© Reuters. FILE PHOTO: A general view of the drug product manufacturing laboratory in biologics and sterile injectables, Catalent, in Brussels, Belgium June 27, 2023. REUTERS/Yves Herman/File Photo

By Sriparna Roy and Leroy Leo

(Reuters) -Catalent said on Wednesday it expected a majority of its current and upcoming production capacity for pre-filled syringes until fiscal year 2026 to soon be booked out, driven by booming demand for newer weight-loss drugs.

The contract drug manufacturer plays a vital role in the production of Danish drugmaker Novo Nordisk (NYSE:NVO)’s Wegovy by filling self-injection pens for the GLP-1 weight-loss drug, which is witnessing a boom in demand.

“Our exposure to the GLP-1 opportunity is rapidly growing,” CEO Alessandro Maselli said in an investor conference call, adding that the company plans to accelerate investment to expand its fill-and-finish facilities at Bloomington in the United States and Anagni in Italy.

Revenue contributions from GLP-1 drugs could rise to over $500 million once its expanded capacity is operational, compared to less than $100 million expected in fiscal 2024, Maselli said.

Catalent (NYSE:CTLT) is also expanding its contract manufacturing for gene-therapy developers and expects a 65% increase in revenue from top customers, especially its biggest client Sarepta Therapeutics (NASDAQ:SRPT), for which it manufactures Elevidys for the rare genetic disorder Duchenne muscular dystrophy (DMD).

Analysts have been concerned about Elevidys demand after the one-time treatment failed in an important late-stage trial, but the company said Sarepta has already confirmed its scale-up plans for 2024.Catalent’s shares surged over 10% in morning trade, partly aided by it beating Wall Street estimates for first-quarter revenue, showing early signs of improvement across its struggling businesses.

Catalent began a strategic review in August, adding new members to its board after a settlement with activist investor Elliott Investment Management.

The Somerset, New Jersey-based company has struggled with production challenges and regulatory inspections at three key facilities.


It recorded a quarterly net loss of $715 million due to a goodwill impairment charge of about $700 million related to acquisitions in its consumer health and biomodalities unit. However, its adjusted net loss of 10 cents per share was 4 cents smaller than estimates.

Preliminary revenue for the first quarter fell 4%, to $982 million, but beat analysts’ average estimate of $939.14 million.