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Emergent Biosolutions CEO on JNJ vaccine production

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Robert Kramer, Emergent Biosolutions CEO, joins the Yahoo Finance Live panel to discuss his outlook on COVID-19 as the company manufactures the Johnson & Johnson one-shot vaccine.

Video Transcript

ZACK GUZMAN: Of course, the new push here on the vaccine front has gotten quite a bit of a big boost from the health care space, the biotech space. Of course, the Defense Production Act was invoked by President Biden. We saw Merck come in to support the Johnson & Johnson vaccine efforts, but of course, one other company out there had already been doing that. We brought that to you.

That would be Emergent BioSolutions, that now says the company can support J&J vaccine production to the tune of one billion doses annually. For more on that and the effort buildout, we're now joined by the CEO of Emergent BioSolutions, Bob Kramer, joining the show. Bob, good to be chatting with you again here. I mean, I suppose it's good regardless of who's working on this to get vaccines out at this point. But the fact that you guys can now hit one billion annually, talk to me about how that partnership has been built out and how the expansion has gone thus far to get J & J's vaccine production up in serious numbers?

BOB KRAMER: Thanks, Zack. Good to spend some time with you this morning. So, as we've spoken with you in the past, we've been at this now for almost eight months, in terms of standing up from scratch a very durable manufacturing platform for not only J&J, but also for the AstraZeneca candidate. We spent the majority of our time in 2020 standing that infrastructure up in place. Toward the end of the year, we then kind of turned the crank and started manufacturing both products, which we're doing today 24/7 on a continual basis.

So we couldn't be more proud, quite frankly, of the work that the team has done. We've put ourselves in the position of being contributing to both AZ and J&J, in terms of their supply chain. So we're-- we're ready to make a significant contribution here with literally hundreds of millions of doses very quickly.

AKIKO FUJITA: Yeah, Bob, no question, you are right in the thick of things right now. You're really trying to get these vaccines out the door so they can be administered to as many people as possible. But I am curious, beyond what we're seeing right now, how are you looking at the demand picture? Is this something that you see sort of sustained demand even beyond this year, when you look at at least the advanced economies having vaccinated, or at least their targets of being vaccinating much of their population?

BOB KRAMER: Yeah, I think at the end of the day, the world is going to need literally billions of doses on a regular basis to protect citizens around the globe, and we're certainly a key element of the supply chain for a couple of these critical vaccines. We're also, as you know, working on our own therapeutic program, but again, I think this COVID-19 pandemic is likely to be with us for a while. We all know about the variants of the virus that have popped up.

So a lot of companies are working on their generation one vaccines, but all ready in early development of generation two vaccines to treat the different variants of COVID-19. So this is going to be with us for a while, and all the more critical to really stand up a very durable, reliable infrastructure of manufacturing to support the availability of these vaccines.

ZACK GUZMAN: You guys had that agreement with J&J since last year too. So Merck's partnership with them to roll out production is newer here. I'm curious how it might change the way that you look at it if Merck's also now involved. And also, as we were talking about, a billion doses annually is quite a bit, obviously more than we would need here in the US. So how does it look in the world demand picture when you think about how you're going to need to start getting these doses out to the rest of those countries that are really relying on J&J's vaccine now?

BOB KRAMER: Yeah, great question, Zack. So, first of all, we welcome kind of Merck to this supply chain mix and solution. Clearly, they have a significant manufacturing muscle, whether it's in the-- the drug substance side of things or on the drug product side. So glad to have them as a another collaborator and partner in this mix.

I think as a country and as a world, we're going to need all of the manufacturing infrastructure and support that we can to meet this fight. I think one of the things that we've learned as a company over our 22-year history of dealing with public health threats is that it's better to be over prepared than underprepared, and that's certainly the case, with respect to surge capacity, to be able to make, again, the billions of doses of vaccines that we need to fight this fight.

AKIKO FUJITA: Bob, you mentioned that you think COVID-19 is going to be with us for a while. When you look at the business of Emergent BioSolutions, the overall pie, how significant is this particular vaccine in the manufacturing? How significant is that going to be for you?

BOB KRAMER: Yeah, so, it's a growing piece of our business, Akiko. I mean, last year, our CDMO business unit contributed roughly $450 million of revenue to our top line revenue of $1.5 billion this year and 2021. That number is expected to be roughly 45% of our $2 billion in revenue. So it's a growing contributor to our top line, and because of that, we are investing heavily in our nine manufacturing and development site network. We've committed about $200 million worth of capital to increase our capacity, as well as increase the capability for us to provide both drugs substance, as well as drug product and development services to a growing list of clients.

AKIKO FUJITA: Bob Kramer, the CEO of Emergent BioSolutions. It's always good to have you on the show.