U.S. Consumer Groups and Labor Unions Urge FTC to Block Novo Holdings-Catalent Deal

By Jody Godoy and Maggie Fick

NEW YORK (Reuters) – U.S. consumer groups and two large labor unions urged the U.S. Federal Trade Commission (FTC) on Thursday to block Novo Holdings, the controlling shareholder of Novo Nordisk (NYSE:NVO), from acquiring contract drug manufacturer Catalent (NYSE:CTLT). They assert that the $16.5 billion deal threatens competition in weight loss drugs and gene therapies.

The U.S. Public Interest Research Group, Service Employees International Union (SEIU), among others, expressed concerns over the acquisition in a letter to the FTC, stating that it could reduce options for competitors like Amgen (NASDAQ:AMGN), Pfizer (NYSE:PFE), Roche, and AstraZeneca (NASDAQ:AZN), who are developing their own GLP-1 drugs.

Senator Elizabeth Warren called for an in-depth review of the deal over similar apprehensions.

Concerns were raised about competitive harms affecting future rivals in securing expertise and manufacturing capacity for product launches. Companies like Viking Therapeutics (NASDAQ:VKTX), Structure Therapeutics, and Sun Pharma could also be impacted by the merger.

Novo Holdings responded confidently about the pro-competitive nature of the transaction, emphasizing its benefits for customers and communities served by Catalent.

A Catalent spokesperson reiterated that the acquisition would improve services for customers and patients.

Novo Holdings plans to sell three Catalent factories in Italy, Belgium, and the U.S. to Novo Nordisk for $11 billion while committing to maintain existing contracts at the sites. Novo Nordisk expects the transaction to close by year-end.

Organizations like Consumer Action and AFSCME, representing millions of workers, raised broader competitive concerns, urging scrutiny of future therapies, including gene therapies associated with contracts between Catalent and companies like Sarepta Therapeutics (NASDAQ:SRPT) and Novartis (SIX:NOVN).

Sarepta does not foresee impact from the acquisition, while Novartis confirmed that Zolgensma is not manufactured at any Catalent facility.