Shortly after Novo Holdings’ parent company elected to resubmit paperwork around the investment firm’s proposed $16.5 billion buyout of CDMO giant Catalent, the U.S. Federal Trade Commission (FTC) has teed up a further extension on the deal’s review period.
Catalent and the Novo Nordisk Foundation on Thursday received requests for additional documents and information on the proposed deal from the FTC as part of what’s known as a “second request,” Catalent said in a Friday securities filing. The Novo Nordisk Foundation acts as parent to both Novo Holdings and drugmaker Novo Nordisk.
The FTC’s second request imposes an additional waiting period of up to 30 days for the agency to review the deal from the time the Novo Nordisk Foundation and Catalent submit the required information. Novo and Catalent also have the option to further extend the waiting period themselves if they so choose.
Both Catalent and the Novo Nordisk Foundation are currently gathering information to appease the FTC’s request “as expeditiously as possible,” the securities filing shows.
Catalent says it still expects the buyout to close toward the end of 2024 as planned.
Earlier this year, Novo Holdings unveiled its plan to buy out Catalent for $16.5 billion following months of speculation that the CDMO had become an acquisition target. As part of the transaction, Novo Holdings plans to sell three of Catalent’s fill-finish sites to Novo Nordisk for $11 billion.
The move would greatly benefit Novo Nordisk, which has been struggling to keep up with intense demand for its respective GLP-1 products in diabetes and obesity, Ozempic and Wegovy. Still, others, like Novo’s chief metabolic medicine rival Eli Lilly, have questioned the Catalent acquisition for its potentially stifling effect on competition.
Regarding the FTC’s second request, a Catalent spokesperson said in an emailed statement that the company is “confident in the many benefits of the transaction with Novo Holdings.”
News of the FTC’s review delay comes a few weeks after the Novo Nordisk Foundation resubmitted the application for the acquisition following “informal discussions with FTC staff.” As with the second request, Novo’s resubmission triggered a separate and cumulative 30-day extension during which the FTC would scrutinize the deal.
Novo Holding’s proposed buyout of Catalent has sparked conversation across the industry about its potential impact.
Notably, Eli Lilly, which sports direct competitors to Ozempic and Wegovy in the form of Mounjaro and Zepbound, has expressed misgivings about the acquisition. Like Novo, Lilly has also been struggling to match manufacturing output with the massive mainstream popularity of its dual GIP/GLP-1 drugs.
Lilly also relies on Catalent’s contract manufacturing services to help supply its drugs. On the company’s fourth-quarter earnings call in early February, Lilly Chief Financial Officer Anat Ashkenazi said the company had “questions about that transaction” and planned on “holding Catalent accountable to their contract with us.”