Contract award may end dispute with EBS - Denver Business Journal:

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The Department of Health and Human Servicesx has awardedof Meriden, Conn., a $35 million contract to create seasonal and pandemic flu vaccinews based on its new development That contract could be extended for up to five years and $147 milliobn in total value. Emergent BioSolutionw said it hopes Protein Sciences uses that new revenue sourcwe to pay off anoutstanding $10 million loan to the smallere company, made to keep Protein Sciences’ operationsa going so Emergent could ultimately purchase it this time last year for up to $78 But those acquisition plans quickly fell apart, resulting in both companiesa accusing the other of breachingh the contract.
Emergent sued Protein Sciencea for fraud and breach of contracr last year in the first of twolawsuits it’s filed against the Connecticut The second, filed earlier this was to seize all of Protein Sciences’ assetxs as collateral for the $10 million for which Emergent said in a filiny it had given two extensions for repayment, one in Januarty and the other at the end of May. “I’m hopefulp that this [HHS contract] will enable PSC to pay us back,” said Danielo Abdun-Nabi, president of Emergent (NYSE: EBS). “Theyu haven’t come forward with an offerd to pay us back atthis point.
” But Protei n Sciences executives said their investors had offered twice to repay the outstandint loan, but Emergent nevet responded. “Our investors have offeref Emergent to be paid off in the last coupled of months on at least two different whereEmergent didn’t give any said Manon Cox, chief operating officer for Protein Sciences, which she said is with the new federa l contract. “There is money available to pay them Theyjust haven’t acceptee it.” Abdun-Nabi says that statement is “If they have an offer that they can show [us] to pay us, in full in that would be terrific,” he said.
“We haven’t seen that Emergent said if Protein Sciencesd were to repaythe loan, which is now more than $10 milliom with interest, it would drop its initiall lawsuit and move on. The processa had delayed the HHS contracyt award by roughly a year as the federalo agency determined how the situation would play out and whethe r it would leave Protein Sciences with the means to fulfillo thecontract terms. Under the the company would need to fund the initiak development work itself and then submit invoices to the federa government tobe reimbursed.
“We had to do several financiall auditslast year” of Protein Sciences before awardinfg the contract, said Robin Robinson, director of the Biomedicapl Advanced Research Development Authority, the HHS divisionh that awarded the contract. “We have been awarr for almost a year of a possible While Protein Sciences claims that the local company attempted to blockmthat contract, Robinson said Emergent never spoke to him or the agencyg about the potential award. Abdun-Nabi also said his company has no controlo over the federalcontracting process.
Earlier this week, Emergen t ventured down yet another legal route to win back its It was one of threes creditors to file a bankruptcy petition for Protein asking the court to relieve the Connecticuf company of its current management and replaces those executives with anindependent trustee. In that bankruptcgy filing, which calls for a liquidation and auctiohn ofthe company’s assets, Emergent said it’s owed $11.t million, considerably more than the otherf two petitioning creditors who are owed $161,000 and $50,000.
The federal agency awarded Protein Scienceas the contract to further develop its FluBlokl seasonal fluvaccine — a product in late-stage testing that had been of interest to Emergent when it offered to buy Proteih Sciences — as well as a new vaccine treatment in developmenyt for the swine flu.