Please ensure Javascript is enabled for purposes of website accessibility

Why Emergent BioSolutions Stock Is Tumbling Today

By Keith Speights - Apr 19, 2021 at 11:29AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company has halted production of COVID-19 vaccines at its Baltimore facility as an FDA inspection moves forward.

What happened

Shares of Emergent BioSolutions (EBS -3.64%) were tumbling 9.9% lower as of noon EDT on Monday. The big drop came after the company revealed in a filing to the U.S. Securities and Exchange Commission (SEC) that it has agreed not to make any new material at its Bayview facility in Baltimore, Maryland, at the request of the U.S. Food and Drug Administration (FDA). This facility had previously produced COVID-19 vaccines for both AstraZeneca (AZN -0.10%) and Johnson & Johnson (JNJ 0.89%)

So what

Emergent BioSolutions continues to reel from manufacturing issues at its Bayview facility that caused 15 million doses of Johnson & Johnson's COVID-19 vaccine to be discarded. The New York Times reported in late March that the company's staff had inadvertently contaminated a batch of J&J's vaccine with ingredients from AstraZeneca's COVID-19 vaccine. 

Vaccine vials

Image source: Getty Images.

That highly publicized glitch led Johnson & Johnson to step in and temporarily manage the production of its vaccine at Emergent BioSolutions' Bayview facility. However, today's news means that J&J's efforts were short-lived. 

Every aspect of this story is bad news for Emergent BioSolutions. The company has been regarded as a top contract manufacturer for drugs and vaccines in the past. The repercussions from the COVID-19 vaccine debacle at its Baltimore facility, though, could be long-lasting if customers opt to turn to other contract manufacturers in the future. 

Now what

It remains to be seen how quickly Emergent BioSolutions will be able to move past the dark cloud hovering over it and for the healthcare stock to rebound. One important step will be to get the Bayview facility operational again. The FDA is continuing its inspection of the facility but hasn't yet announced when its review will be complete.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Emergent BioSolutions. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Emergent BioSolutions Inc. Stock Quote
Emergent BioSolutions Inc.
$29.39 (-3.64%) $-1.11
Johnson & Johnson Stock Quote
Johnson & Johnson
$167.57 (0.89%) $1.48
AstraZeneca PLC Stock Quote
AstraZeneca PLC
$66.74 (-0.10%) $0.07

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/16/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.