Emergent Biosolutions Shares Fall More Than 42% After US Cancels Deal With Covid Vaccine Maker
The tubes are visible in front of the displayed Emergent logo in this illustration, taken on May 21, 2021.
Dado Ruvich | Reuters
Emergent Biosolutions shares fell more than 42% on Friday after the company announced a “reciprocal agreement” with the federal government to cancel a $ 628 million contract following the failed use of doses of the Covid-19 vaccine.
In March, the Maryland-based company was accused of spoiling millions of doses of Covid Johnson & Johnson after injections were contaminated with ingredients intended for the AstraZeneca vaccine.
An FDA inspection later revealed that its Baltimore plant was unsanitary and unsuitable for Scottish shots. V 13-page reportThe inspectors wrote that the facility used to manufacture the vaccine was “not kept clean and sanitary” and “was not of the right size, design and location to facilitate cleaning, maintenance and proper operations.” The US will put J&J in charge of the plant and discontinue production of the AstraZeneca vaccine at the plant.
According to the transcript from FactSet, the company will waive $ 180 million due to contract termination.
The company also said it will continue to work with J&J to produce vaccines at its Baltimore plant, as the deal with the company is decoupled from the contract with the federal government. As of the end of September, Emergent has provided “over 100 million Covid-equivalent vaccine doses” for global distribution, the company told investors.
The work we did through the program and the related assignment contracts with the US government served a critical purpose, said Emergent CEO Robert Kramer in a call, “of which our entire organization is immensely proud.”
When he testified before a House committee in May, Kramer expressed disappointment that plant conditions had led to dose contamination and demanded that production be suspended.
Emergent spokesman Matt Hartwig told CNBC on Friday that the company and the federal government have “mutually agreed on final payments to close all open orders and terminate the underlying CIADM contract.”
“This is a mutually agreed termination for convenience, and neither side claims a breach of default by the other,” he added.