Emergent BioSolutions (EBS) has announced a 5-year agreement with Janssen Pharma, of Johnson & Johnson (JNJ), for large-scale drug substance manufacturing of JNJ’s investigational SARS-CoV-2 vaccine, Ad26.COV2-S.
Shares in EBS are currently rising 3% in Monday’s trading, bringing the stock’s year-to-date gain to 56%.
Emergent will provide contract development and manufacturing (CDMO) services to produce drug substance at large scale over five years, valued at approximately $480 million for the first two years.
“We are proud to deploy our manufacturing strength to address the COVID-19 pandemic,” said Robert Kramer, Emergent BioSolutions CEO. “Advancing this collaboration is one of the ways we live our mission – to protect and enhance life.”
Under the agreement, Emergent will begin providing large-scale drug substance manufacturing for Johnson & Johnson’s adenovirus-based COVID-19 vaccine in 2021, upon successful completion of a technology transfer. Beginning 2023, Emergent will provide a flexible capacity deployment model to support additional drug substance batches annually.
The company says it will provide an update to its 2020 financial outlook when it reports its second quarter financial results.
Activities will be performed at Emergent’s Baltimore Bayview facility, designed for rapid manufacturing of large quantities of vaccines and treatments during public health emergencies. The facility can enable large-scale manufacturing to up to 4000L to prepare for production of commercial volumes to meet customer demand.
As well as CDMO services, Emergent is also developing two investigational plasma-based Covid-19 treatments using its own hyperimmune platforms – COVID-HIG for severe hospitalized and high-risk patients and COVID-EIG for severe disease in humans. Both candidates are anticipated to be in Phase 2 clinical studies in 2020.
Analysts have a bullish Strong Buy consensus on Emergent stock. However due to the recent rally the average analyst price target now indicates 5% downside potential from the current share price. (See EBS stock analysis on TipRanks).
After the company announced a $628 million agreement to provide manufacturing support to the US government’s Covid-19 vaccine delivery efforts, Chardan Capital’s Keay Nakae commented: “We believe that this development is just another example of one of Emergent’s key strengths, its longstanding relationships with the relevant government agencies: ASPR, BARDA, FDA, CDC, etc.”
Related News:
Gilead Licencee Gets Indian Regulatory Approval For Remdesivir Covid-19 Therapy
CytoDyn Signs Distribution Deal For Covid-19 Treatment Leronlimab
Gilead’s Covid-19 Remdesivir Therapy Gets Conditional European Nod
