Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 24, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-33137 | |
Entity Registrant Name | EMERGENT BIOSOLUTIONS INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 14-1902018 | |
Entity Address, Address Line One | 400 Professional Drive Suite 400 | |
Entity Address, City or Town | Gaithersburg, | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 20879 | |
City Area Code | 240 | |
Local Phone Number | 631-3200 | |
Title of 12(b) Security | Common Stock, Par Value $0.001 per share | |
Trading Symbol | EBS | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 52,427,756 | |
Entity Central Index Key | 0001367644 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 181.5 | $ 167.8 |
Restricted cash | 0.2 | 0.2 |
Accounts receivable, net | 162.5 | 270.7 |
Inventories | 248.1 | 222.5 |
Income tax receivable, net | 10.2 | 4.6 |
Prepaid expenses and other current assets | 24.1 | 20.4 |
Total current assets | 626.6 | 686.2 |
Property, plant and equipment, net | 549.2 | 542.3 |
Intangible assets, net | 708.1 | 712.9 |
In-process research and development | 29 | 29 |
Goodwill | 266.4 | 266.6 |
Deferred tax assets, net | 17.6 | 13.4 |
Other assets | 81.8 | 76.9 |
Total assets | 2,278.7 | 2,327.3 |
Current liabilities: | ||
Accounts payable | 84.2 | 94.8 |
Accrued expenses | 41.5 | 39.5 |
Debt, current portion | 47.5 | 62.4 |
Debt, current portion | 26.3 | 12.9 |
Other current liabilities | 7.6 | 6.7 |
Total current liabilities | 207.1 | 216.3 |
Contingent consideration, net of current portion | 26.1 | 26 |
Debt, net of current portion | 762.9 | 798.4 |
Deferred tax liability | 63.9 | 63.9 |
Contract liabilities, net of current portion | 85 | 85.6 |
Other liabilities | 58.9 | 48.6 |
Total liabilities | 1,203.9 | 1,238.8 |
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 15.0 shares authorized, no shares issued or outstanding | 0 | 0 |
Common stock, $0.001 par value; 200.0 shares authorized, 53.5 and 53.0 shares issued; 52.3 and 51.7 shares outstanding, respectively | 0.1 | 0.1 |
Treasury stock, at cost, 1.2 common shares | (39.6) | (39.6) |
Additional paid-in capital | 726.2 | 716.1 |
Accumulated other comprehensive loss, net | (21.2) | (9.9) |
Retained earnings | 409.3 | 421.8 |
Total stockholders' equity | 1,074.8 | 1,088.5 |
Total liabilities and stockholders' equity | $ 2,278.7 | $ 2,327.3 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 15,000,000 | 15,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 53,500,000 | 53,000,000 |
Common stock, shares outstanding (in shares) | 52,300,000 | 51,700,000 |
Treasury stock (in shares) | 1,200,000 | 1,200,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues: | ||
Total revenues | $ 192.5 | $ 190.6 |
Operating expenses: | ||
Cost of product sales and contract development and manufacturing services | 76.9 | 91.8 |
Research and development | 42.7 | 46.1 |
Selling, general and administrative | 69.7 | 65.4 |
Amortization of intangible assets | 14.8 | 14.5 |
Total operating expenses | 204.1 | 217.8 |
Loss from operations | (11.6) | (27.2) |
Other (expense) income: | ||
Interest expense | (8.6) | (9.6) |
Other expense, net | (1.1) | (1) |
Total other expense, net | (9.7) | (10.6) |
Loss before provision for income taxes | (21.3) | (37.8) |
Income tax benefit | 8.8 | 11.8 |
Net loss | $ (12.5) | $ (26) |
Net loss per common share | ||
Basic (in dollars per share) | $ (0.24) | $ (0.51) |
Diluted (in dollars per share) | $ (0.24) | $ (0.51) |
Shares used in computing loss per share | ||
Basic (in shares) | 52 | 51.2 |
Diluted (in shares) | 52 | 51.2 |
Product sales, net | ||
Revenues: | ||
Total revenues | $ 148.2 | $ 153 |
Contract development and manufacturing services | ||
Revenues: | ||
Total revenues | 21.7 | 15.9 |
Contracts and grants | ||
Revenues: | ||
Total revenues | $ 22.6 | $ 21.7 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (12.5) | $ (26) |
Other comprehensive (loss) income, net of tax: | ||
Foreign currency translation | (0.1) | 1.2 |
Unrealized losses on hedging activities, net of tax | (11.2) | 0 |
Unrealized losses on pension benefit obligation, net of tax | 0 | (0.2) |
Total other comprehensive (loss) income, net of tax | (11.3) | 1 |
Comprehensive loss | $ (23.8) | $ (25) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Unrealized losses on hedging activities | $ 2,800 | $ 0 |
Unrealized losses related to foreign currency translations | $ 0 | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows provided by operating activities: | ||
Net income | $ (12.5) | $ (26) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Share-based compensation expense | 6.6 | 6.8 |
Depreciation and amortization | 28.2 | 26.6 |
Amortization of deferred financing costs | 0.7 | 0.7 |
Deferred income taxes | (4.2) | (11.4) |
Change in fair value of contingent consideration, net | 0.6 | 1.7 |
Other | 0 | (0.1) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 108.2 | 141.6 |
Inventories | (25.6) | (5.2) |
Prepaid expenses and other assets | (15.3) | (16.6) |
Accounts payable | (15.6) | 4.2 |
Accrued expenses | 1.1 | 1.7 |
Accrued compensation | (14.9) | (21.3) |
Contract liabilities | 0.5 | 2.1 |
Net cash provided by operating activities: | 57.8 | 104.8 |
Cash flows used in investing activities: | ||
Purchases of property, plant and equipment and other | (24.2) | (21.4) |
Net cash used in investing activities: | (24.2) | (21.4) |
Cash flows used in financing activities: | ||
Proceeds from revolving credit facility | 0 | 30 |
Principal payments on revolving credit facility | (20) | (80) |
Principal payments on term loan facility | (2.8) | (2.8) |
Proceeds from issuance of common stock upon exercise of stock options | 9.1 | 0.9 |
Taxes paid on behalf of employees for equity activity | (5.6) | (6) |
Contingent consideration payments | (0.7) | (0.5) |
Net cash used in financing activities: | (20) | (58.4) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 0.1 | 0 |
Net increase in cash, cash equivalents and restricted cash | 13.7 | 25 |
Cash, cash equivalents and restricted cash at beginning of period | 168 | 112.4 |
Cash, cash equivalents and restricted cash at end of period | 181.7 | 137.4 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest | 7.4 | 8.9 |
Cash paid during the period for income taxes | 3.6 | 5 |
Supplemental information on non-cash investing and financing activities: | ||
Purchases of property, plant and equipment unpaid at period end | 7.3 | 7.1 |
Reconciliation of cash and cash equivalent and restricted cash | ||
Total cash, cash equivalents and restricted cash | $ 181.7 | $ 137.4 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Millions | Total | $0.001 Par Value Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Retained Earnings |
Balance (in shares) at Dec. 31, 2018 | 52,400,000 | 1,200,000 | ||||
Balance at Dec. 31, 2018 | $ 1,010.9 | $ 0.1 | $ 688.6 | $ (39.6) | $ (5.5) | $ 367.3 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Employee equity plans activity (in shares) | 200,000 | |||||
Employee equity plans activity | 1.6 | 1.6 | $ 0 | |||
Net income | (26) | (26) | ||||
Other comprehensive income | 1 | 1 | ||||
Balance (in shares) at Mar. 31, 2019 | 52,600,000 | 1,200,000 | ||||
Balance at Mar. 31, 2019 | $ 987.5 | $ 0.1 | 690.2 | $ (39.6) | (4.5) | 341.3 |
Balance (in shares) at Dec. 31, 2019 | 53,000,000 | 53,000,000 | 1,200,000 | |||
Balance at Dec. 31, 2019 | $ 1,088.5 | $ 0.1 | 716.1 | $ (39.6) | (9.9) | 421.8 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Employee equity plans activity (in shares) | 500,000 | |||||
Employee equity plans activity | 10.1 | 10.1 | $ 0 | |||
Net income | (12.5) | (12.5) | ||||
Other comprehensive income | $ (11.3) | (11.3) | ||||
Balance (in shares) at Mar. 31, 2020 | 53,500,000 | 53,500,000 | 1,200,000 | |||
Balance at Mar. 31, 2020 | $ 1,074.8 | $ 0.1 | $ 726.2 | $ (39.6) | $ (21.2) | $ 409.3 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Statement of Stockholders' Equity [Abstract] | |||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Business
