Catalent sales edge past estimates as focus shifts to Novo deal

[February 10, 2024]  (Reuters) -Contract drug manufacturer Catalent inched past Wall Street estimates for second-quarter revenue on Friday, days after it agreed to a $16.5-billion buyout offer from Novo Nordisk's parent firm.

The New Jersey-based firm 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.

Catalent's shares were marginally higher at $56.70, compared with Novo's offer of $63.50 per share.

"We've been surprised by the continued weakness," said Stephens analyst Jacob Johnson.

Catalent also counts Novo rival Eli Lilly, Sarepta Therapeutics, and AstraZeneca among its clients.

"Indeed, we remain focused on continuing to serve our valued customers, as we always have," CEO Alessandro Maselli said.

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

Lilly's CEO David Ricks told the Financial Times on Tuesday that Novo's proposal raises potential antitrust concerns.

A general view of the drug product manufacturing laboratory in biologics and sterile injectables, Catalent, in Brussels, Belgium June 27, 2023. REUTERS/Yves Herman/File Photo

"We have a hard time seeing how this transaction reaches the level of antitrust concerns," said Johnson.

He said Lilly's concerns likely led to an investigation by the European Union drugs regulator about any impact on availability of drugs processed at Catalent sites.

Quarterly revenue was $1.03 billion, just ahead of analysts' expectations of $1.01 billion, according to LSEG data.

It took a one-time charge of $9 million due to a fire at one of its facilities.

The company reported a quarterly loss per share of 24 cents, compared to estimates of a loss of 2 cents.

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

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