Emergent closes on buying smallpox drug Tembexa from Chimerix with a $238M payment
It was only last year that the oral treatment Tembexa was approved by the FDA to treat smallpox, but the drug has already changed hands.
Emergent BioSolutions, one of the primary drug manufacturers for the US government, has grabbed the global rights for Tembexa from the North Carolina-based biotech Chimerix. And that’s not the only thing that Emergent is picking up.
The manufacturer will also get Chimerix’s 10-year BARDA contract to produce 1.7 million doses of the drug. The value of the contract sits at $680 million as well as a “product procurement” valued at $115 million. Additional options are valued at $551 million, which can be committed at BARDA’s discretion.
While Emergent has sealed the deal, the news has not wowed investors as its stock price has dropped 3% since opening on Tuesday.
The final agreement, which was subject to terms between BARDA and Chimerix, saw Emergent pay $238 million upfront to the biotech. Chimerix can also grab up to $124 million in milestone payments based on how much the US government plans to acquire as well as $12.5 million when certain other milestones are met.
Emergent will also give 15% of any profit from Tembexa sales outside of the US and 20% on sales inside the US. However, the sales from this come from any excesses that are separate from the 1.7 million doses for the contract.
According to an email from an Emergent spokesperson, the company has already started manufacturing the drug and is expecting to deliver its first doses to the US government by the end of the year.
“The addition of Tembexa to our smallpox medical countermeasure franchise, which consists of our smallpox vaccine and therapeutic for smallpox vaccine complications, creates a more comprehensive offering to combat this deadly public health threat,” said Paul Williams, SVP government and MCM business at Emergent, in a statement.
Emergent, which has been working on grabbing Tembexa since May, could also apply the drug to the current monkeypox outbreak. In May, when the global spread of the virus started to ramp up, Brigham and Women’s Hospital chief of infectious diseases Daniel Kuritzkes noted to Endpoints News at the time that the drug can offer some protection as monkeypox is milder than smallpox.
However, the spokesperson noted the drug is not currently indicated for use against monkeypox, and Emergent will defer to public health authorities on how best to deploy it.
This also comes as Emergent hit some major snags in its manufacturing sphere last month, as it was revealed that the company had wasted more than half a billion Covid-19 vaccines as quality issues at the facility where it was made were not reported.
A warning letter was also sent to the company from the FDA in August about quality issues found at its Camden manufacturing site.