Business | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | Business Organization and business Emergent BioSolutions Inc. (the "Company" or "Emergent") is a global life sciences company focused on providing civilian and military populations a portfolio of innovative preparedness and response products and solutions that address accidental, deliberate and naturally occurring public health threats ("PHTs," each a “PHT”). The Company is focused on the following six distinct PHT categories: Chemical, Biological, Radiological, Nuclear and Explosives ("CBRNE"); emerging infectious diseases ("EID"); travel health; emerging health crises; acute/emergency care, and contract development and manufacturing ("CDMO") . The Company has a product portfolio of ten products and product candidates (vaccines, therapeutics, and drug-device combination products) that contribute a substantial portion of our revenue. The Company also has two product candidates that are procured under special circumstances by certain government agencies, although they are not approved by the FDA or any health agency. The U.S. government (the "USG') is the Company's largest customer and provides the Company with substantial funding for the development of a number of it s product candidates. The Company's product portfolio includes: Vaccines ▪ 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; ▪ BioThrax ® (Anthrax Vaccine Adsorbed), the only vaccine licensed by the U.S. Food and Drug Administration ("FDA"), for the general use prophylaxis and post-exposure prophylaxis of anthrax disease; ▪ Vaxchora® (Cholera Vaccine, Live, Oral), the only FDA-licensed vaccine for the prevention of cholera; and ▪ Vivotif® (Typhoid Vaccine Live Oral Ty21a), the only oral vaccine licensed by the FDA for the prevention of typhoid fever. Devices ▪ NARCAN® (naloxone HCl) Nasal Spray, the first needle-free formulation of naloxone approved by the FDA and Health Canada, for the emergency treatment of known or suspected opioid overdose as manifested by respiratory and/or central nervous system depression; and ▪ RSDL ® (Reactive Skin Decontamination Lotion Kit), the only medical device cleared by the FDA to remove or neutralize the following chemical warfare agents from the skin: tabun, sarin, soman, cyclohexyl sarin, VR, VX, mustard gas and T-2 toxin; Therapeutics ▪ raxibacumab (Anthrax Monoclonal), the first fully human monoclonal antibody therapeutic licensed by the FDA for the treatment and prophylaxis of inhalational anthrax; ▪ Anthrasil ® (Anthrax Immune Globulin Intravenous (Human)), the only polyclonal antibody therapeutic licensed by the FDA and Health Canada for the treatment of inhalational anthrax; ▪ BAT® (Botulism Antitoxin Heptavalent (A,B,C,D,E,F,G)-(Equine)), the only heptavalent antibody therapeutic licensed by the FDA and Health Canada for the treatment of botulism; and ▪ VIGIV (Vaccinia Immune Globulin Intravenous (Human)), the only polyclonal antibody therapeutic licensed by the FDA and Health Canada to address certain complications from smallpox vaccination. Product Candidates ▪ AV7909 ® (Anthrax Vaccine Absorbed with Adjuvant), is a product candidate being developed as a next generation anthrax vaccine for post-exposure prophylaxis of disease resulting from suspected or confirmed Bacillus anthracis exposure. The USG has started procuring AV7909 for the Strategic National Stockpile (SNS) prior to its approval by the FDA and has been reducing its purchases of BioThrax as a result; and ▪ Trobigard® is a combination drug-device auto-injector product candidate that contains atropine sulfate and obidoxime chloride. It has not been approved by the FDA or any similar health regulatory body, but it is procured by certain authorized government buyers under special circumstances for potential use as a nerve agent countermeasure. The Company also generates revenue from contract development and manufacturing services on a clinical and commercial (small and large) scale by providing such services to the pharmaceutical and biotechnology industry. These services include process development and bulk drug substance and drug product manufacturing of biologics, fill/finish formulation and analytical development services for injectable and other sterile products, inclusive of process design, technical transfer, manufacturing validations, aseptic filling, lyophilization, final packaging and stability studies, as well as manufacturing of vial and pre-filled syringe formats across bacterial, viral and mammalian therapy technology platforms. The Company operates as one operating segment. |
Basis of Presentation and Princ
Basis of Presentation and Principles of Consolidation | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation Basis of presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Emergent and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements included herein have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X issued by the SEC. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 , as filed with the SEC. All adjustments contained in the accompanying unaudited condensed consolidated financial statements are of a normal recurring nature and are necessary to present fairly the financial position of the Company as of March 31, 2020 . Interim results are not necessarily indicative of results that may be expected for any other interim period or for an entire year. Significant accounting policies During the three months ended March 31, 2020 , there have been no significant changes to the Company's summary of significant accounting policies contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 , as filed with the SEC. Fair value measurements Separate disclosure is required for assets and liabilities measured at fair value on a recurring basis from those measured at fair value on a non-recurring basis. The Company has cash held in money market accounts (level 1), contingent purchase consideration (level 3) and interest rate swaps arrangements (level 2) that are measured at fair value on a recurring basis (Note 7 and Note 8). As of March 31, 2020 and December 31, 2019 , the Company held cash in money market accounts of $90.7 million and $52.2 million , respectively. The Company also records the assets and liabilities of acquisitions at fair value. On a non-recurring basis, the Company measures its IPR&D assets (level 3) using fair value measurements. As of March 31, 2020 and December 31, 2019 , the Company had no other significant assets or liabilities that were measured at fair value. Recently issued accounting standards Recently Adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13") In June 2016, the FASB issued ASU 2016-13. ASU 2016-13 provides guidance on measurement of credit losses on financial instruments that changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and that requires entities to use a new, forward-looking “expected loss” model that is expected to generally result in the earlier recognition of allowances for losses. The guidance became effective for annual periods beginning after December 15, 2019, including interim periods within those years. The Company adopted the standard as of January 1, 2020 and has evaluated the effects of this standard and determined that the adoption did not have a material impact on the Company's consolidated financial statements. ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820) ("ASU 2018-13") In August 2018, the FASB issued ASU 2018-13. ASU 2018-13 improves the disclosure requirements on fair value measurements. The updated guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for any removed or modified disclosures. The Company adopted the standard as of January 1, 2020 which has resulted in expanded disclosures around the Company's recurring level 3 fair value measurements. The disclosures are included in note 7 of the condensed consolidated financial statements. ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15") In August 2018, the FASB issued ASU 2018-15. ASU 2018-15 clarifies the accounting for implementation costs in cloud computing arrangements. ASU 2018-15 is effective for all entities for fiscal years beginning after December 15, 2019. The Company adopted the standard as of January 1, 2020 and has evaluated the effects of this standard and determined that the adoption did not have a material impact on the Company's consolidated financial statements. ASU 2017-4, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-4") In January 2017, the FASB issued ASU 2017-4. ASU 2017-4 simplifies the subsequent measurement of goodwill and eliminates Step 2 from the goodwill impairment test. ASU 2017-4 is effective for annual and interim goodwill tests beginning after December 15, 2019. The Company's measurement period is September 30. The Company adopted the standard as of January 1, 2020 and has evaluated the effects of this standard and determined that the adoption will not have a material impact on the Company's consolidation financial statements. Not Yet Adopted ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting In March 2020, the FASB issued Topic 848. Topic 848 provides relief for impacted areas as it relates to impending reference rate reform. ASC 848 contains optional expedients and exceptions for applying US GAAP to debt arrangements, contracts, hedging relationships, and other areas or transactions that are impacted by reference rate reform. This guidance is effective for upon issuance for all entities and elections of certain optional expedients are required to apply the provisions of the guidance. The Company continues to assess all potential impacts of the standard and will disclose the nature and reason for any elections that the Company makes. ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans ("ASU 2018-14") In August 2018, the FASB issued ASU 2018-14. ASU 2018-14 modifies the disclosure requirements for defined benefit pension plans and other post-retirement plans. ASU 2018-14 is effective for all entities for fiscal years ending after December 15, 2020, and earlier adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2018-14 on its consolidated financial statements. ASU 2019-12, Simplifications to Accounting for Income Taxes ("ASU 2019-12") In December 2019, the FASB issued ASU 2019-12. ASU 2019-12 removes certain exceptions for recognizing deferred taxes for investments, performing intra-period allocation and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including deferred taxes for goodwill and allocating taxes for members of a consolidated group. ASU 2019-12 is effective for all entities for fiscal years beginning after December 15, 2020, and earlier adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2019-12 on its consolidated financial statements. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The components of inventory are as follows: March 31, 2020 December 31, 2019 Raw materials and supplies $ 77.7 $ 70.5 Work-in-process 114.2 89.7 Finished goods 56.2 62.3 Total inventories $ 248.1 $ 222.5 |
