Good afternoon, my name is Antoine and I will be your conference operator today. At this time I would like to welcome everyone to the Emergent BioSolutions Q1 Financial Results Conference Call. (Operator Instructions) I would not like to turn the call over to Mr. Robert Burrows. Please proceed sir.

Thank you, Antoine. Good afternoon ladies and gentlemen. My name is Robert Burrows, Vice President of Investor Relations for Emergent. Thank you for joining us today as we discuss Emergent BioSolutions financial results for the first quarter of 2009. As is customary, our call today is open to all participants. In addition, the call is being recorded and is copyrighted by Emergent BioSolutions. Joining me on the call this afternoon will be Fuad El-Hibri, Chairman of the Board and Chief Executive Officer, and Don Elsey, Chief Financial Officer. Additional members of our senior management team will be present on the call for purposes of the Q&A session and these include Dan Abdun-Nabi, President and Chief Operating Officer and Dr. Jim Jackson, Chief Scientific Officer. Before we begin I am compelled to remind everyone that during the all management may make projections and other forward-looking statements regarding future events and the Company’s prospects or future performance. These forward-looking statements reflect Emergent’s current perspective on existing trends and information. Any such forward-looking statements are not guarantees of future performance and involve substantial risks and uncertainties. Actual results may differ materially from those projected in any forward-looking statements. You are encouraged to review Emergent’s filings with the SEC on Forms 10-K, 10-Q, and 8-K for more information on the risks and uncertainties that could cause actual results to differ. For the benefit of those who may be listening to the replay this call is handled and recorded on May 7, 2009. Since then Emergent may have made announcements relating to topics discussed during today’s call, so again, please reference our most recent press releases and SEC filings. Emergent BioSolutions assumes no obligation to update the information in today’s press release or as presented on this call except as may be required by applicable laws or regulations. Today’s press release may be found on our website at www.emergentbiosolutions.com under Investors/Press Release. With that introduction I would now like to turn the call over to Fuad El-Hibri, Emergent’s Chairman and CEO. Fuad?

Thank you, Bob. Good afternoon ladies and gentlemen. We appreciate your participation on this call. At the close of the market today we reported financial results for the first quarter of 2009. I am very pleased with Emergent’s overall performance during the quarter. We delivered strong sales in earnings results and we remain firmly on the path to achieving our financial and product development goals for the year. In reflecting on today’s results, I would like to provide a brief update on selected aspects of our business. To begin, let me update you on our biodefense franchise. Specifically, I would like to address our ongoing core BioThrax business and our recumbent anthrax vaccine opportunity. First I will discuss BioThrax. As you know BioThrax is the only vaccine licensed by the FDA for the prevention of anthrax infection. We are currently manufacturing and delivering doses of BioThrax to HHS and the Strategic National Stockpile under a multi-year contract for 18.75 million doses valued at up to $448 million. The product sales reported this quarter are a result of delivering many to the SNS under this current contract. We are on contract to complete deliveries of BioThrax under this contract by September 2009 if not earlier. We have also secured a follow on contract with HHS for an additional 14.5 million doses of BioThrax valued at up to $405 million. We will transition into this new contract upon completing delivery under the current contract without interruption. As a result, we have BioThrax sales visibility for the next 24 months. Along with this, we expect that the U.S. government will continue to purchase BioThrax in the medium and long term. In addition to the market opportunity for BioThrax in the U.S. we continue to address growing demand for the product worldwide. Recently we…

Thank you, Fuad. Good afternoon everyone. As Fuad mentioned following the close of the markets today we released our financial results for the first quarter of 2009. I encourage everyone to take a look at the press release which is currently available on our website. We plan to file our quarterly report on Form 10-Q with the SEC by the close of business tomorrow, Friday May 8, 2009. The 10-Q when filed will also be available on our website. Now let me discuss the financial results. The first quarter was a very strong for our company. Our product sales came in at $61.7 million which is an increase of 49% over Q1 2008. The growth in sales quarter-over-quarter was driven by a 52% increase in the number of doses delivered to the SNS. Contracts and grants revenue were $2.8 million, a 134% increase over Q1 2008. This growth is a reflection of the impact of contracts we received from BARDA and NIAID in September of 2008 as well as continuation of work under earlier contracts and grants. Our gross profit on product sales for Q1 was $46.3 million which is an increase of 38% over Q1 2008. Our gross margin on product sales remains strong at 75%. With respect to R&D spending we continue to advance the development of our product pipeline with activities including enhancements to BioThrax. For the quarter development spending was $15.9 million which was an increase of 39% over first quarter 2008. Compared to the fourth quarter of 2008, the growth in R&D spending was only 12%. The growth over fourth quarter 2008 was driven primarily by an increase in development for new product candidate programs including rPA, anthrax monoclonal antibody, as well as preparing for the initiation of the phase IIb tuberculosis trial. Our SG&A…

(Operator Instructions) Your first question comes from Cory Kasimov with J.P. Morgan.

