Novo Nordisk parent to buy Catalent to expand Wegovy supply

Novo Nordisk‘s parent company on Monday said it will acquire drug manufacturer Catalent in a $16.5 billion deal that could help boost the supply of the highly popular weight loss injection Wegovy and diabetes shot Ozempic. 

Catalent is the main supplier of fill-finish work, which involves filling and packaging syringes and injection pens, for Novo Nordisk’s Wegovy. 

As part of the deal, Danish drugmaker Novo Nordisk will buy three of Catalent’s manufacturing sites from its parent company, Novo Holdings, for $11 billion. Novo Holdings owns almost 77% of the voting shares in Novo Nordisk.

Novo Nordisk and Novo Holdings said they expect the acquisition of the plants and the broader deal to buy Catalent to close at the end of 2024. 

Novo Nordisk added that it expects its purchase to gradually help increase its filling capacity from 2026 and beyond. The company already contracts the three plants, which are located in Italy, Belgium and Bloomington, Indiana. 

Catalent shares rose about 10% in premarket trading Monday after the deal announcement. The company has a market value of roughly $10 billion. Novo Nordisk’s stock rose almost 2% in premarket trading, for a market value of about $390 billion.

Shares of Novo Nordisk jumped almost 53% last year as Wegovy and Ozempic soared in popularity – and slipped into shortages – for their ability to help patients lose significant weight over time.

The Catalent deal is the company’s latest effort to boost manufacturing capacity for its drugs as it faces competition from Eli Lilly and other emerging competitors in the weight loss drug market.

Last year, the company announced plans to invest in new production facilities in Denmark and France. Novo Nordisk also said last week that it has more than doubled the number of Wegovy starter doses it’s shipping to the U.S., which allow more patients to begin the treatment.

Under the terms of the deal, Novo Holdings will buy Catalent for $63.50 a share in cash, a premium of 16.5% to Catalent’s closing price on Friday.

The deal to buy Catalent has the backing of activist investor Elliott Investment Management, which has a stake in the U.S. company, according to Novo Holdings. 

Notably, some of Catalent’s factories that manufacture Wegovy have been linked to to regulatory problems in the past. Reuters reported in July that Catalent’s factory in Brussels that fills Wegovy pens had repeatedly breached U.S. sterile-safety rules in recent years and that staff had failed to perform required quality checks.