Emergent CEO confirms $271M of $638M obligated funds - NOT A SINGLE VACCINE ADMINISTERED (updated with the FDA Inspection Reports)
CEO Also Concedes Emergent Received $271 Million But Has Not Provided Americans Any Usable Coronavirus Doses. Que SEC and DOJ investigation(s) into Emergent
Oh if you thought it was bad- buckle up because it’s worse than any of us previously thought and if I were Emergent BioSolutions I’d pick up the phone and call the DOJ and SEC and negotiate a non-prosecution agreement because the newly released evidence is B-A-D.
Brief Background
See March 31, 2021 Article: Trump Pence Kushner & Azar covid-19 supply chain failures far deeper than previously known and it’s maddening
See April 13, 2021 Article; The Select Subommittee on the Coronavirus Crisis - it is worse than most of us knew. Paging Drs Atlas, Alexander and Hatfill -your depositions awaiting
See May 18, 2021 Article - Dear Jared et al - the Attorney General Announces Task Force to Combat COVID-19 Fraud “The Department of Justice will use every available federal tool - including criminal, civil, and administrative actions - to combat and prevent COVID-19 related fraud”
May 19, 2021 Select Subcommittee on the Coronavirus Crisis -hearing-
The Select Subcommittee’s Twitter thread - is very and I mean very bad news FPD these CEOs
The Select Subcommittee also publicly released their long awaited preliminary report. Today House Democrats released a staff memo -which identified initial findings and releasing new documents obtained in the Committees’ ongoing investigation into Emergent BioSolutions, Inc. (Emergent).
The release of these new documents, allows sunshine in to the (questionable) contracts previously awarded by the Trump Administration. Thus for the first time, now provides to the American people, additional details “on the extent of manufacturing failures that led to the destruction of millions of coronavirus vaccines since October 2020” <October 2020 NOT Jan/Feb 2021 and that means the amount of vaccines that were contaminated- I’d expect the after action report to show tens of millions MORE vaccine doses were thrown out because Emergent Bio did nothing to remediate the June 2020 report
June 2020 FDA Report
The FDA documented numerous breaches of manufacturing and sanitary standards at the Emergent Biosolutions facility.
The report was made public (June 2020) showed;
mishandled waste,
peeling paint in hallways and rooms,
and piled-up equipment.
Troubling is the FDA Report (which was done via an unannounced spot/facility inspection);
Employees were not properly trained, the inspectors concluded, and frequently moved between areas producing separate vaccines without following procedures meant to prevent contamination.
The Trump Administration contract with Emergent, to produce the "drug substance" material for both J&J's vaccine and a similar shot developed by AstraZeneca at its site in Baltimore. The massive manufacturing fubar in March caused the spoliation of some 15 million J&J vaccine doses and resulted in the FDA (temporarily) shutting down production.
The FDA Inspectors conclusion was Emergent had failed to "conduct thorough investigations into unexplained discrepancies." Even though the FDA report is redacted it is absolutely clear that the FDA inspectors account describes “a case of cross-contamination between drug substance batches of two viral vector vaccines, almost certainly J&J's and AstraZeneca’s.” See red box
Again I walked you through the Ts & Cs of the contract via this April 20, 2021 Article and noted how entirely lopsided the contract was/is.
This is the FDA on-site report (which was published in late April 2021)
https://www.fda.gov/media/147762/download
SEC and DOJ are you paying attention?
Emergent’s CEO sold off a bunch of his stock when Emergent was trading at $160.00 per share. He sold these stocks before the public news of the fubar of their Bayview plant. If he had sold after the FDA released their report (April 2021) then the Emergent CEO would have taken a $5,000,000.00 hit. That’s literally textbook insider trading…irrespective of hiring their in-house or outside counsel to “clear” the CEO and other Senior Management. So that’s why I keep saying ermmm hello SEC and/or DOJ are you paying attention?
The Trump Administration agreed to pay Emergent millions despite its failure to produce vaccines.
Under the May 2020 contract issued by the Trump Administration, Emergent has charged the federal government $27 million per month in reservation fees to maintain its “readiness” to manufacture vaccines pursuant to “current good manufacturing practices” whether or not the company was producing vaccines.
Under these terms, taxpayers have already paid Emergent more than $271 million. Emergent executives have acknowledged that the reservation fees were among the “primary drivers” of the company’s high profit margins last year. The Biden Administration reduced monthly payments to Emergent by more than half of the fee after the contamination came to light.
Emergent’s systemic failure to address serious deficiencies at its facility led to the destruction of millions of vaccine doses.