Property, plant and equipment
Property, plant and equipment | 3 Months Ended |
Mar. 31, 2020 | |
Property Plant and Equipment Income Statement Disclosures [Abstract] | |
Property, plant and equipment | Property, plant and equipment Property, plant and equipment consisted of the following: March 31, 2020 December 31, 2019 Land and improvements $ 46.6 $ 46.5 Buildings, building improvements and leasehold improvements 242.3 234.8 Furniture and equipment 340.0 334.2 Software 55.6 55.7 Construction-in-progress 86.5 81.5 Property, plant and equipment, gross 771.0 752.7 Accumulated depreciation (221.8 ) (210.4 ) Total property, plant and equipment, net $ 549.2 $ 542.3 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | Leases The Company has operating leases for corporate offices, research and development facilities and manufacturing facilities. We determine if an arrangement is a lease at inception. Operating leases are included in right-of-use (ROU) assets and liabilities. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses an implicit rate when readily determinable. At the beginning of a lease, the operating lease ROU asset also includes any concentrated lease payments expected to be paid and excludes lease incentives. The Company's lease ROU asset may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are accounted for separately. The Company's leases have remaining lease terms of 1 year to 15 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within 1 year. The components of lease expense were as follows: Three months ended March 31, 2020 2019 Operating lease cost: Amortization of right-of-use assets $ 1.1 $ 0.6 Interest on lease liabilities 0.3 0.1 Total operating lease cost $ 1.4 $ 0.7 Supplemental balance sheet information related to leases was as follows: (In millions, except lease term and discount rate) Balance Sheet location March 31, 2020 December 31, 2019 Operating lease right-of-use assets Other assets $ 25.6 $ 24.7 Operating lease liabilities, current portion Other current liabilities 4.2 3.6 Operating lease liabilities Other liabilities 22.7 22.1 Total operating lease liabilities $ 26.9 $ 25.7 Operating leases: Weighted average remaining lease term (years) 7.7 8.0 Weighted average discount rate 4.2 % 4.2 % |
Leases | Leases The Company has operating leases for corporate offices, research and development facilities and manufacturing facilities. We determine if an arrangement is a lease at inception. Operating leases are included in right-of-use (ROU) assets and liabilities. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses an implicit rate when readily determinable. At the beginning of a lease, the operating lease ROU asset also includes any concentrated lease payments expected to be paid and excludes lease incentives. The Company's lease ROU asset may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are accounted for separately. The Company's leases have remaining lease terms of 1 year to 15 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within 1 year. The components of lease expense were as follows: Three months ended March 31, 2020 2019 Operating lease cost: Amortization of right-of-use assets $ 1.1 $ 0.6 Interest on lease liabilities 0.3 0.1 Total operating lease cost $ 1.4 $ 0.7 Supplemental balance sheet information related to leases was as follows: (In millions, except lease term and discount rate) Balance Sheet location March 31, 2020 December 31, 2019 Operating lease right-of-use assets Other assets $ 25.6 $ 24.7 Operating lease liabilities, current portion Other current liabilities 4.2 3.6 Operating lease liabilities Other liabilities 22.7 22.1 Total operating lease liabilities $ 26.9 $ 25.7 Operating leases: Weighted average remaining lease term (years) 7.7 8.0 Weighted average discount rate 4.2 % 4.2 % |
Intangible assets
Intangible assets | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible assets The Company's intangible as sets consist of products acquired via business combinations or asset acquisitions. The following tables summarize the Company's intangible assets for the periods ended March 31, 2020 and December 31, 2019: March 31, 2020 (in millions) Estimated Life Cost Additions Accumulated Amortization Net Products 9-22 years $ 788.0 $ 10.0 $ 96.0 $ 702.0 Customer relationships 8 years 28.6 — 23.8 4.8 Contract development and manufacturing 8 years 5.5 — 4.2 1.3 Total intangible assets $ 822.1 $ 10.0 $ 124.0 $ 708.1 December 31, 2019 (in millions) Estimated Life Cost Accumulated Amortization Net Products 9-22 years $ 788.0 $ 82.2 $ 705.8 Customer relationships 8 years 28.6 23.0 $ 5.6 Contract development and manufacturing 8 years 5.5 4.0 $ 1.5 Total intangible assets $ 822.1 $ 109.2 $ 712.9 During the three months ended March 31, 2020 , the Company achieved a sales milestone that resulted in a $10.0 million obligation related to the Company's asset acquisition of raxibacumab in October 2017. The achievement of the milestone resulted in an increase to intangible assets with a corresponding increase in accounts payable. As of March 31, 2020 there are no remaining contractual obligations for sales milestones related to the raxibacumab acquisition. During the three months ended March 31, 2020 and 2019 , the Company recorded amortization expense for intangible assets of $ 14.8 million and $ 14.5 million, respectively. As of March 31, 2020 , the weighted average amortization period remaining for intangible assets was 13.3 years. In-process research and development (IPR&D) assets are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts. There were no changes to the Company's IPR&D assets during the three months ended March 31, 2020. Goodwill was $ 266.4 million and $ 266.6 million for the periods ended March 31, 2020 and December 31, 2019 |
Contingent consideration
Contingent consideration | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Contingent Consideration | Contingent consideration Contingent consideration liabilities associated with business combinations are fair value measurement items. These liabilities represent an obligation of the Company to transfer additional assets to the selling shareholders and owners if future events occur or conditions are met. These liabilities associated with business combinations are measured at fair value at inception and at each subsequent reporting date. The changes in the fair value are primarily due to the expected amount and timing of future net sales, which are inputs that have no observable market (Level 3). The following table is a reconciliation of the beginning and ending balance of contingent considerations and is based on level 3 significant unobservable inputs. Balance at December 31, 2019 $ 29.2 Change in fair value 0.6 Settlements (0.7 ) Balance at March 31, 2020 $ 29.1 The recurring Level 3 fair value measurements the Company's contingent consideration liability include the following significant unobservable inputs: Contingent Consideration Liability Fair Value as of March 31, 2020 Valuation Technique Unobservable Input Range Weighted Average Revenue milestone and royalty based $29.1 million Discounted cash flow Discount rate 2.5% - 8.6% 4.3% Probability of payment 10.0% - 40.0% 20.9% Projected year of payment 2020 - 2028 2022 |
Derivative instruments and hedg
