Catalent Q2 sales inch past estimates amid takeover by Novo Holdings

By Thomson Reuters Feb 9, 2024 | 8:25 AM

(Reuters) – Catalent reported second-quarter revenue slightly above Wall Street estimates on Friday, days after the contract drug manufacturer agreed to a $16.5-billion acquisition offer from Novo Nordisk’s parent firm.

The company is the main supplier of fill-finish work – involving filling and packaging syringes and injection pens in sterile conditions – for Novo’s popular weight-loss drug, Wegovy.

Novo Holdings’ takeover follows a strategic review undertaken as part of Catalent’s settlement with activist investor Elliott Investment Management in August.

The New Jersey-based manufacturing subcontractor has struggled with production challenges and regulatory inspections at its key facilities.

“With the benefit of Novo Holdings’ expanded resources, we will be able to accelerate investment in our business and enhance key offerings for current and prospective pharma and biotech customers,” CEO Alessandro Maselli said.

Catalent, which provides services to drugmakers like Sarepta Therapeutics, Eli Lilly and AstraZeneca , took on a $600-million loan to repay some of its other debt during the quarter.

It had about $1.3 billion in liquidity as of December-end.

After the deal closes, Novo Holdings will sell three of Catalent’s key fill-finish sites in Anagni, Italy, Brussels, Belgium and Bloomington, Indiana, to Novo Nordisk for $11 billion.

The Belgium and U.S. sites, which already undertake fill-finish work for Wegovy, will eventually stop producing drugs for other pharma companies.

Revenue for the second quarter was $1.03 billion, compared to analysts’ estimate of $1.01 billion, according to LSEG data, helped by improved production across Catalent’s key facilities.

It reported a wider-than-expected loss of 24 cents on an adjusted basis, compared to analysts’ average estimate of a loss of 2 cents.

Shares were marginally down at $56.41 in premarket trading.

Catalent said it would not host a post-earnings conference call this quarter.

(Reporting by Sriparna Roy and Bhanvi Satija in Bengaluru; Editing by Pooja Desai)