Good day, ladies and gentlemen and welcome to the Emergent Biosolutions Fourth Quarter and Full Year 2012 financial results conference call. My name is Karris, and I will be your coordinator for today. At this time, all participants are in listen-only mode. Later we will conduct a question-and-answer session. (Operator Instructions) At this time I would now like to turn the call over to your Mr. Bob Burrows, Vice President, Investor Relations. Please proceed.

Thank you, Karris. Good afternoon, ladies and gentlemen and thank you for joining us today as we discuss Emergent Biosolutions' full year 2012 financial results. As is customary our call today is open to all participants. In addition, the call is being recorded and is copyrighted by Emergent Biosolutions. Participating on the call this afternoon with prepared comments will be Dan Abdun-Nabi, our President and Chief Executive Officer, Bob Kramer, our Chief Financial Officer and Dr. Scott Stromatt, our Chief Medical Officer. On prepared comments we will conduct a Q&A session. Before we begin, I am compelled to remind everyone that during the call 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 filing 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 held and recorded on March 7, 2013. Since then, Emergent may have made announcements relating to topics discussed during today's call. So, again, please do 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/news. And with that introduction, I would now like to turn the call over to Dan Abdun-Nabi, Emergent Biosolutions' President and CEO. Dan?

Thank you, Bob. Good afternoon, everyone and thank you for joining our call today. During my prepared comments, I want to review our financials and then discuss the 2012 operational performance and 2013 milestones for each of our operating divisions, that's BioDefense and Biosciences. To begin, total 2012 revenue was $282 million, this was within the $280 million to $284 million range that we provided in our preliminary financial results announced in January. By 2012 net income was $23.5 million also within the $21 million to $24 million range that we provided in January. For 2013, we reaffirm our guidance of total revenue of between $290 million and $310 million and net income of between $20 million to $30 million, Bob Kramer will provide you more detail on both our 2012 financial performance and 2013 guidance in just a moment. I'll now not cover our 2012 operational performance and what we are focused on achieving in the current year. Let me begin with the Biodefense divisions. There are four key drivers with this division, they're BioThrax, Building 55, Grants and Contracts and lastly ADM. First BioThrax, 2012 proved to be another solid year performance, during the year we shipped approximately $216 million worth of product through the Strategic National Stockpile under our current five-year $1.25 billion contract with the CDC. With contract provides for deliveries of BioThrax through September 2016. In 2013, we anticipated another solid year BioThrax shipments to the SNS and we intend to continue our programs designed to enhance the value of BioThrax. Recall in 2012, we secured a three dose primary schedule for BioThrax, and we're now focused on expanding the label to include a PEP indication to that end 2013 will secured the additional funding from BARDA for this important label expansion and we initiated…

Thank you, Dan. Good afternoon. Before I discuss the status of current clinical trials let me take a few moments to review the basics of TRU-016. TRU-016 is a humanized ADAPTIR modular protein technology therapeutic (Inaudible) anti-CD37. ADAPTIR protein formerly known as SMIP and SCORPION are based on a proprietary platform technology that starts with the Monoclonal Antibody making significant modifications to the effective region, the hinge and binding domain. CD37 is a cell surface protein expressed on mature human B-cells as well as on malignant B-cells that comprised B-cell leukemias and lymphomas. The TRU-016 binds the CD37 cell (Inaudible) by three different mechanisms. What is most exciting about TRU-016 that it's mechanism action is unique and is different from any other drug on the market including anti-CD20 antibodies, (Inaudible) PI3K inhibitors, and BTK inhibitors. Based on a preclinical activities TRU-016 molecule is taken to a clinic. TRU-016 has been staged in several clinical trials and the first clinical trial in humans and the single-agent 6 and 7 previously entry (Inaudible), which had partially. And in those with one or two prior treatment regimes the partial response was 37%. These medications that did not reach a partial (Inaudible) malignant lymphocytes were reduced, overall lymphocytes reduction greater than 50% was observed and of all patients treated. That is very encouraging given that this is only the first study in humans with molecule on the (Inaudible) focused on dose regime for safety, so a lot of low doses were tested. We hope for the combination trial TRU-016 to (Inaudible) presented at ASH at the end of last year. In the Phase 1b portion of the study in 12 patients could relapse (Inaudible) the NCI overall response was 83%, with a (Inaudible) rate of 33%. These results are very encouraging. As Dan mentioned…

