Catalent, which has been struggling with productivity issues and higher-than-expected costs at three of its facilities, continues to work on righting the ship with a restructured board and new initiatives. 

The Somerset-based pharmaceutical company announced Aug. 29 four new independent directors – Steven Barg, Frank D’Amelio, Stephanie Okey and Michelle Ryan. Additionally, current board member John Greisch has been appointed executive chair. 

Greisch will also serve as chair of the board’s new strategic and operational review committee, which will be charged with evaluating the company’s business, strategy and operations as well as its capital-allocation priorities, according to the announcement. 

Catalent also entered into a cooperation agreement with one of its largest investors, Elliott Investment Management LP, under which Elliott has agreed to customary standstill, voting, confidentiality and other provisions. Citi is serving as financial advisor, and Skadden, Arps, Slate, Meagher & Flom LLP and Jones Day are serving as legal counsel to Catalent.

“We are pleased to work collaboratively with Elliott, a highly engaged investor with deep experience in the health care space, and we welcome our new directors to the Catalent Board,” said Alessandro Maselli, who was named president and CEO in July 2022. “The Company will continue to take decisive action to strengthen operational performance, enhance profitability, and create value for all shareholders and other stakeholders.  

Maselli added that the company believes these new initiatives “will advance Catalent’s positioning for long-term growth and success.”

‘Continue to make progress’ 

In April, Catalent made two major announcements: Its senior vice president and chief financial officer stepped down after 15 years with the company, and that productivity issues and higher-than-expected costs at three of its facilities would “materially and adversely impact” its financial results for the third quarter and its outlook for the remainder of the 2023 fiscal year. 

Indeed, in its Q3 financial earnings report released June 12 – results that were delayed because the company said it “identified certain potential non-cash adjustments related to its operations in Bloomington, Indiana” – Catalent reported $1.04 billion in net revenue, a 19% decrease from the $1.27 billion reported for the same period a year ago.   

On Aug. 29, the same day of its board announcements, Catalent released preliminary financial results for the fourth quarter of fiscal 2023, which ended June 30, 2023. The company reported $1.07 billion in net revenue, a decrease of 17% from the $1.29 billion reported for the same period last year.

On Aug. 30, the company notified the U.S. Securities and Exchange Commission of another late Form 10-K filing, which it expects to file “within the extension period of 15 calendar days” from its original Aug. 29 due date.

“We continue to make progress in improving our operational performance and continue to win new business with new and existing customers, including in some of the industry’s most exciting areas, leading us on a path toward more sustainable, profitable growth and to exit fiscal 2024 in a much stronger operational and financial position,” Maselli said in a statement, emphasizing the initiatives announced to “right-size” the business. 

According to a recent report by Reuters, Catalent is Novo Nordisk’s main manufacturing partner for weight-loss drug Wegovy. Novo Nordisk’s U.S. headquarters is in Plainsboro.

“We remain confident in our leading market position as well as our long-term opportunities, and are committed to delivering the industry’s most complex manufacturing solutions and innovative medicines for the benefit of our health care partners and patients,” Maselli continued.

Marc Steinberg, Elliott senior portfolio manager, added, “With global scale and market-leading development and manufacturing capabilities, Catalent is a strategic company that plays an essential role as the partner of choice for the biopharmaceutical industry. We believe the changes announced today … represent critical steps toward ensuring that Catalent reaches its full potential.”