From June 9 through June 18, 2020, Janssen Pharmaceuticals conducted a virtual audit of Emergent’s Bayview facility. On July 24, Janssen sent Emergent a report with its audit findings, which concluded that Emergent’s “quality systems may have weaknesses or gaps that require CAPA [Corrective and Preventive Actions].” The report also stated: “The site virus contamination control strategy is deficient,” noting that “There is not a formal Bayview contamination control strategy for the site“ and “the disinfectant program used in the facility is deficient.”
June 17, 2020, Carlo de Notaristefani, the lead manufacturing advisor for Operation Warp Speed, issued a private report on Emergent. The report identified multiple “risks” at the Bayview facility, noting: “Most of the large scale existing equipment is not suitable for the new processes, and will be either removed or mothballed,” and “staffing plans presented seem inadequate to the level of current activities required for full scale production of 3 programs.” The report also raises other concerns about facility readiness, personnel, and compliance.
Despite the serious nature of these findings, Emergent failed to remediate the problems at the facility. Ultimately, this led to the contamination of millions of vaccine doses in separate incidents in October 2020, December 2020, and February 2021.
Emergent’s CEO Robert Kramer - just answer the damn questions
Chairwoman Maloney said:
“It makes me think you were more interested in enriching yourself than serving the public. If it was my company, I would be there trying to get it fixed so that we could get the results of the contract. So far we have given your company $628 million and they have taken $271 million and as of yet, we have not gotten one usable vaccine.”
Chairwoman Maloney went on to repeatedly and forcefully ask Mr. Kramer to answer her question about whether or not the federal government could use any of Emergent’s vaccines…spoiler not a single dose because of the Emergent’s contamination. Causing millions of vaccine doses to be thrown out.
Emergent’s CEO Robert Kramer finally admitted,
”none of the vaccine that we’ve manufactured has been made available to the U.S.”
Potential Insider Trading Violations
….also noted that if Mr. Kramer had sold his stocks today—instead of before the news of Emergent’s contamination broke—they would have been worth about $5 million rather than $10 million.
Chairwoman Maloney concluded her questioning by saying the following
” instead of thinking of ways to address your company’s contamination, you were thinking of ways to enrich yourself, and I am deeply troubled about this. We lost so many lives and if we had the vaccines, we would have saved those lives.”
Emergent has privately admitted to serious manufacturing problems;
In its response to an April 2021 Food and Drug Administration (FDA) inspection report, Emergent admitted that the “sudden scale-up to full-scale manufacturing activities for two different Covid-19 vaccine drug substances” contributed to “a dramatic increase in storage and staging demands” and “strained the capacity” of Emergent’s equipment as the facility “operated at full capacity for the first time.” Emergent also acknowledged FDA’s finding that Emergent employees were not adequately trained.
Key official who awarded contracts had previously been paid by Emergent.
The New documents released by the Select Subcommittee on COVID-Crisis conclusively indicate, Dr. Robert Kadlec—a former consultant to Emergent who later became a senior Trump Administration official—received;
least $360,000 in consulting fees from Emergent prior to joining the Department of Health and Human Services (HHS) and awarding Emergent billions of dollars in contracts.
The awards included a $261 million order for anthrax vaccines in 2019;
a ten-year, $2 billion contract for smallpox vaccines in 2019;
and $650 million in coronavirus vaccine manufacturing agreements from 2020,
—“which Dr. Kadlec later acknowledged were a risky decision.”
Company executives reaped a windfall as vaccines were destroyed.
February 2021, Emergent was awarded millions in raises and bonuses to its senior executives, praising them for their “exceptional leadership” and “exemplary” performance in 2020—despite the dysfunction at the Bayview plant which documented contamination and other critical quality control issues/
Emergent awarded their executive vice president responsible for manufacturing a “special bonus award” of $100,000 for “significant CDMO [Contract Development and Manufacturing] expansion related to COVID-19” and in recognition of “his exceptional performance in 2020.”
“Has Not Provided Americans Any Usable Coronavirus Doses”
On April 19, 2021, the Select Subcommittee and the Committee on Oversight and Reform opened a joint investigation into Emergent.
Click here to read today’s memo.
Click here to read Exhibits 1 – 9
here to read Exhibits 10 – 18,
and here to read Exhibits 19 – 26
All of which was released (less than an hour ago) by the Select Subcommittee and the Committee on Oversight and Reform….
This is my area of expertise (pharma/QA). The fact that they got a contract based on their history was enough to raise my eyebrows. Their basic history suggests it was never going to result in a viable product.
Apologies I thought I had previously provided you with the “official” FDA Report in the April 2021 Article - where I walked you through the contract and documents
https://file411.substack.com/p/emergent-biosolutions-inc-operation
Link to the June & April 2020 FDA publicly published report, below
https://www.fda.gov/media/147762/download