2024-02-07| M&AManufacturing

Novo Nordisk Acquire Catalent for $16.5 Billion, Enhancing Obesity Drugs Production Capacity

by Oscar Wu
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Novo Nordisk’s parent company, Novo Holdings, is set to acquire Catalent, a pharmaceutical manufacturer, for a total of $16.5 billion in an all-cash deal. The deal will see Novo Nordisk acquire three manufacturing sites from Novo Holdings for a prepayment of $11 billion, with the transaction expected to close by the end of 2024. The acquisition will help to increase the supply of Wegovy and Ozempic, two of Novo Nordisk’s most popular drugs.

Enhancement of Novo Nordisk’s Drug Production by Catalent’s Filling Capacity

The three production sites, which are focused on the aseptic filling of pharmaceuticals, are located in Anagni, Italy, Brussels, Belgium, and Bloomington, US. These three sites will have over 3,000 employees and will continue to work closely with Novo Nordisk. Catalent is currently the primary filling supplier for Wegovy and is responsible for filling and packaging pens and syringes. The acquisition is expected to increase Novo Nordisk’s filling capacity from 2026 onwards.

Catalent, Inc. is a company that helps its biopharma partners to optimize their product development and launch, with a significant scale and expertise in development sciences, dosage technologies, and multimodal manufacturing. It helps to accelerate over 1,500 partner programs and launch over 150 new products annually. The company has built production platforms in over 50 locations worldwide, supplying nearly 8,000 products annually, with a total of 70 billion doses. Headquartered in Somerset, New Jersey, Catalent reported revenues of nearly $4.3 billion in 2023.

Obesity Medications Propel Pharmaceutical Market, Novo Nordisk Expands Production

The demand for Wegovy and Ozempic has increased significantly in recent years, causing Novo Nordisk’s stock to rise by nearly 53% in 2023. However, this has also led to a supply shortage of related medicines. To address this issue, Novo Nordisk has invested heavily in building new production lines and acquiring filling sites since late 2021.

In December 2021, the company announced plans to build three new manufacturing sites and expand its existing production facility in Kalundborg, Denmark, at a cost of DKK 17 billion ($2465 million). In June 2023, Novo Nordisk invested DKK 159 billion ($23 billion) in expanding its Hillerød facility, which provides active pharmaceutical ingredient (API) production capacity. In November 2023, the company announced plans to invest over DKK 160 billion ($23.2 billion) in expanding its production facilities in Chartres, France, which will increase its sterile production and GLP-1 product capacity, as well as expanding its existing quality control laboratories.

Novo Holdings, which is fully owned by the Novo Nordisk Foundation, is the parent company of Novo Holdings A/S and Novonesis A/S and manages the assets and wealth of the Foundation. As of the end of 2022, Novo Holdings’ total assets were DKK 1080 billion ($1162 billion). Novo Holdings owns approximately 77% of the voting rights in Novo Nordisk.

In reaction to the announcement, Catalent’s stock price rose by over 9.74% by the close of trading on the announcement day. The company has a market value of approximately $10 billion. Novo Nordisk’s stock price rose by about 4% by the close, with a market value of about $407 billion.

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