Novo Holdings' $16.5 billion acquisition of Catalent is currently under antitrust review by global regulators, raising questions about the contract drug manufacturer's role with Eli Lilly. Complicating the situation, Novo Holdings plans to sell three of Catalent's fill-finish sites to Novo Nordisk for $11 billion. Novo Nordisk intends to use these sites for its popular GLP-1 drugs, Ozempic and Wegovy.

The European Commission is evaluating Novo Holdings' request for EU approval, with a decision expected by December 6. The FTC is also investigating the acquisition, having requested additional information from Catalent and the Novo Nordisk Foundation. Novo Nordisk maintains that the transaction is not anti-competitive and is cooperating with regulators.

However, the acquisition faces scrutiny from various stakeholders, including Eli Lilly executives, Roche's CEO, unions, consumer groups, and Senator Elizabeth Warren. Warren has expressed concerns that the merger could reduce competition, as Lilly relies on Catalent for manufacturing diabetes and obesity drugs. She warned that Novo Nordisk's control over Catalent could give it an unfair advantage over competitors.

In a recent earnings call, Lilly CEO Dave Ricks confirmed the company's reliance on Catalent for GLP-1 production and expressed concerns about the acquisition's implications. Despite this, there is ambiguity regarding the specifics of the relationship between Catalent and Lilly, particularly concerning the production of Lilly's GLP-1 drugs, Mounjaro and Zepbound.

Catalent has stated it does not manufacture Mounjaro or Zepbound, asserting that only Novo Nordisk's Wegovy is produced at its facilities. In contrast, a Lilly spokesperson suggested that Catalent is involved in optimizing production for its GLP-1 products, though no further details were provided.

Novo Nordisk supports Catalent's claim, stating it is unaware of any competitive GLP-1 products being manufactured at the sites it plans to acquire. The Danish company has also committed to honoring all customer obligations at these sites.

Despite these reassurances, Lilly remains concerned about the implications of having a major competitor also serving as its contract manufacturer, highlighting the complexities of the situation.