After a tough third quarter in which Emergent BioSolutions cut more than $100 million from its revenue guidance, the company is gaining some much-needed cash with an asset sale to Bavarian Nordic.
Emergent on Wednesday said it’s selling its travel health business to Bavarian Nordic—best known for its monkeypox vaccine Jynneos—for an upfront payment of $270 million. Specifically, Emergent is handing over its typhoid fever vaccine Vivotif and its cholera shot Vaxchora plus the late-stage chikungunya candidate CHIKV VLP.
Under the deal, Emergent also has the opportunity to rack up $110 million in future sales- and development-based milestones.
Vivotif is the only oral vaccine approved by the FDA to prevent typhoid fever, Bavarian Nordic points out. The vaccine also boasts a European approval and is marketed in more than 25 countries. Cholera shot Vaxchora is also approved in Europe and the U.S., while Emergent’s chikungunya candidate CHIKV VLP is expected to deliver a phase 3 readout in the second half of 2023 for a prospective launch in 2025.
Emergent doesn’t break out individual revenue figures for Vivotif and Vaxchora, which fall into the company’s “other product sales” reporting. In 2021, Emergent’s sales of drugs outside its key triumvirate of naloxone, anthrax vaccines and its smallpox shot ACAM2000 clocked in at $123.3 million.
Alongside Emergent’s vaccine portfolio, Bavarian Nordic will also get its hands on Emergent’s biologics manufacturing site in Bern, Switzerland, plus a development facility tied to Emergent’s chikungunya shot in San Diego. Some 280 Emergent employees are expected to join the Bavarian Nordic team as part of the transaction, the companies said.
Bavarian sees the deal as a way to cement its foothold in travel vaccines, which, alongside Emergent’s chikungunya candidate, will help the company achieve its vision of becoming “one of the largest pure-play vaccine companies,” Paul Chaplin, Bavarian Nordic’s CEO, said in a statement. He noted travel vaccines are seeing a rebound after the COVID-19 pandemic.
The deal comes after Emergent telegraphed its intention to double down on its medical countermeasures and contract manufacturing businesses. Emergent has a storied history working with the U.S. government on emergency medicines such as overdose reversal drug Narcan and smallpox vaccine ACAM2000.
Still, Emergent’s fate looks hazy on both fronts. Emergent’s profits remain “pressured” by “underutilization of our CDMO capacity,” the company’s chief financial officer Rich Lindahl said on the company’s third-quarter earnings call in November.
That underutilization is likely a reaction to Emergent’s ill-fated COVID-19 vaccine manufacturing run, which forced the company to scrap hundreds of millions of shot doses following a cross-contamination issue with AstraZeneca and Johnson & Johnson’s recombinant products.
Emergent was also the recent recipient of an FDA warning letter at its Camden, Maryland, fill-finish site. In their write-up, agency investigators flagged contamination issues and a lack of written procedures designed to prevent contamination.
Contract manufacturing aside, Emergent CEO Bob Kramer recently told investors it was “difficult to predict” whether the company would score another order for its smallpox vaccine ACAM2000 from the U.S. government before the end of 2022. Two months into 2023, it doesn’t appear to a new contract has materialized.
Elsewhere, Narcan revenues cratered 34% to $87.9 million for the third quarter after a generic to the opioid antagonist launched in the U.S.
Emergent is set to release fourth-quarter results—and further discuss its sale to Bavarian Nordic—on a conference call set for Feb. 27.
Bavarian Nordic, for its part, is coming off some recent wins. In 2022, the company locked up successive supply deals for its smallpox and mpox shot Jynneos with governments around the world. Bavarian Nordic’s contribution proved so significant that Time Magazine named Jynneos one of the best inventions of the year after it was used to help curb a surge of mpox, the virus formerly known as monkeypox.