Great. Welcome, everyone. My name's Jess Fye. I'm a biotech analyst at J.P. Morgan, and we're continuing the 43rd Annual Healthcare Conference today with Emergent. First, you're going to hear a presentation from the company, and then we're going to get into some Q&A. And if you have a question in the audience, just raise your hand. Someone will bring you a microphone, or you can submit them via the portal, and I'll ask them for you up here. So with that, let me pass it over to Emergent's CEO, Joe Papa.
Thank you, Jess.
Thank you, Jess, and good afternoon, everyone. It's great to be here and have the opportunity to present Emergent. Emergent's a 25-year-old company. It's in the very first stage of a turnaround, where we were focused on first stabilizing the company, then turning it around and ultimately transforming the company. We're in a multi-year process. I'm excited to be able to talk more about it, and specifically some of the things that really are our focus for the future. We've done a lot this year, but a lot more to do, to be clear. One of the things you'll hear from us, I think that is somewhat unique in terms of what we are focused on. We're a company here presenting in healthcare that enjoys bipartisan support for the two areas that we focus on, both opioid overdoses and then also the medical countermeasures or biodefense.
We're delighted to have bipartisan congressional support. As I go to the slides, I want to clearly talk about a couple of things. I will have some forward-looking statements. I will refer you to our safe harbor through the SEC filings and all of the risk factors there for your information. As I think about the company, what I really wanted to talk about is I'll start with the team, the team that's with me at Emergent. I only joined Emergent in February of 2024, so it's been right about 11 months for me since I joined the company. This is the rest of the team. We have over hundreds of years of experience with the team, a number of new players. Simon Lowery, our Chief Medical Officer, just recently joined us. Also, we just have a new General Counsel, Jessica Pearl. She joined us in the fall.
And then Colleen, an individual who's heading up our quality group. It's been a couple of years, but she's made a big difference in what we've done as a company in terms of our focus on quality. If you think about Emergent, I want to just give you the quick snapshot on slide number five. As I mentioned before, our 25-year track record in public health. Our mission is to protect, enhance, and save lives. And we provide a number of solutions for complex and urgent public health threats. In fact, our aspiration is to be the leader in solving global public health threats. We have 10 marketed products and also provide some contract manufacturing services from our facilities. We have about $1 billion of revenue. That's just a quick view of our company. This slide really is probably representing some of the most unique parts of our company.
If you think about the products that we make and the complexity of our products, we provide a vaccine and a therapeutic for anthrax, one of the most potent bacteriologic threats from the biodefense world. We provide a vaccine and therapeutic for smallpox, probably one of the most lethal viruses and one that people are most concerned about when they think about virus threats. We also provide a botulism antitoxin. We know that botulinum is one of the most lethal biologic toxins out there. These are things that we get a chance to focus on each and every day, and these are important biodefense issues for us as a company. If you look to the other side of the page, you can also see we have in the commercial side Narcan. Narcan is one of the products used for opioid overdoses.
It's a clear and present danger in terms of number of overdose deaths from opioids. And we're doing everything we can to improve that situation. I'll talk a lot more about that in just a second. And then finally, we have a bioservices business. We have chosen to de-emphasize that business, but we still have a number of customers, and we continue to make progress in providing products for those customers. So that's the concept of what we do. I want to be clear, though, especially on our biodefense side. What gives us probably the biggest moat around our business is that you can't just simply access smallpox and go to your garage and say, "I want to create a smallpox vaccine." It's just not going to happen. It really requires very specific protocols and approvals by the U.S. government and governments around the world.
And that's why we think we're unique and why we have a very significant moat around this business that allows us to go forward on an ongoing basis and have very unique products. And it's clearly beyond the uniqueness. It's longevity or duration of these products simply because of the ability for us to continue to make these products for not only the U.S. government, but governments around the world. As I mentioned, we're in a multi-year turnaround. This is a process that we started in February of 2024 to turn around our business. The very first phase was stabilization. And I am proud to say to you that we've completed our stabilization phase ahead of schedule. We completed it by the fall of 2024.
