Promotions Emergent BioSolutions (NYSE: EBS) fell 30% in April, according to S&P Global Market Intelligence, after quality control errors at one of the company’s facilities spoiled millions of doses Johnson and JohnsonCOVID-19 vaccine.
Cleaning was required after ingredients from another vaccine contaminated J&J’s vaccine production area.
CEO Robert Kramer attributed the mistakes to the complexity of producing two biological products in the same facility – which he said was the government’s order – and an attempt to produce tens of millions of doses more than the facility was built. Contrary to this story, an FDA researcher pointed out several problems last year, including with procedures designed to prevent contamination or confusion.
Management declares that the core business continues to operate as planned. Prior to the problems, the company was a key supplier in the pandemic, helping to produce vaccines for both Johnson & Johnson and AstraZeneca… Now the government has ordered Johnson & Johnson to take over the plant and stop production of the AstraZeneca vaccine.
The episode could hinder Emergent’s competitiveness in the future, but Kramer said the company hasn’t lost customers just yet. Revenue grew 78% in the first quarter over the same period last year, and management projects 15% growth by 2021. This is after a 10% reduction in the forecast due to the suspension of production of the COVID vaccine.
Both management and shareholders hope the company will receive the green light to resume production soon. To do this, he will need to take into account the findings of the agency. This includes nine related to cross-contamination issues. The stock is currently trading at the lowest selling ratio since 2014.
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