Catalent: Q4 currency glitch but CDMO to gain from consolidation trend

By Dan Stanton

- Last updated on GMT

Catalent positioned well to prosper from ongoing consolidation in CDMO industry
Catalent positioned well to prosper from ongoing consolidation in CDMO industry
Ongoing consolidation in the CDMO industry is beneficial for Catalent, the firm says as it reports a fourth quarter marred by weak currencies.

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%.

Consolidation

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.

Incremental M&A

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​.

Related news

Show more

Related products

show more

Reliability, scale, and security of supply

Reliability, scale, and security of supply

Content provided by Univar Solutions USA | 28-Aug-2024 | Product Brochure

Univar Solutions Pharmaceutical Ingredients is proud to offer one of the most expansive portfolios of 15,000+ products, including high-purity solvents,...

Increasing the Bioavailability of Oncology Drugs

Increasing the Bioavailability of Oncology Drugs

Content provided by Lonza Small Molecules | 13-Nov-2023 | White Paper

Oral tyrosine kinase inhibitors (TKIs) are a class of cancer drugs that can be highly susceptible to issues with solubility in the gastrointestinal tract

Pulmonary Delivery of Orally Inhaled Therapeutics

Pulmonary Delivery of Orally Inhaled Therapeutics

Content provided by Catalent Pharma Solutions | 19-Oct-2023 | Product Brochure

New classes and indications of orally inhaled therapeutics are rapidly expanding, with the development pipeline increasingly featuring both large and small...

Related suppliers

Follow us

Products

View more

Webinars