Catalent Expands Its Facility Capabilities in Germany

Catalent, Inc. CTLT announced that it has completed the expansion of its clinical supply facility in Schorndorf, Germany. The Schorndorf site, Catalent's flagship European facility, provides comprehensive clinical supply services, including packaging, storage and distribution.

The latest expansion of the clinical supply facility is expected to solidify Catalent's foothold in the growing clinical trials space and expand its Clinical Development & Supply network worldwide.

Significance of the Latest Expansion

The expansion increases the site's footprint, thereby adding storage and handling of clinical trial supply materials at controlled room temperatures. It also creates space in the original building to accommodate the installation of a new, fully automatic bottle-filling line, along with a dedicated area for Catalent's FastChain demand-led supply service. These added capabilities are expected to support a continued high level of service to Catalent's pharma and biotech customers and the patients they serve.

The company's FastChain service is a continuous Good Manufacturing Practices approach that decouples primary from secondary packaging to enable timely and cost-effective adaptation and regional supply of clinical materials on demand.

Per management, the Schorndorf site is crucial for the company's ability to meet customer demand for clinical packaging solutions, including temperature-controlled services. Management also believes that the additional capacity to the site for temperature-controlled storage and Catalent's FastChain service will likely meet the current and future needs of its customers.

Industry Prospects

Per a report by MarketsandMarkets, the global clinical trial supplies market is anticipated to reach $6.3 billion by 2028 from $3.9 billion in 2023 at a CAGR of 9.9%. Factors like the rising research and development expenditure in pharmaceutical and biopharmaceutical companies and the increasing number of clinical trials worldwide are likely to drive the market.

Given the market potential, the latest site expansion will likely provide a significant impetus to Catalent in the clinical trials space in the European region.

Notable Developments

In May, Catalent announced that its stockholders had approved the pending transaction under which Novo Holdings A/S (Novo Holdings) will acquire all outstanding shares of the company. The acquisition of the company by Novo Holdings was initially announced in February.

The same month, Catalent reported its third-quarter fiscal 2024 results, wherein it recorded a year-over-year improvement in its overall top-line and bottom-line results. The company also saw a revenue uptick in the Pharma and Consumer Health segment during the reported quarter. A continued momentum in both the Biologics and PCH segments, which drove an increase in consolidated sequential revenues and adjusted EBITDA margin for the second consecutive quarter, was also witnessed.

Price Performance

Shares of Catalent have gained 24.8% in the past year against the industry's 2.2% decline. The S&P 500 has witnessed 23.8% growth in the said time frame.

Image Source: Zacks Investment Research

Zacks Rank & Stocks to Consider

Currently, Catalent carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the broader medical space are Globus Medical, Inc. GMED, Stryker Corporation SYK and Elevance Health, Inc. ELV.

Globus Medical, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 12.7%. GMED's earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 10.8%.

Globus Medical's shares have gained 17.3% against the industry's 1.3% decline in the past year.

Stryker, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 10.6%. SYK's earnings surpassed estimates in each of the trailing four quarters, with the average being 4.9%.

Stryker has gained 11.3% against the industry's 2.1% decline in the past year.

Elevance Health, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 12.2%. ELV's earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 2.8%.

Elevance Health's shares have rallied 25.1% compared with the industry's 5.4% rise in the past year.

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