EBS

MKT CAP $325.1MP/E —DIV YIELD —FCF YIELD 26.42%REV TTM $770.2M −9.6%NET INCOME −$176.8M −226.7%NET DEBT $450M52W 4.45 – 13.90NEXT EARNINGS Oct 28SEC XBRL · TTM TO Invalid Date

How EBS rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

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words, now 22,894

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A summary of our risks includes, but is not limited to, the following: • Reduced demand for and/or funding for procurement of CYFENDUS ® , ACAM2000 ® , CNJ-016 ® (VIGIV), BAT ® and/or BioThrax ® , discontinuation of funding of our USG procurement and development contracts. • Inability to secure follow-on product procurement contracts with the USG upon the expiration of any of our existing procurement contracts. • Our inability to maintain quality and compliance in all of our manufacturing operations. • Damage to, destruction of, or any unplanned disruption at our development and/or manufacturing facilities may impede our ability to manufacture our products, as well as deliver our bioservices. • Our operations, including our use of hazardous materials, chemicals, bacteria and viruses expose us to significant potential liabilities. • Clinical trials of product candidates are expensive and time-consuming, and their outcome is uncertain. • We may fail to capitalize on the most scientifically, clinically or commercially promising or profitable product candidates. • Failure to comply with complex laws and regulations pertaining to government contracts and resources required for responding to related government inquiries. • Conditions associated with approvals and ongoing regulation of products may limit how and the extent to which we manufacture and market them. • Failure to comply with various health care laws could result in substantial penalties. • Failure to comply with obligations under USG pricing programs may require reimbursement for underpayments and the payment of substantial penalties, sanctions and fines. • The extent to which we may be able to lawfully offer to sell and sell unapproved products in many jurisdictions may be unclear or ambiguous and such activities may subject us to regulatory enforcement actions. • Development and commercialization of pharmaceutical products and our biologic products are subject to evolving competition from private and public sector competition, or biosimiliar manufacturers. • NARCAN ® (naloxone HCl) Nasal Spray and KLOXXADO ® (naloxone HCI) Nasal Spray are currently subject to generic and branded competition and may be subject to additional branded and generic competition in the future. • Biologic products may be affected by the approval and entry of follow-on biologics, or biosimilars in the United States and other jurisdictions. • Challenges in obtaining or maintaining intellectual property rights and defense or enforcement of such rights. • Potential discrepancies or challenges with respect to licenses, including our failure to comply with obligations under such licenses. • Potential loss or misappropriation of proprietary information, know-how, and trade secrets which carries the risk of reducing the value of our technology and products. • Entry of competing generic drugs upon expiration of patents and/or regulatory exclusivity or with patents no longer in force. • The loss of sole-source suppliers or an increase in the price of inventory. • If other parties do not perform as contractually required or as expected, we may not be able to obtain regulatory approval for or commercialize our product candidates. • Unfavorable results of legal proceedings and government investigations could adversely impact our business, financial condition and results of operations. • Our work on PHTs has exposed us to criticism and may expose us to further criticism, from the media, government personnel and others, which could further harm our reputation, negatively affect our share price, operations and our ability to attract and retain talent. • Cybersecurity incidents involving us, our business partners, collaborators or other third parties could harm our ability to operate our business effectively in light of our heightened risk profile. • We could face product liability exposure associated with the use of our medical products.
GOVERNMENT CONTRACTING RISKS We currently derive, and historically derived a substantial portion of our revenue from USG procurement of CYFENDUS ® , ACAM2000 ® , CNJ-016 ® (VIGIV), TEMBEXA ® , BAT ® and/or BioThrax ® .
As with any approved product, there is a risk that we may encounter challenges causing delays or an inability to deliver CYFENDUS ® , ACAM2000 ® , CNJ-016 ® (VIGIV), TEMBEXA ® , BAT ® and/or BioThrax ® , which may have a material effect on our ability to generate and recognize revenue.
For example, in July 2023, we were awarded a 10-year contract by BARDA for the advanced development, manufacturing scale-up, and procurement of Ebanga TM (ansuvimab-zykl) treatment for Ebola.
