Catalent Reports First-Quarter Loss Amid Acquisition by Novo Holdings

(Reuters) – Contract drug manufacturer Catalent (NYSE:CTLT), currently being acquired by Novo Holdings, reported an unexpected loss in the first quarter with revenue falling short of Wall Street estimates on Tuesday.

Why It's Important

Catalent specializes in filling and packaging services for syringes and injection pens in sterile environments, including for Novo Nordisk (NYSE:NVO)'s popular weight-loss treatment, Wegovy. Novo Holdings, which has a controlling interest in Novo Nordisk, agreed in February to acquire Catalent to enhance the supply of Wegovy.

Context

The acquisition is anticipated to close by the end of this year. Subsequently, the parent company plans to sell three of Catalent's key fill-finish facilities to Novo Nordisk for $11 billion. A regulatory filing revealed that EU antitrust regulators are expected to make a decision by December 6 on whether to approve the acquisition. In May, the U.S. Federal Trade Commission sought additional information about the deal.

Some U.S. consumer and labor groups have criticized the acquisition, urging the FTC to block it due to concerns regarding competition in the thriving weight-loss drugs sector. Drug manufacturers Roche and Eli Lilly (NYSE:LLY) have also raised alarms.

By the Numbers

For the fiscal first quarter ending September 30, Catalent reported revenue of $1.02 billion, slightly below analysts' expectations of $1.06 billion, as noted by data compiled by LSEG. Revenue from its biologics segment was $461 million, missing projections of $470.57 million. The pharmaceuticals and consumer health segment generated $563 million in sales, falling short of estimates of $566.60 million. Catalent recorded a quarterly adjusted loss of 13 cents per share, whereas analysts had forecasted a profit of 5 cents.