Derivative instruments and hedging activities | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure | Derivative instruments and hedging activities Risk management objective of using derivatives The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company has entered into interest rate swaps to manage exposures that arise from the Company's senior secured credit agreement's payments of variable interest rate debt. Accounting policy for derivative instruments and hedging activities The Company entered into interest rate swaps in June 2019. The Company's interest rate swaps qualify for hedge accounting as cash flow hedges. All derivatives are recorded on the balance sheet at fair value. Hedge accounting provides for the matching of the timing of gain or loss recognition on these interest rate swaps with the recognition of the changes in interest expense on the Company's variable rate debt. For derivatives designated as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. The cash flows from the designated interest rate swaps are classified as a component of operating cash flows, similar to interest expense. If current fair values of designated interest rate swaps re mained static over the next twelve months, the Company would reclassify $5.0 million of net deferred losses from accumulated other comprehensive loss to the statement of operations over the next twelve month period. All outstanding cash flow hedges mature in October 2023. As of March 31, 2020 , the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk: Number of Instruments Notional Interest rate swaps 7 $ 350.0 The table below presents the fair value of the Company’s derivative financial instruments designated as hedges as well as their classification on the balance sheet. Asset Derivatives Liability Derivatives March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Balance Sheet Location Fair Value Balance Sheet Location Fair Value Interest Rate Swaps Other Current Assets $ — Other Current Assets $ — Other Current Liabilities $ 4.8 Other Current Liabilities $ — Other Assets $ — Other Assets $ — Other Liabilities $ 11.2 Other Liabilities $ 2.0 The valuation of the interest rate swaps is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each interest rate swap. This analysis reflects the contractual terms of the interest rate swaps, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. To comply with the provisions of ASC 820, Fair Value Measurement, we incorporate credit valuation adjustments in the fair value measurements to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk. These credit valuation adjustments were concluded to not be significant inputs for the fair value calculations for the periods presented. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as the posting of collateral, thresholds, mutual puts and guarantees. The valuation of interest rate swaps fall into Level 2 in the fair value hierarchy. The table below presents the effect of cash flow hedge accounting on accumulated other comprehensive income. Hedging derivatives Cumulative Amount of Gain/(Loss) Recognized in OCI on Derivative Location of Gain or (Loss) Reclassified from Accumulated OCI into Income Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income March 31, Three months ended March 31, 2020 2019 2020 2019 Interest Rate Swaps $ (16.0 ) $ — Interest expense $ — $ — |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt The components of debt are as follows: March 31, 2020 December 31, 2019 Senior secured credit agreement - Term loan due 2023 $ 433.1 $ 435.9 Senior secured credit agreement - Revolver loan due 2023 353.0 373.0 2.875% Convertible Senior Notes due 2021 10.6 10.6 Other 3.0 3.0 Total debt 799.7 822.5 Current portion of long-term debt, net of debt issuance costs (26.3 ) (12.9 ) Unamortized debt issuance costs (10.5 ) (11.2 ) Non-current portion of debt $ 762.9 $ 798.4 Senior secured credit agreement In October 2018, the Company entered into a senior secured credit agreement with multiple lending institutions (the "Credit Agreement"). The terms of the credit agreement include (i) a revolving credit facility (the "Revolving Credit Facility") of $600 million with a maturity date of October 13, 2023, and (ii) a term loan with a principal amount of $450 million (the "Term Loan Facility," and together with the Revolving Credit Facility, the "Senior Secured Credit Facilities"). The Company may request incremental term loan facilities or increases in the Revolving Credit Facility (each an "Incremental Loan") as long as requirements relating to net leverage ratio will be maintained on a pro forma basis. Borrowings under the Revolving Credit Facility and the Term Loan Facility will bear interest at a rate per annum equal to (a) a eurocurrency rate plus a margin ranging from 1.25% to 2.00% per annum, depending on the Company's consolidated net leverage ratio or (b) a base rate (which is the highest of the prime rate, the federal funds rate plus 0.50% , and a eurocurrency rate for an interest period of one month plus 1% plus a margin ranging from 0.25% to 1.00% , depending on the Company's consolidated net leverage ratio. The Company is required to make quarterly payments under the Credit Agreement for accrued and unpaid interest on the outstanding principal balance, based on the above interest rates. In addition, the Company is required to pay commitment fees ranging from 0.15% to 0.30% per annum, depending on the Company's consolidated net leverage ratio, in respect of the average daily unused commitments under the Revolving Credit Facility. The Company is to repay the outstanding principal amount of the Term Loan Facility in quarterly installments based on an annual percentage equal to 2.5% of the original principal amount of the Term Loan Facility during each of the first two years of the Term Loan Facility, 5% of the original principal amount of the Term Loan Facility during the third year of the Term Loan Facility and 7.5% of the original principal amount of the Term Loan Facility during each year of the remainder of the term of the Term Loan Facility until the maturity date of the Term Loan Facility, at which time the entire unpaid principal balance of the Term Loan Facility will be due and payable. The Company has the right to prepay the Term Loan Facility without premium or penalty. The Revolving Credit Facility and the Term Loan Facility mature (unless earlier terminated) on October 13, 2023 . The Credit Agreement also requires mandatory prepayments of the Term Loan Facility in the event the Company or its Subsidiaries (a) incur indebtedness not otherwise permitted under the Credit Agreement or (b) receive cash proceeds in excess of $100 million during the term of the Credit Agreement from certain dispositions of property or from casualty events involving their property, subject to certain reinvestment rights. The financial covenants under the Credit Agreement currently require the quarterly presentation of a minimum consolidated 12-month rolling debt service coverage ratio of 2.50 to 1.00, and a maximum consolidated net leverage ratio of 3.75 to 1.00 for the quarterly filing periods from October 1, 2019 through September 29, 2020 and 3.50 to 1.0, thereafter, which may be adjusted to 4.00 to 1.00 for a four quarter period in connection with a material permitted acquisition. Negative covenants in the Credit Agreement, among other things, limit the ability of the Company to incur indebtedness and liens, dispose of assets, make investments, enter into certain merger or consolidation transactions and make restricted payments. As of the date of these financial statements, the Company is in compliance with all affirmative and negative covenants. 2.875% Convertible senior notes due 2021 On January 29, 2014 , the Company issued 2.875% convertible senior notes due 2021 (the "Notes"). The Notes bear interest at a rate of 2.875% per year, payable semi-annually in arrears on January 15 and July 15 of each year. The Notes mature on January 15, 2021 . |
Revenue recognition
Revenue recognition | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue recognition | Revenue recognition The Company operates as one operating segment. Therefore, results of its operations are reported on a consolidated basis for purposes of segment reporting, consistent with internal management reporting. The Company's revenues disaggregated by the major sources were as follows: Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 U.S. Non-U.S. Total U.S. Non-U.S. Total Product sales, net $ 63.9 $ 84.3 $ 148.2 $ 73.3 $ 79.7 $ 153.0 Contract development and manufacturing services — 21.7 21.7 — 15.9 15.9 Contracts and grants 22.0 0.6 22.6 20.4 1.3 21.7 Total revenues $ 85.9 $ 106.6 $ 192.5 $ 93.7 $ 96.9 $ 190.6 Contract liabilities When performance obligations are not transferred to a customer at the end of a reporting period, cash received associated with amounts allocated to those performance obligations is reflected as contract liabilities on the consolidated balance sheets and is deferred until control of these performance obligations is transferred to the customer. The following table presents the rollforward of the contract liability balances: December 31, 2019 $ 88.9 Deferral of revenue 6.4 Revenue recognized (5.9 ) March 31, 2020 $ 89.4 Transaction price allocated to remaining performance obligations As of March 31, 2020 , the Company expects future revenues of approximately $ 555.9 million associated with performance obligations that have not been satisfied. The Company expects to recognize a majority of these revenues within the next 24 months, with the remainder recognized thereafter. However, the amount and timing of revenue recognition for unsatisfied performance obligations can materially change due to timing of funding appropriations from the USG and the overall success of the Company's development activities associated with its PHT product candidates that are then receiving development funding support from the USG under development contracts. In addition, the amount of future revenues associated with unsatisfied performance obligations excludes the value associated with unexercised option periods in the Company's contracts. Contract assets The Company considers unbilled accounts receivables and deferred costs associated with revenue generating contracts, which are not included in inventory or property, plant and equipment, as contract assets. As of March 31, 2020 and December 31, 2019 , the Company had contract assets associated with deferred costs of $ 36.3 million and $ 34.0 million, respectively, which is reflected as a component of prepaid expenses and other current assets on the Company's consolidated balance sheets. Accounts receivable Accounts receivable, including unbilled accounts receivable contract assets, consist of the following: March 31, 2020 December 31, 2019 Billed, net $ 119.4 $ 227.3 Unbilled 43.1 43.4 Total, net $ 162.5 $ 270.7 As of March 31, 2020 and December 31, 2019 , allowances for doubtful accounts were $0.8 million and de minimis, respectively. |
