Novo Nordisk’s parent company, Novo Holdings, has announced plans to acquire drug manufacturer Catalent in a $16.5 billion deal. This acquisition is expected to enhance the availability of Novo Nordisk’s weight-loss drug Wegovy and diabetes shot Ozempic.
Catalent is the main supplier for Novo Nordisk’s fill-finish work, which involves filling and packaging syringes and injection pens for Wegovy. As part of the deal, Novo Nordisk will purchase three of Catalent’s manufacturing sites for $11 billion. The acquisition of these plants and the broader deal with Catalent is anticipated to close at the end of 2024.
Novo Nordisk expects this purchase to gradually increase its filling capacity starting in 2026. The company already contracts the three plants located in Italy, Belgium, and Bloomington, Indiana. The market responded positively to this news, with Catalent shares closing more than 9% higher and Novo Nordisk’s stock closing around 4% higher.
The demand for Wegovy and Ozempic has been steadily rising, leading to shortages of these medications. Novo Nordisk’s decision to acquire Catalent is aimed at increasing its manufacturing capacity and meeting the growing demand. The weight-loss drug market is becoming increasingly competitive, with emerging competitors like Eli Lilly vying for market share.
To address this competition, Novo Nordisk has been investing in new production facilities in Denmark and France. Additionally, the company has recently increased the number of Wegovy starter doses it ships to the U.S., allowing more patients to begin treatment.
Under the terms of the deal, Novo Holdings will purchase Catalent for $63.50 per share in cash, representing a premium of 16.5% to Catalent’s closing price on Friday. This acquisition has gained the support of activist investor Elliott Investment Management, which holds a stake in Catalent.
It is worth noting that some of Catalent’s factories that manufacture Wegovy have faced regulatory problems in the past. The company’s Brussels factory, which fills Wegovy pens, has repeatedly violated U.S. sterile-safety rules and failed to perform required quality checks. Novo Nordisk will likely address these issues and ensure compliance moving forward.
Overall, Novo Nordisk’s acquisition of Catalent is a strategic move to enhance its manufacturing capabilities and meet the increasing demand for its weight-loss drug Wegovy and diabetes shot Ozempic. With this deal, Novo Nordisk aims to stay ahead in the competitive weight loss drug market and provide patients with effective treatment options.
