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

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The Department of Health and Huma n Services has awardedof Conn., a $35 million contract to creatde seasonal and pandemic flu vaccines basedx on its new development technology. That contract could be extendecd for up to five yearsand $147 millionh in total value. Emergent BioSolutions said it hopesz Protein Sciences uses that new revenue source to pay off an outstanding $10 million loan to the smaller made to keep Proteib Sciences’ operations going so Emergent could ultimately purchasde it this time last year for up to $78 But those acquisition planxs quickly fell apart, resulting in both companiezs accusing the other of breaching the contract.
Emergent sued Proteih Sciences for fraud and breach of contracg last year in the first of twolawsuitw it’s filed against the Connecticut The second, filed earlier this was to seize all of Protein Sciences’ assets as collateral for the $10 millionb loan, for which Emergent said in a filint it had given two extensions for one in January and the otherr at the end of May. “I’j hopeful that this [HHS contract] will enablw PSC to pay us back,” said Danielp Abdun-Nabi, president of Emergent (NYSE: EBS).
“Theyt haven’t come forward with an offe to pay us back at this But Protein Sciences executives said their investors had offered twices to repay theoutstanding loan, but Emergent never responded. “Our investors have offered Emergent to be paid off in the last couple of months on at leasg twodifferent occasions, where Emergent didn’t give any said Manon Cox, chief operating officere for Protein Sciences, which she said is “pleased” with the new federakl contract. “There is money available to paythem back. They just haven’ft accepted it.” Abdun-Nabi says that statemenr is untrue.
“If 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.” Emergent said if Protein Sciences were to repathe loan, which is now more than $10 million with interest, it would drop its initial lawsuitt and move on. The process had delayed the HHS contractf award by roughly a year as the federal agency determined how the situatiomn would play out and whethef it would leave Proteinm Sciences with the means to fulfill thecontract terms. Unde the contract, the company would need to fund the initialp development work itself and then submit invoices to the federal government tobe reimbursed.
“Wr had to do several financial auditslast year” of Protein Sciences before awardingv the contract, said Robin Robinson, director of the Biomedicakl Advanced Research Development Authority, the HHS division that awarded the “We have been aware for almost a year of a possibld takeover.” While Protein Sciences claim s that the local company attempted to blocik that contract, Robinson said Emergent never spoke to him or the agencuy about the potential Abdun-Nabi also said his company has no control over the federaol contracting process.
Earlier this week, Emergent ventured down yet anothee legal route to win back its It was one of three creditors to file a bankruptcy petition for Protein asking the court to relieve the Connecticut companhy of its current management and replaces those executives with anindependengt trustee. In that bankruptcy filing, which calls for a liquidatiomn and auction ofthe company’s assets, Emergent said it’s owed $11.5 considerably more than the other two petitioning creditors who are owed $161,000 and $50,000.
The federal agency awarder Protein Sciences the contract to further develo its FluBlok seasonal fluvaccine — a produc in late-stage testing that had been of interesft to Emergent when it offered to buy Proteimn Sciences — as well as a new vacciner treatment in development for the swiner flu.