Novo Nordisk Catalent deal closer to closing

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Novo Nordisk just got a step closer to significantly improving supply for its blockbuster weight loss drug Wegovy and diabetes treatment Ozempic.

The Danish drugmaker’s parent company, Novo Holdings, got approval from European antitrust regulators last week to move forward with its proposed $16.5 billion buyout of U.S.-based drug manufacturer Catalent – a deal that had raised concerns among both rival drugmakers and lawmakers. 

That leaves the U.S. Federal Trade Commission as the last hurdle Novo Holdings needs to overcome to cement the colossal deal, which it announced in February. Novo Holdings and Novo Nordisk said they expect the transaction to close at the end of the month. 

Catalent is an attractive buyout target for Novo Holdings, which owns 77% of the voting shares in Novo Nordisk. 

The deal could boost availability of the drugs because Catalent is the main supplier of fill-finish work, which involves filling and packaging syringes and injection pens for Wegovy and Ozempic. Novo Holdings will immediately sell three Catalent sites for $11 billion to Novo Nordisk after the deal closes, making the drugmaker more equipped to match soaring demand for its products.

“In the obesity arms race, capacity remains king and the close of this deal could meaningfully accelerate Novo’s ability to supply this growing market,” BMO Capital Markets analyst Evan Seigerman wrote in a note on Friday. “Novo underscored last quarter that it continues to see no issues with patient demand, and with every dose spoken for, capacity is the key bottleneck in the growth of its GLP-1 franchises.”

The European Commission, the executive arm of the European Union, specifically said the transaction would not pose a considerable competitive threat. The commission said drugmakers will still have access to several alternative manufacturers of prefilled syringes and orally disintegrating tablets. 

“The transaction would not lead to customers lacking sources of supply alternative to Catalent,” the Commission maintained, noting that “there is sufficient spare capacity in the market.”

Competing drugmakers have pushed back on the deal. 

Earlier this year, Eli Lilly was the first to suggest it could pose issues since the company is a key rival of Novo Nordisk in the weight loss drug space. In August, Eli Lilly CEO David Ricks also told analysts the company relies on one Catalent site for some production, but that “it’s more the oddity of your main competitor being also your contract manufacturer and how to resolve that situation.”

Roche‘s top executive Thomas Schinecker also said in a media call in October that the Catalent deal would not affect the company, but “could be a problem for other smaller players.” He said limiting competition in the weight loss drug space, which Roche is racing to join, is “not a good idea.” 

Also in October, a coalition of more than 10 unions, public interest organizations and consumer groups wrote a letter to FTC Commissioner Lina Khan urging her to “challenge this transaction” and ensure that “competition is protected and that consumers will have full access to treatments.”

Feel free to send any tips, suggestions, story ideas and data to Annika at annikakim.constantino@nbcuni.com.

President-elect Donald Trump announced Kennedy as his HHS pick last month after saying in October that he would let him “go wild on health.” Kennedy, who briefly campaigned as an independent candidate in the presidential election, has previously promoted misinformation and conspiracy theories about topics like vaccines, Covid-19 and autism, among other things. 

If the Senate confirms Kennedy to lead HHS, he would be responsible for managing the Food and Drug Administration, the Centers for Disease Control and Prevention, Medicare and Medicaid insurance programs and the National Institutes of Health.

In the letter obtained by CNBC on Monday, the Nobel laureates said they “strongly urge” senators to vote against Kennedy’s appointment. The New York Times first reported the letter. 

“In addition to his lack of credentials or relevant experience in medicine, science, public health, or administration, Mr. Kennedy has been an opponent of many health-protecting and life-saving vaccines,” the letter said.

“In view of his record, placing Mr. Kennedy in charge of DHHS would put the public’s health in jeopardy and undermine America’s global leadership in the health sciences, in both the public and commercial sectors,” it said. 

The letter’s signatories include 31 Nobel laureates in medicine, 18 in physics, 17 in chemistry and 11 in economics. Victor Ambros and Gary Ruvkun, who won the award for medicine this year for their ​​discovery of microRNA, signed the letter. Daron Acemoglu and Simon Johnson, who won the prize for economics this year for their work on how institutions affect nations’ prosperity, also signed the letter.  

Here’s the full text: 

December 9th, 2024

To Members of the United States Senate:

We, the undersigned Nobel Laureates, are writing to ask you to oppose the confirmation of Robert F. Kennedy, Jr. as Secretary of the Department of Health and Human Services (DHHS).   

The proposal to place Mr. Kennedy in charge of the federal agencies responsible for protecting the health of American citizens and for conducting the medical research that benefits our country and the rest of humanity has been widely criticized on multiple grounds. In addition to his lack of credentials or relevant experience in medicine, science, public health, or administration, Mr. Kennedy has been an opponent of many health-protecting and life-saving vaccines, such as those that prevent measles and polio; a critic of the well-established positive effects of fluoridation of drinking water; a promoter of conspiracy theories about remarkably successful treatments for AIDS and other diseases; and a belligerent critic of respected agencies (especially the Food and Drug Administration, the Centers for Disease Control, and the National Institutes of Health).  The leader of DHHS should continue to nurture and improve— not threaten—these important and highly respected institutions and their employees.

In view of his record, placing Mr. Kennedy in charge of DHHS would put the public’s health in jeopardy and undermine America’s global leadership in the health sciences, in both the public and commercial sectors.  

We strongly urge you to vote against the confirmation of his appointment as Secretary of the DHHS.

77 Nobel Laureates in Medicine, Chemistry, Physics, and Economics

Feel free to send any tips, suggestions, story ideas and data to Ashley at ashley.capoot@nbcuni.com.