunities V, LP, as administrative agent. The Term Loan Agreement provides for a term loan of $150.0 million that matures in April 2031, subject to certain earlier maturity provisions. The agreement also provides for up to $75.0 million of additional delayed draw availability, subject to the satisfaction of specified conditions. The Company used the net proceeds from the initial term loan, together with cash on hand, to repay and terminate its Term Loan Agreement with OHA Agency LLC, as administrative agent, and the lenders from time to time party thereto (the “Prior Term Loan Agreement”), including accrued interest and fees.

Previous wording

Also on April 16, 2026, the Company amended its existing Revolving Credit Agreement (the “ABL Amendment”). The ABL Amendment, among other things, reduced the total revolving loan commitment to $50.0 million and extended the maturity date to April 2031, subject to customary conditions.

Current wording

Also in April 2026, the Company amended its existing Revolving Credit Agreement (the “ABL Amendment”). The ABL Amendment, among other things, reduced the total revolving loan commitment to $50.0 million and extended the maturity date to April 2031, subject to customary conditions.

Previous wording

We generate Commercial Product revenues through the sale of Naloxone products, primarily NARCAN® Nasal Spray, which is sold commercially over-the-counter at retail pharmacies and digital commerce websites as well as through physician-directed or standing order prescriptions at retail pharmacies, health departments, local law enforcement agencies, community-based organizations, substance abuse centers and other federal agencies, as well as KLOXXADO®Nasal Spray, which is currently being integrated into our distribution network, NARCANDirect®. We generate MCM Product revenues from the sale of our marketed products and procured product candidates. The U.S. government (“USG”) is the largest purchaser of our Government - MCM products and primarily purchases our products for the Strategic National Stockpile, a national repository of medical countermeasures including critical antibiotics, vaccines, chemical antidotes, antitoxins, and other critical medical supplies. The USG primarily purchases our products under long-term, firm fixed-price procurement contracts, generally with annual options.

Current wording

We generate Commercial Product revenues through the sale of Naloxone products, primarily NARCAN® Nasal Spray, which is sold commercially over-the-counter at retail pharmacies and digital commerce websites as well as through physician-directed or standing order prescriptions at retail pharmacies, health departments, local law enforcement agencies, community-based organizations, substance abuse centers and other federal agencies, as well as KLOXXADO®Nasal Spray, which has been integrated into our distribution network, NARCANDirect®. We generate MCM Product revenues from the sale of our marketed products and procured product candidates. The U.S. government (“USG”) is the largest purchaser of our Government - MCM products and primarily purchases our products for the Strategic National Stockpile, a national repository of medical countermeasures including critical antibiotics, vaccines, chemical antidotes, antitoxins, and other critical medical supplies. The USG primarily purchases our products under long-term, firm fixed-price procurement contracts, generally with annual options.

Previous wording

We have received contracts and grant funding from the USG and other non-governmental organizations to perform R&D activities, particularly related to programs addressing certain CBRNE threats and EIDs.

Current wording

We have received contracts and grant funding from the USG and other non-governmental organizations to perform research and development activities, particularly related to programs addressing certain CBRNE threats and EIDs.

Previous wording

Changes in tax laws, rulings, policies, or related legal and regulatory interpretations occur frequently and may have significant favorable or adverse impacts on our effective tax rate. In 2021, the Organization for Economic Cooperation and Development released model rules for a 15% global minimum tax applied to cross-border profits of certain large multinational corporations, known as Pillar Two. Pillar Two has now been enacted by approximately 36 countries, including Ireland. This minimum tax is treated as a period cost beginning in 2024 and its impact is included on the Company's financial results of operations for the current period. The Company is monitoring legislative developments, as well as additional guidance from countries that have enacted legislation.

Current wording

Changes in tax laws, rulings, policies, or related legal and regulatory interpretations occur frequently and may have significant favorable or adverse impacts on our effective tax rate and cash payments. In 2021, the Organization for Economic Cooperation and Development released model rules for a 15% global minimum tax applied to cross-border profits of certain large multinational corporations, known as Pillar Two. Pillar Two has now been enacted by approximately 36 countries, including Ireland.

Previous 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.

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 and six months ended June 30, 2026.

Previous 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.

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. Except for the updates to our critical accounting policies and estimates described below, 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

Total revenues decreased $66.1 million, or 30%, to $156.1 million for the three months ended March 31, 2026. The decrease was due to lower MCM Products revenue of $54.8 million, Contracts and grants revenue of $6.7 million, Commercial Products revenue of $2.4 million and Services revenue of $2.2 million.

Current wording

Total revenues increased $93.4 million, or 66%, to $234.3 million for the three months ended June 30, 2026. The increase was due to higher MCM Products revenue of $109.6 million, and Services revenue of $2.0 million, partially offset by a decrease in Commercial Products revenue of $15.1 million and Contracts and grants revenue of $3.1 million.