The contract consists of a base period of performance with two option periods valued at approximately $121 million, which were exercised in September 2024 and January 2025, respectively, and option periods for procurement of Ebanga TM over five years valued at up to $583 million, one of which was awarded in September 2024 (valued at $41.9 million).
Competitive bidding for government contracts presents many risks and requirements, including: • the possibility that we may be ineligible to respond to a request for proposal; • the commitment of substantial time and attention of management and key employees to the preparation of bids and proposals; • the need to accurately estimate the resources and cost structure that will be required to perform any contract that we might be awarded; • the submission by third parties of protests to contracts that we are awarded that could result in delays or withdrawals of the respective requests for proposal; and • in the event our competitors protest or challenge contract or grant awards made to us through competitive bidding, the potential that we may incur expenses or delays, and that any such protest or challenge could result in the resubmission of bids based on modified specifications, or in the termination, reduction or modification of the awarded contract.
For example, ACAM2000 ® vaccine faces competition from JYNNEOS TM vaccine, which has been procured by the USG in recent years.
Our current procurement contracts with the HHS and the DoW are generally fixed price contracts.
A number of factors could cause interruptions, including: • equipment malfunctions or failures; • technology malfunctions; • cyber-attacks; • work stoppages or slowdowns; • civil unrest and protests, including by animal rights activists; • litigation, investigations or government enforcement actions; • damage to or destruction of our manufacturing equipment, or of one or more of our facilities; • findings and recommendations of health authorities or qualified persons in connection with facility inspections; • ongoing supply chain interruptions; and • product contamination or tampering.
Such deviations may require us to alter manufacturing processes or change manufacturers.
From time to time, we may experience deviations in the manufacturing process, including as a result of regulatory action, that may take significant time and resources to resolve and, if unresolved, may affect manufacturing output and could cause us to fail to satisfy customer orders or contractual commitments, lead to a termination of one or more of our contracts, lead to delays in our clinical trials, result in litigation, or result in other restrictions on the marketing or manufacturing of a product, any of which could be costly to us, damage our reputation and negatively impact our business.
Department of Agriculture and the DoW, as well as regulatory authorities in Canada.
The commercial success of our product candidates can depend on many factors, including accomplishing the following in an economical manner: • successful development, formulation and CGMP or Quality Management System Regulation ("QMSR") scale-up of manufacturing that meets FDA and/or foreign regulatory requirements; • successful program partnering; • successful completion of clinical or non-clinical development; • receipt of marketing approvals, clearances, or other authorizations from the FDA and equivalent foreign regulatory authorities; • establishment of commercial manufacturing processes and product supply arrangements; • training of a commercial sales force for the product; • successful registration and maintenance of relevant patent and/or other proprietary protection; • competitive pricing and market access; and • acceptance of the product by potential government and other customers.
In particular, we may fail to select or capitalize on the most scientifically, clinically or commercially promising or profitable product candidates or we may choose candidates for which government development funds are not available.
For a detailed description of the most significant regulations that affect our government contracting business, see the discussion under “Regulation - Government Contracting” elsewhere in this Annual Report.
We may be subject to government investigations into compliance with government acquisition regulations.
If we are audited or investigated and such audit or investigation were to uncover improper or illegal activities, we could be subject to civil and criminal fines and penalties, and administrative sanctions, including suspension or debarment from government contracting, and we could suffer significant reputational harm.
Our product candidates and the activities associated with them in the U.S. are subject to extensive FDA regulation and oversight.
In the United States, to obtain authorization from the FDA to market and sell any of our future drug, biologic, or vaccine products, we will be required to submit an NDA or BLA to the FDA.
Additional delays may result if an FDA Advisory Committee or other regulatory authority recommends non-approval or restrictions on approval.
In addition, we may experience delays or rejections based on additional government regulation from future legislation or administrative action or based on changes in regulatory authority policy during the period of product development, clinical trials and the review process.
There is a high rate of failure inherent in the medical product development process, and product candidates that appear promising at early stages of development may fail for a number of reasons.
