Emergent BioSolutions Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
August 6, 2024

There are 5 speakers on the call.

Operator

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 Q2 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.

Operator

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 as except as required by law, Emergent does not undertake to update any forward looking statement 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.

Operator

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 include Joe Papa, President and Chief Executive Officer, who will comment on the multi year plan update, key product highlights and future catalysts Rich Lindahl, EVP and Chief Financial Officer, who will speak to the current state of the company, financials for Q2 as well as 2024 full year guidance, including guidance for the Q3. This will be followed by Q and A. Finally, and for the benefit of those who will be listening to the replay of this webcast, this call was held and recorded on August 6, 2024.

Operator

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?

Speaker 1

Hello, everyone, and thank you for joining us today to discuss our Q2 results and our 2024 financial outlook. I am joined today by Rich Lindahl, our Chief Financial Officer. Following my opening remarks, Rich will detail our quarter 2 performance, provide guidance for the Q3 as well as our full year guidance. I will then review our future growth drivers, providing summarizing thoughts on our multi year plan, and then we'll open it up for Q and 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 turnaround and transform the business.

Speaker 1

It has 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 multiyear 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.

Speaker 1

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 out several activities that have been critical during the initial stabilization phase of our multiyear plan. We successfully amended our credit agreement expanding the runway to execute on our operational plans.

Speaker 1

Following our May 1 restructuring announcement and after the transaction with borrower closes for our Kansas site this quarter, Combined, we will have reduced our workforce by approximately 50% since January 2024. We will also have

Operator

a total of approximately $110,000,000

Speaker 1

in expense savings from these combined efforts. In July, we resolved our contract dispute with Janssen and received a $50,000,000 payment from the settlement. We successfully completed an FDA inspection at the Kansas facility in July, which is a full GMP surveillance inspection of our biologic products. This underscores our commitment to ensuring the highest standards of patient safety and product quality. I thank the team again for all these great efforts.

Speaker 1

Now on Slide 8, I walk through a series of strategic actions taken in the Q2 to reduce our total quantum of debt this year. On our previous earnings calls, we discussed divesting certain products and assets. To date, we have achieved a $75,000,000 divestment of RSDL to serve pharmaceuticals, dollars 30,000,000 from the sale of our cannabis facility to Bora Pharmaceuticals, which is expected to close this month and will result in a 3 50 person headcount reduction. The net proceeds from these two transactions is expected to more than satisfy the junior capital raise requirement under Emergent's amended credit facility. We also sold an empty underutilized warehouse at our Canton site for $7,000,000 We received $50,000,000 from Janssen following our contract dispute settlement and we expect $10,000,000 in the 3rd quarter related to the Bavarian Nordic milestone and anticipate another $20,000,000 by year end.

Speaker 1

Also, we have generated operational cash flow following our May business update and have improved working capital to be attributed to debt pay down. Rich will have more comments on that. Turning to our product business line on Slide 9. We continue to make progress delivering on our commitments. I'll start with key highlights around NARCAN nasal spray.

Speaker 1

We are continuing to invest in the expansion of NARCAN nasal spray, which is more crucial than ever as the opioid crisis continues. Last year, more than 100,000 lives were lost to a drug overdose, of which nearly 8 in 10 were caused by an opioid or a synthetic opioid. This is an unacceptable number of American lives lost every year. As a leading naloxone product, we are determined increase access points of NARCAN to help get the life saving product into the hands of more people. And in Canada, where the opioid related deaths continue to increase, we are working closely with Health Canada to distribute convenience kits containing Narcan, which are critical to first responders and people in a position to help save a life.

Speaker 1

We also believe our efforts to broaden access and increase awareness are contributing to the impact we're seeing across several hard hit areas. For example, states like New Jersey reported 1,007 suspected drug deaths in the 1st 6 months of 2024, but that's down 26% from last year. And Maine had an expected 12% decrease in opioid related overdose deaths. While it's not with promising to see the number of opioid deaths decreasing, unfortunately, opioid deaths still remain high and we believe that expanding access to NARCAN is needed. Annually, we expect to deliver NARCAN to about 18,000 individual patients across the U.

Speaker 1

S. And Canada through our NARCAN Direct program. We strive to serve as the best in class provider to all of our public interest customers. In fact, we announced just earlier today a new distribution center in Nevada. This new facility allows Emergent to further meet the increased demand for Naloxone by now having faster, more efficient delivery for NARCAN to all of our customers.