Thank you, Scott. Good afternoon, everyone. I'd first like to make some general comments about consolidated performance for 2012 compared to prior years and then turn to some highlights of or two operating divisions. Total revenue for the year was up, $282 million slightly up from prior year of $273 million due to higher BioThrax sales. At the operating income line generated a profit of $30 million which was 11% of our total revenue. This is down slightly about $2 million from prior year due in part due to a $9.6 million charge we took in Q2 of 2012 related to the write-down of the SBI-087. We were able to offset part of this additional charge with lower R&D spending in the biosciences division, in particular certain of our preclinical programs. Our gross margins was in line with prior year as was our SG&A. In fact since 2009 our total SG&A expenses increased by a modest 3% or an average 1% for a year. For 2012 our net income was $23.5 million at the upper end of the range we communicated in early January, but essentially flat compared to 2011. Please keep in mind that this performance included $9.6 million write-down, pretax write-down in [BioD] R&D. A quick comment about our effective tax rate for 2012 our effective tax rate was 37% which is not materially different from the combined statutory federal and state rate. If we're able to take further advantage of tax credits, such as R&D and orphan drug status programs in the future we exect that this rate would decrease. At yearend our balance sheet continue to reflect a strong capital position for the company, from the asset side, our combined cash and accounts receivable totaled $238 million up from $220 million in 2011. In terms of…

(Operator Instructions) And your first question from the line of Cory Kasimov with J.P. Morgan. Please proceed.

Hi, there it's actually Matt Lowe in for Cory today. Just a couple of questions. First one of Building 55. I know you mentioned that there's a potential to have that license in late 2014 or early 2015, just wondering, do you expect, or for seeing new contracts to be agreed then or do you think existing contract will run until September 2016, and with the potential for new contract once that one is concluded? And then second question is, yes, I know you mentioned about M&A possibilities this year, just wondering if you could give us more details and what you think the best use of cash is, to build the company whilst also building shareholder value in terms of M&A and as just some of the other options. Thanks.

Yeah, thank you, Matt. I appreciate your participation this afternoon and let me see if I can answer both of those questions. So in terms of the timing on the contract as you know, our existing contract with CDC goes through September 2016, and covers production out of building 12. So all of the delivery schedules and the pricing are really tied to that scale of production. We do anticipate there will be some feathering in of Building 55 production as that facility comes line so that the government can maximize the availability of doses to achieve their stated requirements, ultimately of $75 million doses in of an Anthrax vaccine in the strategic national stockpile. The actual mechanics and the timing and the level of deliveries out of Building 55, we don't have clear visibility we have some ideas as to how this might work. But as of yet, we have not had any discussions with the government about that transition and what it would look like, so we do not expect that we're going to have to wait till 2016 before we start delivering out of 55 but in terms of the total deliveries off 55 together with building 12, it's not exactly clear what that will look like. So when you're second question with respect to M&A and the best use of cash to build the business and to drive the company forward so I think we've made it pretty clear over the course of the last several months about our growth plan for 2013 to 2015 in terms of top line as well as bottom line growth, both the key objectives for the organization, we do believe that in order to achieve the top line growth that we've targeted, M&A is a requirement that we don't have a portfolio of products that would contribute to - BioThrax to get us to that $500 million level. So M&A is a fact of life for us over the next year or two. And so our objective is to do that in the most efficient manner recognizing that we don't want to be in a position where we're suffering dilution or significant dilution and that we are looking for transactions that are accretive, either immediately or within a very short period of time, following acquisition. So we anticipate that cash will be used as part of those acquisitions and we think that's a very valuable and important tool for us in order to achieve the stated plan that we've laid out there for 2015. So hopefully that helps then clarify both trends for you.