Income taxes
Income taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes On March 27, 2020, the President of the United States signed into law the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The Company is currently assessing the impact of the CARES Act, but we do not expect there to be a material impact to our consolidated financial statements. The estimated effective annual tax rate for the Company, which excludes discrete adjustments, was 26% and 27% for the three months ended March 31, 2020 and 2019 . For the three months ended March 31, 2020 and 2019 , the Company recorded a discrete tax benefit of $3.2 million and $ 1.8 |
Net loss per share
Net loss per share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Net loss per share | oss per share The following table presents the calculation of basic and diluted net loss per share: Three Months Ended March 31, 2020 2019 Numerator: Net loss $ (12.5 ) $ (26.0 ) Denominator: Weighted-average number of shares—basic 52.0 51.2 Dilutive securities—equity awards — — Weighted-average number of shares—diluted 52.0 51.2 Net loss per share - basic $ (0.24 ) $ (0.51 ) Net loss per share - diluted $ (0.24 ) $ (0.51 ) Basic earnings (loss) per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is computed using the treasury method by dividing net loss by the weighted average number of shares of common stock outstanding during the period, adjusted for the potential dilutive effect of other securities if such securities were converted or exercised and are not anti-dilutive. For the three months ended March 31, 2020 and 2019 , approximately 0.7 million and 3.1 |
Share-based compensation
Share-based compensation | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Share-based compensation | Share-based compensation During the three months ended March 31, 2020 , the Company granted stock options to purchase 0.4 million shares of common stock and 0.5 million restricted and performance stock units under the Emergent BioSolutions Inc. Stock Incentive Plan. The stock option and restricted stock unit grants vest over three |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and contingencies ANDA Litigation - Perrigo 4mg On September 14, 2018, Adapt Pharma Inc., Adapt Pharma Operations Limited and Adapt Pharma Ltd. (collectively, "Adapt Pharma"), and Opiant Pharmaceuticals, Inc. ("Opiant"), received notice from Perrigo UK FINCO Limited Partnership ("Perrigo"), that Perrigo had filed an Abbreviated New Drug Application ("ANDA"), with the United States Food and Drug Administration seeking regulatory approval to market a generic version of NARCAN®(naloxone hydrochloride) Nasal Spray 4mg/spray before the expiration of U.S. Patent Nos. 9,211,253, (the "‘253 Patent"), 9,468,747 (the "‘747 Patent"), 9,561,177, (the "‘177 Patent"), 9,629,965, (the "‘965 Patent") and 9,775,838 (the "‘838 Patent"). On or about October 25, 2018, Perrigo sent a subsequent notice letter relating to U.S. Patent No. 10,085,937 (the "937 Patent"). Perrigo’s notice letters assert that its generic product will not infringe any valid and enforceable claim of these patents. On October 25, 2018, Emergent BioSolutions’ Adapt Pharma subsidiaries and Opiant, (collectively, the "Plaintiffs"), filed a complaint for patent infringement of the ‘253, ‘747, ‘177, ‘965, and the ‘838 Patents against Perrigo in the United States District Court for the District of New Jersey arising from Perrigo’s ANDA filing with the FDA. Plaintiffs filed a second complaint against Perrigo on December 7, 2018, for the infringement of the ‘937 Patent. On February 12, 2020, Adapt Pharma and Perrigo entered into a settlement agreement to resolve the ongoing litigation. Under the terms of the settlement, Perrigo has received a non-exclusive license under Adapt Pharma's patents to make, have made and market its generic naloxone hydrochloride nasal spray under its own ANDA. Perrigo’s license will be effective as of January 5, 2033 or earlier under certain circumstances including circumstances related to the outcome of the current litigation against Teva (as defined below) or litigation against future ANDA filers. The Perrigo settlement agreement is subject to review by the U.S. Department of Justice and the Federal Trade Commission, and entry of an order dismissing the litigation by the U.S. District Court for the District of New Jersey. ANDA Litigation - Teva 2mg On or about February 27, 2018, Adapt Pharma Inc. and Adapt Pharma Operations Limited and Opiant received notice from Teva Pharmaceuticals Industries Ltd. and Teva Pharmaceuticals USA, Inc. (collectively "Teva"), that Teva had filed an ANDA with the FDA seeking regulatory approval to market a generic version of NARCAN® (naloxone hydrochloride) Nasal Spray 2 mg/spray before the expiration of U.S. Patent No. 9,480,644, (the "‘644 Patent"), and U.S. Patent No. 9,707,226, (the "'226 Patent"). Teva's notice letter asserts that the commercial manufacture, use or sale of its generic drug product described in its ANDA will not infringe the '644 Patent or the '226 Patent, or that the '644 Patent and '226 Patent are invalid or unenforceable. Adapt Pharma Inc. and Adapt Pharma Operations Limited and Opiant filed a complaint for patent infringement against Teva in the United States District Court for the District of New Jersey. ANDA Litigation - Teva 4mg On or about September 13, 2016, Adapt Pharma Inc. and Adapt Pharma Operations Limited and Opiant received notice from Teva that Teva had filed an ANDA with the FDA seeking regulatory approval to market a generic version of NARCAN® (naloxone hydrochloride) Nasal Spray 4 mg/spray before the expiration of U.S. Patent No. 9,211,253 (the "'253 Patent"). Adapt Pharma Inc. and Adapt Pharma Operations Limited and Opiant received additional notices from Teva relating to the '747, the '177, the '965, the '838, and the ‘937 Patents. Teva's notice letters assert that the commercial manufacture, use or sale of its generic drug product described in its ANDA will not infringe the '253, the '747, the '177, the '965, the '838, or the ‘937 Patent, or that the '253, the '747, the '177, the '965, the '838, and the ‘937 Patents are invalid or unenforceable. Adapt Pharma Inc. and Adapt Pharma Operations Limited and Opiant filed a complaint for patent infringement against Teva in the United States District Court for the District of New Jersey with respect to the '253 Patent. Adapt Pharma Inc. and Adapt Pharma Operations Limited and Opiant also filed complaints for patent infringement against Teva in the United States District Court for the District of New Jersey with respect to the '747, the '177, the '965, and the '838 Patents. All five proceedings have been consolidated. As of the date of this filing, Adapt Pharma Inc., Adapt Pharma Operations Limited, and Opiant, have not filed a complaint related to the ‘937 Patent. Closing arguments took place on February 26, 2020. In the complaints described in the paragraphs above, the Plaintiffs seek, among other relief, orders that the effective date of FDA approvals of the Teva ANDA products and the Perrigo ANDA product be a date not earlier than the expiration of the patents listed for each product, equitable relief enjoining Teva and Perrigo from making, using, offering to sell, selling, or importing the products that are the subject of Teva and Perrigo’s respective ANDAs, until after the expiration of the patents listed for each product, and monetary relief or other relief as deemed just and proper by the court. |
Basis of Presentation and Pri_2
Basis of Presentation and Principles of Consolidation (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation | The accompanying unaudited condensed consolidated financial statements include the accounts of Emergent and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements included herein have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X issued by the SEC. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 , as filed with the SEC. All adjustments contained in the accompanying unaudited condensed consolidated financial statements are of a normal recurring nature and are necessary to present fairly the financial position of the Company as of March 31, 2020 . Interim results are not necessarily indicative of results that may be expected for any other interim period or for an entire year. |
