Novo Holdings’ planned takeover of Catalent is facing another delay. Just weeks after Novo Holdings decided to resubmit its application to the Federal Trade Commission, the agency is seeking more information about the deal.
The transaction was initially expected to close by the end of this year, but that timeline may not be as solid given the repeated delays in the FTC’s review process.
The acquisition was announced in early February when Novo Holdings – the foundation’s investment arm that owns a majority stake in Danish pharmaceutical giant Novo Nordisk – announced its plans to acquire New Jersey-based contract development manufacturing company Catalent for $16.5 billion.
Catalent is one of the largest CDMOs in the life sciences sector. For the fiscal year ended June 30, 2023, the company reported net sales of $4.2 billion.
If the deal goes through, Novo Nordisk will pay Novo Holdings $11 billion to acquire three Catalent manufacturing sites that specialize in filling vials for sterile injectable medications. The locations are in Belgium, Italy and Indiana.
These sites already have ongoing relationships with Novo Nordisk as part of the drugmaker’s global manufacturing infrastructure for its GLP-1 agonist drugs. Demand for Ozempic and Wegovy – two GLP-1 drugs manufactured by Novo Nordisk – is still rising rapidly, and acquiring these sites would significantly increase the drugmaker’s production capacity.
“We are very pleased with the agreement to acquire the three Catalent production sites, which will allow us to serve significantly more people with diabetes and obesity in the future,” said Lars Fruergaard Jørgensen, CEO of Novo Nordisk, in a February press release .
The first delay in the FTC’s review process for this deal came a month ago, when Novo Holdings withdrew and resubmitted its application for approval of the deal after having “informal discussions with FTC staff.” This was done to “give the FTC additional time to review the transactions,” the refiling said. The refiling triggered a 30-day extension of the FTC’s antitrust review.
And then last week, the FTC requested additional documents and information from Catalent and Novo Holdings — a move that triggered another 30-day extension of the agency’s review.
Both Novo Holdings and Catelent are gathering additional information to provide to the FTC “as quickly as possible,” Catalent said in a securities filing.
Eli Lilly is the most prominent voice questioning the proposed acquisition, which is no surprise considering the drugmaker is Novo Nordisk’s main competitor in the GLP-1 space. Eli Lilly’s Mounjaro and Zepbound are direct competitors to Novo Nordisk’s Ozempic and Wegovy.
Similar to Novo Nordisk, Eli Lilly has struggled to keep up with skyrocketing demand for GLP-1 drugs. In November, the drugmaker said it was planning a new $2.5 billion manufacturing site in Germany to meet rising demand for its injectable diabetes and obesity medications.
Just days after Novo Nordisk announced its plans to acquire Catalent, Eli Lilly CEO David Ricks said Financial Times that he found the deal “unusual” given the increasing scrutiny of mergers in the biopharma sector by antitrust authorities.
Also just days after the deal was announced, Eli Lilly CFO Anat Ashkenazi expressed concerns about how the acquisition would impact his company’s outstanding contracts with Catalent.
“Catalent is an integral part or manufacturer of commercial and pipeline products for the industry, particularly in the areas of diabetes and obesity, and we also have products in those locations,” he said on an earnings call. “Our focus today is to ensure continuity of drug supply for patients and we intend to hold Catalent accountable for its contract with us.”
Novo Nordisk has said it will honor all prior customer commitments of the three assets it plans to acquire. The drugmaker did not respond MedCity News’ Please provide additional comments.
In a statement sent to MedCity NewsA Catalent spokesman said it was “convinced of the many benefits of the transaction” and continued to expect the transaction to close before the end of the year.
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