Moreover, positive results from pre-clinical studies may not be predictive of similar results in human clinical trials and promising results from earlier clinical trials of a product candidate may not be replicated in later clinical trials.
Once marketing authorization has been granted, we and our business partners will remain subject to ongoing regulatory oversight of our medical products, including with respect to labeling; safety surveillance and reporting; registration and listing requirements; CGMP and QMSR requirements relating to manufacturing, quality control, quality assurance, and corresponding maintenance of records and documents; advertising and promotional activities; requirements regarding the distribution of samples to physicians and related recordkeeping; and medical device design, development and manufacturing.
In February 2024, FDA issued the Quality Management System Regulation (QMSR) Final Rule to amend the QSR, incorporating by reference ISO 13485:2016.
The QMSR became effective on February 2, 2026.
Department of Justice (“DOJ”) and the HHS Office of Inspector General (“OIG”), closely regulate and monitor the marketing and promotion of medical products to ensure that they are marketed in a manner consistent with the FDA-approved label and regulatory authorities in other countries may have similar policies.
For drug products, we must promote the product in a manner consistent with the full prescribing information or, for devices, consistent with the approved or cleared indications for use.
If we market unapproved/uncleared products or market our approved/cleared products for unapproved/uncleared indications, we may be subject to enforcement action.in the U.S. or foreign countries, including civil and administrative remedies (such as entering into corporate integrity agreements with the USG), as well as criminal sanctions.
Moreover, if the FDA or any foreign regulatory authority determines that any of our communications constitute pre-approval promotion or promotion of an off-label use, the FDA or foreign regulatory authority could request that we modify our promotional materials, issue an untitled letter or warning letter or the foreign equivalent, or subject us to regulatory or enforcement actions, including injunction, seizure, civil fine or criminal penalties.
For all FDA-regulated products, if the FDA finds that a manufacturer has failed to comply with applicable laws and regulations, or that a product is ineffective or poses an unreasonable health risk, it can institute or seek a wide variety of enforcement actions and other remedies, including but not limited to: • restrictions on such products, manufacturers or manufacturing processes; • restrictions on the labeling or marketing of a product; • restrictions on distribution or use of a product; • requirements to conduct post-marketing studies or clinical trials; • warning letters or untitled letters; • refusal to approve pending applications or supplements to approved applications that are submitted; • delay in or refusal to approve, clear or authorize pending PMA applications, 510(k) premarket submissions, or de novo classification requests; • fines, restitution or disgorgement of profits or revenues; • suspension or withdrawal of marketing approvals; • refusal to permit the import or export of our products; • product seizure; and • injunctions or the imposition of civil or criminal penalties.
Further, the Inflation Reduction Act of 2022 (the “IRA”) requires manufacturers of certain Part B and Part D drugs to issue to HHS rebates based on certain calculations and triggers (i.e., when drug prices increase and outpace the rate of inflation).
Among other things, HITECH makes HIPAA's security standards directly applicable to “business associates,” or independent contractors or agents of covered entities that create, receive or obtain protected health information in connection with providing a service for or on behalf of a covered entity; • the Physician Payments Sunshine Act and its implementing regulations require certain manufacturers of drugs, biologics, medical devices and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report certain payments and transfers of value made to U.S. physicians, other prescribers and teaching hospitals, as well as ownership or investment interests held by physicians, and their immediate family members; and • state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers; state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts; state, local and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s otherwise voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, obtain pharmaceutical agent licensure, and/or otherwise restrict payments that may be made to health care providers and entities; and state, local and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to health care providers or entities, or marketing expenditures .
Efforts to ensure that our business arrangements with third parties comply with healthcare laws and regulations will involve substantial costs.
Because we participate in the Medicaid rebate program, we are also required to report average sales price ("ASP"), information to CMS for certain categories of drugs that are paid for under Part B of the Medicare program.
The Medicaid rebate amount is computed each quarter based on our submission to CMS of our current average manufacturer price (“AMP”) and “best price” for the quarter.
We cannot ensure that CMS will not find our submissions to be incomplete or incorrect.
