Catalent Delays Earnings Call, Shaves $400M Off FY23 Guidance
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Update (May 12): Despite originally stating that it expected to release its financial results on May 15, Catalent failed to confirm this in a May 11 SEC filing, according to Seeking Alpha. Instead, the company simply stated that it will submit “as soon as practicable.”
Contract manufacturer Catalent announced Monday it is pushing back its third fiscal quarter earnings report and investor call originally set for Tuesday. The company now expects to release its financial results on May 15.
Along with the delay, Catalent also slashed its fiscal year 2023 net revenue and adjusted earnings before interest, taxes, depreciation and amortization guidance by more than $400 million each.
The company’s shares slumped almost 26% by market close Monday in reaction to the news.
“We are dissatisfied with our recent results,” Catalent CEO Alessandro Maselli said in a statement, adding that the company is working to solve its operational challenges and improve its financial forecasting to “more effectively anticipate and respond to the increased complexity in our business.”
Monday’s announcement follows previously reported productivity issues at three of Catalent’s manufacturing facilities. One of these, located in Maryland, is a gene therapy plant that encountered “operational challenges” as its production capacity was being increased to meet a customer’s needs.
Catalent also reported “productivity challenges” leading to “higher-than-expected costs” at two of its drug product and substance manufacturing sites, one located in Indiana and the other in Belgium. Following regulatory inspections, the contract manufacturer had to implement improvements to its operational and engineering controls, which lowered its productivity levels and, in turn, associated revenues.
While Catalent stated that none of these operational issues will compromise the quality of its customers’ products, it also does not expect to make up for the lost revenue and productivity within the current fiscal year.
Headquartered in New Jersey and with a headcount of approximately 19,000, Catalent is a major contract manufacturer that works with several high-profile and upcoming biopharma companies.
One such company is Sarepta Therapeutics, which in January opted to broaden an existing strategic partnership with Catalent for the commercial supply of delandistrogene moxeparvovec, its gene therapy candidate for Duchenne muscular dystrophy. The expanded agreement also outlines the potential role Catalent may play in supporting other Sarepta gene therapy candidates for limb-girdle muscular dystrophy.
In November 2022, the contract manufacturer likewise inked a new agreement with Exelixis for three antibody-drug conjugates developed using Catalent’s SMARTag platform, which is meant to enable a simple and efficient chemoenzymatic approach for generating uniform ADCs. The deal, which includes a $30 million upfront payment from Exelixis, will involve development work from Catalent until candidate selection. Exelixis will be in charge of preclinical, clinical and commercial activities.
Tristan Manalac is an independent science writer based in metro Manila, Philippines. He can be reached at email@example.com or firstname.lastname@example.org.