EMERGENT BIOSOLUTIONS TO ACQUIRE CANGENE CORPORATION

• Solidifies leadership position in growing biodefense market with 3 additional US government procured therapeutics
• Advances Biosciences Division toward profitability through significant commercial product and service revenue
• Broadens manufacturing capabilities with revenue generating fill/finish business
• Expected to be accretive in 2014, exclusive of transaction-related costs
• Plan to fund acquisition through existing cash resources and new bank facility

Emergent BioSolutions Inc. (NYSE: EBS) announced today that it has entered into a definitive agreement withCangene Corporation (TSX: CNJ) under which Emergent will acquire all of the outstanding common shares ofCangene in an all-cash transaction valued at $3.24 per share on a fully diluted basis for an aggregate purchase price of $222 million. The transaction is consistent with Emergent's growth plan in that it diversifies the company's revenue mix, adds commercial product sales and contributes to earnings growth. The transaction is expected to be accretive in 2014, exclusive of transaction-related costs.

The Boards of Directors of both companies have approved the transaction. Agreements are in place with shareholders who collectively control, directly or indirectly, approximately 61% of the outstanding common shares of Cangene, under which they have agreed to irrevocably support and vote in favor of the transaction. The companies expect to complete the transaction in the first calendar quarter of 2014.

"The acquisition of Cangene is consistent with our stated growth plan to acquire revenue generating products that leverage our core capabilities," said Daniel J. Abdun-Nabi, president and chief executive officer of Emergent BioSolutions. "The addition of Cangene is expected to accelerate our growth driven by a substantially expanded biodefense franchise, a portfolio of approved specialty therapeutics sold through an established commercial infrastructure, and fill/finish manufacturing capabilities with growing contract revenues. The combined company presents a clearly attractive financial profile with pro forma total revenues of over $430 million and pre-tax operating income of approximately $55 million. This acquisition represents an important step in advancing Emergent's leadership in specialty pharmaceuticals and positions us to drive significant growth in shareholder value."

Cangene Corporation is a biopharmaceutical company focused on the development and commercialization of specialty therapeutics, primarily targeting biodefense applications as well as infectious disease, hematology and transplantation. Cangene has three specialty products that are included in the U.S. Strategic National Stockpile: BAT® (Botulism Antitoxin (Equine) Heptavalent), VIGIV® (Vaccinia Immune Globulin Intravenous (Human)), and AIGIV (Anthrax Immune Globulin Intravenous). Cangene also has four approved commercial specialty products: WinRho® SDF (Rho(D) Immune Globulin Intravenous (Human)), HepaGam B® (Hepatitis B Immune Globulin (Human) Injection), VARIZIG® (Varicella Zoster Immune Globulin (Human)), and episil®.Cangene maintains manufacturing and plasma collection facilities in Winnipeg, Manitoba, contract manufacturing facilities in Baltimore, Maryland, and a sales and marketing office in Philadelphia, Pennsylvania.

"This transaction represents an exciting and very promising opportunity for Cangene and delivers significant value to our shareholders," stated John Sedor, president and chief executive officer of Cangene Corporation. "Cangene has a history of success in medical countermeasures while building a growing, profitable product portfolio supported by a strong, focused commercial platform and an established contract manufacturing operation. Our diversified business across biodefense, specialty pharmaceuticals and contract manufacturing is strategically consistent with Emergent's infrastructure and vision for the future. We are confident the Emergent team believes in what we do, in our products, in our people and in our potential. We look forward to building a highly successful future together."

Benefits of the Transaction

Emergent expects that the transaction will provide the following benefits:

1. Solidifies leadership position in growing biodefense market with 3 additional US government procured therapeutics

• Cangene's biodefense business consists of three medical countermeasures targeting botulinum, smallpox and anthrax, and each with an existing multi-year US government contract.
  • BAT® (Botulism Antitoxin (Equine) Heptavalent) — the only FDA-licensed therapeutic for the treatment of symptomatic botulism following suspected or documented exposure to the botulinum neurotoxin serotypes A, B, C, D, E, F or G.
  • VIGIV® (Vaccinia Immune Globulin Intravenous (Human)) — an FDA-licensed therapeutic for the treatment of complications due to smallpox vaccination, including eczema vaccinatum, progressive vaccinia, severe generalized vaccinia, vaccinia infections in individuals who have skin conditions, and aberrant infections induced by vaccinia virus, except in cases of isolated keratitis.
  • AIGIV (Anthrax Immune Globulin Intravenous) — an investigational therapeutic designed for the treatment of toxemia associated with symptomatic inhalational anthrax.

• Cangene's biodefense revenue for its fiscal year ended July 31, 2013 was approximately $50 million.

2. Advances Biosciences Division towards profitability through significant commercial product and service revenue

• Cangene's commercial product portfolio consists of four FDA-licensed, hospital-based specialty therapeutics targeting infectious diseases, hematology and transplantation and sold worldwide through an established commercial infrastructure.
  • WinRho® SDF (Rho(D) Immune Globulin Intravenous (Human)) — a therapeutic for the treatment of immune thrombocytopenia purpura (ITP) in Rho(D)-positive patients and for the suppression of Rh isoimmunization in non-sensitized Rho(D)-negative patients, otherwise known as hemolytic disease of the newborn (HDN).
  • HepaGam B® (Hepatitis B Immune Globulin (Human) Injection) — an immune globulin for the prevention of Hepatitis B recurrence following liver transplant in HBsAg-positive liver transplant patients and post-exposure prophylaxis in the following settings: acute exposure to HBsAg-positive blood, plasma, or serum, perinatal exposure of infants born to HBsAg-positive mothers, sexual exposure to HBsAg-positive persons, and household exposure to persons with acute HBV infection.
  • VARIZIG® (Varicella Zoster Immune Globulin (Human)) — a post-exposure prophylaxis of varicella in high-risk individuals intended to reduce the severity of chickenpox infections.
  • episil® — a medical device for the management and relief of pain associated with oral lesions of various etiologies, including oral mucositis/stomatitis, which may be caused by chemotherapy or radiotherapy.