Previous wording

Intangible asset amortization increased $0.2 million, or 1%, to $16.5 million for the three months ended March 31, 2026. The increase was primarily due to the added amortization following the increase in basis of the acquired intangible asset related to Ebanga TM.

Current wording

Intangible asset amortization increased $1.0 million, or 6%, to $17.2 million for the three months ended June 30, 2026. The increase was primarily due to the added amortization following the increase in basis of the acquired intangible asset related to Ebanga®.

Previous wording

Gross margin decreased $43.1 million, or 41%, to $61.2 million for the three months ended March 31, 2026. Gross margin percentage decreased 9 percentage points to 41% for the three months ended March 31, 2026. The decrease in gross margin was due to a decline in MCM Products and Commercial Products gross margin of $41.7 million and $4.6 million, respectively, partially offset by an increase in Services gross margin of $3.2 million. Gross margin and gross margin percentage exclude Contracts and grants revenues because the related costs are R&D expenses.

Current wording

Gross margin increased $65.3 million, or 138%, to $112.5 million for the three months ended June 30, 2026. Gross margin percentage increased 14 percentage points to 50% for the three months ended June 30, 2026. The increase in gross margin was due to improved MCM Products gross margin of $81.6 million, partially offset by decreases in Commercial Products and Services gross margin of $15.0 million and $1.3 million, respectively. Gross margin and gross margin percentage exclude Contracts and grants revenues because the related costs are R&D expenses.

Previous wording

R&D expenses decreased $4.6 million, or 30%, to $10.5 million for the three months ended March 31, 2026. The decrease was primarily due to lower project spend on Ebanga TM related development work, partially offset by increases in development overhead spend.

Current wording

R&D expenses decreased $3.3 million, or 26%, to $9.2 million for the three months ended June 30, 2026. The decrease was primarily due to lower project spend on Ebanga® related development work.

Previous wording

SG&A expenses decreased $5.8 million, or 11%, to $46.6 million for the three months ended March 31, 2026. The decrease was primarily due to lower professional services, marketing, and administrative support expenses, primarily attributable to cost-saving initiatives implemented as part of the Company’s ongoing turnaround and transformation efforts. SG&A expenses as a percentage of total revenues increased 6 percentage points to 30% for the three months ended March 31, 2026.

Current wording

SG&A expenses increased $0.9 million, or 2%, to $44.6 million for the three months ended June 30, 2026. The increase was primarily due to lower insurance reimbursement benefits recognized in the current year period compared with the prior year period, partially offset by lower compensation, marketing and administrative support expenses. SG&A expenses as a percentage of total revenues decreased 12 percentage points to 19% for the three months ended June 30, 2026.

Previous wording

Interest expense decreased $3.7 million, or 25%, to $11.0 million for the three months ended March 31, 2026. The decrease was primarily due to lower average outstanding debt balances, resulting in reduced interest expense following the $100.0 million principal prepayment of the Prior Term Loan and repurchases of the Company’s Senior Unsecured Notes in the prior year. Interest expense was further reduced by lower amortization of debt issuance costs, partially offset by higher non‑debt interest expense, primarily related to tax and state interest.

Current wording

Interest expense decreased $8.4 million, or 29%, to $21.0 million for the six months ended June 30, 2026. The decrease was primarily due to lower average outstanding debt balances, resulting in reduced interest expense following the prepayment of the $100.0 million principal amount outstanding under the Prior Term Loan and retirement of the remaining outstanding balance in April 2026, along with repurchases of Senior Unsecured Notes in the prior year. Interest expense was further reduced by lower amortization of debt issuance costs, partially offset by the interest expense and commitment fees associated with the new Term Loan Agreement and delayed draw term loan.

Previous wording

Loss on assets held for sale decreased $12.2 million, or 100%, due to no loss on assets held for sale recognized during the three months ended March 31, 2026. The $12.2 million loss on assets held for sale in the first quarter of 2025 was related to warehouse space in Maryland.

Current wording

Loss on assets held-for-sale decreased $1.5 million, or 12%, to $10.7 million for the six months ended June 30, 2026. The loss on assets held-for-sale in the current period is related to the held-for-sale related remeasurement of the Company’s office property located in Gaithersburg, Maryland, while the loss on assets held-for-sale in the prior period is related to warehouse space in Maryland.

Previous wording

Other, net decreased from $69.7 million in income to $13.9 million in income for the three months ended March 31, 2026. The change of $55.8 million, or 80%, primarily reflects the absence of one-time income items recognized in the prior-year period from the $50.0 million in CHIK VLP development milestones and the Bayview facility sale gain, partially offset by TEMBEXA®milestone revenue earned in the current period.

