Emergent buys vaccine maker for $270M
PaxVax makes vaccines that protect against typhoid and cholera.
Emergent BioSolutions, a Maryland-based pharmaceutical company that provides infectious-disease vaccines for the U.S. government, is about to add cholera and typhoid vaccines to its arsenal of preventives.
The company announced Thursday that it is spending $270 million to acquire PaxVax, a specialty vaccines manufacturer that sells Vivotif and Vaxchora, FDA-approved vaccines that protect against typhoid and cholera, respectively. The merger is expected to close by year end.
PaxVax is majority-owned by Cerberus Capital Management, a private-equity fund that is heavily engaged in defense contracting through its ownership of companies including DynCorp., a Virginia-based security and logistics firm. It has yet to turn a profit, an Emergent executive said Thursday in a call with investors.
The acquisition also gives Emergent the rights to a handful of in-development vaccines. They include one being developed for U.S. military personnel as a prophylactic against adenovirus, which can cause acute respiratory disease, and a separate vaccine candidate that targets the mosquito-transmitted chikungunya virus. The deal also gives Emergent its first research and development facility in Switzerland. Emergent will add about 250 employees.
Emergent BioSolutions’ chief operating officer, Robert Kramer, described the PaxVax acquisition as providing a “dual market” strategy that will give the company a mix of revenue stability and growth potential.
PaxVax’s FDA-approved cholera and typhoid vaccines already have government customers that provide a stable stream of revenue from year to year. The adenovirus and chikungunya vaccines offer a different mix of risk and reward: They could provide a financial windfall for Emergent if the FDA approves them or disappoint investors if they are found ineffective.
“For us it’s consistent with the types of transactions we’ve done in the past,” Kramer said. “These are revenue-generating products in the public health space that further our mission in protecting human life, but also provide a portfolio of advanced pipeline products to fuel future growth of the business.”
The company was founded under the name BioPort in 1998 and hit it big selling anthrax vaccines to biodefense agencies after the 2001 anthrax attacks that killed five Americans and infected 17 others. It was re-branded as Emergent in 2004 and went public two years later.
While public attention to bioterrorism has subsided since 2001, Emergent has maintained its government business. It still controls the market for anthrax vaccines.
In recent years, the company has diversified, seeming to put its stamp on nearly every major infectious-disease scare.
When the Ebola virus ravaged parts of West Africa in 2014 and 2015, Emergent worked with the Biomedical Advanced Research Development Authority (BARDA), a biodefense agency housed under the Department of Health and Human Services, to develop antibodies to fight the disease. When the mosquito-borne Zika virus affected broad swaths of Latin America in 2016, raising fears that it would spread north, BARDA again turned to Emergent, awarding it a $21.6 million contract to develop a vaccine.
The vaccines Emergent is acquiring from PaxVax are meant to address much older public health problems. Outbreaks of cholera have threatened humanity for centuries and are still prevalent in parts of Africa and Asia.