Emergent BioSolutions announced it is reducing investment in and de-emphasizing focus on growth in its CDMO services business. As a result, Emergent is reducing operations at its Bayview facility in Baltimore, Maryland.
Additionally, Emergent will reduce operations at its facility in Canton, Massachusetts, in response to changes in the volume of U.S. government procurements of medical countermeasures. This action will also result in a small reduction in operations at the company’s Rockville, Maryland, drug product facility.
Going forward, Emergent will focus on its core products business – medical countermeasures and NARCAN® Nasal Spray –and on delivering for its existing customers, including the U.S. and allied governments. Emergent will maintain a level of operations at both Bayview and Canton to ramp up production in response to new demand.
“The actions we are taking will further strengthen our core products business and financial foundation,” said Emergent interim Chief Executive Officer Haywood Miller. “This will better align Emergent’s businesses with a focus on our core products and delivering for the needs of our customers. It will provide us with flexibility to respond to future customer demand while responsibly maintaining manufacturing infrastructure deemed critical to respond to public health threats.”
Paul Williams, senior vice president of products, added, “Our focus is in the areas in which we are uniquely equipped to have a positive impact. We remain committed to partnering with the U.S. and allied governments to help address public health threats including anthrax, smallpox, and Ebola while also successfully increasing access to NARCAN Nasal Spray as an over-the-counter treatment to help address America’s opioid overdose epidemic and give people in crisis a second chance.”
These strategic actions will lead to a reduction of approximately 400 employees across all areas of the company. In combination with other cost reduction initiatives, these actions are expected to result in annualized savings of over $100 million when fully implemented. The costs associated with these actions are estimated to be approximately $19 million - $21 million and are expected to be incurred in the third quarter of 2023.
As a result of the strategic shift away from Emergent’s services business, the company is eliminating the chief operating officer (COO) role. As such, Adam Havey, executive vice president and current COO, will be leaving the company on September 30, 2023. Bill Hartzel, senior vice president and head of bioservices, will assume responsibility for manufacturing operations and will join the executive management team reporting to the interim CEO.
“Changes like these are never easy as they impact many of our colleagues,” said Miller. “I want to thank Adam for his more than 20 years of service to Emergent, and all those who are affected by these actions for their dedication and contributions. Emergent is committed to working with impacted employees to help transition them to new opportunities.”
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