Johnson & Johnson will pay Emergent BioSolutions $50 million to settle a two-year contract squabble and bring closure to an ill-fated, government-arranged partnership between the biopharma giant and the contract manufacturer to produce COVID-19 vaccines.

According to a filing with the Securities and Exchange Commission (SEC), J&J has agreed to pay Emergent $50 million by the end of this month to resolve the CDMO’s claims of breach of contract.

In 2022, J&J terminated a five-year deal that called for Emergent to produce drug substance for J&J’s COVID-19 vaccine. The Maryland manufacturer responded in an SEC filing that J&J was on the hook for $420 million for bailing on the agreement. Two months later, J&J filed its own breach of contract complaint against Emergent and asked for an arbitration.

The contract battle began after Emergent made high-profile errors at its sprawling Bayside plant in Baltimore where it was producing COVID vaccines for AstraZeneca and J&J. The mistakes caused millions of contaminated vaccine doses to be discarded and led the FDA to hand control of the plant over to J&J in April 2021.

Meanwhile, J&J was struggling with rare blood clotting issues with its COVID vaccine, which led the FDA to limit its use in May 2022.

In response to the settlement agreement Monday, Emergent’s share price rose by 2%. Since the start of the year, its shares are up 214% as the company has shown signs of recovering from its COVID debacle.

In May, new CEO Joe Papa announced a restructuring that includes the closure of two of its plants in Maryland, including the Baltimore Bayside facility, and a staff reduction by 300 roles.

Three weeks ago, the company also announced the sale of its smaller, fill-finish Camden facility in Baltimore to Bora Pharmaceuticals for $30 million.

https://www.fiercepharma.com/manufacturing/johnson-johnson-pays-50m-resolve-its-ugly-divorce-emergent-biosolutions