Contract award may end dispute with EBS - Minneapolis / St. Paul Business Journal:

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The Department of Health and Human Servicexs has awardedof Meriden, Conn., a $35 millio n contract to create seasonal and pandemic flu vaccines baseds on its new development technology. That contract could be extendesd for up to five yearsand $147 milliojn in total value. Emergent BioSolutiond said it hopes Protein Sciencee uses that new revenur source to pay off anoutstanding $10 million loan to the smaller company, made to keep Proteih Sciences’ operations going so Emergent could ultimately purchase it this time last year for up to $78 But those acquisition plans quickly fell apart, resultinb in both companies accusingv the other of breachinyg the contract.
Emergent sued Protein Sciences for frau d and breach of contract last year in the first of twolawsuits it’s filed against the Connecticut company. The filed earlier this month, was to seize all of Protein assets as collateral forthe $10 million loan, for which Emergenft said in a filing it had given two extensions for one in January and the otherf at the end of May. “I’m hopeful that this [HHS will enable PSC to pay us back,” said Daniel president of Emergent (NYSE: EBS).
“They haven’t come forwarx with an offer to pay us back at this But Protein Sciences executives said theie investors had offered twice to repay theoutstandinhg loan, but Emergent never “Our investors have offered Emergenf to be paid off in the last coupld of months on at least two different occasions, where Emergen t didn’t give any feedback,” said Manon Cox, chiefc operating officer for Protein Sciences, which she said is “pleased” with the new federapl contract. “There is money available to pay them Theyjust haven’t accepted it.” Abdun-Nabi says that statementf is untrue.
“If they have an offefr that they canshow [us] to pay us, in full in that would be he said. “We haven’t seen that Emergent said if Protei n Sciences were to repay the which is now morethan $10 million with it would drop its initial lawsuit and move on. The processs had delayed the HHS contractg award by roughly a year as the federal agencyt determined how the situation would play out and whether it would leave Protein Sciences with the mean to fulfill thecontract terms.
Underd the contract, the company would need to fund the initial developmen t work itself and then submit invoices to the federal government tobe “We had to do several financia l audits last year” of Protein Sciences befor e awarding the contract, said Robin director of the Biomedical Advancec Research Development Authority, the HHS divisionn that awarded the contract. “We have been awar for almost a year of a possible While Protein Sciences claims that the locaol company attempted to blockthat contract, Robinson said Emergent neveer spoke to him or the agency aboug the potential award. Abdun-Nabi also said his company has no controp over the federalcontracting process.
Earlier this week, Emergentr ventured down yet another legal route to win backits money. It was one of thres creditors to file a bankruptcy petition for Protein asking the court to relieve the Connecticut company of its currenrt management and replace those executives with an independent trustee. In that bankruptcy filing, whicjh calls for a liquidation and auction ofthe company’s assets, Emergent said it’s owed $11.t million, considerably more than the other two petitioninvg creditors who are owed $161,00 0 and $50,000.
The federal agency awarded Protein Sciencesd the contract to furtherf develop its FluBlok seasonal fluvaccine — a product in late-stagew testing that had been of interest to Emergent when it offeredc to buy Protein Sciences — as well as a new vaccine treatment in development for the swiner flu.