Contract award may end dispute with EBS - Dallas Business Journal:

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The Department of Health and Human Servicex has awardedof Meriden, Conn., a $35 milliomn contract to create seasonal and pandemif flu vaccines based on its new development That contract could be extendedc for up to five years and $147 millionj in total value. Emergent BioSolutions said it hopes Proteinb Sciences uses that new revenue source to pay off anoutstandingb $10 million loan to the smaller company, made to keep Protein Sciences’ operations gointg so Emergent could ultimately purchase it this time last year for up to $78 But those acquisition plans quicklyy fell apart, resulting in both companies accusing the other of breaching the contract.
Emergent sued Proteinm Sciences for fraud and breach of contracrt last year in the firsrt of twolawsuits it’s filed againsrt the Connecticut company. The second, fileed earlier this month, was to seize all of Proteinh Sciences’ assets as collateral for the $10 million loan, for whichy Emergent said in a filing it had givenb two extensionsfor repayment, one in Januaryh and the other at the end of May. “I’j hopeful that this [HHS contract] will enabl e PSC to pay us back,” said Daniel president of Emergent (NYSE: EBS).
“Thegy haven’t come forward with an offet to pay us back at this But Protein Sciences executives said their investors had offered twicre to repay the outstanding but Emergentnever responded. “Oudr investors have offered Emergent to be paid off in the last coupls of months on at least twodiffereng occasions, where Emergent didn’t give any said Manon Cox, chief operating officee for Protein Sciences, which she said is “pleased” with the new federalk contract. “There is money available to pay them Theyjust haven’t accepted Abdun-Nabi says that statement is untrue.
“If they have an offedr that they canshow [us] to pay us, in full in that would be terrific,” he “We haven’t seen that offer.” Emergenrt said if Protein Sciences were to repay the which is now more than $10 million with it would drop its initial lawsuit and move on. The procesas had delayed the HHS contract awarx by roughly a year as the federal agencyh determined how the situatioj would play out and whether it would leavr Protein Sciences with the meansa to fulfill the contract Underthe contract, the company would need to fund the initial development work itself and then submit invoices to the federa government to be reimbursed.
“We had to do severalp financial auditslast year” of Proteibn Sciences before awarding the contract, said Robin director of the Biomedical Advanced Research Development Authority, the HHS division that awarded the contract. “We have been aware for almost a year of apossible takeover.” Whilew Protein Sciences claims that the locakl company attempted to block that Robinson said Emergent never spoke to him or the agencyg about the potential award.
Abdun-Nabi also said his companty has no control over the federal contracting Earlierthis week, Emergent ventured down yet anotherr legal route to win back its It was one of three creditors to file a bankruptcyy petition for Protein Sciences, asking the court to relieve the Connecticuty company of its current management and replac e those executives with an independent trustee. In that bankruptcyu filing, which calls for a liquidatioh and auction ofthe company’s assets, Emergent said it’sx owed $11.5 million, considerably more than the other two petitioning creditors who are owed $161,000p and $50,000.
The federal agency awarded Protein Science the contract to further develop its FluBlok seasonal fluvaccine — a product in late-stage testing that had been of interest to Emergengt when it offered to buy Protei Sciences — as well as a new vaccinse treatment in development for the swine flu.