Speaker 1

We continue to tackle the many barriers to increase consumer access By offering online availability through Amazon and pharmacy websites, we are creating an easy access avenue for the people to have easy way to obtain delivered right at their doorstep. To date, we have distributed boxes of NARCAN to 32 1,000 retailers. OTC status for NARCAN has also enabled our business to business and workplace efforts. We have secured 5 major businesses that have ordered NARCAN, including United States Gypsum, Koppers and a leading financial services company, just to name a few. We launched narkand.com workplace, which enables businesses to order NARCAN and have it shipped to their offices and worksites.

Speaker 1

We continue to engage with new partners like the National Safety Council to educate and reach businesses around the importance of workplace safety. And just last month, the American Medical Association shared their support to put naloxone next to defibrillators in public places. To pull on this thread, we understand that approximately 1700 lives are saved by the defibrillators each year and the device costs about $18 on average. We also believe putting nalaxone, which is a fraction of the defibrillator cost, alongside this life saving measure could help tens of thousands of lives lost to opioid overdose each year. Our country is facing a public health crisis that has bipartisan support and continuous federal and state funding helps increase access to NARCAN for first responders.

Speaker 1

Just last week, a study in Lancet reported that fatal opioid overdoses contributed to a lower American life expectancy by nearly a year. The burden of these deaths on life expectancy on years of life lost is due to the high burden among younger adults. We clearly have more work to do here. In a new survey we conducted, it was found that younger generations aged 18 to 34 and those with high school level education were less likely to be aware naloxone can reverse the effects of fentanyl, putting these already vulnerable population at further risk. We will continue to strive to meet and respond to our customers' needs to ensure we maintain our leadership position.

Speaker 1

Turning to our medical countermeasures portfolio on Slide 10. In addition to opioid overdose epidemic, we maintain a leadership position in addressing leading public health threats, including anthrax, smallpox, botulism and Ebola. We are optimistic about the potential of our MCM products, including CAMVEXA and EBANGA and their ability to contribute to our future growth. This includes over $50,000,000 in contract modifications with the U. S.

Speaker 1

Government for our MTM business, including a 30,000,000 dollars order to supply Sifenvis, dollars 99,900,000 to supply ACAM2000 and new contract options totaling $122,900,000 despite U. S. Government big and bad. We believe that these milestones reaffirm our place as a trusted biodefense partner and demonstrate the strength of our total portfolio. Contracts also indicate continued runway for potential future procurement.

Speaker 1

In fact, we expect to receive approval from the FDA on our SBLA to expand ACAM for mpox by the end of the quarter. We have a strong line of sight to future procurement levels for our existing portfolio and look forward to pursuing additional opportunities for contract awards in the second half of the year. Next on Slide 11 is a look at our streamlined footprint of sites in Lansing, Michigan and Winnipeg. This is driven by our previously announced decision to scale back our bioservices work, while maintaining our ability to manufacture and deliver our products to customers. We are winding down our efforts at Bayview and Rockfield sites, further reducing our manufacturing footprint and our working capital.

Speaker 1

As mentioned, we sold our MT facility in Canton, Massachusetts for $7,000,000 which is demonstrative of our efforts to explore strategic alternatives for sites that are not linked to our core capabilities. In summary, on Slide 12, we have a diverse portfolio of products linked to our manufacturing network that we expect will continue to meet the demands both in U. S. And abroad. I'll now hand it over

Speaker 2

to Rich to review our financials. 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.

Speaker 2

We delivered solid second quarter results with continued momentum of NARCAN, shipments of anthrax and an international sale of ACAM2000. We received over $250,000,000 of contract modifications to continue supplying Sifendis, ACAM2000, VIG and BAT to the U. S. Government. We announced settlement agreement with Janssen Pharmaceuticals, which resulted in a $50,000,000 payment to Emergent on July 31.

Speaker 2

We announced $112,000,000 in asset sales. We entered into a definitive agreement to divest our Baltimore Camden facility to Bora Pharmaceuticals for $30,000,000 sold an underutilized warehouse at our Canton facility for $7,000,000 and sold our chemical decontamination product, RSDL, to serve pharmaceuticals for $75,000,000 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 1st milestone payment of $10,000,000 which we expect to receive in the 3rd quarter. We'll go into further detail on the balance sheet, but the influx of cash from these items is expected to provide approximately $200,000,000 that can be used for debt repayment this year.

Speaker 2

Since the beginning of 2023, we have also announced actions to reduce annual expenses by roughly $250,000,000 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 EBITDA guidance for 2024. Turning to our results, we had another strong quarter with revenue above our previously provided guidance. As indicated on Slide 14, highlights in the Q2 include total revenues of $255,000,000 a decrease versus the prior year due to timing of the U. S.

