Dive Brief:
- Novo Holdings can complete its $16.5 billion acquisition of contract drug manufacturer Catalent after antitrust regulators in the U.S. declined to challenge the deal before the expiry of a deadline, the companies said Saturday.
- The decision by the Federal Trade Commission, which had asked the companies for more details after the deal’s announcement in February, follows the European Commission’s approval of the acquisition earlier this month. Novo Holdings and Catalent said they now expect the transaction to close within the coming days.
- As a result, Novo Nordisk, the Danish drugmaker that’s controlled by Novo Holdings, can move ahead with a related purchase of three large Catalent factories in Italy, Belgium and Indiana for $11 billion. Addition of the plants will help Novo expand production of injectable drugs like its weight loss medicine Wegovy.
Dive Insight:
Closure of Novo Holdings’ deal for Catalent will reshape the contract drugmaking sector, taking private one of the largest CDMOs and placing it under the banner of a company that also controls the world’s second largest pharmaceutical company by value.
The implications of such a vertical merger have been debated for the past 10 months, as regulators in the U.S. and Europe investigated whether Novo Holdings’ ownership would be anticompetitive. In the U.S., some lawmakers and advocacy groups had pressured the FTC to challenge the deal on the same grounds.
The deal also caught the attention of Novo Nordisk’s pharma peers; the CEOs of both Roche and Eli Lilly expressed skepticism over its fairness — unusual intra-industry criticism.
A good part of the scrutiny has to do with Ozempic and Wegovy, the in-demand diabetes and weight loss drugs sold by Novo Nordisk. The Danish drugmaker is locked in a fierce battle for market share with Eli Lilly, and both companies have invested many billions of dollars in an attempt to quickly ramp up their production capacity.
The three Catalent plants Novo Nordisk will gain in its related deal with Novo Holdings will give it a significant leg up in that quest, likely helping to lock in its dominant position in a market some analysts expect will eventually eclipse $100 billion in annual sales.
“Limiting the competition in this space is not a good idea,” Roche’s CEO Thomas Schinecker said in an October call with reporters. “From an industry perspective, it would be a wrong decision by authorities.”
The European Commission came to a different conclusion. In a statement on its clearance of the deal, the EC said it determined that makers of injectable drugs “will continue to have access to a number of significant, credible CDMOs.” The comission also judged there was “sufficient spare capacity” in the contract drug market.
Outside of the three plants Novo Holdings will sell to Novo Nordisk, Catalent has more than 50 other sites that it will operate independently. In an October letter to Catalent’s customers, CEO Alessandro Maselli wrote, “our commitments to you will not change, your products will remain our focus and your proprietary information will be protected.”
Novo Holdings owns about one-quarter of Novo Nordisk shares, but controls roughly 77% of the company’s voting capital. Novo Holdings itself is wholly owned by the Novo Nordisk Foundation.
In its statement on the deal close, Novo Nordisk said the acquisition of the three Catalent sites will have a mid single-digit negative impact on operating profit growth in 2025.
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- Source: https://www.biopharmadive.com/news/novo-holdings-catalent-deal-ftc-regulatory-clearance/735599/