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Contract drugmaker Catalent shows signs of recovery in Q1 revenue beat

2023-11-15 21:56
(Reuters) -Catalent beat Wall Street's estimates for first-quarter revenue on Wednesday, as the contract drug manufacturer showed signs of improvement
Contract drugmaker Catalent shows signs of recovery in Q1 revenue beat

(Reuters) -Catalent beat Wall Street's estimates for first-quarter revenue on Wednesday, as the contract drug manufacturer showed signs of improvement across its struggling pharmaceuticals and biologics businesses.

Shares of the company rose nearly 6% in premarket trade as its adjusted net loss was also smaller than expected, indicating early signs of recovery on the back of changes to its board.

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

Problems had been piling up for the Somerset, New Jersey-based company, which manufactures drugs, vaccines and gene therapies, as it struggled with production challenges and regulatory inspections at three of its key facilities.

Catalent plays a vital role in the production of Danish drugmaker Novo Nordisk's Wegovy by filling self-injection pens for the weight-loss drug that is witnessing booming demand.

The company's biologics segment, which provides clients with development and manufacturing services for gene therapies and pre-filled syringes and vials, recorded revenue of $447 million, beating analysts' average estimate of $417 million, according to LSEG data.

Its pharmaceutical and consumer health segment posted sales of $535 million, also beating the estimate of $515 million.

Catalent had said on Monday it would delay its first-quarter filing with the U.S. securities regulator due to a goodwill impairment charge of about $700 million related to acquisitions in its consumer health and biomodalities unit, but would file preliminary results on Wednesday.

The company recorded a net loss of $715 million for the quarter, which includes the charge.

On an adjusted basis, Catalent recorded a net loss of $19 million, or 10 cents per share, smaller than the estimated 14-cents-per-share loss.

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

(Reporting by Sriparna Roy and Leroy Leo in Bengaluru; Editing by Pooja Desai)