Beaten Down COVID-19 Vaccine Partner Stock Catalent Finalizes Deal With Activist Investor, Reports Mixed Q4 Earnings

Catalent Inc CTLT, valued at around $8 billion, has finalized a deal with activist investor Elliott Investment Management. 

The board has recommended and approved the appointment of four new independent directors. With these appointments, Catalent's Board of Directors will consist of 16 directors, 13 of whom are independent.

Catalent's board has also established a new Strategic and Operational Review Committee to review the company's business, strategy, operations, and capital allocation priorities.

Catalent reported Q4 adjusted EPS of $0.09, missing the consensus of $0.10, with sales of $1.07 billion, down 17% Y/Y, slightly above the consensus of $1.05 billion.

The company forecasts FY24 sales of $4.30 billion-$4.50 billion versus the consensus of $4.21 billion and $4.28 billion in FY23.

It sees an adjusted net income of $113-$175 million, with an adjusted EBITDA of $680-$760 million.

Having faced acquisition interest from multiple private equity entities and strategic buyers over recent months, Reuters noted, Catalent is inclined to incorporate four directors suggested by Elliott to its current 12-member board. 

Elliott steps into the picture at a pivotal moment for Catalent, as the company's stock has lost approximately half within the past year.

Earlier in 2023, Danaher Corporation DHR was rumored to be considering an acquisition of Catalent, further solidifying its position after recently agreeing to buy Abcam Plc ABCM.

Catalent's vital contribution during the pandemic was evident through its collaboration with major pharmaceutical companies like AstraZeneca Plc AZN, Johnson & Johnson JNJ, and Moderna Inc MRNA to facilitate COVID-19 vaccine distribution. 

However, the company has been navigating through multiple challenges recently, including the departure of its CFO in April and forecasted hits to their fiscal 2023 results due to unforeseen costs and "productivity issues" at three manufacturing sites.

Catalent's contributions include producing Novo Nordisk A/S's NVO weight-loss drug, Wegovy, at their Brussels factory. Moreover, the company's Bloomington plant in Indiana is set to start filling Wegovy injection pens for Novo Nordisk.

CTLT stock has lost 33% in the last six months and is flat year-to-date.

Price Action: CTLT shares are up 1.45% at $46.30 during the premarket session on the last check Tuesday.