Hold Emergent Biosolutions until Dust Clears
Shares of Emergent Biosolutions (EBS), the producer of vaccines aimed at bio-terror microbe b. anthrax, fell as much as 25% on June 22, 2016. As best as we can tell, the decline in the shares is related to investor disappointment over a government contract for the production of BioThrax, the company’s major product. BioThrax is a vaccine for Bacillus anthrax, a potential bio-terrorism threat, and accounts for over 50% of the company’s income. This has yet to be fully fleshed out, thus the drop in the stock remains unexplained.
To summarize, there have been no negative confirmed reports on this stock as far as we can find. And the most recent news has been what would normally be considered positive. On June 21, the company announced via a news release: “the U.S. Department of Health and Human Services (HHS) issued two solicitation notices with respect to the development and procurement of anthrax vaccines for the Strategic National Stockpile (SNS). The company believes that taken together, these two solicitations represent the government’s intent to establish and maintain a stockpile of anthrax vaccines capable of protecting 25 million people through the continued procurement of 29.4 million doses of BioThrax® (Anthrax Vaccine Adsorbed), the only anthrax vaccine licensed by the U.S. Food and Drug Administration (FDA), and the advanced development and procurement of up to 27 million dose regimens of a next generation anthrax vaccine.”
Further, EBS added: “The company believes its next generation anthrax vaccine candidate, NuThrax™ (anthrax vaccine adsorbed with CPG 7909 adjuvant), with its intended two-dose schedule, satisfies all the requirements set forth in the HHS solicitation. The timing and requirements set forth in the two solicitations issued by HHS fully align with the anticipated licensure of the company’s new large-scale manufacturing facility, Building 55, where both BioThrax and NuThrax are expected to be manufactured. The company intends to respond to both solicitations to meet the government’s timeline of completing the BioThrax procurement contract award in September and timely completion of a next generation anthrax vaccine advanced development contract award.”
Our recommendation, based on the most current information, is that investors hold on to the stock and remain patient for now. It is possible that this may be an excellent buying opportunity. We should know more in the next few days and will update accordingly. We contacted the company and have received no response.
Disclosure: I own shares in EBS.
Stock Talk
J W
i don’t know how this works ,but here goes. i bought into ebs on wed on a a limit order and lost the 25% on the same wed. on the dip .My best guess on the drop is that some group of people bought in @ $30.00 and cashed out their speculation after the stock ran up when the announcement was made public that was their signal to pull the trigger and cash in. NOW we get to see the value of the stock, i.e. the difference between what the last group of speculators and the next group of investors(ha ha) are willing to pay
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Joe Duarte
Biotech remains a volatile sector. I own shares in EBS as well, so I was not pleased with the recent action. This could take a while to sort out, But EBS is basically a defense company and these are very unpredictable times. The fact that the government is still willing to pay them to make the vaccine and they have received approval for their new plant from the FDA says something I’m still waiting for a response from the company and will try to contact them again. Joe
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