Yeah, that was great. And just as a quick follow-up on the R&D spend, just wondering if you could give us some details around the split between BioDefense and other R&D spend now that the TB vaccine program is going to be closed down?

Yeah, I think the -- the way that, we don't give breakouts by the way on a go forward basis for the R&D but the way that you certainly should look at it is -- we do have some grants and contracts revenue which are offsetting, a significant portion of our BioDefense spend and our approach to [BioD] R&D, is if it's not funded then we tend not to do it -- unless it's very modest amounts to get it to an inflection point where we can secure additional funding. But right now you know the BioD is substantially funded. I think that's about as much as I want to say with respect to, you know, prospective allocation between the two divisions in R&D.

Okay. That's helpful. Thank you.

And your next question comes from the line of Ian Somaiya with Piper Jaffray. Please proceed.

Thanks, I had a couple of questions. So maybe, just maybe one follow-up on the R&D spending, I guess I understand that there is not a incremental benefit on the bottom line this year, how should we think about the potential for those cost savings to lead to an improvement and that it be net income outlook for the next couple of years, is there any sort of carry forward on that front?

Well, maybe I'll ask Bob Kramer to comment further after I speak to it. So certainly we're giving guidance for the year and we've incorporated the savings associated with the shutdown of the TB program and the UK operations, which are anticipated some time mid this year. We've incorporated that in our guidance. So in terms of the impact for 2013 I think it's baked into the figures that we've disclosed today and discussed. In terms of a go forward basis, well certainly we're no longer incurring the cost associated with the MVA85A, so those costs will no longer be there and I don't know, Bob do you have any further comment to add or for next year?

No, I think you hit it correctly, Dan and it's again, as we commented earlier there will be some savings in R&D in 2013, because of the discontinuance of the program. 2013 will be a bit of a wind down here for that program so while we expect that net-net there will be some savings to 2013, it's not going to be material to the bottom-line and it's not going to change our guidance on net income.

But, and I guess my question is more specific to '14 and beyond and this is in relation to the guidance you've already given for those year. Obviously you have cost savings in place, because you're not pursuing the product anymore, should we assume that that leads to that represents a source of upside to your net income guidance?

So, let me just comment on our 2015 goal or plan. Because I think it's very important that we recognize that we are not forecasting 2014 is part of that. And we have specifically indicated, we don't expect this to be incremental, even stepwise progress towards that goal of top line and bottom line. It will be more of a gradual in the early years and steeper in the later year. So I don't think you should be thinking of this as a even step wise progress year-over-year to 2015 plan numbers that we put out there.

Okay. And another question I had was just on sequestration, and how would you think about that, in terms of your ongoing relationship with the U.S. government or most specifically BARDA?

Yeah, so the sequestration impact I think we've covered that at least with respect to BioThrax procurement. We don't anticipate any impact at all, as a result of the funds already being fully obligated and I take even with respect to grace in contracts. I think great comfort in the recent authorization of PAHPA that was both houses of congress, both sides of the aisle. We do anticipate the President is going to assign us. So I think this is broad base support and what we're seeing is no reduction at all in front end compared to 2012 levels. And they maintained finding for the next five years in the program of course we have to go through the appropriation process. But what we are seeing is broadbase support for the biodefense industry which one of the very recent that we've indicated as part of our plan that we intend to extend our resource in biodefense, we think it's a very viable and healthy marketplace, we have a leadership position, we have very close ties with BARDA on a number of programs that we're working on collaboratively with them. So I think, the picture overall despite the news and the storage regarding sequestration is very positive for the biodefense industry.

Okay. If I could just ask one last question for Scott on TRU-016, just give us a sense of where do you see the (inaudible) setting in is and you mentioned or you alluded to in your prepared remarks that where we are seeing a change and sort of the treatment algorithm for CLL, lymphoma, B cell malignancies broadly speaking, where does 016 fit in and how much – at what point do you seek it their partner or seek to potentially just out license the opportunity?