• Cangene's commercial product revenue for its fiscal year ended July 31, 2013 was approximately $44 million.

3. Broadens manufacturing capabilities with revenue generating fill/finish business

• Cangene's contract manufacturing operations provide fill/finish services supporting over 20 approved products sold worldwide.
• Cangene's contract manufacturing revenue for its fiscal year ended July 31, 2013 was approximately $33 million.

4. Attractive financial profile of combined company

• Pro forma total revenues of approximately $436 million and operating income of approximately $55 million, calculated based on Cangene's FY 2013 results and the trailing twelve month period of September 30, 2013for Emergent.
• Diversified revenues in both the Biosciences and Biodefense Divisions with attractive gross margins.

Financing

In connection with the transaction, Emergent has secured committed debt financing from Bank of America Merrill Lynch along with PNC Bank and J.P. Morgan Chase Bank, N.A., totaling $225 million, which, when combined with existing cash reserves, will be used to finance the acquisition and repay existing indebtedness. The company also anticipates there will be approximately $35 million of cash from Cangene at closing.

Transaction Structure and Approvals

The transaction is structured as a Canadian court-approved plan of arrangement. Completion of the transaction is subject to approval by 66 2/3% of the votes cast by Cangene shareholders, approval by the Ontario Superior Court of Justice, certain regulatory approvals and customary closing conditions. Agreements are in place with shareholders who collectively control directly or indirectly approximately 61% of the outstanding common shares of Cangene, under which they have agreed to irrevocably support and vote in favor of the transaction.

Guidance

Taking into account the expected closing date of Q1 2014, the company is reaffirming its full year 2013 GAAP guidance for total revenues of $300 to $310 million and net income of $25 to $30 million. Excluding approximately $7 million in estimated transaction-related and other costs incurred in the current year, the company is providing a forecast for 2013 non-GAAP adjusted net income of $30 to $35 million (see "Non-GAAP Financial Measures" for a definition of terms and a reconciliation of Non-GAAP adjusted net income to GAAP net income).

The company expects that the transaction will be accretive for 2014 and beyond, assuming a Q1 2014 close. The company anticipates:

• revenue contribution of $90 to $100 million for the partial year period of 2014 with a compound annual growth rate of 4% to 6% over the following three year period (2015-2018); and
• pre-tax operating margin contribution of 4% to 6%, exclusive of transaction-related costs, for the partial year period of 2014, improving to a target of 15% over the following three year period (2015-2018).

Non-GAAP Financial Measures

This press release contains a financial measure, adjusted net income, which is considered a "non-GAAP" financial measure under applicable Securities & Exchange Commission rules and regulations. This non-GAAP financial measure should be considered supplemental to and not a substitute for financial information prepared in accordance with generally accepted accounting principles. The company's definition of this non-GAAP measure may differ from similarly titled measures used by others. The non-GAAP financial measure used in this press release adjusts for specified items that can be highly variable or difficult to predict. The company views this non-GAAP financial measure as a means to facilitate management's financial and operational decision-making, including evaluation of Emergent's historical operating results and comparison to competitors' operating results. This non-GAAP financial measure reflects an additional way of viewing aspects of the company's operations that, when viewed with GAAP results and the reconciliations to the corresponding GAAP financial measure, may provide a more complete understanding of factors and trends affecting Emergent's business.

The determination of the amounts that are excluded from this non-GAAP financial measure is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts. The company is likely to exclude the following items from its non-GAAP adjusted net income in the future, the effect of which is uncertain but may be significant in amount:

• Expenses related to completed and future acquisitions of other businesses, including amortization of acquired intangible and tangible assets, and transaction costs;
• Expenses associated with any potential restructuring activities, including but not limited to, asset impairments, accelerated depreciation, severance costs and lease abandonment charges; and
• Other one-time or non-recurring charges.

Because non-GAAP financial measures exclude the effect of items that will increase or decrease the company's reported results of operations, management strongly encourages investors to review the company's consolidated financial statements and publicly filed reports in their entirety. A reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure is included in the following table.

			(in millions)				Financial Guidance for the Year Ended December 31, 2013
			GAAP Net Income				$25 to $30
			Adjustments:
			-- Cangene transaction-related costs				3.4
			-- HPPD transaction-related costs				0.8
			-- UK restructuring expense				2.8
			-- Adjusted income tax expense				(2.1)
			Non-GAAP Adjusted Net Income				$30 to $35

Advisors

For Emergent, Bank of America Merrill Lynch is acting as financial advisor and DLA Piper and McCarthy Tètrault LLP are acting as legal advisors. For Cangene, Credit Suisse is acting as financial advisor, Raymond James Ltd.provided a fairness opinion and Miller Thomson LLP and Baker & Hostetler LLP are acting as legal advisors.