By Dhirendra Tripathi
Investing.com – Emergent Biosolutions stock (NYSE:EBS) plunged more than 41% Friday a day after the company said it had agreed to terminate a contract signed in 2012 with the federal government to supply drugs and vaccines.
Hit by the development, Emergent cut the top end of its annual revenue guidance by $100 million to $1.7 billion to $1.8 billion. Third-quarter total revenue fell 15%, to $329 million.
The termination reduced the total value of its contract to $470.9 million from $650.8 million. The contract was awarded to the company to establish a plant in Baltimore to make drugs and vaccines to be used in a pandemic or other public-health emergency.
When the coronavirus pandemic hit in 2020, the U.S. government reserved capacity at Emergent for the manufacture of Covid-19 vaccines.
The premature end comes after missteps at the company that included contamination of some of the batches of vaccines it had made for Johnson & Johnson (NYSE:JNJ).
J&J took over its share of the manufacturing facility at the Baltimore unit, and production of another Covid-19 vaccine that Emergent was making on behalf of AstraZeneca (NASDAQ:AZN) was moved out of the plant.