With Novo Holdings’ $16.5 billion buyout of Catalent being reviewed by regulators, what work the contract drug manufacturer may or may not be performing for Eli Lilly remains a point of contention.
Novo Holdings’ $16.5 billion acquisition of CDMO giant Catalent continues to be under antitrust scrutiny by global regulators. Complicating matters is that in a separate but related transaction, Novo Holdings plans to sell three of Catalent’s fill-finish sites to Novo Nordisk for $11 billion. Novo Holdings is the controlling shareholder of Novo Nordisk, which plans to use the sites to produce its blockbuster GLP-1 drugs, marketed as Ozempic for type 2 diabetes and Wegovy for weight loss.
The European Commission is currently assessing a request for EU approval submitted on Oct. 31 by Novo Holdings, with several potential options at its disposal—including approving the Novo-Catalent deal as is, putting conditions on it or launching a “full-scale four-month long investigation if it has serious concerns,” according to Reuters. The regulator is set to announce its decision by Dec. 6.
The FTC investigation of the proposed acquisition is also ongoing, with a decision similarly expected by the end of the year. In May, Catalent in a Securities and Exchange Commission filing revealed that the FTC requested “additional information and documentary materials” from the contract manufacturer and the Novo Nordisk Foundation, the non-profit parent of Novo Holdings.
“We have and will continue to work closely with the FTC and EU regulators as intended under the law,” a Novo Nordisk spokesperson said in an emailed statement to BioSpace, adding that the company is “confident that the transaction is not anti-competitive.”
However, there is growing pressure on the Novo-Catalent acquisition from government and industry stakeholders, including executives from Lilly, Roche CEO Thomas Schinecker, a coalition of unions, consumer organizations and public interest groups, and Sen. Elizabeth Warren (D-Mass.), who last month urged the FTC to “carefully scrutinize” the buyout, warning that it could limit competition.
“Eli Lilly has described Catalent as an ‘integral’ player in its manufacturing of diabetes and obesity drugs,” Warren wrote in her letter to the FTC. “Novo Nordisk’s merger with Catalent will give Novo Nordisk unprecedented visibility into and control over its competitor’s production capacity, costs, and business practices, and the ability to preference its own products and obstruct its competitors’ use of Catalent to produce GLP-1 drugs.”
Indeed, in a Q2 earnings call in August Lilly CEO Dave Ricks said, “We do rely on one of the Catalent sites for GLP-1 and other diabetes production. We’ve aired those concerns publicly and privately since the proposed transaction was announced, and we’re waiting to see what happens.”
He Said, She Said on Catalent
Despite Ricks’ comments, however, there is a lack of clarity around the current relationship between Catalent and Lilly—in particular, with regard to production of the company’s GLP-1 competitors to Ozempic and Wegovy, Mounjaro and Zepbound. A Catalent spokesperson stated categorically in a written statement to BioSpace that it has no role in the commercial manufacturing of Mounjaro and Zepbound.
“While we cannot disclose specifics about our agreements with customers that are not public, we can say that no GLP-1 products other than Novo Nordisk’s Wegovy are currently manufactured for commercial sale at any of Catalent’s facilities, including the three Catalent sites that Novo Holdings plans to sell to Novo Nordisk.”
When BioSpace reached out to Lilly for clarity and specifically asked about the veracity of Ricks’ comments, a company spokesperson implied that the CDMO does, in fact, play a role in the production of Mounjaro and Zepbound. “Catalent is an important contract manufacturer that we have utilized to supply numerous products to patients around the world that is currently performing work designed to optimize production across our portfolio of products, including GLP-1s,” the spokesperson wrote in an emailed statement.
Pressed by BioSpace to elaborate on what products specifically and which of Catalent’s facilities are involved, the Lilly spokesperson said: “We have nothing further to add beyond [Ricks’] comments.”
Novo Nordisk, meanwhile, backs up Catalent’s position that the CDMO has no role in the manufacturing of Lilly’s GLP-1s. “We are not aware of any competitive GLP-1 products being manufactured for commercial sale at the three [Catalent] sites that Novo Nordisk is planning to acquire” from Novo Holdings. The Danish drugmaker was also quick to point out that “Catalent will still operate close to 50 sites independently and separately from Novo Nordisk.”
At the same time, Novo Nordisk has repeatedly said it will “honor all customer obligations at the three Catalent sites” it intends to acquire from Novo Holdings in Italy, Belgium and Bloomington, Indiana.
It’s no consolation for Lilly, however, which remains “concerned” about the transaction, according to Ricks. “It’s more the oddity of your main competitor being also your contract manufacturer and how to resolve that situation.”