Fair value measurements | Separate disclosure is required for assets and liabilities measured at fair value on a recurring basis from those measured at fair value on a non-recurring basis. The Company has cash held in money market accounts (level 1), contingent purchase consideration (level 3) and interest rate swaps arrangements (level 2) that are measured at fair value on a recurring basis (Note 7 and Note 8). |
Recently issued accounting standards | Recently Adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13") In June 2016, the FASB issued ASU 2016-13. ASU 2016-13 provides guidance on measurement of credit losses on financial instruments that changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and that requires entities to use a new, forward-looking “expected loss” model that is expected to generally result in the earlier recognition of allowances for losses. The guidance became effective for annual periods beginning after December 15, 2019, including interim periods within those years. The Company adopted the standard as of January 1, 2020 and has evaluated the effects of this standard and determined that the adoption did not have a material impact on the Company's consolidated financial statements. ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820) ("ASU 2018-13") In August 2018, the FASB issued ASU 2018-13. ASU 2018-13 improves the disclosure requirements on fair value measurements. The updated guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for any removed or modified disclosures. The Company adopted the standard as of January 1, 2020 which has resulted in expanded disclosures around the Company's recurring level 3 fair value measurements. The disclosures are included in note 7 of the condensed consolidated financial statements. ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15") In August 2018, the FASB issued ASU 2018-15. ASU 2018-15 clarifies the accounting for implementation costs in cloud computing arrangements. ASU 2018-15 is effective for all entities for fiscal years beginning after December 15, 2019. The Company adopted the standard as of January 1, 2020 and has evaluated the effects of this standard and determined that the adoption did not have a material impact on the Company's consolidated financial statements. ASU 2017-4, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-4") In January 2017, the FASB issued ASU 2017-4. ASU 2017-4 simplifies the subsequent measurement of goodwill and eliminates Step 2 from the goodwill impairment test. ASU 2017-4 is effective for annual and interim goodwill tests beginning after December 15, 2019. The Company's measurement period is September 30. The Company adopted the standard as of January 1, 2020 and has evaluated the effects of this standard and determined that the adoption will not have a material impact on the Company's consolidation financial statements. Not Yet Adopted ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting In March 2020, the FASB issued Topic 848. Topic 848 provides relief for impacted areas as it relates to impending reference rate reform. ASC 848 contains optional expedients and exceptions for applying US GAAP to debt arrangements, contracts, hedging relationships, and other areas or transactions that are impacted by reference rate reform. This guidance is effective for upon issuance for all entities and elections of certain optional expedients are required to apply the provisions of the guidance. The Company continues to assess all potential impacts of the standard and will disclose the nature and reason for any elections that the Company makes. ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans ("ASU 2018-14") In August 2018, the FASB issued ASU 2018-14. ASU 2018-14 modifies the disclosure requirements for defined benefit pension plans and other post-retirement plans. ASU 2018-14 is effective for all entities for fiscal years ending after December 15, 2020, and earlier adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2018-14 on its consolidated financial statements. ASU 2019-12, Simplifications to Accounting for Income Taxes ("ASU 2019-12") In December 2019, the FASB issued ASU 2019-12. ASU 2019-12 removes certain exceptions for recognizing deferred taxes for investments, performing intra-period allocation and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including deferred taxes for goodwill and allocating taxes for members of a consolidated group. ASU 2019-12 is effective for all entities for fiscal years beginning after December 15, 2020, and earlier adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2019-12 on its consolidated financial statements. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | The components of inventory are as follows: March 31, 2020 December 31, 2019 Raw materials and supplies $ 77.7 $ 70.5 Work-in-process 114.2 89.7 Finished goods 56.2 62.3 Total inventories $ 248.1 $ 222.5 |
Property, plant and equipment (
Property, plant and equipment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property Plant and Equipment Income Statement Disclosures [Abstract] | |
Property, plant and equipment | Property, plant and equipment consisted of the following: March 31, 2020 December 31, 2019 Land and improvements $ 46.6 $ 46.5 Buildings, building improvements and leasehold improvements 242.3 234.8 Furniture and equipment 340.0 334.2 Software 55.6 55.7 Construction-in-progress 86.5 81.5 Property, plant and equipment, gross 771.0 752.7 Accumulated depreciation (221.8 ) (210.4 ) Total property, plant and equipment, net $ 549.2 $ 542.3 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Lease, Cost | The components of lease expense were as follows: Three months ended March 31, 2020 2019 Operating lease cost: Amortization of right-of-use assets $ 1.1 $ 0.6 Interest on lease liabilities 0.3 0.1 Total operating lease cost $ 1.4 $ 0.7 |
Schedule of Leases Supplemental Balance Sheets | Supplemental balance sheet information related to leases was as follows: (In millions, except lease term and discount rate) Balance Sheet location March 31, 2020 December 31, 2019 Operating lease right-of-use assets Other assets $ 25.6 $ 24.7 Operating lease liabilities, current portion Other current liabilities 4.2 3.6 Operating lease liabilities Other liabilities 22.7 22.1 Total operating lease liabilities $ 26.9 $ 25.7 Operating leases: Weighted average remaining lease term (years) 7.7 8.0 Weighted average discount rate 4.2 % 4.2 % |
Intangible assets (Tables)
Intangible assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The following tables summarize the Company's intangible assets for the periods ended March 31, 2020 and December 31, 2019: March 31, 2020 (in millions) Estimated Life Cost Additions Accumulated Amortization Net Products 9-22 years $ 788.0 $ 10.0 $ 96.0 $ 702.0 Customer relationships 8 years 28.6 — 23.8 4.8 Contract development and manufacturing 8 years 5.5 — 4.2 1.3 Total intangible assets $ 822.1 $ 10.0 $ 124.0 $ 708.1 December 31, 2019 (in millions) Estimated Life Cost Accumulated Amortization Net Products 9-22 years $ 788.0 $ 82.2 $ 705.8 Customer relationships 8 years 28.6 23.0 $ 5.6 Contract development and manufacturing 8 years 5.5 4.0 $ 1.5 Total intangible assets $ 822.1 $ 109.2 $ 712.9 |
Contingent consideration (Table
Contingent consideration (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Reconciliation of Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) | The following table is a reconciliation of the beginning and ending balance of contingent considerations and is based on level 3 significant unobservable inputs. Balance at December 31, 2019 $ 29.2 Change in fair value 0.6 Settlements (0.7 ) Balance at March 31, 2020 $ 29.1 |
Fair Value Measurement Inputs and Valuation Techniques | The recurring Level 3 fair value measurements the Company's contingent consideration liability include the following significant unobservable inputs: Contingent Consideration Liability Fair Value as of March 31, 2020 Valuation Technique Unobservable Input Range Weighted Average Revenue milestone and royalty based $29.1 million Discounted cash flow Discount rate 2.5% - 8.6% 4.3% Probability of payment 10.0% - 40.0% 20.9% Projected year of payment 2020 - 2028 2022 |
Derivative instruments and he_2
Derivative instruments and hedging activities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | As of March 31, 2020 , the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk: Number of Instruments Notional Interest rate swaps 7 $ 350.0 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The table below presents the fair value of the Company’s derivative financial instruments designated as hedges as well as their classification on the balance sheet. Asset Derivatives Liability Derivatives March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Balance Sheet Location Fair Value Balance Sheet Location Fair Value Interest Rate Swaps Other Current Assets $ — Other Current Assets $ — Other Current Liabilities $ 4.8 Other Current Liabilities $ — Other Assets $ — Other Assets $ — Other Liabilities $ 11.2 Other Liabilities $ 2.0 |
