CDMO giant Catalent, which continues to wait on a twice-extended review by the Federal Trade Commission (FTC) of its sale to Novo Holdings for $16.5 billion, reported upbeat fourth-quarter earnings.
The company said it tallied net income of $23 million for its fiscal fourth quarter—which ran through the end of June—compared to a loss of $110 million for the same period a year ago. Catalent reported profit of 13 cents per share, with earnings adjusted for one-time gains and costs coming in at 65 cents per share, beating Wall Street analysts’ estimates of 46 cents per share.
Revenue for the quarter was $1.3 billion versus $1 billion a year ago. An average estimate from Zacks Investment Research had pegged expected revenues at $1.23 billion prior to the earnings report.
“These strong results were achieved while also delivering record fourth quarter new business wins and generating positive free cash flow in excess of $100 million in the last three months of our fiscal year,” Alessandro Maselli, Catalent's president and CEO, said in the Aug. 29 press release.
Catalent, which has struggled through a post-pandemic slowdown like many other CDMOs, reported a full-year loss of $1.04 billion compared to a net loss of $256 million during the previous year. Overall, net revenue for the company's 2024 fiscal year was $4.38 billion, a 3% increase.
Catalent previously worked through a roller coaster of financial reporting issues, pushing back the release of quarterly earnings on several occasions during 2023 due to delays caused by production problems at three manufacturing sites and after conducting a strategic review following a settlement with activist investor Elliott Investment Management.
The company also announced last November that it was taking a goodwill impairment charge of about $700 million connected to acquisitions within its consumer health and bio modalities unit.
Regarding Catalent's impending sale, Maselli said Thursday that the company remains “focused on serving our valued customers and positioning the company to best leverage the expanded resources that Novo Holdings, a world-class investment firm focused on life sciences, will provide."
Prior to Novo's interest, life science conglomerate Danaher was rumored to be looking to buy Catalent, but such talk ebbed quickly after reports began to surface about Catalent's productivity and cost problems.
Catalent and Novo Holdings, parent to Novo Nordisk, announced the sale in February in the wake of months of speculation that Catalent was a target of acquisition. Merging the two companies will help Novo Nordisk, which has struggled to keep pace with explosive demand for its respective GLP-1 products in diabetes and obesity.
Some industry watchers and competitors have questioned the deal, citing the potential impact on competition.
In May, the FTC sent both companies a “second request” for additional information on the sale, which put an additional 30-day waiting period in place for review. Catalent expects the deal to close near the end of this year, subject to customary closing conditions, Maselli said in the earnings release.