 "Novo Nordisk")
By Naomi Kresge and Christian Wienberg
Novo Nordisk A/S struck a deal that will allow the Danish drugmaker to respond to surging demand for its weight-loss drug Wegovy and diabetes treatment Ozempic.
Novo’s biggest shareholder is buying Catalent Inc., one of the world’s biggest drug-manufacturing companies, for $16.5 billion, including debt. In a three-way arrangement, Novo will pay the holder $11 billion to get three of Catalent’s factories acquired in the deal.
Novo is racing to build a more robust supply chain after facing shortages of both its Wegovy and Ozempic shots. Competition is heating up between Novo and Eli Lilly & Co., whose recently approved obesity shot Zepbound is predicted to become the best-selling drug in history. In patient trials, Lilly’s drug led to more weight loss than anything Novo has put out to date.
The sale of Catalent has the backing of Elliott Investment Management, the activist investor, which has a stake in the US company. The agreement is worth $63.50 per share in cash, a 17% premium to Catalent’s Friday close, the companies said Monday in a statement. Catalent’s shares were trading around $140 apiece in September 2021 before a series of manufacturing issues with products it was making for several drugmakers, including Moderna Inc.’s Covid-19 vaccine and one of Regeneron Inc.’s best-selling drugs.
Shares of Novo, which have been soaring alongside demand for its obesity and diabetes drugs, gained 3.6% in Copenhagen, closing at a record. The drugmaker is now the biggest publicly traded company in Europe with a market value of more than $520 billion. Catalent rose as much as 10% in New York.
These are the largest deals ever for Novo and its shareholder, known as Novo Holdings A/S.
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Manufacturing Giant
Catalent had drawn takeover interest from other market players. Last year, life sciences company Danaher Corp. expressed interest. Based in Somerset, New Jersey, the contract manufacturer gained prominence during the pandemic as a producer of vaccines and treatments. Its factory in Bloomington, Indiana has been linked to regulatory problems in the past, including for Wegovy.
Catalent CEO Alessandro Maselli talked up the company’s push into glucagon-like peptide-1, or GLP-1, drugs like Wegovy last month at the JPMorgan Healthcare Conference in San Francisco. He predicted the company’s revenue from manufacturing in the drug category would be more than $500 million when considering current and planned investment.
“When you think about the growth story of the company, the first one is GLP-1,” Maselli said.
Production Woes
The acquisition of three factories in Italy, Belgium and Indiana isn’t an immediate fix for Novo’s production problems. It will gradually increase manufacturing capacity from 2026 and onward, according to a spokeswoman. Production has been a thorn in the Danish drugmaker’s side even as it profits from the new class of obesity drugs it helped pioneer.
There are “clear business reasons for Novo Nordisk to acquire these three manufacturing plants in order to speed up supply of key products - not least Wegovy,” Brian Borsting, a credit analyst with Danske Bank A/S, said in a note to clients.
The deal for Catalent factories is the latest in a series of moves by Novo to fix supply problems. Novo announced $8.7 billion in new investments last year to beef up manufacturing. Late last year, the drugmaker unveiled plans to invest in new production facilities in Denmark and France. Last week, it said it has more than doubled the number of Wegovy starter doses it’s shipping to the US, enabling more people to get on the treatment.