This is actually Mona for Cory. In your prepared remarks you mentioned that you expect sales of BioThrax to continue beyond 2011. I wondered if you could expand a bit on the basis for this confidence and how you think that might change the availability of an rPA vaccine.

This is based on several discussions that I have had with representatives of BARDA and HHS where in they have stated that they continue to pursue a multi-product, multi-supplier strategy. And that BioThrax has several important attributes that continue to meet government requirements. With all the enhancements that we’re making to that product, we anticipate that the government will continue to purchase not only under this current contract, but beyond that. If you go back since we acquired the facility ten years ago from the state of Michigan, we have been basically under contract with either DOD or HHS for more than ten years.

Okay and sort of related to that, you mentioned that you have this dedicated manufacturing facility in Lansing that you have dedicated for the production of rPA. Given the delay there now, how do you handle that? At what point do you decide that you want to use this all for BioThrax.

The facility isn’t sitting idle and we are actually conducting pre-award activity for rPA there. Obviously and if there are more than the expected delays with this rPA award, we would reevaluate whether we would continue with the pre-award activities or campaign back to BioThrax. So, certainly rest assured that we are very interested in keeping this very critical asset and fully utilized. But, currently in anticipation of the award we are conducting pre-award activity on rPA.

Okay and one more strategic question and it is something that we have touched on in the past, but you have spoken about targeting this bar of $20 million for profitability and I am wondering at what point you would feel comfortable targeting a higher profitability level? I realize it is a balance between investing in the commercial pipeline and letting it flow to the bottom, but how do you think about that for your business?

That is a very good question. We are very excited about our [inaudible] and commercial pipeline of products and pipeline translates into future growth and other licensed products. There is a tension between investing more and money in the pipeline as it advances through the pipe and of course maintaining profitability. So, we try to balance that, at least for now, by maintaining profitability around the $20 million level. Now as more products advance into late stage clinical trials, that equation may change, but for now, our objective is to remain profitable.

Actually, just on the commercial pipeline, of your various commercial candidates, which do you believe would make it to market first and when would that be given where they are right now?

What I can say is that our TB vaccine, which we are very excited about given the large potential market demand, it is in a phase IIb study right now. We expect to know whether this product is safe in that indication within two years. If it is, we will certainly accelerate the further development of the program and get it into phase III as quickly as possible. With the support of NGOs such as Welcome Trust and Aeras we believe that we will have funding that will compliment our own. So, we are very excited about the TB opportunity. It is difficult, obviously to project, but what I can tell you is that this study will take around two years. Normally a phase III study might take two to three years, so you can take it from there. With respect to hepatitis B, which is also an advanced program, we have now transferred the manufacturing process to a Chinese DMO. We have identified a Chinese TRO and we expect to file an IND there to start up a phase II efficacy trial as soon as possible there after in China. We are very excited about that. And why China? Because the hepatitis B disease is highly prevalent there and there are a lot of chronic carriers. So, it facilitates the enrollment and it is a quick completion of an efficacy trial there.

That is very helpful. Thanks so much.

Your next question comes from David Moskowitz with Caris & Company. David Moskowitz - Caris & Company : First of all the number of doses that you guys shipped in the quarter, and really just as importantly, how many of the 18.75 million doses for the current contract have you shipped thus far to the government?

Let me answer it this way, we normally don’t give out specific dose shipment numbers in any given quarter exactly where we are. But, we have got about two million in change that are left on this particular current contract. We expect, as Fuad mentioned in his comments that we will transition immediately over to the new contract, so from a shipment perspective, a manufacturing perspective, it is going to be fairly transparent. David Moskowitz - Caris & Company : Okay, very good. You guys have until September to complete those shipments, is that correct?

We actually have until September of 2010 to complete the shipments on the current 18.75 so we will be completing delivery of that approximately a year early. David Moskowitz - Caris & Company : I got it. If you are able to make 7.5 billion doses a year and you’ve got about 2 million left, so that means you can make about 1.8 a quarter, it seems to me like there is going to be some flexibility in terms of shipment this quarter. I know there is some overseas demand. You guys mentioned, I think, in the prepared comments about growing the penetration overseas. So, could you talk a little bit about that and also I think the pricing element of that would be important.

