© Reuters. FILE PHOTO: A general view of the drug product manufacturing laboratory in biologics and sterile injectables, Catalent, in Brussels, Belgium June 27, 2023. REUTERS/Yves Herman/File Photo
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 (NYSE:)’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 (NYSE:)’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 (NYSE:) 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 (NASDAQ:), 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.
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