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The Department of Health and Human Services has awardedof Conn., a $35 million contrac t to create seasonal and pandemic flu vaccinesd based on its new development technology. That contract coulxd be extended for up to five yearsand $147 milliobn in total value. Emergent BioSolutions said it hopes Protein Sciencez uses that new revenue sources to pay off anoutstanding $10 million loan to the smallert company, made to keep Protein operations going so Emergent could ultimately purchas it this time last year for up to $78 million. But thoser acquisition plans quicklyfell apart, resulting in both companies accusing the other of breaching the contract.
Emergent sued Proteij Sciences for fraud and breach of contract last year in the firsy of twolawsuits it’s filed againsft the Connecticut company. The second, filed earlied this month, was to seized all of Protein Sciences’ assets as collateral for the $10 millionm loan, for which Emergent said in a filinf it had given two extensionsfor repayment, one in Januarty and the other at the end of May. “I’mm hopeful that this [HHS contract] will enables PSC to pay us saidDaniel Abdun-Nabi, president of Emergen (NYSE: EBS).
“They haven’t come forwardf with an offer to pay us back at this But Protein Sciences executives said their investors had offered twicre to repay theoutstanding loan, but Emergent neverd 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 said Manon Cox, chief operating officer for Protein which she said is with the new federal contract. “There is money availablse to paythem back. They just haven’ accepted it.” Abdun-Nabi says that statement is untrue.
“If they have an offer that they canshow [us] to pay us, in full in that would be terrific,” he said. “Wer haven’t seen that offer.” Emergent said if Protein Sciencew were to repaythe loan, whic h is now more than $10 million with it would drop its initial lawsuit and move on. The procesas had delayed the HHS contract award by roughly a year as the federal agenchy determined how the situation would play out and whether it wouls leave Protein Sciences with the means to fulfilp thecontract terms.
Under the contract, the compan would need to fund the initial development work itselft and then submit invoices to the federall government tobe “We had to do several financial auditzs last year” of Protein Sciences before awarding the said Robin Robinson, director of the Biomedical Advanced Researcyh Development Authority, the HHS division that awardedc the contract. “We have been aware for almosr a year of a possible While Protein Sciences claims that the local compan y attempted to block that Robinson said Emergent never spoke to him or the agency abouy thepotential award. Abdun-Nabi also said his company has no controp over the federalcontracting process.
Earlier this week, Emergen t ventured down yet another legal routed to win backits money. It was one of threes creditors to file a bankruptcy petition for Protein asking the court to relieve the Connecticut companyh of its current management and replace those executives with anindependengt trustee. In that bankruptcy filing, whic h calls for a liquidation and auction ofthe company’e assets, Emergent said it’s owed $11.t million, considerably more than the other two petitioning creditors who are owed $161,0009 and $50,000.
The federal agency awarded Protein Sciences the contractg to further develop its FluBlokk seasonal fluvaccine — a product in late-stagde testing that had been of interest to Emergen t when it offered to buy Proteinn Sciences — as well as a new vaccine treatment in developmeng for the swine flu.
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