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Catalent's (CTLT) Latest Manufacturing Suites to Boost Capacity

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Catalent, Inc. (CTLT - Free Report) recently announced completion of the installation and commissioning of four new high-throughput high-bay cGMP or current good manufacturing practices manufacturing suites at its facility in Kansas City, MO. The addition of the new high-throughput encapsulation manufacturing suites is aimed at increasing the company’s capacity and capabilities for producing oral solid-dose forms.

The addition of the new manufacturing suites includes the installation of a few innovative equipments, which can produce up to 156,000 capsules per hour of either powder or mini-tablets dose forms. Apart from this, a new automated capsule vision inspection system, with the capability of validating 100% of all capsules and tablets manufactured, has also been installed and commissioned to ensure product quality.

The addition of the latest manufacturing suites is expected to significantly strengthen Catalent’s foothold in the global Oral and Specialty Delivery space.

Significance of the Expansion

Per Catalent’s management, the latest expansion of its Kansas City site reflects the uptick in demand for specialist products, including orphan and other expedited drug statuses. It also demonstrates the corresponding necessity for sufficient flexibility to manage a wide variety of customer batch sizes.

The facility is expected to work closely with the company’s early-phase drug development centers in San Diego, CA and Nottingham, U.K. These expanded capabilities will likely enable faster and seamless project transfers between the sites to ensure rapid scale-up and project deliveries across the development phases.

Industry Prospects

Per a report by Future Market Insights, the global oral solid dosage pharmaceutical formulation market is projected to grow from $493.2 billion in 2017 to $926.3 billion by 2027-end at a CAGR of 6.5%. Factors like oral solid dosage forms being cost-effective and easy to manufacture, besides trouble-free packaging and transportation, and increased chemical and physical stability, are likely to drive the market.

Given the market potential, the latest site expansion is expected to provide a significant boost to Catalent’s business globally.

Recent Developments

This month, Catalent 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.

Last month, Catalent had announced the completion of a $30-million (€27 million) project at its facility in Limoges, France. The project 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 announced a tie up with TFF Pharmaceuticals, Inc., which concerns the latter’s patented Thin Film Freezing (“TFF”) technology. The tie-up agreement focuses on generating, testing and manufacturing dry powder formulations for a variety of biotherapeutics via the application of the TFF technology.

Price Performance

Shares of the company have lost 10.4% in the past year compared with the industry’s 22.8% fall. The S&P 500 has risen 5.5% in the same time frame.

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Zacks Rank & Key Picks

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

A few stocks from the broader medical space that investors can consider are AMN Healthcare Services, Inc. (AMN - Free Report) , Abiomed, Inc. (ABMD - 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 36.9% against the industry’s 57.2% fall over the past year.

Abiomed, carrying a Zacks Rank #2 (Buy), has an estimated long-term growth rate of 20%. ABMD’s earnings surpassed estimates in the trailing four quarters, the average surprise being 9.2%.

Abiomed has lost 7.1% compared with the industry’s 6.1% fall 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 29.3% compared with the industry’s 5.2% growth over the past year.