Catalent: FY17 expectations exceeded, biologics strategy making strides
The delivery technologies and development solutions provider posted a fourth quarter revenue of $616.9m – up from $532.2m in the previous year’s fourth quarter.
For fiscal year 2017, revenue was $2,075.4m, an increase of 12% as reported and 15% in constant currency, compared to $1,848.1m last year.
“We're very pleased with our fourth quarter and fiscal year 2017 results which exceeded our expectations,” said John Chiminski, Catalent chairman and CEO on the company’s earnings call yesterday.
Over the past year, the company increased its cGMP spray drying capacity at its Pharmatek facility in San Diego, CA. The company previously told us the addition follows an increased demand for improved solubility, which Chiminksi reiterated on the call.
“To further support the development of spray dry dispersions, we've also expanded roller compaction capacity at the site,” he added. “These strategic investments are the first of several that we have planned for the San Diego facility in the near future,” said Chiminski, noting that integration is progressing well.
Catalent also recently expanded its OptiForm Solution Suite and resigned its manufacturing deal for Pfizer Liqui-Gels.
Biologics update
In an update on the company’s biologics strategy, Chiminski explained it “continues to make great strides.”
“The expansion of our facility in Madison is progressing well and we continue to be on pace for engineering runs in the next few months,” he said.
Chiminski also commented that the company has signed “a number of customer contracts” for the third train, which is currently under construction. The new capacity is expected to fill quickly as the company also is growing its funnel of late-stage clinical opportunities, he added.
However, “in terms of mirroring the industry,” Catalent CFO and executive vice president Matthew Walsh said the company’s biologics business is “under represented” – though growing.
“The range of advanced delivery technology platforms that we have can certainly accommodate biologic products, but many biologics are delivered in prefilled syringe or vials and Catalent is not a significant player in either of those delivery forms today,” Walsh explained.
While the company does have an injectables business, its vial presence is not significant, he added. But looking towards organic and in-organic growth, Walsh said “we certainly know where we need to expand and we are focusing on those areas.”
Expansion and consolidation
Walsh said the company’s philosophy on M&A going into 2018 hasn’t changed. “We continue to look for acquisitions that enhance our technical differentiation and value to customers,” he added.
“We believe that there are numerous opportunities for us to grow inorganically,” Walsh explained, adding that Catalent will continue to be “thorough and aggressive” in identifying potential acquisition targets.
As per industry consolidation in general, Chiminski said it points to a robust and dynamic marketplace.
However, he said the market is still fragmented enough that Catalent does “not really see a significant increase in the overall competitive environment.”
“The market wants to move towards fewer, bigger, better suppliers,” said Chiminski.
