Novo Holdings is encountering more resistance as it aims to close its $16.5 billion acquisition of pharma manufacturing giant Catalent by the end of the year.
A dozen consumer groups and trade unions on Thursday penned a letter (PDF) to Lina Khan, chair of the U.S. Federal Trade Commission (FTC), urging the antitrust agency to block Novo Holdings’ proposed buyout.
The cosigners—which include prominent U.S. trade organizations the American Federation of State, County and Municipal Employees and the Service Employees International Union—voiced concerns over potential anticompetitive practices and patient access to drugs, not only for GLP-1s for diabetes and obesity but gene therapies, too, should the deal go through.
Multiple consumer organizations signed on to the letter as well, including Beta Cell Action, Doctors for America, Generation Patient and Salud y Farmacos, U.S.
The latest call to action for the FTC comes after Sen. Elizabeth Warren, D-Massachusetts, expressed similar fears to the agency over the proposed deal last week.
Novo Holdings telegraphed intentions to buy out CDMO Catalent in early February. Novo Holdings is the holding company and controlling shareholder of Danish drugmaker Novo Nordisk, which is in line to purchase Catalent fill-finish facilities in the U.S., Italy and Belgium for $11 billion, if the merger passes muster.
The consumer groups are particularly worried about Novo Nordisk’s potential plant purchases from Novo Holdings, which would help the drugmaker boost capacity for its blockbuster GLP-1 meds Ozempic and Wegovy, which are approved in diabetes and obesity, respectively.
While Novo currently shares the GLP-1 market with its rival Eli Lilly, multiple other pharmas and biotechs, from Viking Therapeutics and Sun Pharma to Pfizer, Roche and AstraZeneca, are working on their own metabolic offerings in the class.
Those firms will likely require CDMO assistance if their products reach the launch stage, and, currently, there is “only one CDMO, Catalent, that has extensive experience working with GLP-1 manufacturers,” according to the letter.
“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 cosigners said.
They went on to warn that Novo Holdings and Novo Nordisk would have both ability and incentive to block their rivals from obtaining fill-finish capacity at Catalent sites. Further, Catalent, operating under the Novo banner, could “charge higher prices, provide worse customer service and give less favorable terms to Novo’s rivals,” the letter writers cautioned.
Novo Nordisk last week told Fierce Pharma that it plans to “honor all existing contracts at the Catalent sites” should Novo Holdings’ acquisition get approved.
“We are not aware of any competitive GLP-1 products being manufactured for commercial sale at the three sites that Novo Nordisk is planning to acquire,” a company spokesperson explained at the time.
Novo Holdings, for its part, said that its investment team and Novo Nordisk "took active steps to respect each organization’s independence, and to ensure fairness."
"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 over email.
Aside from GLP-1 drugs, the consumer groups raised alarm bells about the transaction’s potential to hamper gene therapy output, arguing that Catalent helps produce both Sarepta Therapeutics' Elevidys for Duchenne muscular dystrophy and Novartis’ Zolgensma for spinal muscular atrophy.
The letter goes on to suggest that Novo Nordisk, which is investing in gene therapy platforms and programs, could press Catalent to prioritize its own manufacturing needs and “pick and choose” which rival gene therapies would win production capacity at the CDMO’s facilities.
With that said, a Novartis spokesperson told Reuters on Thursday that Zolgensma is no longer manufactured at any Catalent plant.
"We are committed to working closely with Catalent’s management to grow the business and contribute the best way possible to their onward commercial success," Novo Holdings spokesperson added.
"The addressable market opportunity is significant in the areas in which Catalent operates, and Novo Holdings believes there is tremendous value to be unlocked in this business," she said.
Nevertheless, the letter writers stressed their belief that “there is no adequate remedy that resolves the competition concerns raised by this transaction.”
Warren made similar remarks last week when she warned the FTC that the deal could increase Novo Nordisk’s “dominance” over GLP-1 medicines, hamper competition and increase prices for patients.
Novo Holdings and Catalent remain confident they can close the transaction by year-end.
Back in April, Novo Holdings’ parent company, the Novo Nordisk Foundation, resubmitted its application for the merger, triggering a 30-day waiting period for additional FTC review.
The following month, Catalent and the Novo Nordisk Foundation received a request from the FTC for additional documents and information on the proposed deal, initiating another waiting period.
Editor's note: This story has been updated with comments from Novo Holdings.