And in that, we've made a number of progress on a number of objectives, specifically on working on some of the things that we needed to do on everything from debt to cash flow to improving operating performance. And I'll preview some of those in just a second, but just want to let you know it's a three-step process. Stabilization we now feel is complete. For the remainder of 2024 and 2025, we're focusing on executing on the turnaround phase. To me, the turnaround phase is really all about finding those places where we can invest in the company to show long-term growth for our business. And finding out, very simply said, we have two main businesses in the opioid overdose area. We have Narcan. We deal with all the first responders.
How can I provide one more product to first responders and basically be a better supplier to those first responders and indeed have what I would refer to as a turnkey program for them? So we'll ship it to you. We'll help you find funding. We'll do all the things that you need as a first responder. We'll do it better than our competition. On the other hand, on medical countermeasures, the second part of our business, we provide products to the U.S. government, and we want to make sure that we know how to interact with BARDA, the Department of Defense, the Strategic National Stockpile, the ASPR, in terms of making sure that we make it easy to do business with Emergent and to provide the needs of those individual portions of the U.S. government and, to be honest, governments around the world.
How do we make it easier to do business? So that's the simplicity of our business. Complex products, but a very simple approach to doing what we believe we can do to help make it easier for our customers to do business. The second stage is a turnaround, as I mentioned. The ultimate stage is our transformation as a 2026 and beyond phase, where we're really looking for long-term, sustainable, profitable growth for the future. Now, this next page is busy, to be clear, but it really looks at some of the milestones we achieved in 2024. I won't go through every one of them, but importantly, we had a number of things that needed to get done and needed to get done with great urgency. We wanted to reduce our net debt by the end of 2024, or at least through the third quarter.
These are mostly third-quarter statistics, and we have not reported fourth quarter yet. We had reduced our net debt by over $200 million. We're very pleased with that debt reduction. We did it through a number of ways. We sold some assets, divested some assets. We also improved operating performance, generated significantly more cash flow, and we reduced working capital, and indeed, on the working capital, we reduced working capital by $100 million from the third quarter of 2023. That was an important metric for us to just make our business more efficient. We also were able to extend our term loan, or actually, we replaced our term loan, is a better way to say it, with a new process that we had.
We have now a new ABL and a new term loan that gives us the freedom to operate well beyond where we were just at the end of 2023. We're now extended out through 2029. We also realized cost savings and financial efficiencies of approximately $130 million. That was just simply needed to bring our cost structure in line with what we were doing as a company on a go-forward basis. Asset divestitures, I mentioned. We streamlined our site network. We had a number of manufacturing facilities, and we've shifted that so that essentially now we're at two main hub manufacturing facilities, one in Lansing, Michigan, and one in Winnipeg, Canada. We're clearly much more simplified our processes. But importantly, within that, we still have the ability to manufacture all of our products and have plans for all of our future products as well.
We thought that was important. We increased the number of contracts we received, both from the U.S. government and from governments all around the world, to extend our sales opportunity and revenue opportunity for the future. Importantly, even within the existing products, we got our ACAM product also approved for Mpox. Mpox, previously known as Monkeypox, is unfortunately. There's an outbreak of it in Africa. We got our product approved, and now we're looking for more opportunities to help the world with the global health threat of Mpox. Then finally, we also were able to settle some of the litigation. We had some litigation ongoing with J&J. We sued them. They sued us back, but we were able to settle that. And indeed, J&J paid us $50 million to resolve this litigation and move forward. We're very pleased with that.
The next page I'll go through relatively quickly. It's just looking at some of these in a little bit more detail in terms of looking at our network, for example, and our financials. So the first page you can see here on the financial side, I talked about some of the asset sales. We realized $117 million of asset sales by selling RSDL, one of our products. We sold our Baltimore-Camden facility to Bora, and we also sold an unutilized warehouse in Canton, Massachusetts. We received the $50 million from J&J. $98 million were in capital. So all of these things were all important things that we needed to accomplish in order for us to move forward with our business.
