J&J gives notice to terminate Emergent manufacturing deal for COVID vaccine

(Reuters) – Johnson & Johnson said on Monday it had formally informed Emergent BioSolutions Inc of its decision to terminate agreement with the contract manufacturer to make COVID-19 vaccine for the drugmaker.

The termination notice comes about a week after J&J had initially informed Emergent of its intent to end the pact based on the contract manufacturer’s breaches, including failure to supply COVID-19 vaccine drug substance, J&J said.

Emergent said earlier on Monday that J&J breached an agreement by failing to buy the minimum quantity of COVID-19 vaccines made by the company.

The contract manufacturer added that J&J had failed to provide required forecasts for the amount of vaccines it needed and had wound down the agreement instead of fulfilling minimum requirements.

If the agreement is terminated, Emergent said J&J would owe it roughly $125 million to $420 million.

J&J, in its statement, said Emergent’s filing was “false and misleading”.

“We have sufficient capacity across our global COVID-19 vaccine manufacturing network, and we continue to meet our contractual obligations to supply our vaccine,” J&J said.

The use of J&J’s COVID-19 vaccine has been stalled in the United States after the Food and Drug Administration in May significantly restricted its use due to safety concerns.

J&J has also pulled its COVID-19 vaccine sales forecast for the year due to a supply glut led by low demand globally.

Manufacturing at Emergent’s Baltimore plant was briefly halted last year after a discovery that ingredients from AstraZeneca’s COVID-19 vaccine, also being produced there at that time, contaminated a batch of J&J’s vaccines.

(Reporting by Manas Mishra and Leroy Leo in Bengaluru; Editing by Amy Caren Daniel and Shinjini Ganguli)