Partners: BARDA, AstraZeneca, Johnson & Johnson, Novavax, Vaxart
Maryland CDMO Emergent BioSolutions had a history with the U.S. government long before it began its work as a major manufacturing partner on the nation’s COVID-19 response.
Back in 2012, the Department of Health and Human Services’ Biomedical Advanced Research and Development Authority (BARDA) chipped in on the cost of constructing Emergent’s Bayview Baltimore plant as a pandemic response site.
So when COVID-19 hit, the government came knocking on Emergent’s door—and had another big check in hand to get the ball rolling on a massive manufacturing scale-up.
In June, BARDA shelled out a whopping $628 million to Emergent to scale production of targeted COVID-19 vaccine candidates to make "tens to hundreds of millions" of doses available through 2021. The contract was part of the Trump administration's "Operation Warp Speed" development initiative to speed promising COVID-19 vaccines through clinical trials and into mass production before the end of 2020.
As part of the agreement, the government devoted $542.7 million to reserve bulk manufacturing capacity at Emergent's Baltimore Bayview site—the product of BARDA's 2012 contract— and reserved the remaining $85.5 million to expand fill/finish capacity at two Emergent plants in Baltimore and Rockville, Maryland.
By that point in the U.S. response to COVID-19, Emergent had already signed on to help manufacture hundreds of millions of shots for Johnson & Johnson and AstraZeneca—which have both emerged as frontrunners in the race for a vaccine—and Novavax, which is in phase 3 testing for its shot. The CDMO also has a deal on the table with Vaxart for an oral-dosage coronavirus vaccine.
The CDMO's deal with J&J signed in July includes a five-year work order worth at least $480 million. Emergent agreed to provide "large-scale" drug substance manufacturing for J&J's recombinant DNA shot beginning in 2021, starting with a $480 million order for the first two years of the deal. For the final three years, the partners will use a "flexible capacity deployment model" to provide annual batches as needed, Emergent said.
Emergent signed its $87 million pact with AstraZeneca in June to reserve space at the Baltimore Bayview site through at least the end of the year.
Those major deals have been a boon for Emergent, but it hasn't always been a smooth road. In September and October, both AstraZeneca and J&J called halts to phase 3 testing of their vaccines after patients developed serious side effects.
Those scares sent Emergent's stock tumbling, but analysts predicted Emergent wouldn't likely take a financial hit even if both drugmakers flopped their testing due to protections in its contracts.
Between deals with AstraZeneca, J&J and BARDA, the company is assured $1.5 billion that “is largely protected from clinical trial risk, through contract protections, meaning that [Emergent] will highly likely recognize the majority of the $1.5B in revenue, irrespective of the clinical outcome of these trials,” Cantor Fitzgerald analysts said in October.
Those worries could ultimately prove a moot point for Emergent either way: Both AstraZeneca and J&J restarted those trials within weeks of halting. In late November, AstraZeneca read out its first interim results from its phase 3 testings showing its vaccine posted an average 70% efficacy between two dosage levels.