Financial Data and Key Metrics Changes - Net income for Q1 2025 was $68 million, representing a 656% increase compared to Q1 2024 [17] - Total revenues were $222 million, down from the prior year due to lower NARCAN and VAC sales, partially offset by higher international smallpox sales [19] - Adjusted EBITDA was $78 million, an increase of $11 million year-over-year, with an adjusted EBITDA margin of 35%, up 1,300 basis points [20] - Adjusted gross margin improved to 58%, a 700 basis point increase year-over-year due to product mix and improved cost structure [20] Business Line Data and Key Metrics Changes - Medical countermeasure (MCM) products generated $91 million in sales outside the U.S. in Q1 2025, contributing significantly to overall revenue [19] - NARCAN sales experienced a decline due to pricing impacts and competition from generic products, but trends improved in the early weeks of Q2 2025 [22][23] - The company reaffirmed revenue and adjusted EBITDA guidance for 2025, focusing on core strengths in medical countermeasures and opioid overdose reversal treatments [10][27] Market Data and Key Metrics Changes - The company reported strong international sales, with approximately 40% of overall revenue coming from outside the U.S. [57] - The naloxone market is expected to grow at a mid-single-digit rate, with the public interest segment being the largest contributor [31][50] - A significant contract valued at $65 million was secured with the province of Ontario for NARCAN supply, indicating growth potential in Canada [34][51] Company Strategy and Development Direction - The company is focused on a multiyear turnaround plan aimed at stabilizing operations, improving profitability, and achieving sustainable growth [8] - Strategic business development transactions were completed to enhance core capabilities, including partnerships for medical countermeasures [10] - The company is actively managing its manufacturing footprint to mitigate tariff impacts and ensure compliance with USMCA [15][43] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing improved cash flow and liquidity, with total liquidity of $249 million as of Q1 2025 [24] - The company anticipates strong profit follow-through from 2024, despite lower top-line revenue, indicating a focus on margin improvement [28] - Management highlighted the importance of continued collaboration with government stakeholders to meet expectations for 2025 deliveries [13] Other Important Information - The company announced a $50 million share repurchase program, which will expire in March 2026 [26] - An annual ESG report for 2024 was published, emphasizing the company's commitment to quality and sustainability [29] Q&A Session Summary Question: Can you discuss your manufacturing footprint and tariff exposure? - The majority of products are manufactured in the U.S. or Canada, with limited tariff exposure due to USMCA compliance [42][43] Question: What drove the gross margin improvement this quarter? - Cost reductions from divestitures and a favorable product mix, particularly higher-margin international orders, contributed to gross margin improvement [45][46] Question: Were NARCAN dynamics considered in the Q1 revenue forecast? - Yes, the company anticipated some impacts from competition and federal funding delays, gaining clarity as the quarter progressed [47][48] Question: What is the expected growth for different segments in the naloxone market? - The public interest segment remains the largest, but business-to-business activities are expected to grow faster due to new initiatives [50][51] Question: How will the $65 million contract with Ontario be allocated? - It is reasonable to assume the revenue could come in fairly evenly over the three-year contract period [60] Question: Will the company benefit from pharmaceutical manufacturing onshoring? - The company is well-positioned with its manufacturing network and has capacity for drug substance and fill-finish, looking to assist companies transitioning back to the U.S. [61][62]

Financial Data and Key Metrics Changes - Net income for Q1 2025 was $68 million, representing a 656% increase compared to Q1 2024 [16] - Total revenues were $222 million, a decline from the previous year due to lower NARCAN and VAC sales, partially offset by higher international smallpox sales [18] - Adjusted EBITDA was $78 million, an increase of $11 million year-over-year, with an adjusted EBITDA margin of 35%, up 1,300 basis points [19] - Adjusted gross margin improved to 58%, a 700 basis point increase year-over-year due to product mix and improved cost structure [19] Business Line Data and Key Metrics Changes - Medical countermeasure (MCM) products generated $91 million in sales outside the U.S. in Q1 2025, contributing significantly to overall revenue [18] - NARCAN sales experienced a decline due to pricing impacts and competitive pressures, but trends improved in the early weeks of Q2 2025 [22][30] - The company reaffirmed revenue and adjusted EBITDA guidance for 2025, indicating confidence in operational performance despite revenue fluctuations [9][27] Market Data and Key Metrics Changes - International sales accounted for approximately 40% of total revenue in Q1 2025, highlighting the company's focus on global market expansion [56] - The naloxone market is expected to grow at a mid-single-digit rate, with the company emphasizing its competitive position in this segment [31][48] Company Strategy and Development Direction - The company is focused on a multiyear turnaround plan aimed at stabilizing operations, improving profitability, and achieving sustainable growth [7] - Strategic business development transactions were completed to enhance core capabilities, including partnerships for medical countermeasures [9] - The company is committed to combating the opioid overdose epidemic and expanding access to NARCAN through various distribution channels [11][33] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing improved cash positions and strong receivable collections expected in Q2 2025 [10][23] - The company anticipates strong profit follow-through from 2024, despite lower top-line revenue, indicating a focus on margin improvement [28] - Management highlighted the importance of international preparedness for medical countermeasures in light of global health threats [56] Other Important Information - The company has a total liquidity of $249 million, which includes cash and undrawn revolver capacity, providing a solid foundation for strategic growth initiatives [23] - A $50 million share repurchase program was announced, with no purchases made in Q1 2025, indicating a cautious approach to capital allocation [26] Q&A Session Summary Question: Can you discuss your manufacturing footprint and tariff exposure? - The majority of products are manufactured in the U.S. or Canada, with limited tariff exposure due to USMCA compliance [41] Question: What drove the gross margin improvement this quarter? - Cost reductions from divestitures and a favorable product mix, particularly from international orders, contributed to gross margin improvement [44][45] Question: Were NARCAN dynamics considered in the Q1 revenue forecast? - Yes, some impacts were anticipated, but clarity on the magnitude of competitive pressures improved over the quarter [46][47] Question: How do you see the naloxone market growing? - The market is expected to grow at a mid-single-digit rate, with public interest remaining the largest segment, but business-to-business activities are anticipated to grow faster [49][50] Question: Will the $65 million contract with Ontario be evenly distributed over three years? - It is reasonable to assume that revenue from the contract will be recognized fairly evenly over the three years [58] Question: Is the company likely to benefit from manufacturing onshoring? - The company is well-positioned with existing manufacturing capacity and is open to supporting companies transitioning back to the U.S. [60][61] Question: Has the company been actively repurchasing stock? - The company will provide updates on the share repurchase program each quarter, but no purchases were made in Q1 2025 [63]