Two and a half years into his tenure as Emergent BioSolutions CEO, Joseph Papa is executing another round of restructuring to align the business with “current business realities.”
The Narcan maker will lay off 93 employees across all areas of the company and remove 21 open positions, the company said Wednesday alongside its second-quarter earnings report. As of the end of 2025, Emergent had roughly 900 staffers globally, according to its annual report.
In a bold move that effectively leaves Emergent without a dedicated R&D leader in its C-suite, the company will eliminate the role of chief medical officer and head of research and development. That means Simon Lowry, M.D., who has held that title since 2024, will leave the company effective Aug. 19, 2026.
In his place, Papa is elevating Stephanie Duatschek, currently senior vice president and chief global strategy and franchise development officer, to executive vice president and chief growth officer. The new role combines R&D, business development and strategy into a single function.
Simultaneously, Emergent will close two wet labs in Gaithersburg, Maryland, and exit a central warehouse lease, as it has sold an underutilized office building for $6.4 million.
During an investor call on Wednesday, Papa framed the sweeping restructuring as intended to “improve our overall cost structure, keep Emergent efficient and nimble, and align resourcing to the current needs of the organization.”
Together, the actions are expected to save Emergent $40 million in annual costs but incur about $10 million to $11.5 million in one-time charges, which will mostly be booked in the second half of 2026.
As to the leadership change, Papa said R&D remains “pivotally important” to Emergent, pointing to its FDA-approved Ebola antibody treatment Ebanga, mpox and smallpox antiviral Tembexa and the anti-anthrax inhalation raxibacumab.
“We think, however, by putting the decisions into one group, where we bring the external business development and internal R&D projects together into one decision-maker, we will have the ability to make faster decisions, better allocation of capital to the future pipeline opportunities,” Papa said.
The latest overhaul becomes part of a multiyear transformation Papa initiated when the former Bausch Health CEO joined Emergent in 2024. Shortly after taking the reins, Papa reduced Emergent’s workforce by about 300 employees while eliminating 86 job openings and closing two manufacturing facilities.
This time, Papa expressed an urgency to strengthen Emergent’s long-term financial position in response to new threats to its Narcan franchise.
On June 16, the FDA approved another over-the-counter intranasal naloxone product in Amphastar Pharmaceuticals’ Rextovy, a 4 mg naloxone hydrochloride nasal spray for the emergency treatment of opioid overdose. Meanwhile, Scienture Holdings officially launched its 10 mg naloxone nasal spray, Rezenopy, recently.
The two new entrants led to more aggressive pricing across the naloxone segment, pressuring Emergent’s Narcan, which saw sales plummet 22% year over year to $52.4 million in the second quarter.
“These are changes in the signals we must proactively address,” Papa said on the Wednesday call.
As a result of the shifting market landscape, Emergent recorded a non-cash impairment charge of about $191 million in the second quarter.
“This accounting adjustment reflects our updated assessment of the product's expected future cash flows in the context of current market dynamics, including pricing and competitive factors,” Emergent CFO Richard Lindah explained on the call.
Nevertheless, trying to infuse a dose of optimism amid increased competition, Papa stressed that opioid overdose deaths remain high, with 45,000 lives lost annually in the U.S., and that Narcan remains a trusted brand leader with over 50% of market share. The company is also rolling out new presentations of Narcan, including a carrying case that Papa said college students can clip to their backpack.
But rather than Narcan, Emergent is banking its growth on its medical countermeasures and biodefense business. In the second quarter, revenues from that department surged 188% year over year to $168 million, although this business, which relies on government contracts, is highly volatile and does not follow normal commercial market patterns.
Alongside its second-quarter report on Wednesday, Emergent announced a call for AI collaborators to address the potential risk of bioterrorism and improve biodefense response preparedness.