In addition, for the “Big Four” federal agencies—the DVA, the DoW, the PHS (including the Indian Health Service), and the Coast Guard—we must make covered drugs available at pricing that is capped at the statutory federal ceiling price ("FCP").
However, an EUA is not a long-term alternative to obtaining FDA approval, licensure, clearance, or other marketing authorization for a product.
Requirements for medical devices are similar and include QMSR compliance, establishment registration and device listing; record keeping; restrictions on advertising and promotion; post-market surveillance and reporting of adverse events and certain malfunctions, and restrictions on import and export.

and 60 more.

Gone since FY2024

A summary of our risks includes, but is not limited to, the following: • Reduced demand for and/or funding for procurement of CYFENDUS ® , ACAM2000 ® , VIGIV CNJ-016 ® , BAT ® and/or BioThrax ® , discontinuation of funding of our USG procurement and development contracts. • Inability to secure follow-on product procurement contracts with the USG upon the expiration of any of our existing procurement contracts. • Our inability to maintain quality and compliance in all of our manufacturing operations. • Damage to, destruction of, or any unplanned disruption at our development and/or manufacturing facilities may impede our ability to manufacture our products, as well as deliver our bioservices. • Our operations, including our use of hazardous materials, chemicals, bacteria and viruses expose us to significant potential liabilities. • Clinical trials of product candidates are expensive and time-consuming, and their outcome is uncertain. • We may fail to capitalize on the most scientifically, clinically or commercially promising or profitable product candidates. • Failure to comply with complex laws and regulations pertaining to government contracts and resources required for responding to related government inquiries. • Conditions associated with approvals and ongoing regulation of products may limit how and the extent to which we manufacture and market them. • Failure to comply with various health care laws could result in substantial penalties. • Failure to comply with obligations under USG pricing programs may require reimbursement for underpayments and the payment of substantial penalties, sanctions and fines. • The extent to which we may be able to lawfully offer to sell and sell unapproved products in many jurisdictions may be unclear or ambiguous and such activities may subject us to regulatory enforcement actions. • Development and commercialization of pharmaceutical products and our biologic products are subject to evolving competition from private and public sector competition, or biosimiliar manufacturers. • NARCAN ® (naloxone HCl) Nasal Spray is currently subject to generic and branded competition and may be subject to additional branded and generic competition in the future. • Biologic products may be affected by the approval and entry of follow-on biologics, or biosimilars in the United States and other jurisdictions. • Challenges in obtaining or maintaining intellectual property rights and defense or enforcement of such rights. • Potential discrepancies or challenges with respect to licenses, including our failure to comply with obligations under such licenses. • Potential loss or misappropriation of proprietary information, know-how, and trade secrets which carries the risk of reducing the value of our technology and products. • Entry of competing generic drugs upon expiration of patents and/or regulatory exclusivity or with patents no longer in force. • The loss of sole-source suppliers or an increase in the price of inventory. • If other parties do not perform as contractually required or as expected, we may not be able to obtain regulatory approval for or commercialize our product candidates. • Unfavorable results of legal proceedings and government investigations could adversely impact our business, financial condition and results of operations. • Our work on PHTs has exposed us to criticism and may expose us to further criticism, from the media, government personnel and others, which could further harm our reputation, negatively affect our share price, operations and our ability to attract and retain talent. • Cybersecurity incidents involving us, our business partners, collaborators or other third parties could harm our ability to operate our business effectively in light of our heightened risk profile. • We could face product liability exposure associated with the use of our medical products.
GOVERNMENT CONTRACTING RISKS We currently derive, and historically derived a substantial portion of our revenue from USG procurement of CYFENDUS ® , ACAM2000 ® , VIGIV CNJ-016 ® , BAT ® and/or BioThrax ® .
As with any approved product, there is a risk that we may encounter challenges causing delays or an inability to deliver CYFENDUS ® , ACAM2000 ® , VIGIV CNJ-016 ® , BAT ® and/or BioThrax ® , which may have a material effect on our ability to generate and recognize revenue.
