Emergent cuts 300 jobs and shutters two facilities

In August 2023, the firm laid out plans to reduce operations at its Bayview and Rockville sites and deemphasize its contract development manufacturing organization (CDMO) focus. Now, the company has disclosed a major organizational restructure to “focus on key business areas that implement a simplified organization to improve our cost structure and enable key actions,” said Joe Papa, CEO of Emergent, during its Q1 financial call.

In addition to the reduction of approximately 300 employees across all areas of the company, Emergent will eliminate around 85 vacant positions. Once completed, these actions are expected to result in annual savings of $80 million and the costs attached to the restructuring plan are predicted to be $18 million to $21 million.

The firm said the closure of its drug substance manufacturing facility in Bayview and its drug product plant in Rockville will lead to concentrated operations at its sites in Lansing, Michigan and Winnipeg, Canada as the company “actively” looks for alternative sites throughout 2024.

“We made the decision to focus our future in the areas of Lansing and Winnipeg. We think that that's probably the most important thing that was our first decision on what sites have the most flexibility that we can run a leaner company with streamlined facilities and still make sure we can provide all of our product availability,” said Papa.

“Once we did that, we looked at the other sites and just made judgments […] based on what we saw in terms of the opportunity [and] what the expenses were. We made decisions to reduce our total operating expenses, but make sure that we can still provide access to the products that are so important to the US government, governments around the world and obviously to treat and be ready to be able to help the opioid crisis. And when we went through that, the sites that Bayview and Rockville came out as sites that we would […] wind down and close the site.”

In relation to the restructuring efforts, the firm said it will continue to focus on “meeting the opioid crisis demand and exploring opportunities to grow” its Narcan nasal spray drug.

For the first quarter 2024, Emergent reported sales of $300.4 million, an 83% increase year-on-year.

Past troubles

Emergent reaped rewards in the early days of the COVID-19 pandemic when the CDMO won a Trump Administration contract worth $628 million to manufacture vaccines for AstraZeneca and Johnson & Johnson (J&J).

However, the firms Bayview facility received a US Food and Drug Administration (FDA) Form 483 and a directive stop to production in April 2021 following an ingredient mix up that led to 15 million doses of COVID-19 vaccines for customers Johnson & Johnson (J&J) and AstraZeneca being deemed unusable at the time.

Additionally, its Camden, Baltimore fill/finish facility received an FDA warning in February 2022 following an inspection, which identified several aseptic processes and maintenance issues.