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Why Emergent BioSolutions Crashed Today

By Eric Volkman - Apr 1, 2021 at 6:56PM

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The company appears to have fumbled part of a very high-profile job for a big partner.

What happened

Emergent BioSolutions (EBS 11.49%) was a dog of a stock Thursday, plummeting to close down by over 13%. This followed news that the company apparently erred in the production process of Johnson & Johnson's (JNJ 1.10%) recently authorized coronavirus vaccine.

So what

Johnson & Johnson claimed that one batch of the vaccine manufactured at Emergent's Baltimore facility did not meet its quality standards, and thus could not be used. It did not specify the number of affected doses.

A syringe being filled with a vaccine from a vial.

Image source: Getty Images.

This matters because the coronavirus has lately been resurgent in some parts of the U.S., and millions of Americans remain unvaccinated. Johnson & Johnson's jab is one of only three authorized by the Food and Drug Administration to combat the coronavirus, and the only one administered in a single dose (the others, from Pfizer/BioNTech and Moderna, are two-dose vaccines).

Emergent said in a statement that it isolated the offending batch and would dispose of it in the proper manner.

"Importantly, the quality control systems worked as designed to detect and isolate this single batch," the company wrote. "Discarding a batch of bulk drug substance, while disappointing, does occasionally happen during vaccine manufacturing, which is a complex and multi-step biological process."

Now what

While that's true, it's not going to help Emergent's reputation as a contract manufacturer -- a big side business for the vaccine specialist -- to the healthcare industry. Johnson & Johnson is a high-profile, mission-critical job, so it'll be a challenge for Emergent to rebuild trust in its processes.

 

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Stocks Mentioned

Emergent BioSolutions Inc. Stock Quote
Emergent BioSolutions Inc.
EBS
$35.33 (11.49%) $3.64
Johnson & Johnson Stock Quote
Johnson & Johnson
JNJ
$175.85 (1.10%) $1.91

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