Up­dat­ed: Trou­bled Emer­gent claims J&J will owe up to $420M if it pulls the plug on its Covid-19 vac­cine

Em­bat­tled con­tract man­u­fac­tur­er Emer­gent BioSo­lu­tions, which trashed tens of mil­lions of J&J’s Covid-19 vac­cine dos­es be­cause of its con­t­a­m­i­nat­ed Bal­ti­more plant, is now telling J&J that it will have to pay some­where in the range of $125 mil­lion to $420 mil­lion if it ter­mi­nates its Covid man­u­fac­tur­ing con­tract with Emer­gent.

In an SEC fil­ing Mon­day, Emer­gent said that it pro­vid­ed Janssen with “a no­tice of ma­te­r­i­al breach” be­cause Janssen is es­sen­tial­ly wind­ing down its Covid-19 vac­cine op­er­a­tions be­fore ful­fill­ing the min­i­mum re­quire­ments in its con­tract with Emer­gent.

But Janssen’s de­ci­sion to pull back from Covid-19 came as the FDA said last month that cas­es of a rare, life-threat­en­ing syn­drome war­rant se­vere­ly re­strict­ing the au­tho­rized use of the vac­cine. The agency said it con­firmed a to­tal of 60 cas­es of what’s known as throm­bo­sis with throm­bo­cy­tope­nia syn­drome, in­clud­ing 9 deaths re­port­ed to the agency’s Vac­cine Ad­verse Event Re­port­ing Sys­tem, out of about 8 mil­lion dos­es of the one-dose shot ad­min­is­tered.

“Cas­es of TTS fol­low­ing ad­min­is­tra­tion of the Janssen COVID-19 Vac­cine have been re­port­ed in males and fe­males, in a wide age range of in­di­vid­u­als 18 years and old­er, with the high­est re­port­ing rate (ap­prox­i­mate­ly 8 cas­es per 1,000,000 dos­es ad­min­is­tered) in fe­males ages 30-49 years; over­all, ap­prox­i­mate­ly 15% of TTS cas­es have been fa­tal,” the agency said in an up­dat­ed fact sheet for health care providers. “Cur­rent­ly avail­able ev­i­dence sup­ports a causal re­la­tion­ship be­tween TTS and the Janssen COVID-19 Vac­cine.”

De­spite the safe­ty is­sues, Emer­gent tries to make the case that its con­tract with Janssen ini­tial­ly was set to pro­duce “drug sub­stance at large scale for up to five years.”

“Ter­mi­na­tion of the Agree­ment will not af­fect the oblig­a­tion of ei­ther par­ty to make any pay­ments for which it is li­able pri­or to or up­on such ter­mi­na­tion, in­clud­ing pay­ment by Janssen for cer­tain raw ma­te­ri­als pur­chased pur­suant to the Agree­ment pri­or to its ter­mi­na­tion, and pay­ment by Janssen for all ser­vices re­lat­ed to the re­quired min­i­mum quan­ti­ty,” Emer­gent said. “At the time of the No­tice, it is the Com­pa­ny’s po­si­tion that the pay­ments owed to the Com­pa­ny by Janssen, if the Agree­ment were to be ter­mi­nat­ed, would be in the es­ti­mat­ed range of ap­prox­i­mate­ly $125 mil­lion to $420 mil­lion.”

A J&J spokesper­son told End­points that it in­formed Emer­gent last week:

“that we in­tend­ed to ter­mi­nate our man­u­fac­tur­ing agree­ment based on Emer­gent’s breach­es, in­clud­ing fail­ure to sup­ply COVID-19 vac­cine drug sub­stance. To­day, John­son & John­son pro­vid­ed for­mal No­tice of Ter­mi­na­tion and Breach. Emer­gent’s SEC fil­ing to­day is false and mis­lead­ing both with re­spect to the con­trived breach al­le­ga­tion against John­son & John­son and in its fail­ure to dis­close our pri­or no­tice that John­son & John­son would ter­mi­nate the sup­ply agree­ment. We have suf­fi­cient ca­pac­i­ty across our glob­al COVID-19 vac­cine man­u­fac­tur­ing net­work, and we con­tin­ue to meet our con­trac­tu­al oblig­a­tions to sup­ply our vac­cine. We re­main fo­cused on en­sur­ing our COVID-19 vac­cine is avail­able where peo­ple are in need.”

News of the no­tice comes as a Con­gres­sion­al re­port from last month found that near­ly 400 mil­lion dos­es of vac­cine (J&J and As­traZeneca) man­u­fac­tured by Emer­gent at its Bal­ti­more plant had to be de­stroyed be­cause of qual­i­ty and con­t­a­m­i­na­tion is­sues. The com­pa­ny al­so re­ceived more than $625 mil­lion from the US gov­ern­ment, and its con­tracts with both J&J and As­traZeneca were worth a com­bined $656 mil­lion, ac­cord­ing to the New York Times.

Ed­i­tor’s note: Ar­ti­cle up­dat­ed with J&J com­ment.

Late Fri­day ap­proval; Trio of biotechs wind down; Stem cell pi­o­neer finds new fron­tier; Biotech icon to re­tire; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

I hope your weekend is off to a nice start, wherever you are reading this email. As for me, I’m trying to catch the tail of the Lunar New Year festivities.