Current wording

Other, net decreased from $66.0 million in income to $13.9 million in income for the six months ended June 30, 2026. The change of $52.1 million was primarily due to the absence of the $50.0 million Bavarian Nordic milestone payment recognized in the prior-year period. The increased expense was also driven by the absence of the gain on sale of the Bayview facility recognized in the prior-year period. These items were partially offset by TEMBEXA® milestone revenue earned in the current period and a favorable warrant valuation adjustment.

Previous 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.

Current wording

Income tax provision increased $0.6 million, or 3%, to $20.5 million for the six months ended June 30, 2026. The increase was primarily due to a change in jurisdictional mix of income and losses.

Previous wording

Naloxone sales decreased $2.4 million, or 5%, to $42.9 million for the three months ended March 31, 2026. The decrease was primarily attributable to lower sales of OTC NARCAN®, driven primarily by an unfavorable price-volume mix in U.S. sales, partially offset by increases in Canadian sales of branded NARCAN®and the timing of the integration of KLOXXADO® sales into the Company’s product portfolio.

Current wording

Naloxone sales decreased $15.1 million, or 22%, to $52.4 million for the three months ended June 30, 2026. The decrease was primarily attributable to lower sales of OTC NARCAN®, mostly driven by an unfavorable price-volume mix in U.S. public interest channels, partially mitigated by increases in Canadian sales of branded NARCAN®and KLOXXADO® sales.

Previous wording

Commercial Products gross margin decreased $4.6 million, or 41%, to $6.7 million for the three months ended March 31, 2026. Commercial Products gross margin percentage decreased 9 percentage points to 16% for the three months ended March 31, 2026. The decrease was largely due to an unfavorable price and volume mix of OTC NARCAN® as well as Canadian branded NARCAN®. Commercial Products segment adjusted gross margin in the current year period excludes the impact of intangible asset amortization of $9.4 million.

Current wording

Commercial Products gross margin decreased $15.0 million, or 69%, to $6.7 million for the three months ended June 30, 2026. Commercial Products gross margin percentage decreased 19 percentage points to 13% for the three months ended June 30, 2026. The decrease was largely due to an unfavorable price and volume mix of OTC NARCAN®across most U.S. sales channels, partially offset by lower product costs related to Canadian sales. Commercial Products segment adjusted gross margin in the current year period excludes the impact of intangible asset amortization of $9.4 million and the portion of stock-based compensation expense recorded as cost of sales of $0.1 million.

Previous wording

Other Products sales increased $13.7 million, or 596%, to $16.0 million for the three months ended March 31, 2026. The increase was primarily due to higher Canadian and other international BAT® sales.

Current wording

Other Products sales increased $47.9 million to $54.1 million for the three months ended June 30, 2026. The increase was primarily due to higher USG and international BAT® sales due to timing.

Previous 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.

Current wording

Anthrax MCM sales decreased $25.6 million, or 43%, to $33.9 million for the six months ended June 30, 2026. The decrease reflects the impact of lower international sales of ANTHRASIL®, mainly to the Canadian government, and USG sales of CYFENDUS®, partially offset by an increase of BioThrax® USG 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 Company delivery of orders that follow.

Previous wording

Smallpox MCM sales decreased $42.2 million, or 40%, to $64.2 million for the three months ended March 31, 2026. The decrease was primarily driven by lower ACAM2000® sales, largely due to reduced international volumes and an overall decline in TEMBEXA® sales driven by lower USG sales volume due to timing partially offset by higher international sales. These decreases were partially offset by an increase in CNJ-016® (VIGIV) USG sales due to timing. Fluctuations in revenues from Smallpox MCM result from the timing of the exercise of annual purchase options in the existing procurement contracts, the timing of USG purchases, the availability of governmental funding and the Company’s delivery of orders that follow.

Current wording

Smallpox MCM sales increased $18.9 million, or 13%, to $165.9 million for the six months ended June 30, 2026. The increase was primarily due to higher CNJ-016® (VIGIV) USG sales from timing, coupled with higher ACAM2000® sales due to timing of USG orders and international sales of TEMBEXA®. These increases were partially offset by lower international sales of ACAM2000® and lower TEMBEXA® USG sales due to timing. Fluctuations in revenues from Smallpox MCM result from the timing of the exercise of annual purchase options in the existing procurement contracts, the timing of USG purchases, the availability of governmental funding and Company delivery of orders that follow.

Previous wording

Cost of MCM product sales decreased $13.4 million, or 27%, to $36.8 million for the three months ended March 31, 2026. The decrease was primarily due to lower cost of sales for ANTHRASIL®, ACAM2000®, CYFENDUS® and TEMBEXA® reflecting reduced sales volumes and the absence of significant prior-year non-recurring manufacturing related costs, including shutdown and severance expenses. These decreases were partially offset by an increase in cost of sales for CNJ-016® (VIGIV), BAT® and BioThrax® driven by greater sales volumes and increased overhead costs at the Winnipeg facility.

