Catalent sees weight-loss drugs boom driving bookings until FY 2026
By Sriparna Roy and Leroy Leo
(Reuters) -Catalent said on Wednesday it expected a majority of its current and upcoming production capacity for pre-filled syringes until fiscal year 2026 to soon be booked out, driven by booming demand for newer weight-loss drugs.
The contract drug manufacturer plays a vital role in the production of Danish drugmaker Novo Nordisk's Wegovy by filling self-injection pens for the weight-loss drug.
Demand for newer drugs from the GLP-1 class like Novo Nordisk's Wegovy and Ozempic and Eli Lilly's Mounjaro and Zepbound have soared this year. These drugs affect hunger signals to the brain, making people feel full longer.
"Our exposure to the GLP-1 opportunity is rapidly growing," Catalent CEO Alessandro Maselli said in an investor conference call, adding that the company plans to accelerate investment to expand its fill-and-finish facilities at Bloomington in the United States and Anagni in Italy.
Revenue contributions from GLP-1 drugs could rise to over $500 million once its expanded capacity is operational, compared to less than $100 million expected in fiscal 2024, Maselli said.
"I thought it was a surprisingly good quarter, with the most exciting element being the GLP-1 opportunity," KeyBanc Capital Markets analyst Paul Knight said.
Catalent is also expanding its contract manufacturing for gene-therapy developers and expects a 65% increase in revenue from top customers, especially its biggest client, Sarepta Therapeutics, for which it manufactures Elevidys for the rare genetic disorder, Duchenne muscular dystrophy (DMD).
The company said Sarepta has already confirmed its scale-up plans for 2024.Catalent's shares surged over 11% in afternoon trade, aided by it beating Wall Street estimates for first-quarter revenue, showing early signs of improvement across its struggling businesses.
Catalent began a strategic review in August, adding new members to its board after a settlement with activist investor Elliott Investment Management amid production challenges and regulatory inspections at three key facilities.
It recorded a quarterly net loss of $715 million due to a goodwill impairment charge of about $700 million related to acquisitions in two units. However, its adjusted net loss of 10 cents per share was 4 cents smaller than estimates.
Catalent's preliminary revenue of $982 million also beat estimates of $939.14 million.
(Reporting by Sriparna Roy and Leroy Leo in Bengaluru; Editing by Pooja Desai and Maju Samuel)
