French regulators lift manufacturing ban at Catalent softgel plant

By Dan Stanton

- Last updated on GMT

Image: iStock/Vepar5
Image: iStock/Vepar5
Full production at Catalent’s Beinheim softgel plant has begun five months after the discovery of out-of-place capsules led to French regulators suspending operations.

In November​, France’s health regulator - l’Agence National de Sécurité du Médicament et des produits de santé (ANSM) – suspended manufacturing at Catalent’s softgel development and production site in Beinheim, after out-of-place softgel capsules were discovered in several product batches during quality control procedures.

Five months on, the contract development and manufacturing organisation (CDMO) announced in an SEC filing​ Friday the ANSM has lifted the suspension order, effective immediately.

Cost of suspension

The suspension has affected a number of clients. GSK, for example,​ was forced to delay the November launch of Zagallo (dutasteride) in Japan until it could guarantee supply of the male pattern baldness drug. 

And for Catalent itself, around $21m was lost in revenues for its second quarter, ending December 31 2015, while management predicted a negative impact of $30-35m for the full year.

However, this was based on predictions the plant would receive the regulatory green light in March, but by early April​ only limited amounts of “medically necessary medicines”​ were being produced from Beinheim, and William Blair analyst John Kreger believes the delay will cause a substantial financial impact.

“Given that there is roughly an extra four to six weeks of suspended activity spread across the fiscal third and fourth quarters, we suspect there will be some additional impact that will result in a further reduction to guidance, holding all other factors constant,”​ he said in a note.

“The additional closure period is roughly the same length as the period of suspension experienced in the fiscal second quarter, we would suspect that the reduction to guidance will likely be another $20m in revenue and $10m in EBITDA.”

Despite this William Blair maintains its ‘outperform’ rating for the CDMO, based on its perceived strength in oral technologies.

Catalent presents its Q3 FY2016 earnings this Wednesday.

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