Why Emergent BioSolutions crashed today
Emerging BioSolutions (NYSE: EBS) was a one-share dog on Thursday, plummeting to close over 13%. This followed the announcement that the company had apparently made a mistake in the production process of Johnson & johnsonof (NYSE: JNJ) recently licensed coronavirus vaccine.
Johnson & Johnson claimed that a batch of the vaccine made at Emerging’s facility in Baltimore did not meet its quality standards and therefore could not be used. He did not specify the number of doses affected.
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This is important because the coronavirus has recently reappeared in parts of the United States and millions of Americans are still unvaccinated. Johnson & Johnson’s jab is one of only three authorized by the Food and Drug Administration to fight against 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 had isolated the offending lot and would dispose of it in the proper manner.
“Importantly, the quality control systems worked as intended to detect and isolate this unique lot,” the company wrote. “The rejection of a bulk batch of drug substance, while disappointing, sometimes occurs during vaccine manufacture, which is a complex, multistep biological process.
While this is true, it will not help Emergent’s reputation as a contract manufacturer – a big side business for the vaccine specialist – at the bottom. health industry. Johnson & Johnson is high-level, mission-critical work, so it will be a challenge for Emergent to restore confidence in its processes.
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Eric Volkman has no position in any of the listed securities. The Motley Fool owns shares and recommends Emergent BioSolutions. The Motley Fool recommends Johnson & Johnson and Moderna Inc. The Motley Fool has a disclosure policy.
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