Speaker 2

Government order for ACAM. Total segment adjusted gross margin of 26% versus 43% in the prior year, primarily due to the Janssen settlement agreement, the write down of related assets and other one time charges and adjusted EBITDA in the quarter of negative $10,000,000 a reduction versus the prior year due to the timing of U. S. Government procurements and approximately $28,000,000 of one time charges. Turning to Slide 15, you'll note there are a number of non recurring items in our results for the quarter, many of which are added back as seen in the non GAAP reconciliation tables.

Speaker 2

A common theme here is that as part of our efforts to stabilize, turnaround and transform the business, we've taken several decisions that improve our future profitability, but result in short term charges. In particular, our actions to reduce our site footprint and significantly deemphasize our bioservices business required us to evaluate the related asset which in turn led to the impairments and write offs shown on the slide. We also resolved several legacy issues and now move ahead with the uncertainty of those matters behind us. Diving deeper into quarterly revenues, important items on Slide 16 include NARCAN sales of $120,000,000 which reflects continued robust demand for our opioid overdose reversal product. Compared to the prior year, we had a slightly unfavorable price volume mix in the U.

Speaker 2

S. Public interest channel, partially offset by higher sales of over the counter NARCAN. Anthrax NCM sales of $39,000,000 an increase of $18,000,000 versus the prior year, driven by timing of Sifenis and BioThrax sales. Smallpox MCM sales of $18,000,000 representing the international order of ACAM2000 in the Q2. The decline year over year is due to the timing of the U.

Speaker 2

S. Government procurement for ACAM2000, which we delivered in early July. Other product sales of $7,000,000 a decrease of $13,000,000 versus the prior year, primarily related to BAP and RSDL sales timing and total bioservices revenues of $65,000,000 which includes the $50,000,000 attributed to the arbitration settlement from Janssen. The remaining bioservices revenue in the quarter was primarily related to our Camden facility. Turning to operating expenses on Slide 17, cost of commercial product sales in the quarter was $53,000,000 influenced by the continued strong sales of NARCAN.

Speaker 2

Cost of MCM product sales in the quarter was $31,000,000 driven by sales of Secendis and BioFracs. Cost of bioservices up $212,000,000 reflecting the asset write down related to the Janssen settlement agreement offset by a decrease in overhead costs at our Maryland facilities R and D expense of $33,000,000 which includes project termination costs and restructuring costs associated with the May 1 announcement. Outside of those items, our core R and D costs are currently focused on the funded Ibanga development program. And SG and A spend of $86,000,000 including restructuring costs offset by lower employee and marketing related expenses. With that, let's move to Slide 18 and review segment performance during the quarter.

Speaker 2

In the Commercial segment, revenues were $120,000,000 comprised entirely of NARCAN and segment adjusted gross margin was $67,000,000 or 56%. In the NCM segment, revenues were $63,000,000 driven primarily by Anthrax and an international sale of ACAM2000. Segment adjusted gross margin was $35,000,000 or 55%. As for the services segment, revenues were $65,000,000 and segment adjusted gross margin was negative $36,000,000 I'll now take a moment to summarize our 2024 year to date performance as shown on Slide 19. First half revenue was $555,000,000 up 11 percent versus prior year driven by MCM and Bioservices.

Speaker 2

Year to date adjusted gross margin was $213,000,000 or 39%, reflecting our prior efforts to reduce costs as well as MCM sales timing and first half EBITDA was $57,000,000 an improvement of roughly $100,000,000 versus the prior year. Turning to Slide 20, we ended the 2nd quarter with $70,000,000 in cash and $83,000,000 of total liquidity, including availability under our revolving credit facility. And as of June 30, 2024, our net debt position was $794,000,000 a roughly $40,000,000 reduction versus the Q1. Net working capital was 3 $80,000,000 at June 30, a $53,000,000 improvement versus the prior quarter and $71,000,000 lower than the Q2 of 2023. We remain focused on continuing to optimize our working capital position to free up capital for debt repayment.

Speaker 2

Turning to 2024 guidance, please see Slide 21. While our efforts to improve operating performance will not happen immediately, we are making significant progress. As announced in our press this evening, we're updating our outlook for the full year 2024. For both revenue and profitability, as we did in May, we are raising the midpoint of our revenue and adjusted EBITDA guidance. Full year guidance is as follows and the details are shown on Slide 29 in the appendix.

