In the U.S., the chorus of opposition against the proposed buyout continues to grow and now includes the CEOs of Roche and Lilly, a broad coalition of unions and consumer groups and at least one senator.
The European Commission on Friday gave its unconditional approval to Novo Holdings’ proposed $16.5 billion acquisition of Catalent.
According to the executive arm of the European Union, the transaction would not pose a considerable competitive threat across the European Economic Area. Findings of the Commission’s investigation showed that if the transaction were allowed to proceed, companies would still have access to several credible manufacturers of prefilled syringes, such as Thermo Fisher and Vetter.
“The transaction would not lead to customers lacking sources of supply alternative to Catalent,” the Commission maintained, noting that “there is sufficient spare capacity in the market.”
The deal is also unlikely to harm Catalent’s customers for orally disintegrating tablets, according to Commission. There are other CDMOs in this space that companies can work with, and they will even have the opportunity to switch between providers.
According to a joint press release from Novo Holdings and Catalent following the Commission’s announcement, the deal is expected to close by the end of 2024, pending “all requisite regulatory clearances.”
Novo Holdings first moved to acquire Catalent in February, putting down $16.5 billion in cash. As part of the transaction, Novo Holdings will sell three of the CDMO giant’s fill-finish sites to its pharma sister, Novo Nordisk, for $11 billion upfront. The Danish drugmaker said at the time that it will honor all of Catalent’s standing contracts and customer obligations once these sites come under its ownership.
Still, several pharma companies bristled at the news of the deal. Eli Lilly CEO David Ricks voiced his concern in the company’s second-quarters earnings call in August, saying that they “rely on one of the Catalent sites for GLP-1 and other diabetes production,” a space in which Novo Nordisk is the other major player. Ricks highlighted the “oddity of your main competitor being also your contract manufacturer.”
In October, Roche’s top executive Thomas Shinecker also spoke against the proposed acquisition, saying in a media call that “limiting the competition in [the GLP-1] space is not a good idea.” While Roche itself will not be affected by the transaction, it “could be a problem for other smaller players,” he said.
Several other bodies have joined the growing chorus of opposition to the acquisition. Also in October, a coalition of more than 10 unions, public interest organizations and consumer groups penned a letter to Federal Trade Commissioner Lina Khan urging her to “challenge this transaction” and ensure that “competition is protected and that consumers will have full access to treatments.”
Sen. Elizabeth Warren (D-Mass.) also wrote to Khan in October, warning the FTC Commissioner that greenlighting the acquisition could provide Novo with “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.”
Editor’s note (Dec. 9): This story has been updated to refer to Novo Holdings’ proposed acquisition of Catalent, instead of a merger between the two companies.
