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Deal ended between Biden administration and Emergent BioSolutions, vaccine maker behind mix-up with J&J COVID shots

Emergent BioSolutions, the Maryland-based contractor behind a mix-up that disrupted the global supply of Johnson & Johnson's COVID-19 vaccine seven months ago, says a vaccine manufacturing deal with the Biden administration has been terminated. The deal was worth more than $650 million.

The company disclosed the development Thursday in a filing. Emergent later said in a statement that it plans to continue making Johnson & Johnson's vaccine under a separate deal with J&J. 

"As we came to September 30, based on where we were at that point in time, we determined that it was no longer probable that we were going to collect 100% of the contract," Rich Lindahl, Emergent's chief financial officer, told investors on Thursday, claiming the "government had been behind on payments" related to their order.

Robert Kramer, the company's CEO, told investors they had agreed to cut ties with the Biden administration despite being "legally entitled to receive the full payment" under the government's contract.

Since the mix-up that forced Emergent to discard batches of vaccine that could have yielded millions of doses for AstraZeneca and Johnson & Johnson, the Food and Drug Administration has allowed the company to resume production of the J&J vaccine.

In the months since, the Food and Drug Administration has greenlighted several of Emergent's vaccine batches of both shots for export, but has yet to authorize the facility to make doses for the domestic supply.

"We've contributed over 100 million dose equivalents of COVID-19 vaccine for global distribution. Importantly, we look forward to continuing to support J&J's ongoing vaccine production in the months ahead," Kramer said.

First inked in 2012 in the wake of the H1N1 flu pandemic, Emergent said it had been "just one of two original partners" to remain in the program first hatched by the Obama administration to expand domestic manufacturing capacity ahead of a potential new pandemic. 

As the COVID-19 pandemic strained global supply chains for vaccine makers, the Trump administration tapped the company's nascent vaccine factory - one of several "Centers for Innovation in Advanced Development and Manufacturing" or CIADM - to make what's known as drug substance, an early stage of the manufacturing process, for Johnson & Johnson and AstraZeneca. 

But the company's mix-up early this year ended hopes that the factory would make an early contribution to ramping up vaccine supply for the U.S., stalled domestic production of Johnson & Johnson's vaccine for months and forced countries abroad to discard finished vaccines made from Emergent's drug substance that they feared could be contaminated. 

Only around 8 percent of fully vaccinated Americans ultimately received Johnson & Johnson's single-shot vaccine, which was made using ingredients instead from the company's own suppliers in Europe. 

"Many companies stepped up to help fight this pandemic, often attempting to do things that had never been done before. Not everything went perfectly. We know that firsthand at Emergent," Kramer said in an op-ed published in The Baltimore Sun

Emergent says it and Johnson & Johnson have invested millions of dollars to overhaul the company's facilities and procedures in the wake of an FDA inspection in April that faulted Emergent's vaccine factory for an array of lapses and concerns that risked contamination.

"But if you want companies to engage, you need to be willing to stand by them through both challenge and achievement," Kramer wrote.

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