Novo completes $16.5bn takeover of Catalent

Novo Holdings' $16.5 billion acquisition of US contract development and manufacturing organisation (CDMO) Catalent has been completed, after months of debate over potential antitrust issues.

The takeover also means that a related $11 billion transaction in which Novo Holdings' subsidiary Novo Nordisk takes control of three of Catalent’s fill-and-finish facilities in Italy, Belgium, and the US has also made it over the line.

Novo Nordisk needs the facilities to help ramp up production of key growth medicines, including semaglutide-based Ozempic for diabetes and Wegovy for obesity, which have seen their growth held back by supply constraints.

Despite that, sales of Ozempic rose 26% to around $4.3 billion in the third quarter of 2024, while Wegovy rocketed 79% to $2.5 billion. The breakneck pace of growth with the two drugs has helped to catapult Novo Nordisk's valuation to $289 billion, making it one of Europe's most valuable companies.

When the proposed three-way deal was first announced earlier this year, it prompted debate about the antitrust implications in part because Catalent is working with many of Novo Nordisk's potential rivals in the evolving market for GLP-1-based therapies for obesity and diabetes.

The completion of the deal follows shortly after a European Commission review found it does not create any competition issues, as there are plenty of other CDMOs that companies can choose to work with, and after the Federal Trade Commission (FTC) in the US said it had no plans to challenge the transaction after asking for more information earlier this year.

"We are very pleased with the completion of the acquisition. The three sites will expand our manufacturing capacity at scale and speed, while complementing our ongoing significant internal supply chain expansions," said Novo Nordisk's chief executive, Lars Fruergaard Jørgensen.

"The acquisition will enable us to reach significantly more people living with serious chronic diseases," he added.

Novo Nordisk has previously indicated that the acquisition of the three Catalent sites will have a mid-single-digit negative impact on operating profit growth next year.

Alongside the acquisition, Novo Nordisk has also embarked on a major capital investment programme to build manufacturing capacity in Europe and the US and is on course to spend around $6.8 billion this year, up from 3.9 billion in 2023.

Ongoing investments include a $4.1 billion programme to build a new facility in Clayton, North Carolina, a $2.2 billion upgrade of its plant in Chartres, France, and a string of projects in Denmark, including a $6 billion expansion of its Kalundborg site.