Pharma, BioPharma, Legal

FTC Seeks More Information on the $16.5B Novo-Catalent Deal, Leading to Another Delay

Novo Holdings’ $16.5 billion planned acquisition of Catalent is facing another delay. Just weeks after Novo decided to resubmit its application to the FTC, the agency is seeking more information about the deal. This move has triggered a second 30-day delay in the antitrust review process.

Novo Holdings’ planned acquisition 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 originally expected to close by the end of this year, but this 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 investment arm of the foundation that owns a controlling stake in Danish pharma giant Novo Nordisk — disclosed its plans to acquire New Jersey-based contract development manufacturing organization Catalent for $16.5 billion. 

Catalent is one of the largest CDMOs in the life sciences field. It reported $4.2 billion in net revenue for the fiscal year that ended June 30, 2023.

Should the deal close, Novo Nordisk will pay Novo Holdings $11 billion to acquire three of Catalent’s manufacturing sites that specialize in the filling of vials for sterile injectable drugs. The sites are located 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 made by Novo Nordisk — is still soaring, and acquiring these sites would significantly boost the drugmaker’s production capacity.

“We are very pleased with the agreement to acquire the three Catalent manufacturing sites which will enable us to serve significantly more people living with diabetes and obesity in the future,” Novo Nordisk CEO Lars Fruergaard Jørgensen said in a February press release.

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The first delay in the FTC’s review process for this deal came a month ago when Novo Holdings withdrew and refiled its application for the deal’s approval after having “informal discussions with FTC staff.” This was done to “give the FTC additional time to review the transactions,” according to the refiling. The resubmission triggered a 30-day extension to 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 yet another 30-day extension to the agency’s review.

Both Novo Holdings and Catelent are gathering more information to give the FTC “as expeditiously as possible,” according to a securities filing from Catalent. 

Eli Lilly is the most prominent voice questioning the proposed acquisition, which comes as no surprise considering the drugmaker is Novo Nordisk’s chief competitor in the GLP-1 space. Eli Lilly’s Mounjaro and Zepbound are direct competitors to Novo Nordisk’s Ozempic and Wegovy. 

Similarly to Novo Nordisk, Eli Lilly has also been having trouble keeping up with the skyrocketing demand for GLP-1 medications. In November, the drugmaker announced it was planning a new $2.5 billion manufacturing site in Germany to help it meet the increasing demand for its injectable diabetes and obesity drugs.

Just days after Novo Nordisk announced its plans to acquire Catalent, Eli Lilly CEO David Ricks told the Financial Times that he found the deal “unusual” given antitrust authorities’ increasing scrutiny for mergers in the biopharma space.

Also just days after the deal was announced, Eli Lilly CFO Anat Ashkenazi expressed concern about how the acquisition would impact his company’s outstanding contracts with Catalent.

“Catalent is an integral part or manufacturer of both commercial and pipeline products for the industry, especially in diabetes and obesity, and we have products with these sites as well,” he said on an earnings call. “So, our focus today is on ensuring that continuity of supply of medicine for patients is uninterrupted, as well as we intend on holding Catalent accountable to their contract with us.”

Novo Nordisk has said that it will honor all prior customer obligations of the three facilities it is planning to acquire.

In statements sent to MedCity News, spokespeople for both Novo Nordisk and Catalent said they still expect the deal to close before the end of the year.

Photo: illustration, Getty Images