Dive Brief:
- Emergent Biosolutions will lay off 300 employees and close two drug production facilities in Baltimore and Rockville, Maryland, according to a May 1 press release.
- The pharmaceutical manufacturer is in the midst of restructuring operations with plans to save up to $80 million.
- The company will instead focus on its facilities in Lansing, Michigan, and Winnipeg, Canada, President and CEO Joe Papa said in a Q1 earnings call.
Dive Insight:
Emergent Biosolutions will continue to prioritize its core products business, including Narcan nasal spray to address the opioid crisis, and medical countermeasures for its patients and customers, including U.S. agencies like the Department of Defense and other allied governments, the release stated.
For its Narcan spray, the pharma company continues “to be well prepared to meet anticipated demand from a supply and manufacturing perspective,” Papa said in the call.
"However, after a careful review by our Board and management team, we need to restructure the way we operate, create a customer-focused, leaner, more flexible team and a streamlined manufacturing footprint that will still allow us to supply all the products needed by our customers," he said.
As part of the reorganization, a new chief science officer role has been created and will report to the CEO. The company recently hired Papa to be its president and CEO in February.
The restructuring plan will cost $18 million to $21 million, which is expected to be primarily incurred in H2 of 2024. In addition to the 300 job cuts, the company will eliminate about 85 job openings, according to the release.
A similar restructuring occurred in August when Emergent laid off approximately 400 employees to cut costs and move away from its contract drug manufacturing business, which ran into several headwinds.
The company’s Baltimore-Bayview facility had manufactured large-scale drug substances for Johnson & Johnson’s and AstraZeneca’s vaccine candidates. Both major contracts were terminated in June 2022 due to a manufacturing contamination error by Emergent.
The year is looking up though. In January, the company signed a 5-year, $236 million contract with the DOD to supply its previous anthrax immunization, BioThrax, to various military branches.
The company also reported $300.4 million in Q1 revenues, about $76 million higher than expected.
