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Emergent BioSolutions ready for IPO - Washington Business Journal

Washington Business Journal
by Vandana Sinha, Staff Reporter

Emergent BioSolutions has filed to trade its stock publicly on the Nasdaq exchange in a transaction sporting a maximum price of $86 million.

The Gaithersburg company hasn't determined the number of shares to be sold or the price, but it has pinpointed the stock symbol, EBSI.

Emergent BioSolutions says it plans to use proceeds from the sale to continue building a $75 million, 50,000-square-foot manufacturing plant in Michigan and push its products through clinical trials.

The company started operations in Michigan in May 1998 under the name BioPort. Later, a reorganization made BioPort a subsidiary of the larger Emergent BioSolutions. Its biggest customer so far is the government, whose contracts supplied 97 percent of the company's revenues last year alone.

For the Defense Department, the company provided more than 8 million doses of its BioThrax anthrax vaccine. Emergent BioSolutions had purchased the rights to the 36-year-old treatment in 1998, and the Food and Drug Administration reaffirmed those rights in December.

The Defense Department says it could purchase another 11 million doses in the next year or so, but that's not finalized yet. In 2004, a federal court had ordered an injunction against the Defense Department, preventing it from administering mandatory doses of BioThrax to military personnel without their consent or a presidential waiver. In February, an appellate court dissolved the injunction, which didn't involve Emergent BioSolutions.

Since 2005, Emergent BioSolutions has also signed contracts with the Department of Health and Human Services to deliver a total 10 million doses of BioThrax by next May for a combined $243 million.

But the health agency has also tapped other anthrax treatments. In 2004, HHS awarded a $877 million contract to VaxGen (NASDAQ: VXGN) to supply 75 million doses of its anthrax vaccine and, in June, it opted to buy 20,000 doses of ABthrax from Rockville-based Human Genome Sciences (NASDAQ: HGSI) for about $165 million.

Although BioThrax is its leading candidate, Emergent BioSolutions is pushing other vaccines through its pipeline.

Between now and the end of the year, it hopes to start Phase II trials in the United Kingdom for a multiple-dose liquid Hepatitis B vaccine and in Vietnam for a single-dose liquid typhoid vaccine, for which The Wellcome Trust will help pay the bills.

Emergent BioSolutions finished Phase I trials for a vaccine injection for women of childbearing age for the protection of the fetus.

The company, which has two manufacturing plants in Frederick and is building a third in Lansing, Mich., also is working on preclinical drugs to treat anthrax after exposure, as well as other vaccines that treat chlamydia and meningitis B. For the latter, Emergent BioSolutions signed an agreement in May with Sanofi Pasteur to co-develop and market the vaccine, earning the local company a $3.8 million upfront payment.

After reporting millions in profits each year for the past three years, Emergent BioSolutions reported a $4.6 million loss from $12 million in revenues in the first quarter of this year, compared with net profits of $224,000 from $15 million in revenues in the same period last year.

J.P. Morgan Securities, Cowen and Co. and HSBC Securities are acting as underwriters for the IPO.