You can just see on the right-hand side of the slide the material debt reduction that we realized. As I mentioned, a year ago at the end of the third quarter, we were at $757 million in net debt, and we got that now to $551 million. Significant debt reduction, which is one of the pre-specified objectives we have for the 2024 year. This is the site network that I referenced to you just a minute ago. We have streamlined it. We have essentially two core manufacturing sites now, Lansing, Michigan, and Winnipeg. We have wound down or closed the Bayview and Rockville sites, and we have consolidated our office headquarter space and then also divested some facilities, as I mentioned. Once again, all designed to improve working capital, improve operating performance for our overall business.
In terms of what I'd like to do now is just move to some of the product side and talk about some of the things we are talking about. And you can see this illustration of Narcan. Narcan is our largest product. And I want to talk about Narcan and, importantly, some news we just announced yesterday. Just yesterday, we announced that we were going to expand our naloxone distribution with Kloxxado nasal spray. I remind you that Narcan is the standard- of- care. It's four milligrams of naloxone that we deliver intranasally. We now have the rights to Kloxxado. Kloxxado is an eight milligram naloxone spray. So it's the ability to provide a higher dose, which we think is important. We have exclusive commercial rights to Kloxxado. Why is that important?
Number one, we think we can broaden the availability of naloxone by putting it through our Narcan network, our Narcan distribution network. In other words, the network that goes direct to first responders. As I mentioned, we have 18,000 distribution points that we ship product to. This allows us now to make sure Kloxxado can also get to those same 18,000 distribution points. The other important issue, and I think as you read the news every day, you hear about the importance of fentanyl and how fentanyl can cause opioid overdose deaths. Well, fentanyl has become much more prevalent. Fentanyl is a very potent opioid. And by having the Kloxxado eight milligrams, we think we position ourselves better to be able to deal with the potential for fentanyl overdoses, which are going to be widespread.
Kloxxado delivers more naloxone, delivers it faster, and for a more prolonged stay, it will occupy the opioid receptors and help patients to recover very quickly, so we're excited about having Kloxxado, and it was an important business development, and once again, it goes into exactly what I said before. It's an ability for us to add a product through business development that gives us one more product to sell to the first responders, so that's the concept of what we're doing. We think that that can help us to continue to grow our business and to become more beneficial to all of our customers. On slide number 14, I want to talk a little bit more about the opioid overdose problems and how the progress. Clearly, one of the important things you see here is that there are still a lot of people dying.
It was 100,000 in 2023. This year, we think it's down to about 80,000, which is still a lot. I mean, if you take that number and you say over the course of 10 years, it's like losing every 10 years, losing the city of Charlotte, North Carolina, gone just from opioid overdosing. Just gives you the size and the magnitude of this problem. We think that until we get to no one dying, we think we've got a lot of work to do, and we're working very hard. One of the first steps we took as a company, because we've made our Narcan available over- the- counter by working with the FDA very closely, having it available over- the- counter, we believe provides a much more available product.
I think we won't feel comfortable until we see every building, every work site having Narcan on a wall or in a kit available just in case employees need the product. We know that we expect to see the volume grow for Narcan and for naloxone because of this issue of people still dying. Importantly, we think there's things we need to do in terms of making this a better situation. The good news for us is that there is an amount of settlement that the large pharma companies and pharma companies that had opioid products have to pay. It's about $50 billion. That money is going directly to try to lower the total number of opioid overdose deaths. It's going to education, and it's also going to product acquisition, so the ability to acquire Narcan.
So we're looking forward to trying to make a difference here with those settlement dollars to ensure that we can lower that number of deaths until there's no one else who passes away from an opioid overdose. So we're working very hard with all the program opportunities in the states and the federal government. We work very closely with the White House initiative to lower the amount of deaths. And the good news is we're starting to see results. As I mentioned, it went from 100,000 deaths to 80,000 deaths. We've got a long way to go there until we're finished. In the future, we've got a number of other things we're looking at in terms of making progress here. We're looking at some of the things we're doing for a public interest channel, which was up 14% last year. Year to date, that's through the third quarter.
