Contract Manufacturing

Catalent looks to cash in with $872m IPO

18-Jul-2014 - By Zachary Brennan
In the last decade, Catalent has earned revenue on nearly half of the NCE (new chemical entity) products approved by the US FDA
A- A+

With its expected sale of 42.5m shares for $20.50 each, CDMO (contract development and manufacturing organization) Catalent is looking to become a public company.

According to the SEC filing for the IPO, the company boasts of being the “leading global provider of advanced delivery technologies and development solutions for drugs, biologics and consumer health products.”

Catalent said it intends to use the proceeds to make a number of payments, including a termination fee of about $29.8m to Blackstone, though affiliates of the Blackstone Group will continue to own a majority of the voting power of shares eligible to vote in the election of our directors. 

Catalent Strengths

In the last decade, Catalent has earned revenue on nearly half of the NCE (new chemical entity) products approved by the US FDA, and over the past three years. Within the NCEs, about 90% of NCE softgel approvals by the FDA over the last 25 years have been developed and supplied by Catalent. They company has also earned revenue on 80% of the top 200 largest-selling compounds globally.

As far as partners are concerned, Catalent has worked with nearly all of the top drugmakers. “In the fiscal year ended June 30, 2013, we did business with 85 of the top 100 branded drug marketers, 20 of the top 25 generics marketers, 41 of the top 50 biologics marketers, and 19 of the top 20 consumer health marketers globally. Selected key customers include Pfizer, Johnson & Johnson, GlaxoSmithKline, Merck, Novartis, Roche, Actavis and Teva,” the company says.

As of June 30, 2014, Catalent’s product development teams, with over 1,000 scientists and technicians, were working on approximately 480 new customer programs. In FY 2014, we introduced 175 new products, an increase of more than 80% from the 97 new product introductions in fiscal 2013. In the nine months ended March 31, 2014, we introduced 123 new products, an increase of more than 112% from the 58 new product introductions in the nine months ended March 31, 2013. 

Growth Opportunities

Catalent said that it believes there are significant opportunities for additional revenue growth among its existing customer base as among the top 50 customers, nearly 75% utilize less than half of its individual offerings.

We have made a number of internal investments in new geographies and markets, including the construction of a state-of-the-art biomanufacturing facility in Wisconsin to serve the growing global biologics development market, and the in-licensing of the SMARTag antibody-drug conjugate technology to address the growing need for improved targeted delivery of therapeutic compounds directly to tumor sites,” the company says.

Catalent is also looking to move into other emerging/high-growth geographies, such as China, Brazil, Japan and the animal health market.

We have made recent investments in such high-growth areas, including the formation of a China-based clinical supplies joint venture with ShangPharma Corporation, the first provider in China of end-to-end clinical supply solutions, a softgel joint venture in China focused initially on the export of cost-advantaged consumer health products, as well as our recent acquisition of a Brazilian softgel provider,” the company says.

Related topics: Contract Manufacturing, Analytical testing, QC, Contract sales & marketing, Drug delivery, formulation