EU antitrust regulators are scrutinizing Novo Holdings' proposed $16.5 billion acquisition of Catalent, seeking input from competitors and stakeholders in four key areas of the pharmaceutical industry. Novo Holdings, which controls Danish drugmaker Novo Nordisk, aims to enhance production capabilities for its popular weight-loss drug, Wegovy.
The European Commission has distributed a questionnaire to major pharmaceutical and contract development and manufacturing organizations (CDMOs) to assess potential anti-competitive issues related to the deal. This inquiry focuses on vertical links within the CDMO sector, including injectables and pre-filled syringes. The deadline for the Commission's preliminary assessment is set for December 6, while Novo Holdings must respond to any concerns by November 29.
The acquisition, announced in February, is part of Novo Nordisk's strategy to increase Wegovy production. Following the deal's completion, Novo Holdings plans to sell three of Catalent's fill-finish facilities in Italy, Belgium, and the U.S. to Novo Nordisk for $11 billion, which will be used for filling injection pens.
Both Novo Holdings and Catalent have expressed confidence that the transaction will finalize by the end of the year. However, the deal is also under review by the U.S. Federal Trade Commission (FTC), which has requested additional information. No updates on the FTC's assessment have been provided since May.
Novo Nordisk faces competition from U.S. rival Eli Lilly, which has introduced its own obesity treatment, Zepbound. Analysts predict that the obesity drug market could reach $150 billion by the early 2030s. Catalent, a leading contract manufacturer, experienced significant growth during the COVID-19 pandemic due to vaccine production contracts but has since encountered challenges, including declining vaccine revenues and increased costs related to quality control issues identified by U.S. regulators.
As the EU regulators continue their investigation, the outcome of this deal could have significant implications for the pharmaceutical landscape, particularly in the rapidly expanding market for obesity treatments.