U.S. cancels $628M deal with vaccine manufacturer

The federal government has canceled a deal worth $628 million with Emergent BioSolutions, the Maryland-based vaccine manufacturer that was a vanguard of the Trump administration’s program to rapidly produce vaccines to counter the coronavirus pandemic.

The company disclosed the development Thursday in a conference call discussing its latest financial results. The cancellation comes after Emergent’s manufacturing facilities in Baltimore were found to have produced millions of contaminated vaccine doses this spring, prompting a monthslong shutdown.

Emergent will forgo about $180 million because of the contract’s termination, the company said. As part of its coronavirus efforts, the federal government had invested in building additional capacity at two of the company’s sites.

After winning the lucrative contract from the Trump administration, whose initiative to accelerate vaccine development and distribution was known as Operation Warp Speed, Emergent ran into production problems.

In March, ingredients intended for use in producing the Oxford-AstraZeneca vaccine shots contaminated 15 million doses of the Johnson & Johnson vaccine. In response, the Biden administration put Johnson & Johnson in direct control of vaccine production there, and removed AstraZeneca manufacturing from the facilities.

In June, the Food and Drug Administration decided to discard at least another 60 million doses of the Johnson and Johnson vaccine produced at the plant, which had a history of FDA violations.

At the time the federal government and Emergent agreed to terms, the office in the Department for Health and Human Services responsible for preparing for public health threats was led by Assistant Secretary Robert Kadlec.

The Washington Post previously reported that before joining the Trump administration, Kadlec was paid as a consultant to Emergent and formed a startup company with the company’s chairman.

Kadlec did not mention either role in a questionnaire about his career that he completed for the Senate when it considered his nomination by Trump in 2017. Kadlec and

Emergent previously told The Post that Kadlec’s past work for Emergent had no bearing on the firm’s government contracts.

When pharmaceutical companies were racing to develop a vaccine last year, the federal government rented out space at Emergent facilities in Baltimore to work on AstraZeneca’s candidate. Oxford-AstraZeneca shots are used worldwide but are not among the three vaccines authorized for distribution in the United States.

At the time, Emergent had already signed a deal with Johnson & Johnson to manufacture their vaccine candidate, according to Robert Kramer, Emergent’s chief executive.

“No one at the time knew which vaccine candidates would succeed,” he wrote in a Thursday op-ed for the Baltimore Sun. “So, even though the U.S. government, we and our partners understood the risks of producing two viral-vector vaccines in the same facility, we took on the challenge.”

Emergent had produced 100 million coronavirus vaccine doses for global use as of late September, he said on Thursday’s conference call.