April 19, 2021 - An investor in shares of Emergent BioSolutions Inc (NYSE: EBS) filed a lawsuit in the U.S. District Court for the District of Maryland over alleged violations of Federal Securities Laws by Emergent BioSolutions Inc in connection with certain allegedly false and misleading statements made between July 6, 2020 and March 31, 2021.
Gaithersburg, MD based Emergent BioSolutions Inc., a life sciences company, focuses on the provision of preparedness and response products and solutions for civilian and military populations that address accidental, deliberate, and naturally occurring public health threats (PHTs).
Emergent BioSolutions Inc signed deals with Johnson & Johnson (“J&J”) and AstraZeneca worth a combined $875 million to provide contract development and manufacturing organization (“CDMO”) services to produce the companies’ COVID-19 vaccine candidates, and received another $628 million from the United States government as a part of Operation Warp Speed, for a total of $1.5 billion in COVID-19 deals.
Following the deals, BioSolutions Inc’s CEO Robert G. Kramer Sr. stated that Emergent BioSolutions Inc was “uniquely prepared to answer the call for [the] COVID-19 pandemic” because of its “proven manufacturing capabilities in place.” Emergent BioSolutions Inc assured investors of Emergent’s ability and capacity to mass manufacture COVID-19 vaccines at its Bayview manufacturing site in Baltimore, Maryland (“Bayview”).
Shares of Emergent BioSolutions Inc (NYSE: EBS) rose to as high as $134.94 per share in August 2020.
According to the complaint the plaintiff alleges on behalf of purchasers of Emergent BioSolutions Inc (NYSE: EBS) common shares between July 6, 2020 and March 31, 2021, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between July 6, 2020 and March 31, 2021, the ompany failed to disclose to investors myriad issues at Bayview that would detrimentally affect its ability to manufacture the vaccine. Investors began to learn the truth on March 31, 2021, after the close of markets, when media reports revealed that employees at Emergent’s Bayview facility “mixed up” ingredients for the J&J and AstraZeneca vaccines, contaminating up to 15 million doses of the J&J vaccine. It was further revealed that this was not an isolated incident and part of a history of manufacturing issues at the Company’s plant. Media outlets called the massive contamination a “significant setback and public relations debacle” and highlighted longstanding contamination risks and quality control issues at the Company’s facilities, leading to a string of FDA citations, including a persistent problem with mold, poor disinfection of some plant equipment leading to growth of bacteria, the repeated approval of raw materials that had not been fully tested, and poor employee training.
Shares of Emergent BioSolutions Inc (NYSE: EBS) declined on April 22, 2021, to as low as $61.00 per share.