Emergent BioSolutions has initiated the next phase of its cost-saving plan as the struggling biopharma aims to turnaround financial performance.
The company will lay off around 300 employees, along with the elimination of approximately 85 positions.
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Emergent also said it will shut down two of its US-based complexes – a drug substance manufacturing facility in Baltimore and a drug product facility in Maryland. Emergent will concentrate operations at its other sites in Winnipeg, Canada, and Lansing, Michigan.
Shares in the biotech are currently down around 98.5% compared to highs in August 2020, when plans for the manufacturing of potential vaccines and Covid-19 therapeutics were in full swing. Most of the company’s sales come through its Narcan (naloxone) nasal spray and anthrax vaccines. The company also garnered success during the Covid-19 pandemic when it helped manufacture vaccines.
However, a cross-contamination issue, noted in 2021, meant Emergent was instructed by the US Food and Drug Administration (FDA) to discard or destroy up to an estimated 400 million doses worth of the key component used in vaccines by Johnson & Johnson and AstraZeneca. The fallout from the controversy coupled with weakening sales meant Emergent needed to install a new operational plan to improve profitability.
Last August, the company pushed its CDMO business to one side to focus on its core businesses of medical countermeasures and Narcan. Around 400 employees were also laid off during this time.
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By GlobalDataWhile Emergent reported $300m in Q1 revenue this year, ready cash remained the key issue. Emergent had $78.5m in the coffers by the end of March.
The sweeping changes laid out by CEO Joe Papa are expected to save the company $80m a year. Emergent will take an initial hit of between $18m and $21m to fully implement the restructuring plan.
Papa said in a statement: “We have put in place a multi-year plan to position Emergent for sustainable and long-term success, and that starts by stabilising our operations, strengthening our balance sheet and managing our debt.”
Papa added that “Decisions like these are never easy” and that Emergent is “committed to providing resources to those affected as they transition to new opportunities”.
Emergent hired Joe Papa in February 2024 to turn around the fortunes of the company. Papa was previously CEO of Canadian drugmaker Bausch Health Companies (formerly Valeant Pharmaceuticals). With Papa at the helm, Valeant managed to pay off more than $6bn of debt.
Despite financial issues, Emergent has had some regulatory success in the past year. The biotech won full FDA approval for its anthrax vaccine Cyfendus and entered a five-year contract with the US Department of Defense to supply the vaccine to the US military. The deal, signed in January this year, is worth up to $235.8m.
In March 2023, Emergent won over-the-counter approval for its Narcan nasal spray, increasing accessibility to the opioid-overdose reversal medicine. In the same month, Emergent sold its travel vaccine portfolio to Bavarian Nordic in a deal that could rise in value to $384m.
