While Novo Holdings and Catalent continue to voice confidence that their planned $16.5 billion merger will go through before the year is out, the deal has received near-constant criticism over the past several weeks.
Now, a new complaint has surfaced—not from lawmakers or consumer groups but a major pharma CEO.
Speaking to the press Wednesday, Roche’s chief executive Thomas Schinecker critiqued the proposed transaction, arguing that it could hamper the ability of smaller biopharma players to lock down essential manufacturing capacity.
“I think limiting competition in this space is not a good idea,” Schinecker said on a media call tied to Roche’s third-quarter earnings.
While the deal would not weigh heavily on Roche’s own production operations, “it could be a problem for other smaller players if there is a restriction in terms of how many CMOs are available,” the executive explained, referring to the industry term for contract manufacturing organizations (CMOs).
“From an industry perspective, I think this would be a wrong decision by authorities,” he added.
As for Roche’s exposure to any potential fallout from Novo Holdings’ acquisition, “we are not at all concerned that we will need additional CMO capacity that we don’t currently have in our forecasts,” Teresa Graham, CEO of Roche Pharmaceuticals, said on the call.
Novo Holdings acts as a holding company for the Danish drugmaker Novo Nordisk. Both organizations have attempted to fend off similar criticisms throughout the month.
Under the current plan, Novo Nordisk is in line to purchase three Catalent fill-finish facilities from Novo Holdings for $11 billion after the closure of Novo Holdings' Catalent purchase.
“Novo Nordisk will honor all existing contracts at the Catalent sites,” A Novo Nordisk spokesperson recently told Fierce Pharma.
Novo Holdings, for its part, told Fierce last week that it “took active steps to respect each organization’s independence and to ensure fairness” when charting the Catalent deal.
"Neither entity would have pursued this transaction if it did not align with each organization’s goals independently, and this is evidenced by their retention of separate legal advisors and months of negotiations between the two parties," a Novo Holdings spokesperson said.
Catalent also stressed that it believes the deal is "pro-competitive," and said that it's unaware of any competitive GLP-1 products being manufactured for commercial sale at the sites Novo Nordisk is slated to acquire.
"We have and will continue to work closely with the FTC and EU regulators as intended under the law," a Catalent spokesperson told Fierce Pharma on Wednesday.
The comments from Roche’s CEO follow two separate appeals to the U.S. Federal Trade Commission to scrutinize or block Novo Holdings’ Catalent acquisition earlier this month.
First, Sen. Elizabeth Warren, D-Massachusetts, called on FTC chair Lina Khan to put the deal under a microscope, raising concerns that the plan could “increase Novo Nordisk’s dominance over vital GLP-1 inhibitor drugs, reducing competition and increasing prices for patients.”
Warren also cautioned that the merger could grant Novo Nordisk “unprecedented visibility into and control over its competitor’s production capacity, costs, and business practices.”
About a week after Warren voiced her concerns, a dozen consumer groups and trade unions urged Khan and the FTC to block the deal outright.
The groups behind the letter alleged that Novo Nordisk’s plant purchases could hinder not only the Danish drugmaker’s chief commercial rival, Eli Lilly but also companies like Viking Therapeutics, Pfizer, Roche and AstraZeneca, who are working on their own metabolic offerings.
“Because of the proposed acquisition, there is a real question of whether these future rivals to Novo will be able to secure the expertise to bring the product to market and have available and qualified capacity to manufacture these products when they commercially launch,” the letter’s cosigners wrote.
Eli Lilly has also hinted at the potential side effects of the deal. Shortly after Novo Holdings announced the buyout, Lilly’s then-chief financial officer Anat Ashkenazi said Lilly had been left with “questions about the transaction.”
She noted at the time that Catalent is an integral part of the biopharma manufacturing landscape, especially in diabetes and obesity, and that Lilly had a production deal with the contract manufacturer.
“We intend on holding Catalent accountable to their contract with us,” Ashkenazi said.
Novo Holdings first unveiled plans to pay $16.5 billion for CDMO giant Catalent in early February.
Both Catalent and Novo remain confident the transaction will close before 2024 is over.
Editor's note: This story was updated with an additional statement from Catalent.