The total Narcan spray volumes were up 7% year to date, and we're looking to just broaden the availability of this product to make sure that we're able to save more lives with Narcan. So if you think about it from a commercial product's point of view, we've got the Kloxxado nasal spray. We've got the ability for us to look at international growth opportunities and do line extensions, kitting opportunities. A very simple example, in my mind, we haven't reached it yet, but I'd love to find the day where every student, college student, for example, if a high school student has their backpack and onto their backpack is clipped a Narcan kit that would allow them to help a friend who may be experimenting with drugs. Now, I get it. They shouldn't experiment with drugs.
However, if they experiment and they happen to get one of their drugs that is laced with fentanyl, it could be the end of their life. So our hope is that we'll find a day when we could actually make a real difference there and have our product available to students when they need it. Let me transition now to our second focus area, and that's the area of Medical Countermeasures , biodefense. We have, once again, an area that has strong bipartisan support, and that's one of the things that we think is unique about Emergent both of our areas, opioid overdose and Medical Countermeasures , biodefense, has strong bipartisan support in Congress. You can see that we work with the Strategic Preparedness and Response, or the ASPR, and they have identified anthrax and smallpox as being the number one and two biologic threats.
And that represents about, well, certainly it's a majority. About two-thirds of their funding is in the area of smallpox and anthrax. So it's clearly areas that we're focused on to meet the needs of the U.S. government. But you can see some of the levels of their budget and some of the things they're spending on. And some of the things, as we said, we work with BARDA, we work with Strategic National Stockpile, BioShield, and even the Department of Defense. Many of the forward deployed troops of the U.S. and of many of our allies have a mandatory funding for BioThrax to ensure that the troops are vaccinated against the anthrax concerns. So a lot of good activity with the U.S. government, and I think that's really the other fundamental business where we're trying to do one more product when we help the U.S.
government with their needs going forward as we think about what we're trying to accomplish. On slide 18, I want to talk about what we think is an increasingly dangerous world and some of the things that we can do to help in the medical countermeasure response. There is an increased number of dangerous threats out there. We are a special agent of the U.S. government, especially as it would relate to smallpox. So we have access to things, information, not me, but some of the members of my team who know what's going on and where we can help. Easy example, there's an outbreak in Africa of Mpox. What can we do to help solve the Mpox problem? Number one, we donated 50,000 of our doses to Africa.
Number two, we are petitioning and working with the World Health Organization and the Africa CDC to ensure that our product can be used through an emergency use authorization. That's ongoing. We don't have that yet, but we hope to have more information on that in the first quarter of 2025, and clearly, we're going to continue to work with everyone to try to help this overcome the threat of Mpox because Africa alone has said they're going to need about 10 million doses just to get this under control. If I go to the other comments on our MCM products, these are just some of the products that we have today. We look at where we are on the slide in the left-hand side on the current markets, where we market each product.
We look at what we think are some of the short-term drivers by the end of 2025. Many of those are going to be market expansion, like for us to take smallpox ACAM product now into Mpox, a simple example of that. Some of them are going to be where can we just get incremental new data on our products so that we can get, for example, Tembexa. We're doing a clinical trial in Africa to help look at a therapeutic for smallpox and for now, in this case, Mpox in Africa to get some additional data. And then, obviously, everything we can do for geographic expansion. Take our products that we currently make for the U.S. government and how can we make those and ship those to governments around the world is what our plans are. So simply stated, what can we do?
Number one, geographic expansion, what we can do. Number two, for new indications like our Mpox. And then number three, what can we do to get new data on each of our products to show the performance of the products going forward? If I move to slide 21, it really shows you that I think the answer to this is that the numbers kind of show themselves in terms of looking at how we improved our financial metrics in terms of what we've been able to comment on in terms of all the information, whether you look at operating cash flow, a $377 million swing in operating cash flow from the third quarter of 2023 to the third quarter of 2024. We look at what's happened with net working capital. I mentioned before, a $100 million reduction.