On July 31, 2023, we were awarded a 10-year contract by BARDA for the advanced development, manufacturing scale-up, and procurement of Ebanga TM (ansuvimab-zykl) treatment for Ebola.
The contract consists of a base period of performance with two option periods valued at approximately $121 million, which were exercised on September 5, 2024 and January 10, 2025, respectively, and option periods for procurement of Ebanga TM over five years valued at up to $583 million, one of which was awarded in September 2024 (valued at $41.9 million).
Competitive bidding for government contracts presents many risks and requirements, including: • the possibility that we may be ineligible to respond to a request for proposal; • the commitment of substantial time and attention of management and key employees to the preparation of bids and proposals; • the need to accurately estimate the resources and cost structure that will be required to perform any contract that we might be awarded; • the submission by third parties of protests to our responses to requests for proposal that could result in delays or withdrawals of those requests for proposal; and • in the event our competitors protest or challenge contract or grant awards made to us through competitive bidding, the potential that we may incur expenses or delays, and that any such protest or challenge could result in the resubmission of bids based on modified specifications, or in the termination, reduction or modification of the awarded contract.
For example, ACAM2000 ® vaccine faces competition from JYNNEOS TM vaccine, which product has been procured by the USG in recent years.
Our current procurement contracts with the U.S.
Department of Health & Human Services (“HHS”) and the U.S.
Department of Defense (“DoD”) are generally fixed price contracts.
For example, in August 2023, the FDA inspected Emergent's Canton, Massachusetts facility and in December 2023, the FDA inspected Emergent's Lansing, Michigan facility, and in each case the FDA issued a Form FDA 483 and both facilities were classified as “voluntary action indicated” or VAI.
A VAI classification indicates that, although investigators found and documented objectionable conditions during the inspection, the FDA would not take or recommend any administrative or regulatory action.
In February 2024, the FDA inspected Emergent's Bayview facility in Baltimore, Maryland.
The Bayview facility inspection was classified as "no action indicated" or NAI.
A number of factors could cause interruptions, including: • equipment malfunctions or failures; • technology malfunctions; • cyber-attacks; • work stoppages or slowdowns; • civil unrest and protests, including by animal rights activists; • injunctions; • damage to or destruction of our manufacturing equipment, or of one or more of our facilities; • findings and recommendations of health authorities or qualified persons in connection with facility inspections; • ongoing supply chain interruptions; and • product contamination or tampering.
Such deviations may require us to revise manufacturing processes or change manufacturers.
From time to time, we may experience deviations in the manufacturing process, including as a result of regulatory action, that may take significant time and resources to resolve and, if unresolved, may affect manufacturing output and could cause us to fail to satisfy customer orders or contractual commitments, lead to a termination of one or more of our contracts, lead to delays in our clinical trials, result in litigation, or other restrictions on the marketing or manufacturing of a product, any of which could be costly to us, damage our reputation and negatively impact our business.
Department of Agriculture and the DoD, as well as regulatory authorities in Canada.
Difficulties manufacturing COVID-19 product candidates for certain Bioservices customers and the November 2021 termination of the Center for Innovation in Advanced Development and Manufacturing agreement with BARDA for COVID-19 vaccine development and manufacturing caused us to suffer considerable reputational and financial damage and resulted in the initiation of stockholder litigation and government investigations described elsewhere in this Annual Report.
In June 2022, we became involved in a contractual dispute with Janssen regarding the manufacture of its COVID-19 vaccine, which resulted in arbitration proceedings.
See Note 19, “Litigation” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K for more detail.
While the dispute initially created additional financial and operational uncertainty, the matter was resolved in July 2024.
Pursuant to the Settlement Agreement, the Company received $50.0 million from Janssen, and all claims among the parties arising from the Janssen Agreement were resolved; however, the dispute, litigation, the associated cost and reputational harm have had a material adverse effect on our business.
