Emergent BioSolutions Inc. allegedly failed to tell investors about manufacturing issues at its Baltimore plant that led to the contamination of up to 15 million Johnson & Johnson coronavirus vaccine doses, a suit says in federal court in Maryland.
The biopharmaceutical company touted deals to produce vaccines for J&J and AstraZeneca, but didn’t disclose a history of manufacturing problems at the plant that increased the likelihood of “massive contaminations,” investors told the U.S. District Court for the District of Maryland.
Emergent also failed to tell investors that even before the J&J doses were ruined in March, it had already had to throw out millions of AstraZeneca doses due to contamination concerns, the complaint says. The company’s public statements about its “ability and capacity to mass manufacture” the two vaccines in Baltimore were thus false, misleading, or lacked a reasonable basis, according to the investors.
Emergent’s share price fell $12.45—more than 13%—in the day after the J&J contamination news broke March 31, the suits says. The company’s share price allegedly dropped more than 15% total by the close of trading on April 5 as more stories came out about the Baltimore plant’s problems.
Causes of Action: Exchange Act §10(b)—Using a manipulative or deceptive device or contrivance for a securities transaction in violation of SEC rules (15 U.S.C. §78j); SEC Rule 10b-5—Employing a device, scheme, or artifice to defraud, making untrue statements or omitting facts, or engaging in any act, practice, or course of business which operates as a fraud or deceit (17 C.F.R. §240.10b-5).
Relief: Damages with interest; attorneys’ fees; court costs.
Potential Class Size: Hundreds or thousands of investors who acquired Emergent common stock from July 6, 2020, through March 31, 2021.
Response: Emergent didn’t immediately respond to a Tuesday request for comment.
Attorneys: Saxena White PA and Murphy Anderson PLLC represent the investors.
The case is Palm Tran Inc. Amalgamated Transit Union Local 1577 Pension Plan, D. Md., No. 8:21-cv-00955, complaint filed 4/19/21.