Novo Holdings, the parent company of Novo Nordisk, has announced its acquisition of contract drugmaker Catalent for $11.5 billion in cash. This strategic move aims to address the high demand for Novo Nordisk’s popular weight-loss drug, Wegovy.
As part of this acquisition, Novo Nordisk will also purchase three Catalent fill-finish sites. These sites play a crucial role in the filling and packaging of syringes and injection pens for Wegovy, which has experienced extraordinary demand over the past year. This acquisition aligns with Novo Nordisk’s efforts to meet the growing demand for newer, potent weight loss and diabetes medications like Wegovy and Ozempic.
Catalent’s shares surged by 13% to $61.69 in premarket trading following the announcement.
Novo Nordisk’s CEO, Lars Fruergaard Jørgensen, emphasized the significance of this acquisition, stating that it complements the substantial investments the company has already made in active pharmaceutical ingredients facilities. Additionally, these newly acquired sites will provide strategic flexibility to Novo Nordisk’s existing supply network.
Novo Nordisk anticipates that this deal will gradually increase its filling capacity starting from 2026 onward.
Under the terms of the agreement, Novo Nordisk will purchase the three Catalent sites from its controlling shareholder, Novo Holdings, for $11 billion. Novo Holdings currently holds 76.9% of the voting shares in Novo Nordisk, the manufacturer of Wegovy.
It’s important to note that the acquisition of the three fill-finish sites is expected to have a low single-digit percentage negative impact on operating profit growth for both 2024 and 2025, according to Novo Nordisk.
Novo Nordisk faces competition from Eli Lilly’s Zepbound in the rapidly growing obesity drug market. However, both companies struggle to meet the surging demand for these medications. Analysts estimate that the market could be worth as much as $100 billion by the end of the decade.
Novo Holdings will acquire all outstanding shares of Catalent at a price of $63.50 per share in cash, representing a premium of 16.5% over the company’s last trading price.
Elliott Investment Management and some of its affiliates have agreed to vote their shares of Catalent common stock in favor of the merger with Novo Holdings.
In addition to the cash acquisition, Novo Holdings will also assume Catalent’s debt, bringing the total enterprise value of the deal to $16.5 billion.
