Emergent loses out on $180M as U.S. cancels COVID-19 vaccine production contract

After a tumultuous several months with the word “troubled” regularly attached to its Baltimore plant, contract manufacturer Emergent BioSolutions is no longer making COVID-19 vaccines for the U.S. government. 

Since April, the Maryland-based company has been steeped in controversy for ruining millions of COVID-19 vaccine doses because of cross-contamination as it produced shots for AstraZeneca and Johnson & Johnson from its hulking facility in Baltimore.

The scrutiny extended to the government, which had a long association with the company and, at the onset of the pandemic, awarded it hundreds of millions of dollars to scale-up and manufacture pandemic vaccines. On Thursday, Emergent said it reached a "mutual agreement" with the U.S. government to end the deal.

The government stopped paying Emergent in April when the contamination was disclosed, a Biden administration official told the New York Times. Emergent will forego $180 million of the $650 million deal it struck with the government in May of 2020, the company said in its third-quarter results.

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Emergent’s ties to the government began in 2012 when the company signed on with the Centers for Innovation in Advanced Development and Manufacturing (CIADM) program, which was established to prepare an orchestrated response to infectious diseases and other public health threats.

Emergent CEO Robert Kramer said the company's involvement with CIADM is over as well. That was assured when the government moved AstraZeneca’s vaccine production out of the Baltimore Bayview plant and did not direct additional work to take its place, Kramer added.

Emergent will continue to produce COVID-19 vaccines for Johnson & Johnson at the Baltimore plant.

“We’ve made significant progress in Bayview resuming operations and production for Johnson & Johnson at the end of July and more recently completing all remaining work on behalf of AstraZeneca,” Kramer said. “We’ve contributed over 100 million dose equivalents of COVID-19 vaccine for global distribution.”

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While it’s association with the government is over, Emergent will still have to answer to a congressional investigation over its operations during the pandemic. Meanwhile, an investor lawsuit alleges that higher-ups at the company engaged in insider trading, unloading stock worth more than $20 million over a 15-month period.