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Stock-based compensation and stockholders' equity | 9 Months Ended
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Sep. 30, 2023
Stockholders' Equity Note [Abstract] |
Stock-based compensation and stockholders' equity | Stock-based compensation and stockholders' equity Stock-based compensation During the nine months ended September 30, 2023, the Company granted stock options to purchase 0.8 million shares of common stock, 1.6 million restricted stock units and 0.5 million performance stock units under the Emergent BioSolutions Inc. Amended and Restated Stock Incentive Plan. Performance stock units are presented at the target payout percentage of 100% of target shares granted and the maximum potential payout percentage is up to 200% of target shares granted. Typically, the stock options and restricted stock unit grants vest over three equal annual installments beginning on the day prior to the anniversary of the grant date. The performance stock units settle in stock at the end of the three-year performance period based on the Company's results compared to the performance criteria. During the nine months ended September 30, 2023, 0.9 million of stock options and 0.7 million shares of restricted stock units were forfeited prior to the completion of the applicable vesting requirements or expiration. Additionally, 0.3 million performance stock units were forfeited during the nine months ended September 30, 2023, as the award targets or vesting requirements were not achieved. Stock-based compensation expense, net of forfeitures was recorded in the following financial statement line items:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Cost of product sales | $ | 1.0 |  |  | $ | 1.8 |  |  | $ | 3.6 |  |  | $ | 5.4 |
Cost of CDMO | 0.2 |  |  | 0.4 |  |  | 0.8 |  |  | 1.4 |
R&D | 0.6 |  |  | 1.3 |  |  | 1.7 |  |  | 3.9 |
Selling, general and administrative | 2.2 |  |  | 7.7 |  |  | 13.0 |  |  | 22.7 |
Total stock-based compensation expense | $ | 4.0 |  |  | $ | 11.2 |  |  | $ | 19.1 |  |  | $ | 33.4 |
At-the-Market Equity Offering Facility We may, from time to time, sell up to $150.0 million aggregate gross sales price of shares of our common stock through Evercore Group L.L.C. and RBC Capital Markets, LLC, as sales agents, under an “at-the-market” equity offering program (the “ATM Program”) that we entered into on May 18, 2023. There were no sales of our common stock under the ATM Program during the three months ended September 30, 2023. Between the entry into the ATM Program and September 30, 2023, we sold 1.1 million shares of our common stock under the ATM Program for gross proceeds of $9.1 million, representing an average share price of $8.22 per share. As of September 30, 2023, $140.9 million aggregate gross sales price of shares of our common stock remains available for issuance under the ATM Program. We intend to use proceeds obtained from the sale of shares under the ATM Program for general corporate purposes. 2023 Inducement Plan On September 28, 2023, the Company's Board of Directors adopted and approved the Emergent BioSolutions, Inc. Inducement Plan (the "Inducement Plan"), pursuant to which the Company may from time to time make equity grants to individuals not previously an employee or director of the Company or any of its subsidiaries (or following a bona fide period of interruption of employment) as a material inducement to their employment by the Company. The Inducement Plan was adopted by the board of directors without stockholder approval pursuant to New York Stock Exchange Listing Rule 303A.08. The board of directors reserved 5,000,000 shares of the Company's common stock for issuance under the Inducement Plan. The terms and conditions of the Inducement Plan are substantially similar to the Company's stockholder-approved Emergent BioSolutions Inc. Amended and Restated Stock Incentive Plan. As of September 30, 2023, no shares had been issued under the Inducement Plan. 2021 Share Repurchase Program On November 11, 2021, the Company announced that its board of directors authorized a stock repurchase program of up to an aggregate of $250.0 million of common stock (the "2021 Share Repurchase Program"), of which $187.9 million was utilized to purchase approximately 4.4 million shares. The 2021 Share Repurchase Program expired on November 11, 2022. During the three months ended September 30, 2022, there were no shares repurchased. During the nine months ended September 30, 2022, the Company utilized $75.5 million to purchase approximately 1.8 million shares. The 2021 Share Repurchase Program did not obligate the Company to acquire any specific number of shares. Repurchased shares are available for use in connection with the Company's stock plans and for other corporate purposes. Accumulated other comprehensive income (loss), net of tax The following table includes changes in accumulated other comprehensive income (loss), net of tax by component:
