Emergent drops 2022 guidance by $100 million says Bayview maintenance is underway and contract with Johnson & Johnson remains unchanged

After struggling through COVID-19 vaccine production woes in 2021, Emergent BioSolutions has another surprise for its investors in early 2022. 

Last month, Emergent projected revenues of $1.4 billion to $1.5 billion for this year. Now, the company has dropped the figure to $1.3 to $1.4 billion. 

Why the adjustment?

In its quarterly report, Emergent credited its decision to undergo maintenance on its troubled Baltimore Bayview facility “earlier than anticipated,” and to expand the project to set the facility up for “future non-pandemic work.”

At the same time, Emergent stressed that its COVID-19 vaccine contract with Johnson & Johnson remained unchanged. The plant halted operations last year after it failed to meet manufacturing standards.

“Our most recent discussions with Johnson & Johnson have indicated that they are evaluating their global supply chain as they assess the demand for their COVID-19 vaccine,” Rich Lindall, Emergent’s chief financial officer, said in a conference call. “Based on this information and in coordination with J&J, we are taking the opportunity to initiate a maintenance period.”

RELATED: Emergent shuts down COVID-19 vaccine production at troubled plant after feds put J&J in charge

When asked which quarter the maintenance would begin, Emergent CEO Robert Kramer said that it was already underway.

“We expect that we will be back into production in late Q2,” Kramer said. “There may be some additional enhancements that we want to make later in the year, but that’s our current thinking.”

Meanwhile, Emergent expects first-quarter revenue to come at between $280 and $310 million. In the first quarter of last year, Emergent raked in $343 million, a 78% increase from 2020 as the company's COVID-19 contract manufacturing business kicked into gear. 

Emergent was flying high early last year as it was producing COVID-19 vaccines for AstraZeneca and J&J from its hulking Baltimore plant. But a cross-contamination production glitch between the two vaccines forced Emergent to discard up to 15 million doses of the shot in March of last year. After that mishap, it was revealed that Emergent also had to throw out millions of doses of the AZ vaccine in November of 2020.   

Now, the company is reassuring investors that its J&J deal is intact. 

“The contract is in place. There is nothing in dispute,” Kramer said. “We’re taking this opportunity to lean forward, look forward a bit and make those modifications that we’ve long wanted to make.”

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

Emergent's maintenance news came along with the company’s fourth-quarter earnings report which revealed $1.8 billion in revenue from 2021.