Emergent is a specialty biopharmaceutical company that develops vaccines and antibody therapeutics for infectious diseases. In response to the COVID-19 pandemic, Emergent signed deals with Johnson & Johnson (“J&J”) and AstraZeneca worth a combined $875 million to provide contract development and manufacturing organization (“CDMO”) services to produce the companies’ COVID-19 vaccine candidates, and received another $628 million from the United States government as a part of Operation Warp Speed, for a total of $1.5 billion in COVID-19 deals.
Following the deals, Emergent’s CEO Robert G. Kramer Sr. stated that the Company was “uniquely prepared to answer the call for [the] COVID-19 pandemic” because of its “proven manufacturing capabilities in place.” Indeed, throughout the Class Period, Defendants repeatedly assured investors of Emergent’s ability and capacity to mass manufacture COVID-19 vaccines at its Bayview manufacturing site in Baltimore, Maryland (“Bayview”). The announced deals sent the Company’s stock soaring – peaking at over $134 per share on August 13, 2020.
As discussed in the Class Action Complaint, however, the Company failed to disclose to investors myriad issues at Bayview that would detrimentally affect its ability to manufacture the vaccine. Investors began to learn the truth on March 31, 2021, after the close of markets, when media reports revealed that employees at Emergent’s Bayview facility “mixed up” ingredients for the J&J and AstraZeneca vaccines, contaminating up to 15 million doses of the J&J vaccine. It was further revealed that this was not an isolated incident and part of a history of manufacturing issues at the Company’s plant. Media outlets called the massive contamination a “significant setback and public relations debacle” and highlighted longstanding contamination risks and quality control issues at the Company’s facilities, leading to a string of FDA citations, including a persistent problem with mold, poor disinfection of some plant equipment leading to growth of bacteria, the repeated approval of raw materials that had not been fully tested, and poor employee training.
In response to this news, shares of Emergent’s stock price fell $14.29 per share, or over 15% over the next two trading days, from a close of $92.91 per share on March 31, 2021, to close at $78.62 on April 5, 2021.
The alleged class includes: All persons or entities that purchased or otherwise acquired Emergent common stock from July 6, 2020 through March 31 2021, inclusive.