Catalent Scoops Up Fellow CDMO, Metrics, for $475 Million

A month after reporting a restructuring strategy, Catalent, Inc. announced its intent to acquire Mayne Pharma subsidiary, Metrics Contract Services, for $475 million. The buyout would net Catalent a 333,000 square-foot facility in Greenville, North Carolina, that can produce 1 billion solid-dose pills each year. 

Expanding Catalent’s Oral Solid Formulation Capabilities

Acquired in 2012 by Australia’s Mayne Pharma, Metrics says that the North Carolina facility has seen $100 million in improvements over the last five years. Now, the massive facility has 16 manufacturing suites, 11 of which handle highly potent compounds, and two packaging lines to support development and commercial supply programs. 

Catalent says it plans to finance the purchase primarily with cash on hand, existing credit facilities, and, depending on the market conditions, maybe some new debt financing. Along with the facilities, Catalent says it will retain the current 400 employees working at the plant, where they will join the Catalent team when the deal closes, hopefully by the end of this year. 

Group President of Pharma and Consumer Health segment at Catalent, Dr. Aris Gennadios, said, “The experienced team and consistently improved, state-of-the-art facility in Greenville will provide Catalent’s customers with immediate, fit-for-scale capacity for in-demand highly potent drugs and other oral solid small-to-mid-size batch needs. This capacity is particularly important for customers with R&D pipelines featuring accelerated, orphan, and rare disease programs for oncology and other important therapeutic areas.”

Metrics has a five-year manufacturing deal with Mayne Pharma, and as part of the deal, Catalent has agreed to continue fulfilling that agreement using the Greenville facility. The two companies have agreed to a transition service agreement once the five-year manufacturing agreement ends. 

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Catalent’s Continued Effort To Grow During Bleak Economic Conditions

With several varied manufacturing facilities across the U.S., Catalent has shown a concerted effort to continue to develop its operations over the last year. In April, the company said it pumped $350 million into its Bloomington, Indiana facility. The company said it installed new bioreactors, expanded downstream processing capabilities, and installed automated cartoning and syringe filling devices. Catalant said the expansions could add up to 1,000 jobs in the coming years.

Also, this year, Catalent acquired Erytech Pharma, a commercial-scale cell therapy manufacturing facility, for $44.5 million. It also purchased a partially finished manufacturing facility in England, which it dedicated an additional $160 million to build out. Then it pumped $175 million into its Winchester, Kentucky facility in May, which it said would create as many as 277 jobs. 

By the end of the year, Catalent will have spent over $1 billion on expansion investments and acquisitions to grow during a time when most public companies are seeing staggeringly low stock prices. Catalent might see a future that the rest of the industry is having a hard time imagining. The upcoming acquisition of Metrics Contract Services for $475 million is another step in Catalent’s growth process. 

Author

Reed Slater