Well, module has good activity and very good safety, and as you know the disease cannot be cure. And so we see it being using combination with the product activation. We've done in combination with bendamustine, with rituximab, PI3K inhibitor and we see active but synergistic activity. And so we see a definitely working combination there. As you know the feels moving away from toxic chemotherapy regime to more non-toxic. So I see it being using combination with those type of drug. Now in terms of partnering we are looking for partner now and that are our goal to work with partner because I think there is some good opportunities for the molecule.

Yeah, and on the partnering front, let me just add to that Scott we've indicated again tied to our growth plan that our preference for advanced clinical stage candidates is to partner out. It has a lot of benefits, it reduces, it does reduce potential costs associated with the further development, it provides some significant commercialization capability, it may enable us to accelerate timeline. So we see a lot of benefits associated with partnering the candidate and to Scott point we have started that process and we think there is a real opportunity to strike a valuable partnership for TRU-016.

Okay, thank you.

(Operator Instructions) And our next question comes from the line of Eric Smith with Cowen and Company. Please proceed. Eric Smith – Cowen and Company: Thanks for taking my question, Dan on PAHPA has any money been specifically allocated for anthrax or is anthrax still prioritized within the biodefense budget?

Yeah, so under the PAHPA legislation there was over $500 million allocated to replenishment of the stock file for SNS for each of the next five years. So that is the specific dollar amount and BioThrax is part of that replenishment. So indirectly the answer is yes. Specific money identified for replenishing the stock pile at levels that we see today. Eric Smith – Cowen and Company: Okay. Then on the guidance not to beat the dead horse, but I guess what I'm struggling with regard to 2013 is that you've guided at the midpoint of your revenue guidance to revenues that are about $20 million nearly $20 million higher than what you just saw in 2012. You suggested that the expenses are going to be in the same ballpark despite kind of some costs savings both on the R&D and SG&A side that you might have. Your net income guidance really is in any different from we just saw in 2012. So where are the incremental, where is the incremental revenue going I guess?

Bob, do you want to take that?

Eric, I'm not quite sure I followed the question. Eric Smith – Cowen and Company: Well, it sounds like your – at the midpoint your revenue guidance is higher, your expense guidance is certainly no higher if anything little bit lower, yet your net income guidance is in line with what we just saw year-on-year.

Yeah, so again as we described, I mean 2013 will be a bit of a transition year. We have to – as we implement our growth strategy, it's not going to be down as Dan indicated over night. It will take us sometime to unwind the development programs to the extent that we make those decisions in 2013, as well as wind up on the growth strategy, the M&A activity with the plan to pursue in 2013. So it will take a little bit of time for us to get things lined up and pursue to those growth plan objectives. Eric Smith – Cowen and Company: I mean, specifically on the tax rate side Bob would you think that the 37% you just posted in 2012 would be a good number, and if you had any R&D credits as you mentioned it could be a little less?

Well again we anticipate or expect that to the extent that we can more fully utilize those tax credits in 2013 and beyond the tax rate overall will begin to creep down but as you know it's all depend on our ability to take advantage of those credit opportunities. But yes, I mean we would expect that to trend down. Eric Smith – Cowen and Company: Okay. Then last question I assume you just go to pause on the share buyback program, I didn't see any further share count reductions in the quarter?

No, well through the end of the year in the program was active, it still active today and we are occasionally in the market opportunistically exercising the program and we'll give updates on a quarter-by-quarter basis going forward but at the end of the year we were -- we had purchased just short of 400,000 shares at $5.8 million of value. So we're again it's an active program, we assess from time-to-time the appropriateness of engaging the activity and we'll update you accordingly. Eric Smith – Cowen and Company: Thank you.

Sure.

At this time there are no further questions in queue.

Great, thank you, Karris. Ladies and gentlemen, that's all the time we have today, thank you for your participation. Please note that today's call has been recorded and a replay will be available beginning later today through March 21. Alternatively, there is available a webcast of today's call, an archived version of which will be available later today accessible through the company's website at www.emergentbiosolutions.com and clicking on the investors tab. Thank you again and we look forward to speaking with all of you in the future. Goodbye.

And ladies and gentlemen that does conclude today's conference. Thank you for your participation. You may now disconnect. Have a wonderful day.