Emergent BioSolutions has faced a number of back-to-back PR crises since production issues at its Baltimore facility placed the company under intense scrutiny. The CDMO's stock price has tumbled as a result, but it appears CEO Robert Kramer cashed out some of his shares just in time.
Citing Securities and Exchange Commission filings, Kramer sold more than $10 million worth of Emergent stock in January and early February, right before the company’s shares began to tumble following its quarterly earnings reported on Feb. 19, The Washington Post reports.
That was also before The New York Times reported in late March that the company had to dump up to 15 million doses of Johnson & Johnson’s COVID-19 vaccine over an ingredient mix-up at its Baltimore plant. J&J has since taken control over the facility and AstraZeneca, which was also making its vaccine there, was forced to move out.
Shares of the contract manufacturer have fallen from roughly $125 in mid-February to a low of $62 per share, a more than 50% decline. If Kramer were to have sold his shares at Emergent's current market price, they would fetch about $5.5 million, the Post reports. The transactions mark his first substantive sale of the company’s stock since 2016.
The sales were part of Kramer’s compensation package and were made under a trading plan—designed to protect executives and their sales from insider trading probes—first adopted in November, the Post reports. Under the plan, Kramer purchased the shares for about $2.5 million to sell at market price. The executive's remaining stake in the company is worth roughly $10.1 million, according to the report.
An Emergent spokesperson defended Kramer’s stock sales, adding that “any insinuation of wrongdoing is without evidence or merit,” the Post reports. However, the company didn’t address whether Kramer was aware of the company’s upcoming financial results or issues with its vaccine production before the transaction were made.
Kramer’s stock sales come amid a slew of damaging reports against Emergent, including a Congressional probe into the manufacturer’s $628 million federal contract to produce COVID-19 vaccines for Johnson & Johnson and AstraZeneca.
The House Oversight Committee announced last week that it will look at the company's influence within the Trump administration, and its “documented history” of quality control issues and contractual missteps. The committee asked Kramer and Executive Chairman Fuad El-Hibri to testify before the House Select Subcommittee on the Coronavirus Crisis on May 19.
The same day the lawmakers unveiled the investigation, the FDA cited Emergent for a number of cleanliness and quality control issues following an investigation at its Baltimore plant, including its failure to properly investigate the ingredient mix-up that ruined the J&J shots.
Meanwhile, an FDA inspection of the same plant last April showed the company lacked the necessary personnel to produce a coronavirus vaccine, and another inspection in June raised additional concerns about poorly trained staff and quality control shortfalls.