As Emergent BioSolutions pushes toward its goal of reaching $1 billion in annual revenues by 2020, the company has secured an important regulatory milestone. On Monday, the FDA approved its Canton, Massachusetts, plant to manufacture ACAM2000, a smallpox vaccine the biotech picked up from Sanofi this summer.
The FDA approval came earlier than expected, as CEO Daniel Abdun-Nabi previously said the license was expected to arrive in 2018. Emergent picked up the vaccine and the plant through a $125 million deal with Sanofi. Under a CDC deal, Sanofi was working to transfer the upstream portion of the vaccine’s production process from Austria to Canton.
Now, the vaccine—the cornerstone of the U.S. government’s smallpox preparedness efforts—is to be manufactured domestically.
Under its ACAM2000 purchase, Emergent also got what’s left of a CDC contract to provide the vaccine to the United States' national stockpile. With the FDA greenlight, the company is now on track to start manufacturing of ACAM2000 in 2018 and to fulfill the remaining deliveries worth up to $160 million by 2019, Sean Kirk, Emergent’s SVP of manufacturing operations and CMO business unit head, told FierceVaccines.
The two-building Canton facility is a bulk manufacturer for live viral vaccine products. Kirk said it already has an existing customer and the company is looking to build out this business as part of its CMO services and infrastructure. According to a previous SEC filing, the biotech will manufacture Sanofi’s Japanese encephalitis virus vaccine at the site.
During the company’s third-quarter earnings call, Abdun-Nabi said Emergent will begin discussions with the CDC for a potential follow-on contract when they get close to completing the current deal. With that, Wells Fargo analyst David Maris, in a note to investors on Monday, put ACAM2000’s annual revenue at $80 million for both 2018 and 2019, and $45 million from 2020 and onward.
Companywide, Emergent’s sales are mostly coming from government contracts. Separate from an existing $911 million five-year procurement contract with the CDC, the company in March signed a $100 million deal with the Biomedical Advanced Research and Development Authority to deliver its anthrax vaccine BioThrax to the national stockpile. It’s also on track to file for Emergency Use Authorization next year for NuThrax—an improved anthrax vaccine—and it already has a BARDA contract that could reach $1.6 billion. In September, the biotech secured a five-year follow-on contract worth up to $171 million to supply its skin chemical neutralization treatment RSDL to the Department of Defense.
In addition to its ACAM2000 buy, the company recently reached a deal with GlaxoSmithKline to acquire raxibacumab, a monoclonal antibody approved by the FDA for the treatment and prophylaxis of inhalational anthrax. An existing BARDA contract on that product has a remaining value of about $130 million.
But to achieve $1 billion sales target, Wells Fargo’s Maris said he expects Emergent to seek additional transactions in 2018. At the same time, company officials have acknowledged they're scouting deals.
“We're targeting revenue generators that fit within our core competencies, things that we can leverage. We're looking for products in the public health threat space,” company CFO Bob Kramer said during the third-quarter conference call. “We're looking to enable growth on the top line as well as be accretive to earnings within 12 months of acquisition.”