For the fourth quarter of fiscal year 2015, the contract development and manufacturing organisation (CDMO) reported net revenue of $510m (€454m), down 2% on the same period last year.
“We deal in seven major currencies, and all of them were down against the dollar,” Catalent’s CFO Matt Walsh said in a conference call yesterday. “The biggest impact was the euro but we also have approximately 15% of our revenues denominated in British pounds. So the euro and the pound together comprise almost 45% of our sales and that’s where we saw the biggest impact year-on-year.”
On a constant currency rate, net sales actually grew 8% year-on-year with the firm’s Oral Technologies business growing 3% due to improved performance from softgel and modified release products, while the Development and Clinical Services segment reported sales of $124m – up 22%.
CEO John Chiminski was pleased with the results, telling stakeholders Catalent is well positioned to benefit from the consolidation trend in his firm’s industries.
“The dynamics of our industry and market remains very favourable for our business,” he said yesterday. “There remains a growing need for fewer, bigger, better suppliers with scale and global reach with an emphasis on both delivery and compliance.
“Given our market-leading position, capabilities, regulatory track record, and a history of reliable supply, this trend continues to bode well for Catalent’s organic growth.”
There has been a spate of M&A activity in the CDMO sector over the past few years, the largest being Patheon and DSM’s merger last year to create DPx. In March, the CEO of DPx told this publication more consolidation will come.
DPx is Catalent’s largest rival based on revenue, and Chiminski echoed his counterpart’s views saying “ongoing consolidation in our dynamic industry is generally positive for Catalent due to the inherent stickiness of our service offerings for pharmaceutical and biologic products.”
Furthermore, he told investors Catalent’s “incremental M&A” strategy helped keep the firm at the forefront of this trend by augmenting the firm’s offerings and scale.
Over the past year, Catalent has completed the acquisitions of delivery tech firm Micron Technologies, antibody-drug conjugate tech firm Redwood Bioscience, and Australian packaging company Pharmapak Technologies.