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

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The Department of Health and Human Servicews has awardedof Conn., a $35 million contract to create seasonal and pandemix flu vaccines based on its new development technology. That contracrt could be extended for up to five yearsand $147 million in total value. Emergenf BioSolutions said it hopes Protein Sciences uses that new revenue sourcwe to pay off anoutstanding $10 million loan to the smalle company, made to keep Proteinj Sciences’ operations going so Emergen t could ultimately purchase it this time last year for up to $78 But those acquisition plans quickly fell resulting in both companies accusing the other of breachingt the contract.
Emergent sued Protein Sciences for fraud and breach of contracy last year in the firs of twolawsuits it’s filedx against the Connecticut company. The filed earlier this month, was to seize all of Proteij Sciences’ assets as collaterao for the $10 million loan, for which Emergentr said in a filing it had givebn two extensionsfor repayment, one in Januarh and the other at the end of May. “I’km hopeful that this [HHS will enable PSC to pay us saidDaniel Abdun-Nabi, president of Emergenr (NYSE: EBS).
“They haven’t come forwar d with an offer to pay us back at this But Protein Sciences executives said their investors had offere d twice to repay theoutstanding loan, but Emergentg never responded. “Our investors have offeref Emergent to be paid off in the last couplwe of months on at least twodiffereng occasions, where Emergent didn’t give any said Manon Cox, chief operating officer for Protein which she said is with the new federal contract. “There is mone y available to paythem back. They just haven’t accepte it.” Abdun-Nabi says that statement is untrue.
“I f they have an offer that they canshow [us] to pay us, in full in that would be terrific,” he said. “We haven’t seen that offer.” Emergen said if Protein Sciences were to repaythe loan, which is now more than $10 milliom with interest, it woulds drop its initial lawsuit and move on. The proces s had delayed the HHS contract award by roughly a year as the federak agency determined how the situation would play out and whethet it would leave Protein Sciences with the means to fulfill thecontracft terms. Under the contract, the company would need to fund the initial development work itselff and then submit invoices to the federal government tobe reimbursed.
“We had to do several financial auditslast year” of Proteib Sciences before awarding the contract, said Robin director of the Biomedical Advanced Research Developmengt Authority, the HHS division that awardeds the contract. “We have been aware for almost a year of apossiblse takeover.” While Protein Sciencese claims that the local company attempted to block that contract, Robinson said Emergentf never spoke to him or the agenct about the potential award.
Abdun-Nabk also said his company has no controlp over the federal contracting Earlierthis week, Emergent ventured down yet another legak route to win back its It was one of three creditors to file a bankruptchy petition for Protein Sciences, asking the courtf to relieve the Connecticut company of its current management and replace thosew executives with an independent trustee. In that bankruptcy which calls for a liquidation and auction ofthe company’sd assets, Emergent said it’s owed $11.
r million, considerably more than the other two petitioning creditors who are owed $161,000 and The federal agency awardecd Protein Sciences the contracf to further develop its FluBlok seasona flu vaccine — a product in late-stage testinb that had been of interest to Emergent when it offeredc to buy Protein Sciences — as well as a new vaccinre treatment in development for the swine flu.