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Emergent (EBS) Wins HHS Contract to Supply VIGIV Product

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Emergent BioSolutions Inc. (EBS - Free Report) announced that it has received a contract award of approximately $535 million spread over a 10-year period for the continued delivery of Vaccinia Immune Globulin Intravenous (VIGIV) product to the United States, Strategic National Stockpile (SNS) for raising awareness related to smallpox vaccination. The contract was awarded by the Office of the Assistant Secretary for Preparedness and Response (ASPR) in the United States Department of Health and Human Services (HHS).

Shares of Emergent were up more than 8% following this news on Monday. However, the stock has lost 24.5% so far this year, wider than the industry’s decrease of 0.8%.

Emergent’ scope of work under HHS contract includes collection of plasma, manufacturing and delivery of finished product. During the first year, the company will use plasma provided by the U.S. government to manufacture doses of VIGIV, while for the remaining years, Emergent-led plasma collection and production will be involved to rake in potential higher annual revenues.

Notably, VIGIV is the only product licensed by the FDA for the treatment of complications arising from smallpox vaccination. The product was developed on Emergent's hyperimmune platform and has been a critical component of the U.S. government's preparedness strategy since 2002, the year it was first procured for inclusion in the stockpile.

Emergent already markets smallpox vaccine ACAM2000, which was acquired during the fourth quarter of 2017 from Sanofi (SNY - Free Report) .

We would like to remind investors that Emergent has a strong vaccine portfolio. The company’s key Biodefense product — BioThrax — is the sole vaccine to be marketed for general use in both pre- and post-exposure prophylaxis of anthrax disease. The United States government is the primary purchaser of Biodefense products.

Apart from BioThrax vaccine, Emergent markets the anthrax monoclonal antibody, raxibacumab, which too was bought during the fourth quarter of 2017 from GlaxoSmithKline (GSK - Free Report) .

Zacks Rank & Key Pick

Emergent currently carries a Zacks Rank #5 (Strong Sell).

A better-ranked stock is the healthcare sector is Acorda Therapeutics, Inc. , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Acorda’s loss per share estimates have been narrowed 6.5% for 2019 and 6.9% for 2020 over the past 60 days.

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