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EU regulators quiz Novo Nordisk, Catalent rivals on $16.5 billion deal
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EU regulators quiz Novo Nordisk, Catalent rivals on $16.5 billion deal
Nov 13, 2024 11:09 AM

BRUSSELS/LONDON (Reuters) - EU antitrust regulators have asked pharma rivals and customers for feedback in four business areas in light of Novo Holdings' planned $16.5 billion takeover of Catalent ( CTLT ), people familiar with the matter said.

Novo Holdings is the controlling shareholder of Danish drugmaker Novo Nordisk, whose profits from blockbuster weight-loss drug Wegovy propelled it to become Europe's most valuable company by market value.

While the questionnaire shows the European Commission seeking to understand the market, it could allow rivals and customers to flag potential anti-competitive concerns. 

The questionnaire seeks feedback on vertical links in parts of the contract development and manufacturing organisation (CDMO) industry, including injectables, pre-filled syringes orally dissolved pills, and soft gels, the sources said.

The regulator distributed it to big pharma and CDMO companies, the sources said. This came after Novo Holdings put in a request for EU approval for the deal on Oct. 31.

The EU watchdog has set a Dec. 6 deadline for its preliminary review. Novo Holdings has until Nov. 29 to offer remedies during this phase, if any are required. 

European Union regulators can either clear the deal with or without remedies, or open a full-scale, four-month investigation if they have serious concerns.

The $16.5 billion deal, announced in February, underscores Novo Nordisk's drive to boost output of Wegovy, a once-weekly injection.

After the deal closes, Novo Holdings will sell three of Catalent's ( CTLT ) fill-finish sites - in Italy, Belgium and the United States - onto Novo Nordisk for $11 billion. The sites will then by fully used by Novo Nordisk for filling its injection pens.

Novo Holdings, Novo Nordisk and Catalent ( CTLT ) all recently reiterated their expectations that the transaction will close towards the end of this year.

In May, the companies said they had received a second request from the U.S. Federal Trade Commission (FTC) for more information on the deal. There has been no update from the FTC on its review of the deal since then.

Novo Nordisk faces competition from U.S. rival Eli Lilly's ( LLY ) injection Zepbound in the fast-growing obesity drug race. Some analysts have estimated the market could be worth as much as $150 billion by the early 2030s.

U.S-based Catalent ( CTLT ), one of the world's largest contract manufacturers, made a huge windfall during the COVID-19 pandemic as it was contracted to help make vaccines by several companies.

But the company faced a range of problems in the pandemic's aftermath, as COVID-vaccine revenue fell and its costs increased due to actions to address quality control lapses identified during inspections by U.S. drug regulators at three plants.

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