Catalent Stock Flat Following the Sell Agreement With Ardena
Catalent CTLT recently announced that it has entered into a definitive agreement to sell its oral solids development and small-scale manufacturing facility in Somerset, NJ, to Ardena. Ardena is a Contract Development and Manufacturing Organization with locations in Belgium, Spain, the Netherlands and Sweden.
The agreement is likely to close in early 2025. The financial details of the agreement have not been disclosed.
Likely Trend of CTLT Stock Following the News
Following the announcement, shares of the company closed flat at $60.66 on Tuesday.
In the past six months, CTLT shares have gained 8.8% compared with the industry’s rise of 10.3%. The S&P 500 has risen 15.2% in the same time frame.
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More on the CTLT’s Oral Solids Capabilities
Catalent has expanded its commercial spray drying skills, oral high potency API handling capabilities, and manufacturing capacity throughout its network by investing in oral solid capabilities at additional locations in the United States and Europe in recent years.
Most notably, Catalent invested $475 million in October 2022 to purchase its 333,000-square-foot plant in Greenville, NC. This cutting-edge facility specializes in comprehensive solutions for oral solid dosage forms, including formulation development, analytical services, commercial manufacture, and packaging. It has fit-for-scale capacity and potent handling capabilities.
CTLT’s Notable Buyout Deal
In February, Catalent and Novo Holdings, a holding and investment company responsible for managing the assets and wealth of the Novo Nordisk Foundation, announced that they have entered into a merger agreement under which Novo Holdings will acquire Catalent in an all-cash transaction that values Catalent at $16.5 billion on an enterprise value basis.
Novo Holdings will acquire all outstanding shares of Catalent for $63.50 per share in cash. Of Catalent’s more than 50 global sites, Novo Holdings intends to sell three Catalent fill-finish sites and related assets acquired in the merger to Novo Nordisk, in which Novo Holdings has a controlling interest, shortly after the closing of the merger. This transaction is aligned with Novo Holdings’ strategy of investing in established life science companies with strong long-term potential.
The merger is expected to close toward the end of calendar year 2024, subject to customary closing conditions, including approval by Catalent stockholders and receipt of required regulatory approvals. The transaction is not subject to any financing contingency.
CTLT’s Other Recent Developments
In July, CTLT announced that it had completed the expansion of its clinical supply facility in Schorndorf, Germany. The Schorndorf site, Catalent’s flagship European facility, provides comprehensive clinical supply services, including packaging, storage and distribution. The expansion increases the site’s footprint by 32,000 square feet (3,000 square meters), adding storage and handling of clinical trial supply materials at controlled room temperatures between 15 and 25 degrees celsius.
In May, Catalent and Siren Biotechnology entered a strategic partnership to support the development and manufacturing of Siren Biotechnology’s AAV immuno-gene therapies. Under the partnership, Catalent will provide process development and cGMP manufacturing of Siren Biotechnology’s adeno-associated viral (AAV) vector-based therapeutic candidates for use in clinical trials.
CTLT’s Zacks Rank & Stocks to Consider
CTLT carries a Zacks Rank #3 (Hold) at present.
Some better-ranked stocks in the broader medical space are DaVita Inc. DVA, Baxter International Inc. BAX, and Boston Scientific Corporation BSX.
DaVita, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 17.5%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 24.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DaVita’s shares have gained 116.4% compared with the industry’s 38.3% rise in the past year.
Baxter, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 10%. BAX’s earnings surpassed estimates in each of the trailing four quarters, with the average being 3.7%.
Baxter has gained 15% compared with the industry’s 30.7% rise in the past year.
Boston Scientific, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 12.6%. BSX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 7.2%.
Boston Scientific’s shares have rallied 74.7% compared with the industry’s 30.7% rise in the past year.
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