|  | Defined Benefit Pension Plan |  | Derivative Instruments |  | Foreign Currency Translation Adjustments |  | Total
Balance at December 31, 2022 |  | $ | 3.5 |  |  | $ | 6.2 |  |  | $ | (6.6) |  |  | $ | 3.1 |
Other comprehensive income (loss) before reclassifications |  | — |  |  | (4.4) |  |  | (0.1) |  |  | (4.5) |
Amounts reclassified from accumulated other comprehensive income (loss) |  | — |  |  | 2.4 |  |  | — |  |  | 2.4 |
Net current period other comprehensive income (loss) |  | — |  |  | (2.0) |  |  | (0.1) |  |  | (2.1) |
Balance at March 31, 2023 |  | $ | 3.5 |  |  | $ | 4.2 |  |  | $ | (6.7) |  |  | $ | 1.0 |
Other comprehensive income (loss) before reclassifications |  | — |  |  | 1.2 |  |  | 2.6 |  |  | 3.8 |
Amounts reclassified from accumulated other comprehensive income (loss) |  | (3.5) |  |  | (2.9) |  |  | — |  |  | (6.4) |
Net current period other comprehensive income (loss) |  | (3.5) |  |  | (1.7) |  |  | 2.6 |  |  | (2.6) |
Balance at June 30, 2023 |  | $ | — |  |  | $ | 2.5 |  |  | $ | (4.1) |  |  | $ | (1.6) |
Other comprehensive income (loss) before reclassifications |  | — |  |  | 0.9 |  |  | 1.2 |  |  | 2.1 |
Amounts reclassified from accumulated other comprehensive income (loss) |  | — |  |  | (3.1) |  |  | — |  |  | (3.1) |
Net current period other comprehensive income (loss) |  | — |  |  | (2.2) |  |  | 1.2 |  |  | (1.0) |
Balance at September 30, 2023 |  | $ | — |  |  | $ | 0.3 |  |  | $ | (2.9) |  |  | $ | (2.6) |
Balance at December 31, 2021 |  | $ | (4.0) |  |  | $ | (4.5) |  |  | $ | (7.6) |  |  | $ | (16.1) |
Other comprehensive income (loss) before reclassifications |  | — |  |  | 4.9 |  |  | 0.5 |  |  | 5.4 |
Amounts reclassified from accumulated other comprehensive income (loss) |  | — |  |  | 1.4 |  |  | — |  |  | 1.4 |
Net current period other comprehensive income (loss) |  | — |  |  | 6.3 |  |  | 0.5 |  |  | 6.8 |
Balance at March 31, 2022 |  | $ | (4.0) |  |  | $ | 1.8 |  |  | $ | (7.1) |  |  | $ | (9.3) |
Other comprehensive income (loss) before reclassifications |  | — |  |  | 1.9 |  |  | 0.4 |  |  | 2.3 |
Amounts reclassified from accumulated other comprehensive income (loss) |  | — |  |  | 0.9 |  |  | — |  |  | 0.9 |
Net current period other comprehensive income (loss) |  | — |  |  | 2.8 |  |  | 0.4 |  |  | 3.2 |
Balance at June 30, 2022 |  | $ | (4.0) |  |  | $ | 4.6 |  |  | $ | (6.7) |  |  | $ | (6.1) |
Other comprehensive income (loss) before reclassifications |  | — |  |  | 2.6 |  |  | (1.3) |  |  | 1.3 |
Amounts reclassified from accumulated other comprehensive income (loss) |  | — |  |  | (0.4) |  |  | — |  |  | (0.4) |
Net current period other comprehensive income (loss) |  | — |  |  | 2.2 |  |  | (1.3) |  |  | 0.9 |
Balance at September 30, 2022 |  | $ | (4.0) |  |  | $ | 6.8 |  |  | $ | (8.0) |  |  | $ | (5.2) |
The tables below present the tax effects related to each component of other comprehensive income (loss):
| Three Months Ended September 30,
| 2023 |  | 2022
| Pretax |  | Tax Expense |  | Net of tax |  | Pretax |  | Tax Expense |  | Net of tax
Defined benefit pension plan | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Derivative instruments | (3.1) |  |  | 0.9 |  |  | (2.2) |  |  | 3.0 |  |  | (0.8) |  |  | 2.2 |
Foreign currency translation adjustments | 0.9 |  |  | 0.3 |  |  | 1.2 |  |  | 0.1 |  |  | (1.4) |  |  | (1.3) |
Total adjustments | $ | (2.2) |  |  | $ | 1.2 |  |  | $ | (1.0) |  |  | $ | 3.1 |  |  | $ | (2.2) |  |  | $ | 0.9 |
| Nine Months Ended September 30,
| 2023 |  | 2022
| Pretax |  | Tax Expense |  | Net of tax |  | Pretax |  | Tax Expense |  | Net of tax
Defined benefit pension plan | $ | (4.1) |  |  | $ | 0.6 |  |  | $ | (3.5) |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Derivative instruments | (8.0) |  |  | 2.1 |  |  | (5.9) |  |  | 15.4 |  |  | (4.1) |  |  | 11.3 |
Foreign currency translation adjustments | 2.9 |  |  | 0.8 |  |  | 3.7 |  |  | 2.1 |  |  | (2.5) |  |  | (0.4) |
Total adjustments | $ | (9.2) |  |  | $ | 3.5 |  |  | $ | (5.7) |  |  | $ | 17.5 |  |  | $ | (6.6) |  |  | $ | 10.9 |

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