Emergent BioSolutions is undergoing substantial changes as it shifts its focus away from its challenged contract development and manufacturing organization (CDMO) business to reinforce its core medical countermeasures and Narcan divisions.
Consequently, the company is not only eliminating its chief operating officer position but also cutting numerous jobs.
Emergent announced on Tuesday that it’s downplaying its CDMO services business. This involves reducing operations at its facilities in Baltimore, Maryland (Bayview), as well as in Canton, Massachusetts, and Rockville, Maryland.
The contract manufacturing sector of Emergent has been grappling with setbacks ever since a widely publicized incident involving cross-contamination led to the destruction of a significant quantity of COVID-19 vaccine doses.
In its strategic outlook, Emergent is prioritizing the development of its core medical countermeasures portfolio and the Narcan opioid overdose reversal spray.
Despite the downsizing at its facilities, the company clarified that it will maintain some level of activity at both Bayview and Canton locations in order to be responsive to emerging demands.
To achieve its realignment, the company plans to lay off around 400 employees across various departments. Alongside other cost-cutting measures, this business shift is projected to result in annual savings exceeding $100 million. These adjustments will incur costs of around $20 million, anticipated to materialize in the third quarter of 2023.
Considering that the company employed approximately 2,500 people at the start of the year, the job cuts will affect roughly 15% to 20% of the workforce. Earlier this year, Emergent had revealed 132 layoffs in January and a decision to sell its travel health business to Bavarian Nordic in February, resulting in the separation of an additional 280 staff members.
Given its redirection away from services-oriented endeavors, Emergent is also dismantling the role of chief operating officer. This change will lead to the departure of the current role-holder, Adam Havey, by September 30. In his stead, Bill Hartzel, Senior Vice President and Head of Bioservices, will assume responsibility for manufacturing operations.
While Emergent has experienced turbulence in recent years, it has achieved notable successes in 2023.
In March, the company made history by successfully transitioning its Narcan nasal spray from prescription approval to receiving over-the-counter FDA authorization. This move has been celebrated for enhancing access to naloxone in the battle against the US opioid crisis.
In July, Emergent achieved full approval for its anthrax vaccine Cyfendus for adults aged 18 to 65. Prior to this, under a pre-emergency use authorization, the vaccine had been supplied to the Department of Health and Human Services for emergency preparedness since 2019.
