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Emergent Sinks As Government Ends Deal

http://www.chron.com/disp/story.mpl/ap/fn/4573056.html

NEW YORK — Shares of biopharmaceutical company Emergent BioSolutions Inc. tumbled Thursday after the U.S. government canceled a request for an anthrax vaccine.

Emergent said that due to "programmatic considerations" the National Institute of Allergy and Infectious Disease is no longer seeking a request for proposal notice for a third generation anthrax vaccine.

JPMorgan analyst Dr. Richard Smith said in a client note that the bad news will hurt Emergent, as well as other companies that were seeking similar contracts, but did not expect the canceled request to have much impact on the stock. He reiterated his "Overweight" rating for Emergent shares.

"The largest near-term driver for Emergent continues to be securing of a 11 million dose contract from the Department of Defense for BioThrax as well as further orders from Health and Human Services," he said. BioThrax is a first generation anthrax vaccine.

Emergent shares dropped $1.47, or nearly 10 percent, to $13.56 in midday trading on the New York Stock Exchange. The stock _ which closed at $15.03 on Wednesday _ is down 15.3 percent since hitting an all-time high of $17.75 on Jan. 25. Emergent began trading on Nov. 15.

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