Remember there are several factors that go into delivery. One is, of course, our manufacturing schedule. The other is if the FDA release of each launch which may vary in time. Then ultimately there are the logistics, which Don said earlier, when the CDC can receive the shipment. So, all I can tell you so far is we have pretty much shipped everything that we produce as quickly as possible within our schedule at least to the governments and typically t he government has been able and willing to receive our shipment. I want to highlight the point that Don made earlier, that there is variability from quarter-to-quarter simply based on the schedule of the delivery and when they actually accept the shipment. As you look at it, we basically are manufacturing at full capacity right now and minus the growing international sales that we position, we are delivering everything else to HHS. David Moskowitz - Caris & Company : You guys in the past had talked about, about 5% of BioThrax revenues, or doses, I can’t remember what that statistic was, leaving the U.S., or not being shipped to the U.S. government. What percentage of doses, or sales, do you expect to go O.U.S. this year?

Our sales are in the millions of dollars annually and our objective of course is to keep growing those sales. As I said before, given our flexibility and the schedule with HHS we can allow the doses that are contracted with foreign governments to be shipped, even if it means that we might have a few less doses to deliver to HHS for that particular quarter. So far we have always been ahead of schedule. We have allowed ourselves to manage quarter-to-quarter shipments to the extent that we can accommodate international sales, it hasn’t been a problem so far. David Moskowitz - Caris & Company : Maybe I am looking at this wrong. Was there a significant amount of X U.S. shipment this past quarter?

We don’t really comment on that. David Moskowitz - Caris & Company : Okay. It looks like R&D was a little bit light this period relative to the historical trends. I am just wondering if there is anything notable about that. Also, your tax rate was 42% in the quarter. Is that the run rate we should be looking for going forward?

First off, with regards to the R&D expenditure, when you take a look at the number of candidates that we have in our pipeline, clearly they are going to ebb and flow the activities there with, with regards to finishing trials, entering new trials, etc…etc… Particularly with typhoid and hepatitis B you will see from the spending outline for those two products as we are transitioning those to the end that we talked about earlier. The actual out of pocket spend is a little bit less than in periods past. So, it is a combination of factors and you can’t take a look at the quarter spending on that and say okay, it has got a particular trend one way or another. I would just say this particular quarter was a combination of activities in the various candidates that caused it to be a little less spendy this quarter than in the past. With regard s to the tax rate, where we’ve wound up pretty much on an annual basis is in the area of 40% plus or minus depending on what is going on at any point in time and where our shipments are. We are not able to disclose externally where we ship to the SNS, but clearly it has an impact with regards to taxation and our overall effective rates, and how the whole tax picture comes together. Generally speaking we have been able to manage it in the 40% range, maybe a little bit less than that when you take the year into account in totality. David Moskowitz - Caris & Company : I have one last question on product. When you guys went over the pipeline, I didn’t hear anything about the AIG product. I think that is a pretty exciting technology. If I am to understand it properly you guys could get an HHS contract sometime next year for that product. Could you talk about that a little bit in terms of timing and the potential opportunity?

Indeed, AIG remains a very cutting program for us. We started what we hope to be the pivotal clinical trial and that is ongoing. There is not much to report other than that we started that about a month ago and RP we still believe is likely come out sometime next year. So, our goal is to position ourselves with this product to be competitive. David Moskowitz - Caris & Company : How big could that RFP be?

Previously the government has expressed a requirement of about 100,000 doses for each; the AIG program product and also one of anthrax monoclonal product, which is HGSIs spot. But, on the AIG side, so far only 10,000 doses have come back, so 90,000 are still up for grabs, assuming that that requirement remains the same, which we have no reason to believe that it will change. David Moskowitz - Caris & Company : And the price per dose for the 10,000 doses?

The price per dose, the previous price for the 10,000 doses was around $14,000.00. Again, using a round number $10,000.00 a dose, 90,000 doses would translate to about $900 million. So, it is a large chunk. A very important product because it is a therapeutic and so we are very excited about that opportunity. We are also making progress on our anthrax monoclonal candidate, which I wish I had more time to talk when I gave the prepared comments, but we are excited about each one of those candidates. David Moskowitz - Caris & Company : Fair enough, thanks.

Your next question comes from Eric Schmidt from Cowen & Company. Eric Schmidt - Cowen & Company : Fuad, I was hoping you might comment on which you expect to receive first, either the RPA contract or another contract for BioThrax.

That is an interesting question, Eric, because those are basically on parallel tracks. When looking back at our history and contracting with the government, we have annual contracts. Lately the government was willing to give us a three-year, multi-year contract, so far we are at two or three year contracts. So, we are very excited with this longer term commitment that the government is willing to do. I would think that in the last year of the contract the government will focus on negotiating the next three-year contract. We always hope that we might get their attention a little earlier than that, but we believe that a year in advance of the expiration of the current contract would be a time when we would start entering into discussion with BARDA again. Eric Schmidt - Cowen & Company : I take that to mean you don’t expect a BioThrax contract until maybe the second half of next year?

