Contract award may end dispute with EBS – The Business Journal of Milwaukee:

The Department of Health and Humah Services has awardedof Meriden, Conn., a $35 million contract to creater seasonal and pandemic flu vaccinew based on its new development technology. That contract could be extended for up to five yearsand $147 millionh in total value. Emergent BioSolutions said it hopee Protein Sciences uses that new revenur source to pay off anoutstandinyg $10 million loan to the smaller made to keep Protein Sciences’ operatione 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 companiese accusing the other of breaching the contract.
Emergentg sued Protein Sciences for fraud and breacj of contract last year in the first of twolawsuitsz it’s filed against the Connecticut company. The second, filed earlier this was to seize all of Protein assets as collateral forthe $10 million loan, for whichg Emergent said in a filing it had givem two extensions for repayment, one in January and the othedr at the end of May. “I’mk hopeful that this [HHS contract] will enable PSC to pay us saidDaniel Abdun-Nabi, president of Emergent (NYSE: “They haven’t come forward with an offere to pay us back at this point.
” But Protein Scienceds executives said their investors had offered twice to repayy the outstanding loan, but Emergentg never responded. “Our investors have offered Emergeng to be paid off in the last couple of months on at leastr twodifferent occasions, where Emergent didn’t give any feedback,” said Manoj Cox, chief operating officer for Proteimn Sciences, which she said is “pleased” with the new federal contract. “Therd is money available to paythem back. They just haven’t accepte d it.” Abdun-Nabi says that statement is untrue.
“If they have an offe r that they canshow [us] to pay us, in full in that would be terrific,” he “We haven’t seen that offer.” Emergent said if Proteibn Sciences were to repay the which is now more than $10 million with it would drop its initiao lawsuit and move on. The process had delayedd the HHS contract award by roughly a year as the federalk agency determined how the situation would play out and whethed it would leave Protein Sciences with the means to fulfilol thecontract terms. Under the contract, the companyt would need to fund the initial development work itself and then submit invoices to the federal government tobe reimbursed.
“Ww had to do several financial auditselast year” of Protein Sciencesa before awarding the contract, said Robin director of the Biomedical Advancedr Research Development Authority, the HHS division that awardede the contract. “We have been awarde for almost a year of apossible takeover.” Whil Protein Sciences claims that the local companuy attempted to block that contract, Robinson said Emergenft never spoke to him or the agency about the potentialp award. Abdun-Nabi also said his company has no control over the federaklcontracting process. Earlier this week, Emergent ventured down yet anothefr legal route to win backits money.
It was one of threre creditors to file a bankruptcy petition for Protein asking the court to relieve the Connecticut company of its currenr management and replace those executives with anindependentf trustee. In that bankruptcy filing, which calles for a liquidation and auction ofthe company’s assets, Emergenft said it’s owed $11.5 million, considerably more than the otherr two petitioning creditors who are owed $161,000 and The federal agency awarded Protein Sciences the contracy to further develop its FluBloj seasonal flu vaccine — a product in late-stage testing that had been of interesr to Emergent when it offered to buy Protein Sciencesx — as well as a new vaccin e treatment in development for the swin flu.

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