If you look at what happened with leverage, our leverage was over 40, and now it's down to 3.3. But still more to do there, to be clear, but good progress in making the improvements there. And then, obviously, stronger liquidity for our company going forward. As I think about kind of the catalyst and some of the things we're doing to enable growth, clearly on slide 22, you see some of the things we're focused on. And I would say it's focused once again on what can we do internally and then what can we do externally to grow our company. Internally, what are we going to do for Mpox? Clearly, that's something that we're awaiting more information on, but we think there's an opportunity with the emergency use listing with the World Health Organization.
We will receive from Bavarian Nordic some additional milestone payments on the order of about $50 million as they get approval for those products. So that's another cash generation. And we'll clearly work with U.S. and international countries for the MCM orders and opportunities for the future. I will say, though, that the business development side, Kloxxado is just one example of how we can add one more item to the bag that we have as we go to first responders. But look to us to have more to say about not only first responders, but also what other products can we do with the U.S. government to ensure that we can satisfy the needs in the U.S. government with more products. So clearly, those are all things that we'll be talking about in the future as we go forward.
And then finally, as I try to summarize in terms of where we are, our plans right now are to advance our turnaround plan in 2025. We will maintain the highest standards of patient safety and quality and compliance, but we do want to leverage this bipartisan support we have in Congress to drive our business forward. We do think that we have opportunities to grow each of our existing segments. There will be some ups and downs, to be clear, in any given quarter or any given year, but we do think there's opportunities for growth there. We, as I mentioned before, we've got the opportunity to grow our Tembexa, our Raxibacumab, our Ebanga products. We're getting incremental contracts from U.S. government and governments around the world for those. We are going to clearly look at international expansion.
One of the things that's great about our business as we develop those products in concert with working with the U.S. government, the FDA, BARDA, we then have the opportunity to sell those products to countries around the world and government agencies around the world that need the products as well, especially with our allies, and then clearly, we have the opportunity for the international expansion through geographic, and then importantly, just continue to elevate our business lines for today's competitive landscape. We think it's an exciting future. I want to thank you for joining us today and your interest in Emergent, and I look forward to opening for any questions you may have. Thank you. With me, I should have introduced is Rich Lindahl. He's the CFO of Emergent, is here as well, and Jess is here.
So if there's any questions, we're happy to take questions from the audience or Jess, if you have them.
Great. We need to start with a couple that are here on the iPad up front. Can you remind us of the net price difference for Narcan versus generics? And why are generics not picking up more volumes? Sure. This isn't the public interest segment. Can I hear your question on webcast? Yes.
Okay. Good. So let me take Jess's question on, relative to Narcan. Number one, we believe Narcan offers a number of advantages, but specifically to get to the direct question of the pricing, we know that the competition, the generic competitors are out there at a price point somewhere around $24 for we know one of our competitors is working with the state of California, for example, at a $24 price point.
We have stated that we are going to be competitive with our pricing. We don't think we have to match that price, but we have to be competitive with that price point. Let me talk more about what we do beyond just simply and how we get to that second part of your question about how we continue to hold on to the business. We believe there's business for Narcan is more than just simply a price point. Number one, we have the Narcan brand and the millions of patients' lives have been saved with Narcan, and we think that's a very important point. We make certainly as we're going out and talking about Narcan and the importance of that brand, but the importance of all the other things we do and the life saved with Narcan. Number two, we also have manufacturing capabilities that others do not.
We have automated lines. We work with our vendor that helps us to make sure that our product has the most manufacturing capabilities and also keeps our cost structure low through the ability for us to automate everything. Number three, and I think this last one is important. We have a distribution system that is, we believe, unmatched. We have a Narcan Direct program where we can ship to 18,000 individual endpoints, and we believe that helps make it easier for first responders to get access to our Narcan. But beyond that, we have a sales team and team that's out in all the regions of the country. And what they're doing is really focusing on helping the first responders identify places where they can get funding for Narcan to pay for the Narcan.
