In an indication of the challenges of meeting demand for Novo Nordisk’s weight-loss blockbuster, the company said Monday it would spend $11 billion to buy three manufacturing facilities to ramp up manufacturing of its diabetes and obesity drugs.
The deal is part of a $16.5 billion two-step proposed transaction. First, Novo Nordisk’s controlling shareholder, Novo Holdings, will buy the contract manufacturer
Catalent
for $63.50 a share in cash, it said Monday.
Novo Holdings, which manages the assets of the Novo Foundation, said that the deal price represents a 16.5% premium over Catalent’s share price as of the end of trading on Friday, and a 47.5% premium over the 60-day volume-weighted average price.
Catalent shares were trading at $59.84 per share, notably below the deal price. Novo Holdings said it doesn’t expect the deal to close until the end of the year, which could reflect some worry about regulatory objections.
After the deal closes, Novo Nordisk says it plans to pay $11 billion to Novo Holdings for Catalent manufacturing sites in Italy, Belgium, and Bloomington, Indiana.
The facilities are so-called fill-finish sites, used in the last stage of the manufacturing process to put finished medicines into the vials sold to patients. They represent an important and finicky step in the manufacturing of injectables like Ozempic and Wegovy, the Novo Nordisk diabetes and weight-loss drugs that seized the attention of investors and of the general public last year.
The impressive efficacy of the two medicines, and their extraordinary sales potential, have sent Novo Nordisk’s American depositary receipts up 128% over the past two years.
Novo Nordisk has struggled, however, to meet demand, and company executives have warned that increasing capacity will take time. “We are serving a fraction of that market today,” CEO Lars Fruergaard Jørgensen told Barron’s in November. “It takes a significant ramp-up in manufacturing before you actually satisfy that demand.”
The company said Monday that the three Catalent sites it plans to acquire “all have ongoing collaborations” with Novo Nordisk. Novo Nordisk says it will honor existing obligations to other customers at the three sites, and that it expects the deal will begin to increase its own filling capacity beginning in 2026.
The deal “will enable us to serve significantly more people living with diabetes and obesity in the future,“ Jørgensen said in a Monday statement.
For Catalent, the deal could represent a move into calmer waters after a turbulent few years. The stock surged during the Covid-19 pandemic as the company partnered with
Moderna
to make vaccines, before production issues wreaked havoc on the shares in 2022. The company later became a target of activist investors, entering into a cooperation agreement with Elliott Investment Management in August, when the company began a strategic review to maximize long-term value.
Elliott and its affiliates back the Novo Holdings deal and will vote in favor of it, Catalent said.
“This transaction delivers significant, certain and premium value to our stockholders. Novo Holdings believes in our vision and will provide Catalent with a strong foundation as we continue developing, manufacturing and supplying top products,” Catalent Chairman John Greisch said in a statement.
Write to Jack Denton at [email protected]
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