To grow Wegovy, Novo Nordisk Parent to Purchase Catalent for $16.5 Billion

Paresh Jadhav

11 months ago

Novo Nordisk’s parent foundation announced today that its investment arm will purchase drug manufacturer Catalent in a deal that will increase production of its weight loss drug Wegovy. Both parties anticipate completion by the end of 2024.

Novo Nordisk will acquire Catalent’s three drug filling sites located in Italy, Belgium and Bloomington Indiana as part of an investment deal to bolster production of Wegovy which continues to be in short supply.

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Catalent’s three fill-finish sites will be acquired

Novo Nordisk’s parent foundation’s investment arm will acquire drug manufacturer Catalent for $16.5 billion. Catalent plays an integral part in producing Novo Nordisk’s top-selling obesity medication Wegovy, which remains limited in availability.

Novo Holdings expects this acquisition will allow them to reach more people with diabetes and obesity by increasing production at a quicker pace, as well as expand capacity at three fill-finish sites specialized in filling sterile drugs – in Anagni (Italy), Brussels and Bloomington (Indiana, US).

These facilities could significantly expand Wegovy’s overall availability, giving Novo Nordisk the boost they need to meet rising customer demands. As most of this acquisition will be debt financed, its share buyback program should remain unaffected; expected closure date: late 2024

The deal is expected to close by the end of 2024

Novo Nordisk will acquire Catalent, a global contract development and manufacturing company, through their investment arm’s parent foundation by 2024, providing additional sites as they ramp up production for obesity and diabetes drugs.

Catalent’s three acquisitions will center around drug filling – an essential process for providing Wegovy to patients through injection pens – due to its tremendous popularity. Given this situation, Novo has had to restrict supplies quickly in order to guarantee access for existing customers.

Catalent is well known for assisting pharmaceutical and consumer health companies to maximize product development, launch, and full life-cycle supply. Operating out of 50 global sites worldwide, Catalent boasts extensive expertise across development sciences, formulations, delivery technologies, multimodality manufacturing processes and multi-modality production methods.

It’s the biggest deal Novo Holdings has ever made

Catalent, maker of Wegovy (semaglutide), has seen tremendous success thanks to the drug’s rise in demand, yet keeping up with it all can be challenging. That is why companies should invest in their manufacturing capacities whenever possible.

Novo Holdings recently made their largest purchase ever in an effort to meet growing demand for Wegovy and other medications, expanding Novo’s presence within contract development and manufacturing industry.

Catalent completed its strategic review, including selling three sites to Novo. These locations are in Anagni, Italy; Brussels, Belgium; and Bloomington, Indiana in the United States, employing 3,000 people each. Their “fill-finish work” involves filling and packaging Wegovy pens and syringes among other drugs; Elliott Investment Management recently purchased a stake of 2% in Catalent to support this deal.

It’s a strategic move

Novo Nordisk hopes that this deal will provide them with access to additional production capacity that could address shortage issues with Wegovy and Ozempic, both containing the same active ingredient. They expect sales of both drugs to increase by 19% to 25% between now and 2019.

Eli Lilly has recently invested billions of dollars into new production facilities to make GLP-1 medications. Meanwhile, Danmarks Pharma will spend more than $6 billion expanding their own manufacturing facilities, with much of that investment dedicated to increasing capacity for making active pharmaceutical ingredients (APIs) used in Wegovy and Ozempic.

Catalent’s fill-finish sites will be used to increase production of Wegovy syringes and injection pens manufactured at Anagni, Italy; Brussels, Belgium; and Bloomington, Indiana, U.S. (the latter employs around 3,000 workers). Citi and JP Morgan serve as financial advisers while Skadden, Arps, Slate Meagher & Flom act as legal advisor.