Novo Holdings’ pending $16.5-billion acquisition of Catalent to acquire sterile manufacturing capacity to support its Type 2 diabetes and obesity drugs is a major move in the CDMO drug-product space, but what are the implications for other assets in the deal, notably solid dosage products?

By Patricia Van Arnum, Editorial Director, DCAT, pvanarnum@dcat.org

The impact of a mega deal
The pending $16.5-billion acquisition of Catalent by Novo Holdings, the parent company of Novo Nordisk, is driven in large measure by Novo’s interest to increase its fill-finish capacity for its diabetes and obesity drugs, including its blockbusters, Ozempic (semaglutide) for treating Type 2 diabetes and Wegovy (semaglutide) for treating obesity. The deal is expected to close by the end of this year (2024), and Novo Holdings plans to sell three Catalent fill–finish sites (Anagni, Italy; Bloomington, Indiana; and Brussels, Belgium) and related assets to Novo Nordisk for $11 billion. The acquisition is expected to gradually increase Novo Nordisk’s filling capacity from 2026 and onwards following a transition period to fulfill existing customer contracts.

With that mega deal, much of the focus on Novo’s pending acquisition of Catalent has been on the parenteral drug-product sector of the CDMO market, but what about other businesses and assets that Novo will be acquiring when it closes its acquisition?

Catalent has two main segments: Biologics and Pharma & Consumer Healthcare. Its  Biologics Segment provides contract formulation development and manufacturing and related services for parenteral dose forms, including vials, prefilled syringes, and cartridges, the part of the business coveted by Novo in its pending acquisition. Catalent’s Biologics Segment also provides development and  manufacturing for biologic drug substances, cell and gene therapies, and vaccines.

The other major business of Catalent is its Pharma & Consumer Healthcare Segment, which provides formulation development, manufacturing, and packaging services for oral, nasal, inhaled, and topical dosage forms. With this part of Catalent seemingly not a strategic fit for Novo, it raises the question: will Novo retain these assets or seek to divest them in whole or in part?

Catalent’s Pharma & Customer Healthcare Segment is a major piece of Catalent’s revenues and posted moderate growth in fiscal year (FY) 2024 (ending June 30, 2024). This segment posted FY 2024 net revenues of $2.43 billion, accounting for 55% of Catalent’s total FY 2024 revenues of $4.38 billion. Year-over-year, the Pharma & Customer Healthcare Segment posted a 5% revenue gain and EBITDA (earnings before interest, taxes, depreciation, and amortization) of $597 million in FY 2024.

This segment reflects two major recent acquisitions by Catalent: its $475-million acquisition of Metrics Contract Services, a Greenville, North Carolina-based CDMO of oral solid dosage forms, including high-potency products, in 2022, and its $1-billion acquisition in 2021 of Bettera, a Plano, Texas-headquartered manufacturer of gummies, soft chews, and lozenges for the nutritional supplement market. The acquisition of Metrics Contract Services netted Catalent Metrics’ 330,000-square-foot facility in Greenville, North Carolina, which provides formulation development, analytical testing, commercial manufacturing, and packaging. The Bettera  acquisition added four new dietary supplement manufacturing sites to Catalent’s existing consumer health network.

Overall, Catalent’s Pharma and Consumer Healthcare Segment includes 33 facilities (as of June 30, 2024) for manufacturing, development, and laboratory facilities for oral solids, softgels, fast-dissolving products, gummies, soft chews & lozenges, as well office and related space. This includes its corporate headquarters in Somerset, New Jersey, one of 15 sites in North American in its Pharma and Consumer Healthcare Segment, which also has nine facilities in Europe, six in Asia-Pacific, and three in South America.

Looking at oral solids specifically, some of the larger facilities in Catalent’s development, manufacturing, and supply network include its 180,000-square-foot facility  in Winchester, Kentucky, which is the company’s flagship US manufacturing location for large-scale oral dose forms, and its 333,000-square-foot facility for oral solid dosage forms in Greenville, North Carolina. Its Somerset, New Jersey, site houses a laboratory, clinical, and commercial manufacturing plant for oral dose forms in addition to being the company’s Center of Excellence for Hot Melt Extrusion technology. Its 261,130-square-foot facility in Schorndorf, Germany, is part of the company’s  European and global clinical supply network for oral solids.

Moves made to date
To date, Catalent has made a few moves in selling some of its assets in its Pharma and Consumer Healthcare Segment. This week (October 14, 2024), the company announced it had agreed to sell its oral solids development and small-scale manufacturing facility in Somerset, New Jersey, to Ardena, a Ghent, Belgium-based CDMO of drug substances and drug products.

The Somerset facility also houses Catalent’s corporate headquarters, which in the near term will remain at the Somerset site during a transition period before shifting to a new location. The deal is expected to close in early 2025, subject to regulatory approvals and other customary closing conditions.

Last month (September 2024), Pace Life Sciences, a provider of contract services for formulation development, clinical-scale drug product manufacturing, and analytical testing, acquired Catalent’s Center of Excellence for small-molecule analytical services in Research Triangle Park, North Carolina.