Catalent: GLP-1 and gene therapy to counter dwindling COVID returns

Catalent has suffered another drop in biologics revenues post-COVID, but the CDMO is confident its increased support of GLP-1 programs will drive sales in the short- to mid-term. 

For the contract development and manufacturing organization’s (CDMO’s) first quarter fiscal year 2023, revenues stood at $982 million, down 6% on the same period last year. The firm’s biologics segment – which includes cell and gene therapy production services – pulled in $447 million and was down 16 % year-on-year. 

Like much of the biologics services industry, Catalent’s fortunes have plummeted over the past year as the unprecedented high level of contracts inked to support COVID-19 programs have dried up post-pandemic. The firm has also been subject to regulatory issues and financial problems, but Catalent CEO Alessandro Maselli said the tide is now beginning to turn.

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“While the macro headwinds that we started to call out in November of last year are still present, the strength of our pipeline is bearing fruit, allowing us to continue to guide to a mid to high teens revenue growth rate this year when excluding COVID-related revenue,” he told stakeholders. 

Key factors Maselli highlighted included gene therapy contracts and expanded exposure to GLP-1 programs. 

Catalent is named as a contract manufacturer of the drug product for Novo Nordisk’s Wegovy (semaglutide), a diabetes treatment that has been shown to help patients lose weight. Wegovy is in the class of drugs known as GLP-1, which, along with Eli Lilly’s  Mounjaro/Zepbound (tirzepatide) are expected to pull in close to $25 billion in global annual sales by 2032. 

“Our exposure to the GLP-1 opportunity is rapidly growing. We are now forecasting that a larger majority of our current and future pre-filled syringe capacity coming online in fiscal ’24 through fiscal ’26 is expected to be booked soon in support of this exciting category of products, confirming our position as a leading CDMO in this space globally.” 

Despite imposing measures to limit spending, Catalent has continued to advance capacity projects at its “fully utilized” drug product facility in Brussels, Belgium as a result rising GLP-1 demand, while plans are underway to accelerate investments in fill and finish facilities in Bloomington, Wisconsin and Anagni, Italy. This is according to Maselli, becauseCatalent is only beginning to see the tailwinds from the GLP-1 space emerge. “In fiscal ’24, we expect revenues of less than $100 million from GLP-1 programs. Once all these lines I just referred to are completed and running at scale, we anticipate this product category to contribute well over $0.5 billion in revenue.” 

Gene therapy 

Maselli also told investors continued opportunities from gene therapy clients will help pull the CDMO out of its current downturn. 

This quarter already saw a double-digit revenue growth in the segment as “a large gene therapy product whose revenue was treated as development revenue a year ago is now treated as commercial revenue.” 

Catalent’s largest gene therapy customer is Sarepta Therapeutics, which saw the US Food and Drug Administration (FDA) approve its adeno-associated virus-based gene therapy Elevidys (delandistrogene moxeparvovec) back in June. 

“Our world-class team continues to ramp operations and work around-the-clock to meet Sarepta’s demand and manufacturing goals,” Maselli said. “Sarepta has recently confirmed their scale-up plans for calendar 2024, firming up orders and we expect revenue from these top customers to grow approximately 65% this fiscal year as we manufacture product for the US market and the rest of the world to Sarepta and its partners.” 

However, Catalent says it will not be reliant solely on Sarepta in the burgeoning gene therapy space, as numerous projects are moving through the clinic. 

“We had a lot of seeding happening in that business over the last several years and now it seems that the harvest time is coming with a significant amount of late-stage programs heading toward commercialization,” Maselli said.