Emergent: Compliance underway at Camden, but ‘it’s a long road ahead’

Emergent has invested in quality enhancement and improvement initiatives in response to an FDA warning letter but says there is still much to do.

For Emergent BioSolution’s third quarter results, revenues from its contract development and manufacturing organization (CDMO) business unit dropped $76.4 million year-on-year. While much of this was due to lowered sales from COVID-19 vaccine clients AstraZeneca and J&J, the decrease also reflected reduced production at the firm’s Camden facility in Baltimore, Maryland, which recently received a warning letter.

The US Food and Drug Administration (FDA) cited issues with Emergent’s systems for cleaning and maintenance of equipment to prevent contamination of drug product – specifically related to particulates from the metal trays, and processes and practices surrounding aseptic processing – in the letter, dated August 10, 2022.

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The letter also affected Emergent’s $63million CDMO costs for the quarter, which despite being 45% lower than last year due to reduced production activities, did incorporate additional investments to help remediate the Camden plant.

“We are doing a lot in Camden as well as other sites to strengthen our profile and culture of quality compliance,” said CEO Bob Krameron a financial call. “And while there’s a lot more work to do that are ongoing, I’m really pleased with the fact that as an example there are tangible benefits and proof that we’re making progress including things like harmonizing our quality management systems across the enterprise.”

He told stakeholders Emergent has implemented executive level governance reviews on a periodic basis across Camden and is supplementing quality and compliance teams with additional resources.

“We have a very disciplined and robust process to measure and monitor progress against all of the work streams that were incorporated into our warning letter response to the FDA,” he said, adding Emergent is regularly updating the FDA on progress at the plant.

“There are some very simple, quantitative measures that we’re following and tracking. And then there are some more simple qualitative measures including the fact that this week, as an example, we’ve initiated ‘Integrity in Action’ week across our network in the enterprise, which we’re really reinforcing the importance of prioritizing behaviors supportive of a culture of quality and compliance that we aspire to achieve.

“So overall we’re making good progress. It’s a long road ahead, but I’m pleased and satisfied with what we’re doing so far.”

For the full quarter, Emergent reported total revenues of $240 million, down 27% year-on-year, and a net loss of $75.7 million – up from $32.7 million in Q3 2021.