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

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The Department of Health and Huma n Services has awardedof Meriden, Conn., a $35 million contract to create seasonal and pandemic flu vaccinesz based on its new developmenrt technology. That contract could be extended for up to five yearxand $147 million in total Emergent BioSolutions said it hopes Protein Sciencea uses that new revenue sourcre to pay off an outstanding $10 millionh loan to the smaller made to keep Protein Sciences’ operationas going so Emergent could ultimately purchase it this time last year for up to $78 But those acquisition planas quickly fell apart, resulting in both companies accusing the other of breaching the Emergent sued Protein Sciences for fraud and breach of contract last year in the firstr of two lawsuits it’s filed against the Connecticut The second, filed earlier this month, was to seize all of Proteinh Sciences’ assets as collateral for the $10 million loan, for which Emergent said in a filiny it had given two extensionss for repayment, one in January and the other at the end of May.
“I’mm hopeful that this [HHS contract] will enabls PSC to pay us back,” said Daniekl Abdun-Nabi, president of Emergent EBS). “They haven’t come forward with an offefr to pay us back atthis point.” But Protei Sciences executives said their investora had offered twice to repay the outstandin loan, but Emergent never responded. “Our investors have offered Emergenft to be paid off in the last couple of months on at leasrt twodifferent occasions, wheres Emergent didn’t give any feedback,” said Manon Cox, chief operatinbg officer for Protein Sciences, which she said is with the new federal “There is money available to pay them back.
They just haven’y accepted it.” Abdun-Nabi says that statement is “If they have an offetr that they canshow [us] to pay us, in full in that would be terrific,” he said. “We haven’t seen that Emergent said if Proteinb Sciences were to repaythe loan, whicyh is now more than $10 milliohn with interest, it would drop its initiao lawsuit and move on. The procesz had delayed the HHS contract award by roughly a year as the federak agency determined how the situation would play out and whether it wouldd leave Protein Sciences with the means to fulfill thecontract terms.
Under the contract, the company would need to fund the initial development work itself and then submit invoices to the federal governmentf tobe reimbursed. “We had to do several financiapl auditslast year” of Protein Sciences beforr awarding the contract, said Robinb Robinson, director of the Biomedical Advanced Researchj Development Authority, the HHS division that awarded the contract. “Wde have been aware for almost a year of apossiblse takeover.” While Protein Sciences claims that the local company attempted to blockj that contract, Robinson said Emergent neverd spoke to him or the agency abou t the potential award.
Abdun-Nabi also said his company has no control over the federakcontracting process. Earlier this week, Emergent ventured down yet anothee legal route to win backits money. It was one of threee creditors to file a bankruptcy petition for Protein asking the court to relieve the Connecticu t company of its current management and replace those executives with anindependenr trustee. In that bankruptcg filing, which calls for a liquidation and auction ofthe company’s Emergent said it’s owed $11.56 million, considerably more than the othee two petitioning creditors who are owed $161,0090 and $50,000.
The federal agency awarded Protein Sciencese the contract to furthe develop its FluBlok seasonal fluvaccins — a product in late-stage testing that had been of interesrt to Emergent when it offered to buy Protein Sciencez — as well as a new vaccine treatmentr in development for the swine flu.