- Emergent BioSolutions on Tuesday disclosed plans to lay off approximately 400 employees as part of a larger initiative to cut costs and move away from its contract drug manufacturing business.
- The layoffs will affect “all areas of the company” and, combined with other cost-reduction efforts, lead to annualized savings of over $100 million, Emergent said. Moving forward, Emergent will focus on its “core products business,” which revolves around the opioid overdose treatment Narcan as well as medical countermeasures to public health threats.
- Emergent will also report its latest financial results Tuesday afternoon. During the first three months of the year, the company recorded $165 million in revenue, with product sales accounting for $143 million and its contracted services — which include developing and manufacturing drugs for other firms — accounting for $15 million. Emergent ended that quarter with a $148 million loss from operations.
Emergent said it will reduce operations at facilities in Baltimore and Canton, Massachusetts, though for different reasons. The cuts at its Baltimore site are due to a de-emphasis on contracted services, while the changes at its Canton facility are “in response to changes in volume of U.S. government procurements of medical countermeasures.”
Those changes will also result in a “small reduction in operations” at Emergent’s drug product facility in Rockville, Maryland. The company said it will “maintain a level of operations” at both the Baltimore and Canton sites “to ramp up production in response to new demand.”
“The actions we are taking will further strengthen our core products business and financial foundation,” said Emergent’s interim CEO, Haywood Miller, in a statement Tuesday.
Paul Williams, the company’s senior vice president of products, added that Emergent remains “committed to partnering with the U.S. and allied governments to help address public health threats including anthrax, smallpox, and Ebola while also successfully increasing access to Narcan Nasal Spray as an over-the-counter treatment to help address America’s opioid overdose epidemic and give people in crisis a second chance.”
In March, the Food and Drug Administration approved Narcan for over-the-counter use.
Emergent’s restructuring comes amid a protracted downturn in the biotechnology stock market that has forced many small drugmakers to slash their research, development and manufacturing budgets.
Emergent also previously ran into problems with two high-profile contracts, which tasked the company with manufacturing the COVID-19 vaccines developed by Johnson & Johnson and AstraZeneca.
In the spring of 2021, in the thick of the pandemic, an error at Emergent’s Baltimore plant ruined millions of doses of J&J’s vaccine. Days after the mix-up became public, the U.S. government had J&J take over vaccine production at the plant and told AstraZeneca to find a different manufacturing partner for its shot.
Emergent said Tuesday that the activities associated with its strategic shift will cost around $19 million to $21 million, which will be incurred during the third quarter.
The company also announced the elimination of its chief operating officer role. Adam Havey, who currently holds the position, will leave Emergent at the end of September. Manufacturing operations will then be overseen by the head of Emergent’s bioservices business, Bill Hartzel, who will join the executive management team that reports to Miller.