The commercial success of our product candidates can depend on many factors, including accomplishing the following in an economical manner: • successful development, formulation and CGMP or Quality System Regulation ("QSR") scale-up of manufacturing that meets FDA and/or foreign regulatory requirements; • successful program partnering; • successful completion of clinical or non-clinical development; • receipt of marketing approvals, clearances, or other authorizations from the FDA and equivalent foreign regulatory authorities; • establishment of commercial manufacturing processes and product supply arrangements; • training of a commercial sales force for the product; • successful registration and maintenance of relevant patent and/or other proprietary protection; • competitive pricing and market access; and • acceptance of the product by potential government and other customers.
In particular, we may fail to select or capitalize on the most scientifically, clinically or commercially promising or profitable product candidates or choose candidates for which government development funds are not available.
For a detailed description of the most significant regulations that affect our government contracting business, see the prior discussion under “Regulation - Government Contracting.” We may be subject to government investigations of compliance with government acquisition regulations.
If we are audited or investigated and such audit or investigation were to uncover improper or illegal activities, we could be subject to civil and criminal fines and penalties, administrative sanctions, including suspension or debarment from government contracting, and suffer significant reputational harm.
Our product candidates and the activities associated with them are subject to extensive FDA regulation and oversight.
In the United States, to obtain authorization from the FDA to market and sell any of our future drug, biologic, or vaccine products, we will be required to submit a New Drug Application (an “NDA”) or Biologics License Application (a “BLA”) to the FDA.
Likewise, the data in our device submissions may be insufficient to support approval, de novo classification or clearance where required, and we may not be able to demonstrate to the satisfaction of the FDA that our devices are safe or effective for their intended uses or, for a 510(k) device, that they are substantially equivalent to the predicate.
Even if we are granted 510(k) clearances, de novo authorizations, or premarket approval application ("PMA") approvals, they may include significant limitations on the indications for use for the device.
There is a high rate of failure inherent in the medical product development process, and product candidates that appear promising at early stages of development may fail for a number of reasons, and positive results from pre-clinical studies may not be predictive of similar results in human clinical trials.
Similarly, promising results from earlier clinical trials of a product candidate may not be replicated in later clinical trials.
Once marketing authorization has been granted, we and our business partners will remain subject to ongoing regulatory oversight of our medical products, including with respect to labeling; safety surveillance and reporting; registration and listing requirements; CGMP and QSR requirements relating to manufacturing, quality control, quality assurance, and corresponding maintenance of records and documents; advertising and promotional activities; requirements regarding the distribution of samples to physicians and related recordkeeping; and medical device design, development and manufacturing.
Department of Justice (“DOJ”) and the HHS Office of Inspector General (“OIG”), closely regulate and monitor the marketing and promotion of medical products to ensure that they are marketed in a manner consistent with the FDA-approved label.
For drug products, we must promote the product in a manner consistent with the full prescribing information or, for 510(k) cleared devices, consistent with the cleared indication.
If we market unapproved/uncleared products or market our approved/cleared products for unapproved/uncleared indications, we may be subject to enforcement action.
For all FDA-regulated products, if the FDA finds that a manufacturer has failed to comply with applicable laws and regulations, or that a product is ineffective or poses an unreasonable health risk, it can institute or seek a wide variety of enforcement actions and other remedies, including but not limited to: • restrictions on such products, manufacturers or manufacturing processes; • restrictions on the labeling or marketing of a product; • restrictions on distribution or use of a product; • requirements to conduct post-marketing studies or clinical trials; • warning letters or untitled letters; • refusal to approve pending applications or supplements to approved applications that are submitted; • delay in or refusal to approve, clear or authorize pending PMA applications, 510(k) premarket submissions, or de novo authorization requests; • fines, restitution or disgorgement of profits or revenues; • suspension or withdrawal of marketing approvals; • refusal to permit the import or export of our products; • product seizure; and • injunctions or the imposition of civil or criminal penalties.
Further, the Inflation Reduction Act of 2022 (the “IRA”), was signed into law on August 16, 2022.
While the IRA is still subject to rulemaking (and currently is being implemented through guidance documents from the responsible federal agencies), the IRA, as written, among other changes, gives HHS the ability and authority to directly negotiate with manufacturers the price that Medicare will pay for certain high-priced drugs.

and 89 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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