Catalent Falls Short of Expectations in Q1 as Novo Deal Awaits

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Catalent Falls Short of Expectations in Q1 as Novo Deal Awaits

Contract drug manufacturer Catalent, traded on the NYSE under the ticker CTLT, reported first-quarter revenue that fell short of Wall Street expectations on Tuesday. The company, which is currently in the process of being acquired by Novo Holdings, announced an unexpected loss for the quarter.

Catalent provides filling and packaging services for syringes and injection pens under sterile conditions and is a key supplier for Novo Nordisk's Wegovy weight-loss treatment, traded as NYSE:NVO. Novo Holdings, which holds a controlling stake in Novo Nordisk, initiated the acquisition of Catalent in February to increase Wegovy's supply capacity.

The $16.5 billion acquisition is expected to be completed by the end of 2024. Subsequently, Catalent plans to sell three main fill-finish facilities to Novo Nordisk for $11 billion.

A regulatory filing made on Monday indicated that EU antitrust regulators would make a decision on the acquisition by December 6. Previously, in May, the U.S. Federal Trade Commission had requested additional information related to the transaction. The deal has faced criticism from U.S. consumer and labor groups, as well as pharmaceutical manufacturers Roche and Eli Lilly, traded as NYSE:LLY, due to potential impacts on competition in the weight-loss drug market.

For the financial first quarter ending September 30, Catalent reported revenue of $1.02 billion, slightly below the analyst consensus of $1.06 billion obtained from LSEG. The biopharmaceutical segment underperformed expectations, generating $461 million against the anticipated $470.57 million. Similarly, the pharmaceutical and consumer health segment yielded $563 million, below the projected $566.60 million.

Moreover, contrary to expectations of a 5-cent adjusted profit per share from analysts, Catalent reported an adjusted quarterly loss of 13 cents per share. The company's financial results come at a time when it is preparing for significant ownership and operational structure changes in the near future.

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