And we'll help them show where are some of these grants available, where are some of the funding vehicles available. And that allows them to have the product Narcan available, also to get dollars for funding for education programs. By doing things beyond just simply making a product, we clearly think that that helps us differentiate ourselves. And there are other points. We have a four-year shelf life for our product. The competitors are at like a two-year shelf life. So there are other things that we believe we do that help differentiate our abilities with Narcan versus simply a generic product player. Okay.
Next question here. There's sort of a lot of questions in one. Maybe Rich can chime in here as well. What do you think sustainable EBITDA is if we take out one-timers and sustainable EBITDA margin?
And then it goes on to make some comments complimenting you on a remarkable job turning around the business. And then it goes on to ask kind of what's the end game? Are you selling the company, going private, continuing as a standalone public company? Rich, why don't you take the first half and I'll take the latter.
Okay. Great. So as you think about, we're not sitting here ready to provide guidance for 2025 just yet. We'll do that when we announce our fourth quarter results, likely in the first week of March. Having said that, as you think about kind of modeling going forward, one thing to compare 2024 to 2025 that's very important is that Joe mentioned the J&J settlement of $50 million. That was a one-time revenue item that would not repeat as we go into the year.
We also divested the Baltimore-Camden site, which was really the lion's share of our CDMO revenue as well. And we divested our RSDL products. So when you take those three things into consideration, there's about $100 million of revenue that comes out of the base as we go into 2025. Having said that, we also completed significant actions to reduce the cost base. And that was reflected partially in our results in 2024, but would be more fully reflected in 2025. So we believe there's a margin expansion story as we move into 2025. We'll provide more details when we provide our guidance. But I think as we look at moving from 2024 into 2025, the 2024 guidance range is not a bad place to start as you think about 2025.
And on the latter half of the question, as Emergent being a public company, I would suggest we're for sale every single day. And we'd have to listen to anybody that want to have an interest in putting Emergent together with other businesses. So we clearly would do that. Having said that, what we're really focused on for 2025, 2026, and beyond is, once again, executing on this turnaround plan. We did the activities to stabilize the company in 2024, and I hope you can see some of those numbers and the financials. I think they speak for themselves. But as we think about 2025 and beyond, it's going to be looking at where are those catalysts for growth that we can go forward? How can I add on additional products that go to whether it be the first responder side?
And clearly, some of the things I talked about for kits for Narcan, business-to-business opportunities for Narcan. We know, for example, that of all the people that die in the workplace, 10% of the people that die in the workplace die because they had an overdose. We think that that's something we can do by having our product available in every workplace setting, for a simple example. But those are the things that we're going to keep focusing on is how to continue to grow the business, whether it be organically or inorganically. As to what happens with the end result, I think we'll wait to see what happens there, but we're focused on this turnaround story. But we're for sale every day. So if somebody is interested, we'll certainly listen. And your Narcan business has had really good volume momentum, but you had some price pressure in 2024.
How should we think about kind of the balance of those two inputs when we think about Narcan revenue in 2025? Sure. I think this is we expect in 2025 to see some of the same factors, to be clear. We do have to get we'll have a full year effect of the pricing. The pricing has come down, to be clear. As I mentioned, we're not matching pricing, but we are being competitive. So we'll have a full year effect of that. The pricing has been relatively stable in the U.S. over the last several months. We keep a track on that. I mean, there's some isolated bids in City A or County B or things like that or state. But for the most part, pricing has been relatively consistent over the most recent time.
Notwithstanding that, as I mentioned, for our total overall volume of Narcan, it's up about 7%. We expect, as you look at 2025 and 2026 and 2027, we'll continue to see somewhere in the high single-digit growth for volume, and we will be competitive on price. We may see some price declines, but we'll be competitive on pricing.
You've also been addressing the cost structure. What's the right way to think about the kind of OPEX runway as we go into 2025? Rich, you want to take that OPEX for 2025? Yeah. As I talked about before, significant cost actions, a large amount of that comes through in the cost of goods sold line as a result of us having taken several of our sites down to a warm lit status, which reduces the operating costs there.
