Following a challenging third quarter wherein Emergent BioSolutions reduced its sales projection by more than $100 million, the firm is earning some much-needed capital thanks to a transaction with Bavarian Nordic.
On Wednesday, Emergent said it will be selling its travel medicine division to Bavarian Nordic, which is renowned for its monkeypox vaccine Jynneos. The deal is valued at $270 million. To be more specific, Emergent is turning up its typhoid vaccine Vivotif, its cholera injection Vaxchora, and chikungunya contender CHIKV VLP. To further incentivize future sales and product development, the agreement provides Emergent with the potential to earn an additional $110 million in milestone payments.
Bavarian Nordic notes that to prevent typhoid fever, the FDA has authorized only the use of the oral vaccination Vivotif. The vaccine has received European Union clearance and is currently sold in over 25 nations. The cholera vaccine Vaxchora has received regulatory approval in both Europe and the United States, while Emergent’s chikungunya candidate CHIKV VLP is scheduled to complete phase 3 testing in the second half of 2023, with a possible launch date of 2025.
Bavarian Nordic will acquire not just the vaccine portfolio of Emergent, but also the biologics production plant in Switzerland, Bern and the San Diego research facility related to Emergent’s chikungunya vaccine. The firms claimed that as a result of the deal, some 280 people now working for Emergent would be joining the Bavarian Nordic team.
According to Bavarian Nordic CEO Paul Chaplin, the acquisition would help the firm realize its goal of becoming one of the leading pure-play vaccine companies by strengthening its position in the travel vaccine market. This goal will be aided by Emergent’s chikungunya candidate. He mentioned that since the outbreak of COVID-19, travel vaccinations have seen a resurgence.
Emergent had already signaled its aim to expand into the pharmaceutical countermeasures and contractual manufacturing industries, which this transaction reflects. Historically, Emergent has collaborated with the U.S. Government on emergency drugs, including Narcan (used to reverse the effects of an overdose) and ACAM2000 (used to prevent smallpox infection).
But both fronts remain uncertain for Emergent. CFO Rich Lindahl remarked at an earnings conference in November that the shortfall in Emergent’s CDMO capacity continues to strain its revenues.
This shortfall is probably a response to Emergent’s disastrous COVID-19 vaccine production run, in which the business was forced to discard innumerable shot doses due to a cross-contamination problem with chimeric products made by AstraZeneca and Johnson & Johnson.
Separately, Emergent’s fill-finish facility in Camden, Maryland, received a warning letter from the FDA not too long ago. Agency inspectors noted contamination problems and a lack of documented processes for preventing contamination in their report.
On a conference call scheduled for February 27th, Emergent will announce its financial results for the fourth quarter and provide further details on its sale to Bavarian Nordic.
Meanwhile, Bavarian Nordic has been successful as of late. In 2022, the business signed consecutive supply agreements with governments throughout the globe for its pox and mpox vaccine Jynneos.
