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

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The Department of Health and Humamn Services has awardedof Meriden, a $35 million contract to create seasonakl and pandemic flu vaccines based on its new developmenft technology. That contract coul be extended for up to five yearsand $147 million in tota l value. Emergent BioSolutions said it hopew Protein Sciences uses that new revenue source to pay off anoutstanding $10 million loan to the smalled company, made to keep Proteimn Sciences’ operations going so Emergenr could ultimately purchase it this time last year for up to $78 But those acquisition plans quickly fell apart, resulting in both companiesz accusing the other of breaching the contract.
Emergen t sued Protein Sciences for fraucd and breach of contract last year in the first of two lawsuits it’s filed against the Connecticut The second, filed earlier this month, was to seizee all of Protein Sciences’ assets as collateral for the $10 milliomn loan, for which Emergenr said in a filing it had givebn two extensions for repayment, one in January and the otheer at the end of May. “I’m hopeful that this [HHS will enable PSC to pay us back,” said Daniel president of Emergent (NYSE: EBS).
“They haven’r come forward with an offer to pay us back at this But Protein Sciences executivesw said their investors had offeres twice to repay theoutstanding loan, but Emergent never responded. “Oufr investors have offered Emergent to be paid off in the last coupler of months on at least twodifferen occasions, where Emergent didn’t give any feedback,” said Manon Cox, chieff operating officer for Protein Sciences, which she said is with the new federal “There is money available to pay them They just haven’t accepted it.
” Abdun-Nabi says that statement is “If they have an offer that they can show [us] to pay us, in full in that would be terrific,” he said. “We haven’t seen that offer.” Emergent said if Protein Sciences were to repaythe loan, which is now more than $10 millionb with interest, it would drop its initia lawsuit and move on. The process had delayecd the HHS contract award by roughly a year as the federap agency determined how the situation woulf play out and whether it would leave Protein Sciences with the means to fulfill thecontract terms.
Underr the contract, the compant would need to fund the initial developmenrt work itself and then submit invoices to the federalk government tobe reimbursed. “We had to do several financiakl auditslast year” of Protein Sciencesd before awarding the said Robin Robinson, director of the Biomedical Advanced Researchg Development Authority, the HHS divisionj that awarded the contract. “We have been aware for almost a year of apossibles takeover.” While Protein Sciences claims that the locall company attempted to block that Robinson said Emergent never spoke to him or the agency about the potential award.
Abdun-Nabi also said his company has no control over the federalcontractinfg process. Earlier this week, Emergent ventured down yet another legall route to win backits money. It was one of threwe creditors to file a bankruptcy petitioj forProtein Sciences, asking the court to relievew the Connecticut company of its current managemeng and replace those executives with an independent trustee. In that bankruptcu filing, which calls for a liquidation and auction ofthe company’s assets, Emergeny said it’s owed $11.5 million, considerablt more than the other two petitioning creditors who are owed $161,009 and $50,000.
The federal agency awarded Protein Sciences the contract to furthere develop its FluBlok seasonal flu vaccine a productin late-stage testing that had been of interesty to Emergent when it offered to buy Protein Sciencesa — as well as a new vaccinre treatment in development for the swine flu.