CDMO Catalent trumpets biologics windfall courtesy of COVID-19

Catalent Bloomington, Indiana plant
With a suite of capacity expansions on the way, Catalent's COVID-19 CDMO work shows no signs of slowing down in 2021. (Catalent)

The COVID-19 pandemic has taken a toll on top lines throughout the biopharma industry—but not for New Jersey-based CDMO Catalent,

Instead, the pandemic has been a growth "accelerator," CEO John Chiminski said Tuesday on his company's second-quarter earnings call. With more than 80 pandemic projects under Catalent's belt, he's not kidding. Virus-related drug and vaccine products have given a massive boost to the company's biologics business, and with more shot capacity on the way, Catalent's COVID-19 work shows no signs of slowing down any time soon.

Buoyed by production contracts with major COVID vaccine players Moderna, Johnson & Johnson and AstraZeneca, Catalent saw its biologics revenues hit $403.9 million in the second quarter of its 2021 fiscal year. That's a whopping 76% increase in constant currencies over the same quarter last year.

All told, biologics made up 44% of Catalent's total net revenue for the quarter, which ended December 31, 2020. Taking acquisitions out the equation, net revenues for the company's biologics unit—on deck to crank out pandemic vaccines as well as therapeutics—jumped 65%, while profits for the segment climbed 104% versus the same period in 2019. 

That boost comes courtesy of the company's vast network of COVID-19 manufacturing partners, CEO Chiminski said on a call with analysts. Two of Catalent's vaccine partners—AstraZeneca and Moderna—are already rolling out vaccines to the public, and the CDMO is on deck to manufacture Johnson & Johnson's shot in the U.S., too.

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J&J just last week unveiled long-awaited phase 3 data on its single-dose vaccine, showing it was 66% effective overall in global phase 3 trials, with efficacy climbing to 85% in severe disease. 

To match the pandemic's breakneck speed, Catalent has hustled along a number of planned capacity expansions in Europe and the U.S., Chiminski explained. With new filling lines on the way, the company figures it can meet demand for COVID-19 vaccines from its trio of partners and fill out its non-pandemic customer orders without disruption, he said. 

The company recently completed the buildout of a high-speed filling line, plus other capacity expansions, at its Bloomington, Indiana, plant—where the company is producing Moderna and J&J's vaccines. Its team there is now working 24/7 to meet U.S. demand, Chiminski said. 

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All told, the company is on track to produce 100 million Moderna doses for the U.S. by March, out of a total 200 million doses it figures it can deliver by the end of June. 

Another high-speed filling line in Bloomington, first announced in 2020, is set to come online in the fourth quarter of the company's 2021 fiscal year. That line will be devoted to the production of Moderna's shot, among other products, Chiminski said. 

Plus, the company is establishing a high-speed flexible syringe cartridge filling line in Bloomington, too. That project won't be used for COVID-19 work, so the company is eyeing completion in the back half of 2021, Chiminski said.  

Those upgrades come in addition to new manufacturing trains being added to Catalent's cell line facility in Madison, Wisconsin; plans to boost capacity in Anagni, Italy; and a fill-finish facility in Limoge, France, that the company expects to complete this year, Chiminski said. 

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During the call, analysts pressed the company about whether the U.S. government could order Catalent to prioritize production of COVID-19 vaccines through the Defense Production Act—a move that caused issues for drugmaker Horizon Therapeutics late last year when Catalent was forced to divert manufacturing slots for thyroid eye disease med Tepezza in favor of pandemic products. 

The short answer is no, Chiminski said. With a new high-speed filling line in place in Bloomington and another on the way, the company says it's equipped to meet capacity for government-mandated production as well as non-COVID orders. 

Overall, the company raked in $910.8 million in second-quarter revenues, up 24% in constant currencies from the $721.4 million reported for the same quarter last year. Armed with a slew of successful COVID-19 contracts, the company has raised full-year guidance to a range of $3.8 billion to $3.9 billion, up from its earlier projection of $3.5 billion to $3.7 billion. 

Editor's Note: This story was updated to correct an error stating Catalent's Madison cell line facility is a cell manufacturing facility.