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Emergent BioSolutions to acquire anthrax treatment, move manufacturing to Baltimore

Baltimore, MD -- Emergent BioSolutions Inc.'s manufacturing facility in east Baltimore.
Baltimore, MD -- Emergent BioSolutions Inc.'s manufacturing facility in east Baltimore.(Barbara Haddock Taylor / Baltimore Sun)

Emergent BioSolutions, a Gaithersburg-based drug maker with facilities in Baltimore, has acquired a drug used to treat anthrax from GlaxoSmithKline in a deal worth up to $96 million.

Under the deal announced Wednesday, Emergent will pay $76 million cash upfront and up to $20 million in product sales and milestone payments to acquire Raxibacumab, a drug used to treat inhaled anthrax.

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The deal will add to Emergent's portfolio of countermeasures for infectious diseases and advance the company's goal of growing business at its recently expanded Baltimore manufacturing facility. The drug comes with a $130 million federal contract. Emergent plans to make and package it at its East Lombard Street facility and another on South Paca Street beginning in 2020.

"It's an anchor product for Baltimore," Emergent CEO Daniel J. Abdun-Nabi said.

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When the next flu pandemic strikes, a newly expanded pharmaceutical plant in East Baltimore now stands ready to respond. Emergent BioSolutions, in partnership with the federal government, spent $80 million to double the size of its East Lombard Street plant near Johns Hopkins Bayview Medical Center.

In partnership with the federal government, Emergent spent $80 million to double the size of its manufacturing plant near Johns Hopkins Bayview Medical Center.

As one of three Centers for Innovation in Advanced Development and Manufacturing, the facility can be called on by the federal government to mass-produce flu vaccines and has received contracts to manufacture drugs for other public health threats, such as Ebola and Zika.

The expansion, which was completed in May, significantly adds to the facility's capacity and makes it possible for the company to produce larger-scale commercial drugs.

In the past, Emergent has focused on research and development-stage drug manufacturing or other relatively small-batch orders.

Emergent already produces a vaccine for adsorbed anthrax known as BioThrax at its facility in Lansing, Mich., for the U.S. Centers for Disease Control and Prevention and the federal Biomedical Advanced Research and Development Authority.

The company also is developing NuThrax, a next-generation vaccine for adsorbed anthrax, which is currently in trials.

Emergent BioSolutions, a Gaithersburg-based drug developer, has signed a follow-on contract with the Centers for Disease Control and Prevention worth up to $911 million over five years to supply more than 29 million doses of its BioThrax anthrax vaccine.

Raxibacumab, which is approved by the U.S. Food and Drug Administration, is expected to keep the East Baltimore plant busy for years to come, Abdun-Nabi said.

The acquisition, which is subject to regulatory approval, is expected to close later this year.

GSK will continue making the drug and Emergent will purchase it, then deliver it to the U.S. Strategic National Stockpile, as manufacturing operations shift to Baltimore. Emergent expects to begin manufacturing the drug in Baltimore in 2020.

"It would really be a stable operation there, as we produce year in and year out to meet the government requirement," he said.

Emergent expects to add about 10 employees a year at the East Baltimore plant, reaching 100 workers by 2020.

Across town, the company is planning a $30 million expansion at its Paca Street facility where it fills, finishes and packages the drugs it produces. The expansion could add 100 employees over the next five years, for a total of 270.

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The Raxibacumab deal comes on the heels of Emergent's announcement last week that it plans to acquire a smallpox vaccine from Sanofi for up to $125 million, including $97.5 million in cash upfront.

Emergent, founded in 1998 in Michigan as a small-batch manufacturer of anthrax vaccines for the federal government, moved its headquarters to Maryland in 2005.

Over the past several years, Emergent has steadily added to its portfolio of medical countermeasures for biological and chemical threats, and infectious diseases through acquisitions. Its recent acquisitions include a reactive skin decontamination lotion, antibacterial technology and antiviral technology.

Abdun-Nabi said the company would continue to look at acquisition opportunities as part of its long-term growth plan.

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