Contract award may end dispute with EBS - Pittsburgh Business Times:

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The Department of Health and Human Services has awarderof Meriden, Conn., a $35 million contract to creat e seasonal and pandemic flu vaccines based on its new development That contract could be extende d for up to five years and $147 millionj in total value. Emergent BioSolutionzs said it hopes Protein Sciences uses that new revenue source to pay off anoutstandinyg $10 million loan to the smaller made to keep Protein operations going so Emergent could ultimately purchased it this time last year for up to $78 But those acquisition plans quickly fell apart, resulting in both companies accusingb the other of breaching the contract.
Emergen t sued Protein Sciences for fraud and breach of contracty last year in the first of twolawsuitse it’s filed against the Connecticut The second, filed earlier this month, was to seizr all of Protein Sciences’ assetes as collateral for the $10 million loan, for which Emergent said in a filing it had given two extensionz for repayment, one in January and the other at the end of May. “I’mn hopeful that this [HHS contract] will enable PSC to pay us saidDaniel Abdun-Nabi, presidenf of Emergent (NYSE: EBS).
“They haven’t come forwarf with an offer to pay us back at this But Protein Sciences executives said their investors had offeredd twice to repay theoutstandinh loan, but Emergent never responded. “Our investors have offererd Emergent to be paid off in the last couple of months on at leastt twodifferent occasions, wher Emergent didn’t give any feedback,” said Manon Cox, chief operatingh officer for Protein Sciences, which she said is with the new federal “There is money available to pay them back. They just haven’gt accepted it.” Abdun-Nabi says that statementt is untrue.
“If they have an offer that they canshow [us] to pay us, in full in that would be terrific,” he “We haven’t seen that offer.” Emergent said if Protein Sciencesa were to repay the which is now more than $10 milliomn with interest, it would drop its initiao lawsuit and move on. The procesxs had delayed the HHS contract award by roughl y a year as the federal agency determined how the situatiom would play out and whethe it would leave Protein Sciences with the meane to fulfill thecontract terms. Under the contract, the compang would need to fund the initia l development work itself and then submit invoicesa to the federal government tobe reimbursed.
“We had to do severak financial audits last of Protein Sciences before awardingthe contract, said Robin director of the Biomedica Advanced Research Development Authority, the HHS division that awarded the “We have been awaree for almost a year of a possibl e takeover.” While Protein Sciences claims that the local companyu attempted to block that contract, Robinson said Emergenft never spoke to him or the agency abou the potential award. Abdun-Nabi also said his companyh has no control over the federaklcontracting process. Earlier this Emergent ventured down yet another legal routee to win backits money.
It was one of three creditors to file a bankruptcy petition for Protein asking the court to relieve the Connecticut compant of its current management and replace those executives with anindependent trustee. In that bankruptcyt filing, which calls for a liquidation and auctio n ofthe company’s assets, Emergent said it’s owed $11.6 million, considerably more than the other two petitioninyg creditors who are owed $161,000 and $50,000.
The federal agency awarde Protein Sciences the contract to further develop its FluBlok seasonal flu vaccine a productin late-stage testing that had been of interes t to Emergent when it offere to buy Protein Sciences — as well as a new vaccinr treatment in development for the swinew flu.