Emergent Drops Bid for Protein Sciences

By Alejandro Lazo

Emergent BioSolutions of Rockville has dropped a bid to acquire Protein Sciences, the maker of a next-generation flu vaccine that Emergent sought to buy last year in an attempt to diversify.

Emergent, a major supplier of an anthrax vaccine to the federal government, in April agreed to pay $75 million or more last April to acquire Protein Sciences. This week's announcement marks the end of an agreement between two companies that quickly fell into disarray.

"After protracted efforts to determine whether a mutually agreeable acquisition could be completed, we have concluded that such a transaction is no longer practical," Daniel J. Abdun-Nabi, president and chief operating officer of Emergent BioSolutions, said in a statement Tuesday. "In line with Emergent's growth strategy, we are actively pursuing other opportunities which would complement our product pipeline."

The deal was originally expected to close in June, but a Protein Sciences shareholder vote on the issue was postponed. Then in July, Emergent filed suit against Protein Sciences, based in Meriden, Conn., accusing the company of deception and fraud. The suit, filed in New York State Supreme Court, alleged that Protein Sciences had intended to use a bridge loan of $10 million from Emergent to continue doing business while it investigated ways of keeping the company independent. Protein Sciences has filed to dismiss the suit.

Daniel D. Adams, president and chief executive of Protein Sciences, said in an interview Wednesday that the two companies are negotiating terms of the settlement.

"Clearly we didn't engage in fraud," Adams said. "This is a busted deal, the norm in a busted deal, is you either make a different bid or you move on. Why they chose to go the litigation route is only known to them."

Tracey Schmitt, a spokeswoman for Emergent, declined further comment.

By Terri Rupar  |  January 7, 2009; 3:18 PM ET  | Category:  Biotech
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