Derivative Instruments, Gain (Loss) | The table below presents the effect of cash flow hedge accounting on accumulated other comprehensive income. Hedging derivatives Cumulative Amount of Gain/(Loss) Recognized in OCI on Derivative Location of Gain or (Loss) Reclassified from Accumulated OCI into Income Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income March 31, Three months ended March 31, 2020 2019 2020 2019 Interest Rate Swaps $ (16.0 ) $ — Interest expense $ — $ — |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The components of debt are as follows: March 31, 2020 December 31, 2019 Senior secured credit agreement - Term loan due 2023 $ 433.1 $ 435.9 Senior secured credit agreement - Revolver loan due 2023 353.0 373.0 2.875% Convertible Senior Notes due 2021 10.6 10.6 Other 3.0 3.0 Total debt 799.7 822.5 Current portion of long-term debt, net of debt issuance costs (26.3 ) (12.9 ) Unamortized debt issuance costs (10.5 ) (11.2 ) Non-current portion of debt $ 762.9 $ 798.4 |
Revenue recognition (Tables)
Revenue recognition (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The Company's revenues disaggregated by the major sources were as follows: Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 U.S. Non-U.S. Total U.S. Non-U.S. Total Product sales, net $ 63.9 $ 84.3 $ 148.2 $ 73.3 $ 79.7 $ 153.0 Contract development and manufacturing services — 21.7 21.7 — 15.9 15.9 Contracts and grants 22.0 0.6 22.6 20.4 1.3 21.7 Total revenues $ 85.9 $ 106.6 $ 192.5 $ 93.7 $ 96.9 $ 190.6 |
Rollforward of Contract Liabilities | The following table presents the rollforward of the contract liability balances: December 31, 2019 $ 88.9 Deferral of revenue 6.4 Revenue recognized (5.9 ) March 31, 2020 $ 89.4 |
Schedule of Accounts Receivable, Net | Accounts receivable, including unbilled accounts receivable contract assets, consist of the following: March 31, 2020 December 31, 2019 Billed, net $ 119.4 $ 227.3 Unbilled 43.1 43.4 Total, net $ 162.5 $ 270.7 |
Net loss per share (Tables)
Net loss per share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Income per Share | The following table presents the calculation of basic and diluted net loss per share: Three Months Ended March 31, 2020 2019 Numerator: Net loss $ (12.5 ) $ (26.0 ) Denominator: Weighted-average number of shares—basic 52.0 51.2 Dilutive securities—equity awards — — Weighted-average number of shares—diluted 52.0 51.2 Net loss per share - basic $ (0.24 ) $ (0.51 ) Net loss per share - diluted $ (0.24 ) $ (0.51 ) |
Business (Details)
Business (Details) | 3 Months Ended |
Mar. 31, 2020categorysegmentproduct | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of categories of public health threats | category | 6 |
Number of revenue generating products | product | 10 |
Number of operating segments | segment | 1 |
Basis of Presentation and Pri_3
Basis of Presentation and Principles of Consolidation (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Money market funds | $ 90.7 | $ 52.2 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials and supplies | $ 77.7 | $ 70.5 |
Work-in-process | 114.2 | 89.7 |
Finished goods | 56.2 | 62.3 |
Total inventories | $ 248.1 | $ 222.5 |
Property, plant and equipment_2
Property, plant and equipment (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment, gross | $ 771 | $ 752.7 |
Accumulated depreciation | (221.8) | (210.4) |
Total property, plant and equipment, net | 549.2 | 542.3 |
Land and improvements | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment, gross | 46.6 | 46.5 |
Buildings, building improvements and leasehold improvements | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment, gross | 242.3 | 234.8 |
Furniture and equipment | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment, gross | 340 | 334.2 |
Software | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment, gross | 55.6 | 55.7 |
Construction-in-progress | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment, gross | $ 86.5 | $ 81.5 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Lessee, Lease, Description [Line Items] | |
Operating lease, renewal term | 5 years |
Operating lease, termination period | 1 year |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease, term of contract | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease, term of contract | 15 years |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating lease cost: | ||
Amortization of right-of-use assets | $ 1.1 | $ 0.6 |
Interest on lease liabilities | 0.3 | 0.1 |
Total operating lease cost | $ 1.4 | $ 0.7 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Operating Leases | ||
Operating lease right-of-use assets | $ 25.6 | $ 24.7 |
Operating lease liabilities, current portion | 4.2 | 3.6 |
Operating lease liabilities | 22.7 | 22.1 |
Total operating lease liabilities | $ 26.9 | $ 25.7 |
Operating leases: | ||
Weighted average remaining lease term (years) | 7 years 8 months 12 days | 8 years |
Operating leases: | ||
Weighted average discount rate | 4.20% | 4.20% |
Intangible assets - Schedule of
Intangible assets - Schedule of Finite-lived Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Cost | ||
Intangible assets, gross | $ 822.1 | $ 822.1 |
Finite-lived intangible assets acquired | 10 | |
Finite-lived intangible assets, accumulated amortization | 124 | 109.2 |
Intangible assets, net | $ 708.1 | $ 712.9 |
Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization period of intangible asset | 9 years | 9 years |
Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization period of intangible asset | 22 years | 22 years |
Products | ||
Cost | ||
Intangible assets, gross | $ 788 | $ 788 |
Finite-lived intangible assets acquired | 10 | |
Finite-lived intangible assets, accumulated amortization | 96 | 82.2 |
Intangible assets, net | $ 702 | $ 705.8 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization period of intangible asset | 8 years | 8 years |
Cost | ||
Intangible assets, gross | $ 28.6 | $ 28.6 |
Finite-lived intangible assets, accumulated amortization | 23.8 | 23 |
Intangible assets, net | $ 4.8 | $ 5.6 |
Contract development and manufacturing services | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization period of intangible asset | 8 years | 8 years |
Cost | ||
Intangible assets, gross | $ 5.5 | $ 5.5 |
Finite-lived intangible assets, accumulated amortization | 4.2 | 4 |
Intangible assets, net | $ 1.3 | $ 1.5 |
Intangible assets - Narrative (
Intangible assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | |||
Amortization | $ 14.8 | $ 14.5 | |
Weighted average amortization period | 13 years 3 months 18 days | ||
Goodwill | $ 266.4 | $ 266.6 | |
Raxibacumab | |||
Business Acquisition [Line Items] | |||
Change in amount of contingent consideration, liability | $ 10 |
Contingent consideration (Detai
Contingent consideration (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Unobservable Input Reconciliation [Roll Forward] | |
Balance, beginning of period | $ 29.2 |
Change in fair value | 0.6 |
Settlements | (0.7) |
Balance, end of period | $ 29.1 |
Contingent consideration Contin
Contingent consideration Contingent consideration - Fair Value Level 3 of Significant Unobservable Inputs (Details) $ in Millions | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value, measurement with unobservable inputs reconciliation, recurring basis, liability value | $ 29.1 | $ 29.2 |
Discounted cash flow | Fair Value, Inputs, Level 3 | Fair Value, Recurring | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value, measurement with unobservable inputs reconciliation, recurring basis, liability value | $ 29.1 | |
Discounted cash flow | Fair Value, Inputs, Level 3 | Fair Value, Recurring | Discount rate | Minimum | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Business combination, contingent consideration, liability, measurement input | 0.025 | |
Discounted cash flow | Fair Value, Inputs, Level 3 | Fair Value, Recurring | Discount rate | Maximum | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Business combination, contingent consideration, liability, measurement input | 0.086 | |
Discounted cash flow | Fair Value, Inputs, Level 3 | Fair Value, Recurring | Discount rate | Weighted Average | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Business combination, contingent consideration, liability, measurement input | 0.043 | |
Discounted cash flow | Fair Value, Inputs, Level 3 | Fair Value, Recurring | Probability of payment | Minimum | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Business combination, contingent consideration, liability, measurement input | 0.100 | |
Discounted cash flow | Fair Value, Inputs, Level 3 | Fair Value, Recurring | Probability of payment | Maximum | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Business combination, contingent consideration, liability, measurement input | 0.400 | |
Discounted cash flow | Fair Value, Inputs, Level 3 | Fair Value, Recurring | Probability of payment | Weighted Average | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Business combination, contingent consideration, liability, measurement input | 0.209 |
Derivative instruments and he_3
Derivative instruments and hedging activities - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Interest rate swaps | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Net deferred losses from accumulated other comprehensive loss | $ 5 |
Derivative instruments and he_4
