(Reuters) – Shares of Emerging BioSolutions Inc fell 15% on Friday, following the termination of a contract with the U.S. government to reserve capacity and expand manufacturing of third-party COVID-19 vaccines at its sites.
The contract manufacturer has come under regulatory criticism after an accidental mixing of ingredients ruined around 15 million doses of Johnson & Johnson’s COVID-19 vaccine and prompted the United States Food and Drug Administration to shut down operations at its Baltimore plant earlier this year.
The change in terms with the US Department of Health and Human Services will reduce the value of the contract to $ 470.9 million, from $ 650.8 million, Emergent said in a regulatory filing Thursday night.
Emergent announced in late July that it would resume production of J & J’s vaccine at the plant following further reviews by the FDA.
The termination of the contract with the U.S. government further decreases revenue from Emerging’s contracted drug manufacturing business, Cowen analyst Boris Peaker said in a note.
Equipment made for the J&J vaccine at the Baltimore plant before the April shutdown and awaiting FDA approval could be enough to produce up to 50 million shots, Reuters reported last month.
Emergent said Thursday that it plans to continue supporting J&J from its Bayview site.
Emerging stocks have fallen 41% this year through Thursday’s close.
Report by Manojna Maddipatla in Bengaluru; Editing by Anil D’Silva