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Pfiz­er lays off em­ploy­ees at Cal­i­for­nia and Con­necti­cut sites

Pfizer has laid off employees at its La Jolla, CA, and Groton, CT sites, according to multiple LinkedIn posts from former employees.

The Big Pharma confirmed to Endpoints News it has let go of some employees, but a spokesperson declined to specify how many workers were impacted and the exact locations affected. Earlier this month, the drug developer had confirmed to Endpoints it was sharpening its focus and doing away with some early research on areas such as rare disease, oncology and gene therapies.

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Rodney Rietze, iVexSol CEO

Bris­tol My­ers, Charles Riv­er join Se­ries A fund­ing for iVex­Sol

Massachusetts-based iVexSol has secured funding to the tune of $23.8 million in its latest Series A round. The new investors include Bristol Myers Squibb, manufacturer Charles River Laboratories and Asahi Kasei Medical.

iVexSol is a manufacturer of lentiviral vectors (LVV), used in making gene therapies, and this latest round of fundraising brings its total Series A total over $39 million, which will be used to recruit more employees and bolster its technology.

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John Rim, Samsung Biologics CEO (Samsung/PR Newswire)

Sam­sung Bi­o­log­ics spells out ex­pan­sion plans in South Ko­rea and US

The CDMO arm of one of South Korea’s largest conglomerates has posted its year-end results and plans for 2023, which include new construction.

Samsung Biologics netted north of KRW 3 trillion ($2.4 billion) in 2022 revenue and an operating profit of KRW 983.6 billion ($799 million), which the company touted on Friday as “record-high earnings.” The revenue boost was 55% compared to 2021.

Jake Van Naarden, Loxo@Lilly CEO

Lil­ly en­ters ripe BTK field with quick FDA nod in man­tle cell lym­phoma

Eli Lilly has succeeded in its attempt to get the first non-covalent version of Bruton’s tyrosine kinase, or BTK, inhibitors to market, pushing it past rival Merck.

The FDA gave an accelerated nod to Lilly’s daily oral med, to be sold as Jaypirca, for patients with relapsed or refractory mantle cell lymphoma.

The agency’s green light, disclosed by the Indianapolis Big Pharma on Friday afternoon, catapults Lilly into a field dominated by covalent BTK inhibitors, which includes AbbVie and Johnson & Johnson’s Imbruvica, AstraZeneca’s Calquence and BeiGene’s Brukinsa.

Filip Dubovsky, Novavax CMO

No­vavax gets ready to take an­oth­er shot at Covid vac­cine mar­ket with next sea­son plans

While mRNA took center stage at yesterday’s FDA vaccine advisory committee meeting, Novavax announced its plans to deliver an updated protein-based vaccine based on new guidance.

Vaccines and Related Biological Products Advisory Committee (VRBPAC) members voted unanimously in favor of “harmonizing” Covid vaccine compositions, meaning all future vaccine recipients would receive a bivalent vaccine, regardless of whether they’ve gotten their primary series.

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Eliot Forster, F-star CEO (Rachel Kiki for Endpoints News)

F-star gets down to the wire with $161M sale to Chi­nese buy­er as na­tion­al se­cu­ri­ty con­cerns linger

With the clock ticking on F-star Therapeutics’ takeover by a Chinese buyer, the companies are still scrambling to remove a hold on the deal from the US government’s Committee on Foreign Investment in the United States.

F-star and invoX Pharma said they are “actively negotiating” with CFIUS “about the terms of a mitigation agreement to address CFIUS’s concerns regarding potential national security risks posed by the transaction.”

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CBER Director Peter Marks (Susan Walsh/AP Images)

FDA ad­vi­so­ry com­mit­tee votes unan­i­mous­ly in fa­vor of bi­va­lent Covid shots re­plac­ing pri­ma­ry se­ries

The FDA’s Vaccines and Related Biological Products Advisory Committee (VRBPAC) voted unanimously in favor of “harmonizing” Covid vaccine compositions, meaning all current vaccine recipients would receive a bivalent vaccine, regardless of whether they’ve gotten their primary series.

The vote marks an effort to clear up confusion around varying formulations and dosing schedules for current primary series and booster vaccines, as well as “get closer to the strains that are circulating,” according to committee member Paul Offit, professor of pediatrics at the Children’s Hospital of Philadelphia.

FDA cuts off use for As­traZeneca’s Covid-19 ther­a­py Evusheld

The FDA has stopped use of another drug as a result of the new coronavirus variants. On Thursday, the agency announced that AstraZeneca’s antibody combo Evusheld, which was an important prevention option for many immunocompromised people and others, is no longer authorized.

The FDA said it made its decision based on the fact that Evusheld works on fewer than 10% of circulating variants.

Evusheld was initially given emergency authorization at the end of 2021. However, as Omicron emerged, so did studies that showed Evusheld might not work against the dominant Omicron strain. In October, the FDA warned healthcare providers that Evusheld was useless against the Omicron subvariant BA.4.6. It followed that up with another announcement earlier this month that it did not think Evusheld would work against the latest Omicron subvariant XBB.1.5.