Biotech
Tuesday, August 29th, 2023 8:48 am EDT
Contract drug manufacturer Catalent will expand its board of directors and begin a review of its business as part of a deal with activist investor Elliott Investment Management, which has pushed for change at the Somerset, New Jersey-based company.
Four new independent directors will join Catalent’s board, including an Elliott executive, former Pfizer CFO Frank D’Amelio and two former executives of Sanofi and Johnson & Johnson. The board also appointed former Hill-Rom Holdings CEO John Greisch as executive chair and head of a new committee tasked with assessing Catalent’s operations and capital allocation priorities.
“We believe the changes announced today … represent critical steps toward ensuring that Catalent reaches its full potential,” said Elliott Senior Portfolio Manager Marc Steinberg in a Tuesday statement announcing the changes and agreement with Catalent.
Elliott has reportedly built up a large stake in Catalent, which manufactures drugs for pharmaceutical and biotechnology companies, including high-profile medicines like Novo Nordisk’s obesity drug Wegovy and Sarepta Therapeutics’ newly approved Duchenne gene therapy Elevidys.
However, the company has run into operational hurdles, including problems with its financial forecasts and productivity hang-ups at key factories. Its CFO left in April.
On Tuesday, Catalent also announced preliminary results for its fourth quarter, which ends June 30. Net revenue declined by 17% from the same period one year ago, but the company set new projections for annual revenue in its fiscal year 2024 that were higher than analysts expected.
Shares rose by 5% through late morning trading Tuesday. The company is currently worth nearly $9 billion.
The business review could assess options for a sale, according to Reuters. The industrial conglomerate Danaher had reportedly sought a deal for Catalent, but later dropped its pursuit in April. On Monday, Danaher said it would buy Abcam, a supplier of antibodies and other research tools, for $5.7 billion.
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