I think you should look at an improving gross margin profile as we move into 2025. We also took significant actions on the SG&A line. You should expect to see lower SG&A in 2025 versus 2024 as well. R&D, we're looking at opportunities, as Joe talked about, to invest to create organic growth opportunities. We'll comment further on that when we release our results and provide guidance.
We've even spent a moment on the acquisition of the Kloxxado rights. How much did you pay? And what's the right way to think about the opportunity here? Is this a situation where customers would want to stock both the four milligram and eight milligram? Kind of what's the value prop for eight? Yeah. We have not stated specifically the contract terms of what we're acquiring here.
But the simplest way to say Kloxxado is that it's going to be a profit split. In other words, there's some baseline sales, but we acquire the commercial rights with the belief that we will be able to grow the business over time. And as we grow the business over time, we'll expect to share that 50/50 with Hikma, our partner. Hikma will continue to manufacture the product for us, to be clear. But we think this is a win-win, a win-win-win, a win for Hikma because they'll continue the manufacturing. They'll have access to the Narcan Direct distribution system. It's a win for Emergent because we now have access to an eight milligram product that we didn't have before. And we think it's clearly a win for the customers because we can make Kloxxado available through our Narcan Direct programs, easier to acquire the product through these direct programs.
So we think win-win-win for us in total is the concept behind what we're trying to do. I can say, since as a webcast, there was no money exchanged upfront. It was simply this opportunity for a win-win-win for going forward with the business. I'm sorry, there was a second part of that question.
How will customers treat this, right?
Yeah, yeah. So once again, I view it as right now, there's a business today for Narcan four milligram standard- of- care . No question about that's the standard- of- care . Having said that, there is clearly some places and some times where you need an eight milligram, especially as you think about the increased availability and increased number of patients that get exposed to fentanyl. So we think there's places where fentanyl is known to occur.
It's known to be certainly among some of the people that have this problem on overdosing on multiple occasions. The first responders just know that what they're entering in, and that's when they'll use a higher dose. So those are the things that we're not going to suggest that 8 milligram is going to be the standard- of- care . But I do think because of the increased availability of fentanyl, it becomes more important to have an 8 milligram product. And candidly, we've seen data that suggests that up to 70% of the time, people are getting more than 4 milligrams. So there's an opportunity there to have the 8 milligram available. Once again, it will not be standard- of- care . We think 4 milligram will be, but there is clearly an opportunity to increase the amount of the Kloxxado 8 milligram available.
Look to us to have more to say about how we leverage these two together for a program. Once again, the way I look at this is that we've got that channel, that distribution directly to the first responders. How do I put one more item in that first responder's bag to help them to do their business, but importantly, then to generate additional gross margin to us? Because I've already got that network already established, everything I do from that gross margin will drop to our operating line and get exactly what Rich talked about in terms of the leverage. I'm sorry, getting more overall gross margin dollars in an operating leverage. Should we think of Kloxxado as having a similar or a different price point to Narcan?
Narcan will be priced at a lower price point, but Kloxxado is not two times Narcan. It's less than that. So it can be very efficient for people if you know that you're going to need more than four milligrams to use one Kloxxado dose. And of course, the cost of goods are lower, of course, relative to two. I should say it that way, relative to two, to be clear. Makes sense. So I guess thinking about gross margins, is there a path for Emergent's gross margins to return to kind of 2019 or pre-COVID levels? Rich, you want to take that? Sure. I think over the near term, I think we're comfortable having them sort of in the 50-ish zone, which is more consistent with what you started seeing in the second half of 2024.
I think meaningful expansion back to the 2018, 2019 levels will certainly aim for that, but I wouldn't necessarily be modeling that right now.
And is that because of the Narcan mix or what is it?
It's an overall product mix, yeah. So the Narcan is a little bit lower margin than some of the medical countermeasures. But yeah, I would say that's probably the main driver.
Okay. We're just about out of time, so we'll stop there. Thank you.
Thank you very much for your question. Thank you, everyone.