Derivative instruments and hedging activities - Derivative Designated as Cash Flow Hedges (Details) - Designated as Hedging Instrument - Interest rate swaps | Mar. 31, 2020USD ($)instrument |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Number of Instruments | instrument | 7 |
Notional | $ | $ 350,000,000 |
Derivative instruments and he_5
Derivative instruments and hedging activities - Fair Value by Balance Sheet Location (Details) - Interest rate swaps - Designated as Hedging Instrument - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | $ 0 | $ 0 |
Other Assets | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 0 | 0 |
Other Current Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives | 4.8 | 0 |
Other Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives | $ 11.2 | $ 2 |
Derivative instruments and he_6
Derivative instruments and hedging activities - Cash Flow Hedging on AOCI (Details) - Interest rate swaps - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Cumulative Amount of Gain/(Loss) Recognized in OCI on Derivative | $ (16) | $ 0 |
Cash Flow Hedging | Interest expense | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income | $ 0 | $ 0 |
Debt - Schedule (Details)
Debt - Schedule (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | Jan. 29, 2014 |
Debt Instrument [Line Items] | |||
Long-term debt | $ 799.7 | $ 822.5 | |
Current portion of long-term debt, net of debt issuance costs | (26.3) | (12.9) | |
Unamortized debt issuance costs | (10.5) | (11.2) | |
Non-current portion of debt | 762.9 | 798.4 | |
2.875% Convertible Senior Notes due 2021 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 10.6 | 10.6 | |
Stated percentage | 2.875% | 2.875% | |
Other | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 3 | 3 | |
Senior secured credit agreement - Term loan due 2023 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 433.1 | 435.9 | |
Senior secured credit agreement - Revolver loan due 2023 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 353 | $ 373 |
Debt - Narrative (Details)
Debt - Narrative (Details) | Oct. 15, 2018USD ($) | Jun. 30, 2019 | Mar. 31, 2020 | Oct. 31, 2018USD ($) | Jan. 29, 2014 |
Debt Instrument [Line Items] | |||||
Debt instrument, covenant, net leverage ratio rolling period | 12 months | ||||
Debt instrument, covenant, net leverage ratio adjustment period | 12 months | ||||
Amended Credit Agreement | Minimum | |||||
Debt Instrument [Line Items] | |||||
Commitment fee percentage | 0.15% | ||||
Amended Credit Agreement | Maximum | |||||
Debt Instrument [Line Items] | |||||
Commitment fee percentage | 0.30% | ||||
Amended Credit Agreement | Eurocurrency | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 1.00% | ||||
Amended Credit Agreement | Eurocurrency | Minimum | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 1.25% | ||||
Amended Credit Agreement | Eurocurrency | Maximum | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 2.00% | ||||
Amended Credit Agreement | Federal Funds Rate | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 0.50% | ||||
Amended Credit Agreement | Base Rate | Minimum | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 0.25% | ||||
Amended Credit Agreement | Base Rate | Maximum | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 1.00% | ||||
2.875% Convertible Senior Notes due 2021 | |||||
Debt Instrument [Line Items] | |||||
Stated percentage | 2.875% | 2.875% | |||
Senior secured credit agreement - Revolver loan due 2023 | 2017 Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Current borrowing capacity | $ 600,000,000 | ||||
Senior secured credit agreement - Revolver loan due 2023 | 2017 Credit Agreement | Minimum | |||||
Debt Instrument [Line Items] | |||||
Debt covenant, consolidated debt service coverage ratio, minimum | 2.50 | ||||
Senior secured credit agreement - Revolver loan due 2023 | 2017 Credit Agreement | Maximum | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, covenant, net leverage ratio through June 30, 2019 | 3.75 | ||||
Debt instrument, covenant, net leverage ratio to September 30, 2019 | 3.50 | ||||
Debt instrument, covenant, net leverage ratio from October 1, 2019 to September 29, 2020 | 4 | ||||
Senior secured credit agreement - Term loan due 2023 | 2017 Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Current borrowing capacity | $ 450,000,000 | ||||
Senior secured credit agreement - Term loan due 2023 | Amended Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Percentage of original principal amount required to repay in the first two years | 2.50% | ||||
Percentage of original principal amount required to repay during the third year | 5.00% | ||||
Percentage of original principal amount required to repay remaining year | 7.50% | ||||
Cash proceeds excess amount from dispositions of property or casualty events subject to certain reinvestment right | $ 100,000,000 |
Revenue recognition - Narrative
Revenue recognition - Narrative (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($)segment | Dec. 31, 2019USD ($) | |
Revenue from Contract with Customer [Abstract] | ||
Number of operating segments | segment | 1 | |
Revenue, remaining performance obligation, amount | $ 555.9 | |
Deferred costs, current | $ 36.3 | $ 34 |
Revenue recognition - Remaining
Revenue recognition - Remaining Performance Obligation (Details) | Mar. 31, 2020 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 24 months |
Revenue recognition - Disaggreg
Revenue recognition - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 192.5 | $ 190.6 |
U.S. Government | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 85.9 | 93.7 |
Non-U.S. Government | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 106.6 | 96.9 |
Product sales, net | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 148.2 | 153 |
Product sales, net | U.S. Government | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 63.9 | 73.3 |
Product sales, net | Non-U.S. Government | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 84.3 | 79.7 |
Contract development and manufacturing services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 21.7 | 15.9 |
Contract development and manufacturing services | U.S. Government | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 0 | 0 |
Contract development and manufacturing services | Non-U.S. Government | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 21.7 | 15.9 |
Contracts and grants | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 22.6 | 21.7 |
Contracts and grants | U.S. Government | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 22 | 20.4 |
Contracts and grants | Non-U.S. Government | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 0.6 | $ 1.3 |
Revenue recognition - Contract
Revenue recognition - Contract Liabilities (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Change in Contract With Customer, Liability [Roll Forward] | |
Beginning of period | $ 88.9 |
Deferral of revenue | 6.4 |
Revenue recognized | (5.9) |
End of period | $ 89.4 |
Revenue recognition - Accounts
Revenue recognition - Accounts Receivable (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Billed, net | $ 119.4 | $ 227.3 |
Unbilled | 43.1 | 43.4 |
Total, net | 162.5 | 270.7 |
Allowance for doubtful accounts receivable | $ 0.8 | $ 0 |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Effective annual tax rate | 26.00% | 27.00% |
Discrete tax benefit | $ 3.2 | $ 1.8 |
Net loss per share (Details)
Net loss per share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Numerator: | ||
Net loss | $ (12.5) | $ (26) |
Denominator: | ||
Weighted-average number of shares-basic (in shares) | 52 | 51.2 |
Dilutive securities-equity awards (in shares) | 0 | 0 |
Weighted-average number of shares-diluted (in shares) | 52 | 51.2 |
Net loss per share - basic (in dollars per share) | $ (0.24) | $ (0.51) |
Net loss per share - diluted (in dollars per share) | $ (0.24) | $ (0.51) |
Antidilutive securities excluded from computation of earnings per share | 0.7 | 3.1 |
Share-based compensation (Detai
Share-based compensation (Details) shares in Millions | 3 Months Ended |
Mar. 31, 2020shares | |
Stock Options | |
Stock issued or granted during period [Abstract] | |
Stock options granted (in shares) | 0.4 |
Award vesting period | 3 years |
Restricted Stock Units | |
Stock issued or granted during period [Abstract] | |
Restricted stock units granted (in shares) | 0.5 |
Award vesting period | 3 years |
Tranche One | Stock Options | |
Stock issued or granted during period [Abstract] | |
Award vesting rights, percentage | 33.33% |
Tranche One | Restricted Stock Units | |
Stock issued or granted during period [Abstract] | |
Award vesting rights, percentage | 33.33% |
Tranche Two | Stock Options | |
Stock issued or granted during period [Abstract] | |
Award vesting rights, percentage | 33.33% |
Tranche Two | Restricted Stock Units | |
Stock issued or granted during period [Abstract] | |
Award vesting rights, percentage | 33.33% |
Tranche Three | Stock Options | |
Stock issued or granted during period [Abstract] | |
Award vesting rights, percentage | 33.33% |
Tranche Three | Restricted Stock Units | |
Stock issued or granted during period [Abstract] | |
Award vesting rights, percentage | 33.33% |