Health and Beauty

Emergent Biosolutions inventory plunges greater than 42% after US canceled take care of Covid vaccine maker

In this illustration, dated May 21, 2021, test tubes can be seen in front of an Emergent logo displayed.

Given Ruvic | Reuters

Emergent Biosolutions shares fell more than 42% Friday after the company announced it had “amicably agreed” with the federal government to terminate a $ 628 million deal after Covid-19 vaccine doses had been botched.

The Maryland-based company was blamed in March for ruining millions of Johnson & Johnson’s Covid cans after the shots were contaminated with ingredients for the AstraZeneca vaccine.

An inspection by the Food and Drug Administration later revealed that the Baltimore facility was unsanitary and unsuitable for making the shots. In a 13-page report, inspectors wrote that the facility used to manufacture the vaccine “was not kept in a clean and hygienic condition” and was “not of the appropriate size, construction and location to permit cleaning, maintenance and proper operation facilitate. “The US would hire J&J to run the facility and stop producing the AstraZeneca vaccine at the facility.

The company will forego $ 180 million due to the termination of the contract, executives told investors on Thursday, according to a copy from FactSet.

It also said it will continue to work with J&J to manufacture its vaccines at its Baltimore facility as the deal with the company is separate from its contract with the federal government. By the end of September, Emergent had contributed “over 100 million dose equivalents of the Covid vaccine” to global sales, the company said to investors.

The work “we have done under the program and related procurement contracts with the US government served a critically important purpose,” said Robert Kramer, CEO of Emergent, “one that our entire organization is immensely proud of.” .

When he testified before a House Committee in May, Kramer expressed disappointment that conditions at the factory resulted in the cans becoming contaminated and having to stop production.

Up-and-coming spokesman Matt Hartwig told CNBC on Friday that the company and the federal government have “mutually agreed final payments to complete all outstanding assignments and terminate the CIADM base contract.”

“These are mutually agreed for the sake of convenience, and neither party claims the other is in breach of payment obligations,” he added.

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