I am surprised this news has not hit the stock harder - FluBlok was a potential catalyst for Emergent BioSolutions (EBS) in the future. This has been a contentious acquisition from day 1, but now appears completely dead. Stick a fork in it.
- Emergent Biosolutions said Wednesday it has decided not to buy vaccine maker Protein Sciences Corp., ending a $78 million deal because it is "no longer practical." Emergent said the two companies could not agree on the terms of the acquisition. The biopharmaceutical company agreed to buy privately held Protein Sciences in May, but two months later, it said it would not sell because Emergent violated the buyout agreement.
- Protein Sciences said Emergent disclosed and mischaracterized confidential information, and was making inappropriate contact with its shareholders and interfering with the approval process for its late stage flu vaccine candidate FluBlok. It also said it had not provided enough funding to complete the deal.
- Emergent later sued Protein Sciences and its senior management. Emergent said it will seek settlement of the lawsuit, along with repayment of a $10 million loan that is secured with most of Protein Sciences' assets.
- Meriden, Conn.-based Protein Sciences has a proprietary manufacturing technology called the Baculovirus Expression Vector System. It used that technology to develop FluBlok. The vaccine is designed for use against seasonal and pandemic outbreaks.
EBS has been range bound the past 2 weeks or so, but providing some excellent trades the past month. The ceiling appears to be $27- so we'd look for a break over that level to add, or on a more serious pullback (preferably to the 50 day moving average of $22). Below $21, I'd probably cut back severely since it is quite far away from its 200 day moving average... so that's the playbook. Waiting for one or the other to happen while it marks time.
(p.s. if you know of another stock with a similar chart please let me know)
[Oct 22: Readers Idea - Emergent BioSolutions]
Long Emergent BioSolutions in fund and personal account