UPDATED: In refiling $16.5B Catalent buyout pitch, Novo gives FTC more time for review

After Novo Holdings set the stage for a $16.5 billion buyout of contract manufacturing giant Catalent earlier this year, its parent company is giving antitrust officials more time for their review with one simple trick.

Following "informal discussions with FTC staff," the Novo Nordisk Foundation opted to pull its paperwork with the Federal Trade Commission and resubmit the deal application, according to a document (PDF) posted this week by Catalent.

In doing so, Novo hoped “to give the FTC additional time to review the [t]ransactions," Catalent said in the filing.

Catalent and the Novo Nordisk Foundation, on behalf of Novo Holdings, filed prior applications detailing the proposed deal March 4.

With the resubmission, the Novo Nordisk Foundation has triggered another 30-day waiting period during which the FTC will review the forms. The competition agency also has the ability to extend the deadline by another 30 days, if it so chooses.

Denmark's Novo Nordisk Foundation, an enterprise foundation that hands out grants for projects related to research, medicine, education and other causes, is the parent company of Novo Holdings. Novo Holdings acts as a holding company for Novo Nordisk, the pharmaceutical outfit behind the immensely popular semaglutide drugs Ozempic and Wegovy. 

When the companies first unveiled their takeover plans, Novo Holdings and Catalent said they expected the deal to close toward the end of 2024.

Novo Holdings’ deal will see the Danish fund manager fork over $16.5 billion for Catalent, which operates dozens of production sites across Asia, Europe, Latin America and North America. The company is acquiring all outstanding shares of the CDMO for $63.50 per share in cash, representing a 16.5% premium to the closing price of Catalent’s stock near the time of the announcement.

Aside from winning the blessing of Catalent’s board of directors, Elliott Management—the activist investor that entered a cooperation agreement with Catalent last summer amid a particularly rough patch for the CDMO—has signaled its approval of the Novo buyout, too.

Novo Nordisk is also set to gain from the deal, which will see Novo Holdings hand over the keys to three Catalent fill-finish sites in Italy, Belgium and the U.S., to the Danish drugmaker for $11 billion.

Novo is picking up the new production real estate in order to flesh out the supply network for its immensely popular GLP-1s Ozempic for diabetes and the obesity blockbuster Wegovy. The meds’ mainstream hype—fueled at various times by celebrity endorsements and off-label prescribing for cosmetic weight loss—has also resulted in protracted shortages of Novo Nordisk’s injectable semaglutide products over the past few years.

Catalent’s sale raises new concerns for pharma and biotech companies that rely on contractors to crank out their clinical- and commercial-stage drugs. During a February conference call, Eli Lilly Chief Financial Officer Anat Ashkenazi said the drugmaker had "questions about the transaction."

“We intend on holding Catalent accountable to their contract with us,” Ashkenazi added.

Other buyout interest

Meanwhile, Novo wasn’t the only one vying to acquire Catalent over the last few years. Another company with an “existing commercial relationship” with Catalent—dubbed Party A—made several inquiries about a strategic transaction during the summer and fall of 2022, ultimately offering to buy out the CDMO at $75 per share on Dec. 10, 2022, according to a securities filing published late last week.

By January 10, 2023, another company with an existing commercial relationship, Party B, jumped into the fray, telling Catalent’s CEO Alessandro Maselli that it would be “interested in engaging with Catalent” if the CDMO ever decided to kick off a review of strategic alternatives.

Unlike Party A, the unnamed Party B never made a formal offer for Catalent, according to the filing.

While the identities of Party A and B remain unknown, there are some clues.

For instance, Bloomberg reported back in February of 2023 that life sciences conglomerate Danaher had expressed an interest in purchasing Catalent at a “significant premium,” sending the CDMO’s shares up 22% at the time of the report.

Then, in April 2023, the news outlet reported that Danaher had ditched its buyout plan. The exact rationale behind Danaher’s decision wasn’t immediately clear, but the reported move came after Catalent revealed productivity problems and high costs at three of its facilities—including two of the CDMO’s largest. 

Editor's note: This story was updated with background on the Catalent acqusition from a securities filing.