Current wording

Cost of MCM Product Sales and Gross Margin

Previous wording

MCM Products gross margin decreased $41.7 million, or 42%, to $57.9 million for the three months ended March 31, 2026. MCM Product gross margin percentage decreased 7 percentage points to 57% for the three months ended March 31, 2026. The decrease in gross margin percentage was primarily due to an unfavorable sales mix weighted more heavily toward lower margin products as well as product absorption-related variances. These impacts were partially offset by a decrease in shutdown and severance related costs compared with the prior year. MCM Product segment adjusted gross margin in the current year period excludes the impacts of intangible asset amortization of $7.1 million, the portion of stock-based compensation expense recorded as cost of sales of $0.5 million, and inventory step-up provision of $0.1 million.

Current wording

MCM Product gross margin increased $40.0 million, or 32%, to $165.4 million for the six months ended June 30, 2026. MCM Product gross margin percentage increased 3 percentage points to 61% for the six months ended June 30, 2026. The increase in gross margin percentage was primarily due to a favorable sales volume and product mix which was weighted more heavily towards higher margin products, the margin improvements were partially offset by non-recurring manufacturing costs mentioned above. MCM Product segment adjusted gross margin in the current year period excludes the impacts of intangible asset amortization of $14.8 million, the portion of stock-based compensation expense recorded as cost of sales of $1.2 million and inventory step-up provision of $0.3 million.

Previous 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.

Current wording

Services revenues decreased $0.2 million, or 2%, to $11.4 million for the six months ended June 30, 2026. The decrease was primarily attributable to production activity at the Company’s Winnipeg facility.

Previous 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.

Current wording

As of June 30, 2026, our capital resources included $139.7 million of cash and cash equivalents and an available borrowing capacity of up to $50.0 million under the Revolving Credit Agreement. In addition, pursuant to the Term Loan Agreement, the Company has access to a delayed draw term loan facility through April 2028, subject to the satisfaction of certain conditions, including compliance with a maximum consolidated secured leverage ratio of 1.75 to 1.00 and other customary borrowing conditions. We have not drawn upon this facility as of June 30, 2026. 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 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 June 30, 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

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.

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 and six months ended June 30, 2026 was $0.1 million and $0.2 million, respectively.

Previous 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.

Current wording

During the three and six months ended June 30, 2026, the Company utilized $9.1 million and $18.2 million, including commissions and excise taxes, to repurchase 1.1 million and 1.9 million shares, respectively. The average price paid, excluding commissions and excise taxes, was $8.38 and $9.21 per share, respectively. As of June 30, 2026, the Company had $37.5 million available to repurchase shares under the Reauthorized Share Repurchase Program.

Previous 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.

Current wording

In August 2026, the Board of Directors authorized the Company to repurchase up to $75.0 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 during the three and six months ended June 30, 2026 and 2025 under a previous debt repurchase program that expired in May 2026.

Previous 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.

Current wording

Our future contractual obligations as of June 30, 2026 primarily included long-term obligations related to our outstanding borrowings under the Term Loan Agreement and the Senior Unsecured Notes, as well as lease arrangements and purchase commitments. In April 2026, the Company repaid in full all amounts outstanding under its Prior Term Loan Agreement in connection with its entry into the Term Loan Agreement. As of June 30, 2026, the Company had $589.7 million of fixed and variable rate debt with varying maturities. See Note 9, “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 three months ended March 31, 2026 and 2025:

Current wording

The following table provides information regarding our cash flows for the six months ended June 30, 2026 and 2025:

Previous 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.

Current wording

Net cash used in investing activities for the six months ended June 30, 2026 increased $131.4 million as compared with the six months ended June 30, 2025. The increase in cash used was primarily driven by a $50.4 million milestone payment related to a prior-year acquisition associated with development activities for Ebanga®. The increase was also attributable to the absence of investing cash inflows received in the prior year period, including milestone payments related to the sale of our travel health business to Bavarian Nordic, and proceeds from the sale of property, plant and equipment, including our Baltimore-Bayview facility to Syngene.

Previous wording

Net cash used in financing activities for the three months ended March 31, 2026 increased $11.0 million as compared with the three months ended March 31, 2025. The increase was primarily driven by increases in the purchases of treasury stock and taxes paid for stock-based compensation activity.

Current wording

Net cash used in financing activities for the six months ended June 30, 2026 increased $29.0 million as compared with the six months ended June 30, 2025. The increase was attributable to debt issuance and debt extinguishment costs incurred in connection with the April 2026 debt refinancing activities, as well as increased purchases of treasury stock and taxes paid related to stock-based compensation activity.