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Catalent Acquires Gene Therapy Leader Paragon Bioservices

Zacks Equity Research

Catalent, Inc. CTLT recently announced that it has closed the $1.2-billion acquisition of Paragon Bioservices, Inc. — a leading viral vector development and manufacturing partner for gene therapies.

Shares of Catalent have surged 45.5% year to date compared with the industry’s growth of 4.7%.

With this acquisition, Catalent will add to its portfolio Paragon’s specialized expertise in adeno-associated virus (AAV) vectors, the most commonly used vector to deliver DNA to cells. This positions Catalent to capitalize on strong industry tailwinds in the potentially $40-billion addressable market for gene therapies. Catalent will also add Paragon’s unique and differentiated scientific, development, and manufacturing capabilities, which will enhance the biologics business of the former as well as end-to-end integrated biopharmaceutical solutions for customers.

Paragon has GMP manufacturing projects underway with more than half of the top 40 leading gene therapy developers worldwide. It also opened its new, state-of-the-art commercial manufacturing center near the Baltimore-Washington International (BWI) airport, which is equipped with several 500-liter and 2,000-liter single-use bioreactors for clinical through commercial material production. Catalent is committed to the resource dedication for Paragon’s customers, and maintaining a flexible and reliable development and manufacturing partnership for its clients.

The above-mentioned transaction will enable Catalent to achieve its next stage of development as well as expand the firm’s capabilities and platform for the benefit of customers and their patients. By working with Paragon's talented team and world-class customers, Catalent will be able to complete the significant ongoing investments into expanded state-of-the-art facilities and deliver revolutionary, lifesaving treatments to patients.

Also, in connection with the acquisition of Paragon, Catalent has completed the issuance of $650 million of a new series of convertible preferred stock.

Zacks Rank & Stock to Consider

Currently, Catalent carries a Zacks Rank #3 (Hold).

A better-ranked stock in the same space is Eisai Co. ESALY, Recro Pharma Inc. REPH and Evotec AG EVTCY. All of these sport a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Eisai’s earnings per share estimates have moved up from $1.91 to $1.95 for 2019 and from $1.93 to $2.02 for 2020, in the past 60 days.

Recro Pharma’s loss per share estimates have narrowed from $3.73 to 54 cents for 2019 and from a loss $1.51 to a profit of 6 cents for 2020, in the past 60 days. The company delivered a positive earnings surprise in all of the trailing four quarters, the average beat being 41.88%.         

Evotec’s earnings per share estimates have moved up from 86 cents to 90 cents for 2019 in 60 days’ time.

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Catalent, Inc. (CTLT) : Free Stock Analysis Report
Eisai Co. (ESALY) : Free Stock Analysis Report
Recro Pharma, Inc. (REPH) : Free Stock Analysis Report
Evotec AG (EVTCY) : Free Stock Analysis Report
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