GAITHERSBURG, Md. - Emergent BioSolutions Inc. (NYSE: EBS) has announced that it has secured two contract options with the U.S. government for the procurement of additional courses of its smallpox treatment, TEMBEXA® (brincidofovir), in a deal valued at $67.4 million. The procurement is part of the U.S. government's efforts to maintain a preparedness posture against the potential threat of human smallpox.
TEMBEXA®, which received FDA approval in June 2021, is designed to treat human smallpox disease in adults and pediatric patients, including neonates. It is available as 100 mg tablets and a 10 mg/mL oral suspension, with dosing once weekly for two weeks. The oral suspension is specifically important for patients who may have difficulty swallowing.
The order is part of a 10-year contract with optional procurement CLINs (Contract Line Item Numbers) that can be exercised throughout the contract's term, with a maximum potential value of $568 million. The latest options exercised, CLIN0004A and CLIN0005A, ensure funding through 2027 and aim to maintain a continuous supply of TEMBEXA®.
Paul Williams, senior vice president of Emergent's products business, emphasized the importance of the partnership between the company and the U.S. government in meeting the country's preparedness needs. The project is funded by the Department of Health and Human Services; Administration for Strategic Preparedness and Response; Biomedical Advanced Research and Development Authority (BARDA) under contract number 75A50122C00047.
Smallpox, caused by the variola virus, was historically one of the deadliest diseases known, with a 30% case fatality rate. Although eradicated in the 1970s, there is ongoing concern that the virus could reemerge through accidental release or as a bioterrorism agent. The U.S. Centers for Disease Control and Prevention categorizes the variola virus as a Category A bioterrorism agent due to its transmission ease, high mortality, and potential for public panic and social disruption.
Emergent BioSolutions, celebrating its 25th year, focuses on public health solutions, including vaccines and therapeutics for governments and consumers, and contract development and manufacturing services for the pharmaceutical and biotech industries.
This announcement is based on a press release statement and includes forward-looking statements regarding future procurements under the contract to supply TEMBEXA® to the U.S. government. Emergent's actual results could differ materially from those anticipated in these forward-looking statements due to various factors, including inaccuracies in assumptions or the materialization of unknown risks or uncertainties.
In other recent news, Emergent BioSolutions has secured orders worth approximately $400 million for its smallpox and mpox vaccines and treatments. In addition, the company has issued equity securities and set warrant prices, providing a mechanism for future capital raising. Emergent BioSolutions has also settled a securities class action lawsuit for $40 million, allowing them to focus on their multiyear business transformation plan.
Further developments include a $41.9 million contract modification from the Biomedical Advanced Research and Development Authority for the enhancement of the drug substance manufacturing process of Ebola treatment, Ebanga™. The company has also secured a $250 million loan from Oak Hill Advisors, aimed at strengthening its financial position and reducing net debt. These recent developments highlight Emergent BioSolutions' ongoing commitment to addressing both financial and public health challenges.
InvestingPro Insights
Amidst the news of Emergent BioSolutions' new government contract for its smallpox treatment, TEMBEXA®, the company's financial health and market performance provide additional context for investors. According to InvestingPro data, Emergent BioSolutions currently holds a market capitalization of $323.04 million. Despite a challenging period with a one-week price total return showing a significant drop of 15.02%, the company has experienced a substantial six-month price total return of 143.44%, highlighting a period of strong recovery in its stock price.
InvestingPro Tips suggest that while the stock has faced recent volatility, with a notable hit over the last week and month, its valuation implies a strong free cash flow yield. This could be a sign of underlying value in the stock that may appeal to certain investors. Additionally, the stock's high shareholder yield is a noteworthy aspect that merits consideration, especially for those looking to capitalize on potential shareholder returns.
It's important for investors to note that analysts do not anticipate the company to be profitable this year, and Emergent BioSolutions has not been profitable over the last twelve months. These factors, coupled with the company's high price volatility, suggest that the stock may carry higher risk. For those interested in a deeper dive into Emergent BioSolutions' financials and market performance, InvestingPro offers additional tips and insights that could further inform investment decisions.
For a more comprehensive analysis, investors can explore the full spectrum of 11 InvestingPro Tips available for Emergent BioSolutions at https://www.investing.com/pro/EBS, which could provide a more nuanced understanding of the company's potential risks and opportunities.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.