- Catalent Inc CTLT announced the departure of its CFO, Thomas Castellano. Search for another CFO is underway.
- Ricky Hopson, the company's President, Division Head for Clinical Development & Supply, is appointed Interim CFO.
- While the company did not provide results for the fiscal third quarter, Catalent expects that productivity issues and higher-than-expected costs experienced at three of its facilities during the quarter will materially impact its Q3 results and outlook for the remainder of fiscal 2023.
- Catalent's plans to increase capacity to ramp up production at its gene therapy site in Harmans, Maryland (BWI), were slower than expected due to certain operational challenges.
- The company also experienced productivity challenges and higher-than-expected costs at its drug product and drug substance manufacturing facilities in Bloomington, Indiana, and Brussels, Belgium.
- Catalent expects to recover related revenue from its BWI site in 1HFY24 (2H of calendar 2023). Productivity levels in Bloomington are expected to be restored to previously forecast levels by the end of fiscal 2023.
- William Blair downgraded the rating to Market Perform until there is additional clarity about the underlying issues at each of the three sites.
- It remains optimistic about the outlook for Catalent, given the company's strong competitive position.
- However, given the significant issues, it is clear that the company's execution issues are deeper and more problematic than previously anticipated.
- What is still unclear is the reason for operational inefficiency. The analyst is not confident in management's ability to navigate the transition away from COVID and execute consistently moving forward.
- Price Action: CTLT shares are down 27.30% at $46.05 on the last check Friday.
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