Even as Catalent moves toward a $16.5 billion sale to Novo Holdings, hundreds of the CDMO's former staffers won't be in the mix going forward.
As part of a restructuring Catalent unveiled last year, the company recently culled its ranks to the tune of roughly 300 employees between October and December of 2023. The contract manufacturer revealed the layoffs in a quarterly filing this week.
Catalent first unveiled plans to reduce costs and consolidate its facilities last summer. Late last year, meanwhile, the CDMO extended those plans to include layoffs across both is biologics and pharma and consumer health segments, Catalent explained in its recent filing.
In October, Catalent decided to shutter its facility in San Francisco and transfer operations to other sites within its network—a decision directly tied to the company’s latest layoff round.
The site closure is expected to yield charges of at least $25 million, while the layoff round incurred costs of roughly $12 million, Catalent said.
Last fall—in a separate securities filing—Catalent confirmed it had laid off 50 employees as part of the reorganization. The newer filing shows that the layoffs gained steam at the end of the 2023 calendar year.
News of the layoffs comes a week after Novo Holdings—the fund manager associated with Danish drugmaker Novo Nordisk—announced it would spend $16.5 billion to acquire Catalent. As part of the deal, which is slated to close toward the end of 2024, Novo Nordisk is buying three of Catalent’s fill-finish sites from Novo Holdings for $11 billion.
The M&A move surprised the biopharma world—and not everyone was thrilled. Look no further than Novo’s chief diabetes and obesity rival, Eli Lilly, whose chief financial officer last week said she had “questions” about the transaction.
“We intend on holding Catalent accountable to their contract with us,” Anat Ashkenazi, Lilly’s CFO, said during a recent earnings call.
Ashkenazi called Catalent an “integral” manufacturing player, especially in diabetes and obesity, noting that some Lilly products are made at Catalent sites.
As for Catalent itself, the CDMO’s sales have continued to struggle on languishing COVID demand and other factors. Last week, Catalent reported that revenues for the second quarter of its 2024 fiscal year were down 11% to $1.03 billion.
The manufacturer also posted a net loss of $204 million, versus $81 million in net income in the second quarter of the prior fiscal year.
Catalent blamed both outcomes on reduced demand for its COVID-19 services.
Editor’s note: The headline of this story was updated to clarify that the article centers on layoffs from the calendar year 2023.