Proxy Truces On The Rise At Catalent: Elliott Builds Significant Stake, Calls For Board Shake-Up

Elliott Investment Management, an activist shareholder, has reportedly acquired a substantial stake in Catalent Inc CTLT. They are now advocating for a significant overhaul of the contract manufacturer's board. 

While the exact size of Elliott's stake remains undisclosed, Wall Street Journal reported that Elliott has been engaging with potential director candidates to form a slate of nominees for a proxy contest.

As specified in the company's proxy materials, the nomination window for director candidates at Catalent closes on July 29. 

Elliott's push for change comes during a turbulent period for Catalent, which offers outsourced drug manufacturing services to pharmaceutical and biotech companies.

In recent months, Catalent faced significant setbacks, including the departure of its chief financial officer in April. The company also revealed unexpected costs and operational challenges at some of its manufacturing sites, some of which were tied to failed FDA facility inspections. 

As a result, the company reported a 19% decline in revenue for the three months ending March 31 and incurred a net loss of $227 million, compared to net earnings of $141 million in the same period the previous year.

Catalent's Chief Executive Officer, Alessandro Maselli, who assumed the role just over a year ago, mentioned that the company is making progress in addressing operational challenges while implementing cost-cutting measures. 

In an effort to improve its financial situation, Catalent appointed a new CFO, Matti Masanovich, formerly the finance chief of Tenneco Automotive before its acquisition by private-equity firm Apollo.

Price Action: CTLT shares traded 6% higher at $49.10 during premarket trading on the last check Thursday.