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Monday, H.C. Wainwright began covering Emergent BioSolutions Inc. (NYSE:EBS) with a Buy rating and a price target of $15.00 per share. The stock, currently trading at $8.27, has shown remarkable resilience with a 244% gain over the past year.
According to InvestingPro analysis, the company appears undervalued based on its Fair Value assessment. The firm highlighted the biopharmaceutical company's diversified business model, which includes its over-the-counter (OTC) opioid overdose reversal product NARCAN, its infectious disease vaccines and treatments, and its contract development and manufacturing organization (CDMO) services.
Emergent BioSolutions' leading product, NARCAN (naloxone nasal spray), is notable for its strong market share and brand recognition. The ongoing opioid epidemic in the United States, which saw 81,000 overdose deaths in 2023, underscores the demand for such treatments. Analysts project that NARCAN sales could surpass $400 million in 2024, although expectations are for sales to decline in subsequent years.
The company also offers a range of products targeting infectious diseases, such as the anthrax countermeasures ABthrax and CYFENDUS, as well as ACAM2000 for smallpox and monkeypox (Mpox). With a solid current ratio of 2.88 and liquid assets exceeding short-term obligations, InvestingPro data shows the company maintains a strong financial position to support its diverse product portfolio. InvestingPro subscribers have access to 7 additional key insights about EBS's financial health and market position.
The significance of these products is underscored by the continued threat of biological weapons and the current Mpox epidemic, which has resulted in over 200 deaths and more than 100,000 infections since 2022. Emergent recently secured a $50 million contract option for CYFENDUS, with deliveries scheduled to start within this calendar year and completion by April 2025.
Emergent's CDMO division operates in a competitive market anticipated to grow beyond $630 billion. The company serves prominent pharmaceutical clients, including Johnson & Johnson and AstraZeneca (NASDAQ:AZN) plc, though these firms are not rated by H.C. Wainwright.
The positive outlook from H.C. Wainwright on Emergent BioSolutions is based on the company's multiple well-positioned business segments and a favorable market presence in areas of significant and ongoing healthcare needs. The $15 price target reflects the firm's confidence in the company's growth potential over the next 12 months. While analysts project challenges with profitability this year, the company's revenue growth forecast stands at 5% for 2024.
For deeper insights into EBS's financial health and growth prospects, InvestingPro offers a comprehensive research report with detailed analysis of key performance metrics and future outlook.
In other recent news, Emergent BioSolutions Inc. has secured a $50 million contract with the U.S. Biomedical Advanced Research and Development Authority (BARDA) for its CYFENDUS® Anthrax Vaccine.
This follows a prior $30 million modification to supply the same vaccine, which received U.S. Food & Drug Administration approval in July 2023. Deliveries are expected to commence this year and conclude by April 2025.
In addition, Emergent BioSolutions has disclosed its operational and financial results for the third quarter of 2024. During a conference call led by Assistant Treasurer Frank Vargo, the company provided insights into its performance and future outlook, stressing that any forward-looking statements are dependent on current expectations and could be subject to change.
Emergent BioSolutions, which has been operating for 25 years, has an annual revenue of $1.13 billion, and continues to invest in growth despite current unprofitability.
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