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Emergent BioSolutions to lay off about 300 employees

(Reuters) -Emergent BioSolutions said on Wednesday that it would cut about 300 jobs across all areas of the company and shut down several manufacturing facilities as part of a restructuring plan.

Shares of the company rose about 40% to $2.7 in extended trading.

The company has been seeking to cut costs and pivot away from its contract manufacturing business due to sluggish demand and drive sales growth for its opioid overdose reversal drug Narcan and other branded drugs.

Emergent said it will close its Baltimore, Bayview drug substance manufacturing facility and its Rockville, Maryland drug product facility.

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Smaller biotech companies have been struggling to finance drug development programs as interest rates, which are at multi-decadal highs, have squeezed much-needed funding, hampering their ability to deliver on contract research services.

"Today's actions are about the future of Emergent," said CEO Joseph Papa.

Papa, a former Bausch + Lomb CEO was recently appointed to the top position at Emergent to return the company to revenue growth.The job cuts, which include elimination of about 85 vacant positions, along with other initiatives are expected to save roughly $80 million annually when fully implemented.

The company expects to incur an estimated cost of between $18 million and $21 million, primarily in the second half of 2024.

It cut its workforce by 400 employees last year and scaled back operations at some of its facilities to focus on core products.

(Reporting by Pratik Jain in Bengaluru; Editing by Anil D'Silva and Tasim Zahid)