Business as usual at Catalent’s Bloomington operation amid acquisition
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Change is not imminent at Catalent Inc.’s Bloomington operation after Monday’s announcement that the New Jersey-based company is being acquired by Novo Holdings, with plans to sell the plant to Novo Nordisk. The move will likely result in more stability for the Indiana operation, according to one expert, following Catalent’s rough financial year and previous layoffs.
The medical device companies announced the acquisition as an all-cash deal valued at $16.5 billion. Novo Holdings plans to acquire all outstanding shares of Catalent for $63.50 per share in cash. The deal will take Catalent off the New York Stock Exchange and become part of the private company.
Catalent will operate as normal until the deal closes, which is expected at the end of the year. Novo Nordisk said it will honor all contracts and customer obligations, meaning the facility will phase out certain production and start new work as those commitments meet their end date.
“Catalent continues to operate as an independent company and deliver on its mission to deliver premium manufacturing and development services for our customers and the patients they serve,” Catalent spokesperson Laura Hortas said in an email to Inside INdiana Business.
George Telthorst, director of Indiana University’s Center for the Business of Life Sciences, talks about what the next few years will look like at the Bloomington location and the stability Novo Nordisk brings.
Catalent’s three manufacturing sites in Bloomington, Belgium and Italy will transition to produce diabetes and weight loss drugs growing in demand—most likely Wegovy. Novo Nordisk said in a news release the deal aligns with their goal of reaching more patients. Several weight loss drugs have been under a national shortage the past year, including Novo Nordisk restricting some low-dose supply of Wegovy in May.
“We are very pleased with the agreement to acquire the three Catalent manufacturing sites which will enable us to serve significantly more people living with diabetes and obesity in the future,“ Novo Nordisk President and CEO Lars Fruergaard Jørgensen said in the release. “The acquisition complements the significant investments we are already doing in active pharmaceutical ingredients facilities, and the sites will provide strategic flexibility to our existing supply network.”.
The acquisition was unanimously approved by Catalent’s board of directors. The deal still requires approval by Catalent stockholders and is subject to regulatory approvals and customary closing conditions.
What’s next
With the patent life and popularity of weight loss drugs, Novo Nordisk’s acquisition brings stability to the Bloomington operation, said George Telthorst, director of Indiana University’s Center for the Business of Life Sciences. The deal shows that weight loss drugs are sighted to have major growth, he said, and the company is positioning itself to meet that demand.
Since Catalent has a host of ongoing obligations, Telthorst said there won’t be a big plant shutdown to transition to Novo Nordisk’s operation. Over time as those contracts end, more space will be repurposed with new production, he said.
The type of work is also not significantly different, he said of the current workforce. Whether there will be higher pay or raises, he said that will depend on the local economy. The deal will also mark a shift in the culture with its new European owners, he said.
Catalent acquired the 875,000-square-foot Bloomington operation from Cook Pharmica LLC in 2017 for $950 million.
Just like the acquisition from Cook, Novo Nordisk will absorb Catalent’s workforce. Neither Catalent or Novo Nordisk had comment about potential staffing changes, including hiring, layoffs or salary raises.
“Novo Nordisk is one of the top health care companies in the world and recognizes the strong teams we have at our Agnani, Bloomington and Brussels sites,” Hortas said. “Novo Nordisk has indicated that, following transaction close, they are excited to welcome the employees at the three sites to their team.”
During the pandemic, Catalent ramped up its operations to meet the demand for COVID-19 vaccines and boosters, resulting in hiring hundreds of workers for an expected expansion and investment. However, the contract drug maker has instead held layoffs, including a round of about 400 workers in December 2022. Last May, Catalent pointed to productivity issues and high costs as reasons for the company’s faltering financial position.
Novo Nordisk’s introduction into the region strengthens its position as a health sciences sector, Telthorst said. In the long term, he said there’s potential for a boost of investment and bringing new and good ideas to Indiana.
“It’s further affirmation that the region is definitely a medical products center of excellence,” he said.
Telthorst talks about what the future could look like with a new company in the life sciences ecosystem.
Also, Catalent’s clients could move their contracts over to Simtra, formerly Baxter, increasing their activity.
Just as the city of Bloomington worked with Catalent through its tenure, it expects a similar relationship with its new tenet.
“We feel optimistic about Novo Nordisk’s impact on the site and its Bloomington-based employees, and we will do whatever we can to support a smooth transition for Catalent, its employees, and Novo Nordisk,” city spokesperson Angela Van Rooy said in an email.