Yes, something like that. Let me put it this way, I would expect discussions to start sometime next year. We haven’t even started on the new contract. I mean we won’t start it until third quarter this year. We would like to make two or three deliveries under the current contract before we go back to the government to ask for more. Eric Schmidt - Cowen & Company : Are you optimistic for RPA this year or could that slip into next?

I asked Dan to participate today. Dan is our president and COO. He has been spearheading the discussions and negotiations with BARDA and he can share with you kind of his discussions with BARDA representatives recently.

Sure Fuad. As Fuad indicated, we met with BARDA after they amended the solicitation to require that the regulatory plan be submitted to the FDA by June 15. At that meeting they laid out what they saw as the steps towards completing the contract process. They did indicate that they are very committed to completing the process. They have gotten assurances from the FDA that the FDA will review the submission on the regulatory materials very quickly and respond to the bidders with any comments that the FDA might have. Following receipt of the comments the process that we would expect to confer is those comments would be addressed in a submission that we would then make to BARDA. We would modify anything that needs to be modified to accommodate FDA’s observations. At that point BARDA would undertake its own review. They have a technical panel process at BARDA and the plan would then be referred to the technical panel for evaluation as well. Then we would enter into contract negotiations to the extent modifications are required. Of course, we are dealing with an executive branch agency so the White House would be involved, HHS, DHS, OMB etc…so that executive branch process would have to be undertaken. So, our expectations around this is this could be a good 12 month process. Eric Schmidt - Cowen & Company : When do you expect that you might share some additional information on your RPA vaccine with us, either stability or clinical data or potentially an update on your manufacturing that you have ongoing in the background there?

In terms of stability I think we previously indicated that the formulations that we have identified now we believe have addressed the stability issues that VaxGen suffered when the product was in their hands and that is what gives us a great deal of confidence that this is a product that meets the requirements of BARDA and can achieve the goals and objectives of the RFD and the contract. Eric Schmidt - Cowen & Company : What kind of duration of stability do you have now?

I don’t have the specifics; it is well over a year, maybe approaching the 24 month time period. I think extended beyond what VaxGen previously had been able to demonstrate and I think it is satisfactory to meet the requirements of the RFD. In terms of the specifics around that, we ought to get something out to investors at an appropriate time in the future so you can better understand the profile of the product and where we see the product going. In terms of manufacturing, we think it is a fairly straightforward manufacturing process that would be undertaken within building 55 using the standard fermentation capabilities that we have there. Building 55 I think is uniquely suited to address the large-scale manufacturing requirements for the rPA candidate. I am not sure there is anything special or unique that we need to share with you with respect to manufacturing capabilities. Obviously it is a compliant site with quality control and quality assurance systems in place. It is a secure facility. We have been manufacturing BioThrax there for many years, so we understand the regulatory requirements. So from that side, I think we have checked all the boxes. Eric Schmidt - Cowen & Company : Great, thanks a lot.

Your next question comes from Daniel Mallin from WBB Securities.

I have a couple of clarification questions on the rPA. I know that much has been made about the delay, but I am more interested in terms of the time frame to develop a successful rPA vaccine assuming that one can ultimately be developed. I know that the contracts are actually eight years. I am wondering if you can sort of map out for me a little bit, assuming that a contract was awarded or two contracts were awarded: in other words, let’s say tomorrow you received a contract, where do you stand in terms of the development? I don’t think you have done any manufacturing validation trials. I guess you are still playing with lab scale material that was either given to you by VaxGen or that you produced in small reactors on your own, but clearly to initiate an additional trial you would have to do some manufacturing validation trials. So, I guess if you could just try and map out for me a little bit under the presumption that a contract award is made henceforth, how quickly would we expect to have an additional trial begin. I assume it would be an additional phase II trial. From there do you think that it is really eight years to deliver the 25 million doses, or is it conceivable that it can be done in say five or six?

