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Novo Nordisk parent to acquire Catalent to shore up weight-loss drug production

The $16.5 billion deal is intended to provide manufacturing capability for drugs such as Wegovy

by Aayushi Pratap
February 9, 2024

A logo saying Catalent outside an office building in the suburbs.
Credit: Kris Tripplaar/Sipa USA/Newscom
Catalent's headquarters in New Jersey

Novo Holdings, the Danish investment giant that also controls Novo Nordisk, has agreed to acquire Catalent, one of the largest US drug-manufacturing contractors, for $16.5 billion. The deal could help Novo Nordisk boost production of its weight-loss drug Wegovy, which has gained immense popularity since the US Food and Drug Administration approved it in June 2021.

Novo Holdings expects to close the acquisition by the end of 2024, after which it will sell three of Catalent’s sites—in Anagni, Italy; Bloomington, Indiana; and Brussels, Belgium—to Novo Nordisk for $11 billion. Novo Nordisk is trying to boost the supply of Wegovy and a similar diabetes drug, Ozempic. The drugs, which contain the active substance semaglutide, work by mimicking a hormone called glucagon-like peptide-1 (GLP-1), which reduces appetite, leading to weight loss.

Last year, Novo Nordisk announced it will spend over $8 billion to expand manufacturing sites in France and Denmark to boost production of drugs in its chronic illness portfolio, which includes Ozempic and Wegovy. However, as of early February, semaglutide injections continued to be labeled as being in short supply by the FDA.

Catalent, based in Somerset, New Jersey, provides drug companies with contract manufacturing of biologic drugs and filling of injectables. It enjoyed a sales boom during the early days of the COVID-19 pandemic but later struggled with production and management changes. A 2023 lawsuit accused Catalent of cutting corners with COVID-19 vaccine manufacturing protocols and having problems keeping up production.

Jacob Johnson, a research analyst at the investment firm Stephens, says the Novo-Catalent deal is suggestive of the growth of injectable weight-loss drugs. Oral alternatives are being developed by companies such as Pfizer, but investors are concerned about the prospects for these alternatives, he says in a note to investors on the deal.

The purchase could threaten Eli Lilly and Company, which also contracts with Catalent for some pharmaceutical services. Lilly’s weight loss drug Zepbound was approved by the FDA in November 2023. It contains tirzepatide, the same active ingredient as in Lilly’s diabetes drug Mounjaro. Like the Novo Nordisk drugs, they are GLP-1 agonists.

Lilly CEO David Ricks suggested to the Financial Times that transferring the three plants to Novo Nordisk raises possible antitrust concerns. The European Union’s drug regulator told Reuters that it will assess the impact of the deal on the availability of all medicines processed at Catalent.



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