© 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 GLP-1 weight-loss drug, which is witnessing a boom in demand.
“Our exposure to the GLP-1 opportunity is rapidly growing,” 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.
Catalent (NYSE:) 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).
Analysts have been concerned about Elevidys demand after the one-time treatment failed in an important late-stage trial, but the company said Sarepta has already confirmed its scale-up plans for 2024.Catalent’s shares surged over 10% in morning trade, partly 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.
The Somerset, New Jersey-based company has struggled with 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 its consumer health and biomodalities unit. However, its adjusted net loss of 10 cents per share was 4 cents smaller than estimates.
Preliminary revenue for the first quarter fell 4%, to $982 million, but beat analysts’ average estimate of $939.14 million.