That is a loaded question Dan, let me see if I can answer each aspect of it as best as I can. First let me say that whenever there is an X transfer from one facility to another there would have to be process validation conducted. We are in the process of transferring from the VaxGen facility to our facility and so after the tech transfer has been completed we would start validation. With respect to the other question you have, which is what would be the next clinical trial that we envision. Yes, your assumption that it would be a stage II trial is correct. So, that would be done as soon as there is an award and we can gear up for that clinical trial. With respect to how long would it take? The government has given us five to eight years to do that. I think that given the failure of the previous rPA developer and doing this under stressed timelines I think has given the government the motivation to give us, the developers, more time to develop. So rather than setting us up for failure the government wants us participating, as we would like the government to do. I think the process has been very informative. I think it has been a very constructive for the government and certainly they haven’t put pressure on trying to get the process done unreasonably quickly. Obviously we are all interested in completing the licensure as quickly as possible. The other variable is when can you actually deliver a product into the SNS. The answer is when it is EUA able. The question still remains largely open, when is a product EUA able? Is it when it has completed its phase III studies? When it has completed all of the pivotal animal studies? Or sometimes it is before that and there is still some question as to when a product can actually be delivered into the SNS. The conservative approach would be to say it’s very close to actually being licensed. If you take that conservative approach, yes it might take the full eight years to get there.

I have just one other observation in response to your comment regarding lab scale versus full scale. The material that we have was made at full scales, so we are not talking about highway patches or lab scale material. This is manufactured at full scale, the commercial scale that we would take for the final product. So, I just wanted to clarify that. In terms of the next study, it would be very quickly after contract award would be the current plan so that we can continue on the development path that had been started before we assumed control of the product.

I assume you would have to manufacture some proteins specific for your next trial as opposed to using whatever protein you might have inherited from VaxGen, yes?

Not necessarily. I don’t think that is necessarily a fair conclusion. We would obviously formulate the product as we have now designed it and then proceed with the trial. But again, that is part of our regulatory plan and we think that is entirely reasonable. We have had outside debt consultants working with us on this and everybody has netted it. We are going to meet with the FDA as we indicated earlier and we will get some visibility into their views as well.

Are you currently developing this program with any government funding or grants or is this all based on internal funds?

When we met with BARDA we asked that question, whether we would be able to secure pre-contract funding for the continued development of the rPA. The response was bidders in this RFD are not eligible to receive pre-contract award funding. So, we understand that would be true for all participants in this process.

Thank you and once again congratulations on the quarter.

Your final question comes from Greg Wade from Wedbush Morgan.

I was just wondering if you might give us the number of doses that were delivered to the SNS in the first quarter and how many doses remain under contract 1.

The question was actually posed a little bit earlier and we don’t give out specific dose numbers, but I did allude to in answering the earlier question that approximately $2 million in change remain under the current contract; that when that is completed we anticipate beginning delivery under the 14.5 million-dose contract, so it will be fairly transparent.

Thanks so much.

Craig Gordon - Cowen & Company: I apologize for Eric getting in front of me; you know sometimes you just can’t control him. In terms of the BioThrax expansion for the facility, the timelines for that is that a 2009 event where you think you can kind of be more specific about that or should we think of more details behind that plan, more in the 2010 time frame?

Obviously about a year ago before the RFP for rPA we had envisioned manufacturing BioThrax at large scale in the brand new automated facility. We were all excited about it. Then when the RFP came out we felt that this asset would be critical in securing large scale in large order for rPA manufacturing. So, now that this facility, as I mentioned before, is currently dedicated in the pursuit of pre-award activity. Now, since then and every quickly we looked at other options within our facility and outside the facility because as you know, I don’t know if you have been to our facility in Lansing, we have 12.5 acres with there with several buildings where we could look at relatively quickly to install additional capacity at the current scale. We are looking at different options and as soon as we have a plan that is thought through and finalized we will update you on that. Craig Gordon - Cowen & Company: Great and in terms of Typhella, my understanding, are we still waiting on phase IIb data from the U.S. trail or has that already gone into phase IIc and can you just update us on the timelines for Typhella and when do you see that product going into phase III depending on the phase II data?

The clinical study reports are due to come out next month. The trial is done here in the United States and we will of course report and publish that; Thereafter we are planning to take Typhella along with hepatitis B to an Asian partner. It could be the same Chinese partner; it could be another partner and with that then we would gear up for a subsequent clinical trial. Craig Gordon - Cowen & Company: Great, thank you very much for taking my questions.

This concludes the question- and-answer portion of today’s call. I will now turn the call back over to Mr. Robert Burrows.

Thank you, Antoine. Ladies and gentlemen that concludes today’s call and thank you all for your participation. Please note that today’s call has been recorded and a replay will be available beginning later today through the 21st of May. Alternatively there is a web cast of today’s call available, an archived version of which will be available later today, accessible through the Company’s website. Again that is www.emergentbiosolutions.com. Thanks again and we look forward to speaking to all of you in the future. Good-bye.

Thank you for your participation in today’s conference call. This concludes the presentation. (Operator Instructions) Have a good day.