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Catalent's (CTLT) Latest Buyout to Expand Its Global Footprint

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Catalent, Inc. (CTLT - Free Report) recently announced the acquisition of a biologics development and manufacturing facility currently under construction near Oxford, U.K., from Vaccine Manufacturing and Innovation Centre UK Limited. This facility addition is expected to expand Catalent’s presence in the U.K. and across Europe.

It is worth mentioning that Catalent’s Biotherapeutics network is also spread across sites in Italy, Belgium, France, Switzerland and the United States.

Catalent plans to invest approximately $160 million (£120 million) to complete the building of the facility and equip it with advanced capabilities for the development and manufacturing of biologic therapies and vaccines, including mRNA, proteins and other innovative modalities. Apart from employment generation, the new facility is expected to support public and private organizations looking to develop and manufacture biotherapeutics.

With the latest facility acquisition, Catalent is expected to significantly expand its global footprint in the Biotherapeutics space and solidify its position in the Biologics business worldwide.

Significance of the Expansion

Per management, the buyout will likely enable the company to tie up with the academic and biomedical science community around Oxford. This, in turn, is expected to result in a facility that provides opportunities to transform innovation into applicable treatments for patients on a global scale.

Catalent plans to prioritize the construction of the facility in order to start customer programs this year. Furthermore, the company plans to combine its capabilities within its existing network of biologics facilities across Europe to offer a flexible range of manufacturing, technology and development solutions for the pipeline of numerous development programs currently underway.

Industry Prospects

Per a report by Research and Markets, the global biopharmaceutical market was estimated to be $330.7 billion in 2021 and is anticipated to reach $478.08 billion by 2026 at a CAGR of approximately 7.7%. Factors like rising chronic diseases, an increase in the elderly population and the growing adoption of biopharmaceuticals globally are expected to drive the market.

Given the market potential, the recent facility buyout is expected to significantly boost Catalent’s business worldwide.

Notable Developments

Last month, Catalent announced the completion of a $30-million (€27 million) project at its facility in Limoges, France. The project's completion is expected to convert the site into a European center of excellence for biopharmaceutical development, drug product fill/finish services and packaging.

The same month, CTLT tied up with TFF Pharmaceuticals, Inc. concerning 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.

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

Price Performance

Shares of the company have gained 2.6% in the past year against the industry’s 20.5% fall. The S&P 500 has risen 9.8% in the same time frame.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank & Other Key Picks

Currently, Catalent carries a Zacks Rank #2 (Buy).

A few other stocks from the broader medical space that investors can consider are AMN Healthcare Services, Inc. (AMN - Free Report) , Edwards Lifesciences Corporation (EW - Free Report) and Henry Schein, Inc. (HSIC - Free Report) .

AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 20%. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AMN Healthcare has gained 34.5% against the industry’s 55.5% fall over the past year.

Edwards Lifesciences, carrying a Zacks Rank #2, has an estimated long-term growth rate of 13.9%. EW’s earnings surpassed estimates in three of the trailing four quarters, the average surprise being 6.5%.

Edwards Lifesciences has gained 43% compared with the industry’s 0.2% growth over the past year.

Henry Schein has an estimated long-term growth rate of 11.8%. HSIC’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.5%. It currently has a Zacks Rank #2.

Henry Schein has gained 29.2% compared with the industry’s 9.3% growth over the past year.