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Catalent's (CTLT) New Tie-Up to Provide Better Patient Access

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Catalent, Inc. (CTLT - Free Report) recently announced its collaboration with TFF Pharmaceuticals, Inc. (TFFP - Free Report) with respect to the latter’s patented Thin Film Freezing (“TFF”) technology. The tie-up agreement focuses on the generation, testing and manufacture of dry powder formulations for a variety of biotherapeutics via the application of the TFF technology.

Per the agreement terms, Catalent will offer its scaled-up expertise and manufacturing capabilities to TFF Pharmaceuticals as its preferred development and manufacturing partner. This will enable Catalent to provide its customers access to the TFF technology.

The TFF technology can be used to generate dry powder formulations for inhalation. This complements Catalent’s existing capabilities in spray drying for the development of inhalable drugs, which was established by its 2021 buyout of the manufacturing and packaging operations of Acorda Therapeutics in Boston, MA.

The latest partnership is expected to solidify Catalent’s foothold in the global Oral and Specialty Delivery space.

Rationale Behind the Collaboration

The TFF technology has the potential to boost the adoption of the pulmonary route for systemic delivery of biotherapeutics. Thus, Catalent’s latest partnership regarding the technology is expected to enhance outcomes for its customers.

Catalent’s management believes that leveraging its expertise in the development and current good manufacturing practices or cGMP manufacture of dry powders will enable it to potentially bring TFF Pharmaceuticals’ unique and differentiated technology to scale.

Per TFF Pharmaceuticals’ management, the collaboration with Catalent is likely to significant expand its access to manufacturing capabilities and provide scalability for its technology. This simultaneously provides the company with the opportunity to build its portfolio of technology licensing partnerships.

Industry Prospects

Per a report by Transparency Market Research published on BioSpace, the global oral thin films market was valued at $2.6 billion in 2019 and is anticipated to expand at a CAGR of approximately 9% between 2020 and 2030. Factors like rise in demand for thin-film drug delivery systems and precision medication are likely to drive the market.

Given the market potential, the latest tie-up is expected to provide a significant boost to Catalent’s business globally.

Notable Developments

Last month, Catalent announced its plans to expand its Waigaoqiao Free Trade Zone facility in Shanghai, China, to increase capacity for temperature-controlled storage and distribution of clinical supplies, as well as additional secondary packaging capabilities.

In January, the company announced that it has completed a $10-million expansion in its isolator units at its Malvern, PA and Dartford, U.K. facilities to provide advanced containment capabilities for the micronization of highly potent drug compounds.

The same month, Catalent launched its new Xpress Pharmaceutics service, designed to accelerate the development of oral drugs through Phase 1 clinical studies.

Price Performance

Shares of the company have lost 1.1% in the past year versus the industry’s 27% fall and the S&P 500's 13.4% rise.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank & Key Picks

Currently, Catalent carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks in the broader medical space include Henry Schein, Inc. (HSIC - Free Report) and AMN Healthcare Services, Inc. (AMN - Free Report) .

Henry Schein, flaunting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 11.8%. HSIC’s earnings surpassed estimates in the trailing four quarters, the average beat being 25.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Henry Schein has gained 34.3% compared with the industry’s 12.2% growth over the past year.

AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN’s earnings surpassed estimates in the trailing four quarters, the average beat being 20%. It currently sports a Zacks Rank #1.

AMN Healthcare has gained 39.3% against the industry’s 54.9% fall over the past year.