Speaker 2

Total revenues of $1,050,000,000 to $1,125,000,000 commercial product sales of $450,000,000 to $480,000,000 we continue to see strong demand for NARCAN in the U. S. Public interest, Canadian and OTC channels. Having said that, we're taking a more conservative view on 2024 given developments in the competitive environment. MCM product sales of $455,000,000 to 490,000,000 dollars Since our last report on May 1, we received the $250,000,000 award for Sifendis, ACAM, BAT and VIG.

Speaker 2

We now have a large portion of our NCM revenue committed for 2024. Services segment revenue of 100 and $20,000,000 to $130,000,000 an increase versus our prior guidance due to the impact of the Janssen settlement. Shifting to profitability metrics, we're forecasting adjusted EBITDA of $140,000,000 to $180,000,000 The increase at the midpoint reflects the improved visibility of our NCM revenues as well as our continued focus on operating expenses. It's important to note that this guidance reflects the sale of RSDL, which we completed last week, but does not yet reflect the impact of the upcoming Camden facility sale as that transaction is not yet closed. Having said that, there is currently $15,000,000 to $20,000,000 of revenue and negative $5,000,000 to $10,000,000 of adjusted EBITDA related to Camden in our forecast for the second half of the year.

Speaker 2

For the full year of 2024, we're forecasting total segment adjusted gross margin of 42% to 45%. Shifting to the Q3, we're forecasting revenue in a range of $265,000,000 to $315,000,000 That's all for the financial update. I'll now turn the call back over to Joe for some final thoughts.

Speaker 1

Thank you, Rich. Our hardworking 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 number 23, I'd like to focus on the future growth drivers for our organization based on potential expansion of our in line products.

Speaker 1

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 partnership, 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 debt while we prepare to enter our turnaround phase and move towards an exciting future.

Speaker 1

With that, operator, let's open up the line for questions.

Operator

Certainly. Our question will be coming from Jessica Fye of JPMorgan. Your line is open.

Speaker 3

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 in 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?

Speaker 3

And maybe could you comment on potential peak sales for NARCAN?

Speaker 1

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.

Speaker 1

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.

Speaker 1

Number 1, 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 the purchase now the ability to make NARCAN more available to all the markets, I think, is 1st and foremost one of the big items for us. Beyond that, we clearly are working very closely to 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 those 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 Paul, other things you want to add to answer that question?

Speaker 4

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, we're really talking about we're barely just starting to see a decrease in deaths, but 100 deaths, but 100,000 deaths is way too much. And we've got to solve that, 1, 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.

Speaker 4

Obviously, we're online and on retail shelves and continue to drive 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.

Speaker 1

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, that does not often we 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.

Speaker 1

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 expense fee of the United States population by almost a year, just because of opioid, 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 allows us to be faster and more customer responsive, which is what we're trying to do for the future, create a leaner customer focused organization that has more flexibility. So I think all those things are the reason why we see NARCAN as being a great opportunity for the future.

Speaker 3

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

Speaker 1

Sure. We're working very closely. We still work very closely with the State of California to be clear. California had some very aggressive opioid reduction targets, which obviously we support the importance of that. We continue to supply products to the State of California.

Speaker 1

Once again, having a distribution center in Nevada makes it easier for us to deliver to the State 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 NARCIA is important. We believe our manufacturing capacity and capabilities is important.

Speaker 1

And we believe our distribution capability to 18 1,000 locations around the United States are 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.

Speaker 3

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?

Speaker 1

Are you asking specifically about NARCAN or just total business? So I understand just a couple of

Speaker 3

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

Speaker 1

Yes. Well, let me start with NARCAN because that's where the basis of your strategic 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, etcetera, looking at all avenues for NARCAN to bring down that cost.

Speaker 1

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 side. 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 talked about during the call, we're going to shut down the Rockville, we're shutting down the Bayview as we divest the Canton site, as we sell the Canton 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 that the remaining Lansing site, the Winnipeg site will become much more important and obviously more, we believe, efficient as we go forward.

Speaker 2

Yes, I think that's right. And I think, so 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 and D spending as we go forward. And then finally, on the SG and A side, we are working very hard to reduce our overall level of SG and A, which again will flow through as we come out of this year into next year.

Speaker 3

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

Speaker 2

So I think on INBANCO, 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 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.

Speaker 3

Great. Thanks so much.

Operator

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

Speaker 1

Well, thank you again everyone for joining us today. As I mentioned on said, 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 reduce debt by the working capital improvement. So all those things will be important parts of our future. Look forward to any additional questions as we have a chance to go out and talk to all of you.

Speaker 1

Thank you. Have a great day everyone.

Operator

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.

Operator

We look forward to speaking with you all in the future. Goodbye.

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