Emergent claims J&J breached contract

June 7, 2022

Emergent and Johnson and Johnson are going through what seems to be a rough and public breakup.

In an SEC filing shared this week, Emergent let J&J know that it is still expecting the money promised in the vaccine initial agreement, approximately $420 million.

The filing, signed by Richard Lindahl, Emergent’s executive vice president and CFO, states that the company is notifying J&J of a possible “material breach of the agreement for, among other things, failure by Janssen to provide [Emergent] the requisite forecasts of the required quantity of product to be purchased.”

Last year, an out-of-spec result during quality testing led Emergent to discard the equivalent of 15 million doses of the J&J jab, which was already suffering bad press following rare cases of blood clots in patients. Now, Emergent is saying that if J&J fails to fulfill the minimum terms outlined in the agreement, the drugmaker will owe the CDMO a range of “approximately $125 to $420 million.” 

While J&J hasn’t publicly stated that the high-profile mistake had anything to do with their decision to slow down production, the viral vector vaccine was already struggling in comparison to its mRNA-based competitors. Last month, the FDA made an updated statement limiting its use after “finding that the risk of serious thrombocytopenia syndrome warrants limiting the authorized use of the vaccine.”

Read more about Emergent's story: Earlier this year we profiled the Bayview Facility and spoke to Dino Muzzin, senior vice president of Manufacturing Operations, who shared insights with us about what it was like to produce two novel viral vector vaccines to full scale in the same facility, with a deadly pandemic spreading out of control in the background.