Like many other COVID-19 players, CDMO Catalent has been feeling the heat of plunging COVID product demand. But with a manufacturing push from partner Sarepta Therapeutics and sky-high demand for GLP-1 products, the company is confident in its financial future in 2024 and beyond.
Even before it posted its latest quarterly earnings report, Catalent announced that it would be reaffirming its full-year 2024 revenue guidance range of $4.3 billion to $4.5 billion. Analysts at William Blair are “admittedly surprised” by the move, but CEO Alessandro Maselli says the company is “making strides.”
Masselli bases Catalent’s confidence on high demand for its gene therapy services plus “expanded exposure” to GLP-1 demand and a “very strong rate” of new approvals in its pharma and consumer health segment, the chief said in the company’s earnings call.
A large chunk of those gene therapy services and the CDMO’s non-COVID business in general comes from Sarepta Therapeutics and its Duchenne muscular dystrophy gene therapy Elevidys. The treatment scored an FDA accelerated approval in June, but trouble could be on the horizon after a confirmatory trial miss.
The study was meant to support a major label expansion. Despite the trial’s failure on the primary endpoint, Sarepta is pursuing the “broadest label possible” and is ramping up production to stock up for its assumed outcome of full approval.
That’s good news for Catalent for now but could make for a “significant blow” in the future if Sarepta can’t lock down a label expansion, William Blair analysts said earlier this month.
As it stands, the CDMO is expecting its revenue from Sarepta, its top customer, to grow approximately 65% in its fiscal year 2024, Maselli said. Catalent’s fiscal years end every June.
Aside from gene therapies, Catalent is pinning much of its growth in the coming years on the GLP-1 hype. This year, the company expects to pick up less than $100 million, but with “a large majority of current and future” prefilled syringe capacity expected to be booked through 2026, GLP-1 cash should eventually make up “well over half a billion dollars” in revenue according to Maselli.
Catalent’s quarterly revenue haul totaled $982 million, beating Wall Street estimates of $940 million. COVID sales nosedived by $85 million from the same period last year.
The company earlier this week posted a notice of late filing with the Securities and Exchange Commission, warning that it won’t be able to turn in its quarterly earnings filing by the due date. The hold-up was attributed to a goodwill impairment charge of some $700 million.