Catalent flags problems at its manufacturing plants; CFO departs

(Reuters) – Contract drug manufacturer Catalent Inc on Friday warned that slow production at three of its facilities will impact its fiscal 2023 results and said CFO Thomas Castellano has stepped down, sending its shares down more than 20%.

The company said it experienced “productivity issues” at its gene therapy manufacturing site in Harmans, Maryland after a slower-than-expected ramp up in production capacity and that it would affect its third- and fourth-quarter revenue.

Catalent also faced similar challenges at its facilities in Bloomington, Indiana and Brussels, Belgium that the company said would impact its outlook and third-quarter results.

The company’s shares fell 21.3% to $45.20, losing about $3 billion in market capitalization.

The company makes drug substances as well and finished drug products for manufacturers. Its larger clients have included companies such as Moderna Inc and Johnson & Johnson.

Catalent is currently the sole contract manufacturer for Novo Nordisk’s highly popular weight loss drug Wegovy, which uses the same ingredient as its diabetes drug Ozempic.

Novo Nordisk, which was overwhelmed by demand for Wegovy after it was launched in the United States in 2021, said on Thursday that a second contract manufacturer was ready to begin production of the drug.

It was not immediately clear if Wegovy was made at any of Catalent’s impacted facilities. Novo Nordisk was not immediately available for comment outside of business hours.

Catalent on Friday also named company insider Ricky Hopson as interim CFO and said it had launched the search for a permanent finance chief.

(Reporting by Manas Mishra and Pratik Jain in Bengaluru; Editing by Shounak Dasgupta)